UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21153
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Nuveen Maryland Dividend Advantage Municipal Fund 3
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: May 31
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Date of reporting period: May 31, 2009
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
LOGO: NUVEEN Investments
Closed-End Funds
Nuveen Investments
Municipal Closed-End Funds
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
Annual Report
May 31, 2009
--------------- ------------------ ------------------ -----------------------
NUVEEN MARYLAND NUVEEN MARYLAND NUVEEN MARYLAND NUVEEN MARYLAND
PREMIUM INCOME DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND 2 MUNICIPAL FUND 3
NMY NFM NZR NWI
--------------- ------------------ ------------------
NUVEEN VIRGINIA NUVEEN VIRGINIA NUVEEN VIRGINIA
PREMIUM INCOME DIVIDEND ADVANTAGE DIVIDEND ADVANTAGE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND 2
NPV NGB NNB
May 09
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LOGO: NUVEEN Investments
Chairman's
Letter to Shareholders
[PHOTO OF ROBERT P. BREMNER]
DEAR SHAREHOLDER,
The problems in the U.S. financial system and the slowdown in global economic
activity continue to create a very difficult environment for the U.S. economy.
The administration, the Federal Reserve System and Congress have initiated a
variety of programs directed at restoring liquidity to the financial markets,
providing financial support for critical financial institutions and stimulating
economic activity. There are encouraging signs that these initiatives are
beginning to have a constructive impact. It is not possible to predict whether
the actions taken to date will be sufficient to restore more normal conditions
in the financial markets or enable the economy to stabilize and set a course
toward recovery. However, the speed and scope of the government's actions are
very encouraging and, more importantly, reflect a commitment to act decisively
to meet the economic challenges we face.
The performance information in the attached report reflects the impact of many
forces at work in the equity and fixed-income markets. The comments by the
portfolio manager describe the strategies being used to pursue your Fund's
long-term investment goals. Parts of the financial markets continue to
experience serious dislocations and thorough research and strong investment
disciplines have never been more important in identifying risks and
opportunities. I hope you will read this information carefully.
Your Board is particularly sensitive to our shareholders' concerns in these
uncertain times. We believe that frequent and thorough communication is
essential in this regard and encourage you to visit the Nuveen website:
www.nuveen.com, for recent developments in all Nuveen funds. We also encourage
you to communicate with your financial consultant for answers to your questions
and to seek advice on your long-term investment strategy in the current market
environment.
Nuveen continues to work on resolving the issues related to the auction rate
preferred shares situation, but the unsettled conditions in the credit markets
have slowed progress. Nuveen is actively pursuing a number of solutions, all
with the goal of providing liquidity for preferred shareholders while preserving
the potential benefits of leverage for common shareholders. We appreciate the
patience you have shown as we work through the many issues involved.
On behalf of myself and the other members of your Fund's Board, we look forward
to continuing to earn your trust in the months and years ahead.
Sincerely,
/s/ Robert P. Bremner
Robert P. Bremner
Chairman of the Nuveen Fund Board
July 23, 2009
Nuveen Investments 3
Portfolio Manager's Comments
Nuveen Investments Municipal Closed-End Funds NMY, NFM, NZR, NWI, NPV, NGB, NNB
Portfolio manager Cathryn Steeves reviews economic and municipal market
conditions at both the national and state levels, key investment strategies and
the twelve-month performance of the Nuveen Maryland and Virginia Funds. Cathryn,
who joined Nuveen in 1996, has managed these seven Funds since 2006.
WHAT FACTORS AFFECTED THE U.S. ECONOMIC AND MUNICIPAL MARKET ENVIRONMENTS DURING
THE TWELVE-MONTH PERIOD ENDED MAY 31, 2009?
During this period, downward pressure on the economy continued. In an effort to
improve overall economic conditions, the Federal Reserve (Fed) continued to cut
interest rates, lowering the fed funds rate from 2.00% on June 1, 2008, to a
target range of zero to 0.25% in December 2008, its lowest level on record. In
March 2009, the Fed announced that, in addition to maintaining the current
target rate, it would buy $300 billion in long-term Treasury securities in an
effort to support private credit markets and up to an additional $750 billion
(for a total of $1.25 trillion) in agency mortgage-backed securities to bolster
the housing market. (At its June 2009 meeting, subsequent to this reporting
period, the Fed kept the target rate and bond purchase program unchanged.)
Additionally, the federal government passed a $700 billion financial industry
rescue package in October 2008, which was followed by a $787 billion stimulus
package approved in February 2009.
The Fed's rate-cutting and the stimulus package were in part a response to the
decline in U.S. economic growth, as measured by the U.S. gross domestic product
(GDP). Since posting an annual growth rate of 2.8% in the second quarter of
2008, the GDP has contracted at annual rates of 0.5% in the third quarter of
2008, 6.3% in the fourth quarter of 2008, and 5.5% in the first quarter of 2009,
all of which adds up to the worst recession in 50 years. The ongoing housing
slump also continued to trouble the economy, with the average home price falling
18.1% nationally between April 2008 and April 2009, pushing home values to
mid-2003 levels. In the labor markets, May 2009 marked the 17th consecutive
month of job losses, with a total of 6.0 million jobs lost since the economic
recession began in December 2007. The national unemployment rate for May 2009
was 9.4%, its highest point since 1983, up from 5.5% in May 2008. At the same
time, inflation remained subdued, as the Consumer Price Index (CPI), reflecting
a 27% drop in energy prices, fell 1.3% year-over-year as of May 2009, the
largest twelve-month decline since 1950. The core CPI (which excludes food and
energy) rose 1.8% over this same period, within the Fed's unofficial objective
of 2.0% or lower for this measure.
During this period, the nation's financial institutions and markets--including
the municipal bond market--experienced significant turmoil and reductions in
demand for many types
CERTAIN STATEMENTS IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS. DISCUSSIONS OF
SPECIFIC INVESTMENTS ARE FOR ILLUSTRATION ONLY AND ARE NOT INTENDED AS
RECOMMENDATIONS OF INDIVIDUAL INVESTMENTS. THE FORWARD-LOOKING STATEMENTS AND
OTHER VIEWS EXPRESSED HEREIN ARE THOSE OF THE PORTFOLIO MANAGER AS OF THE DATE
OF THIS REPORT. ACTUAL FUTURE RESULTS OR OCCURRENCES MAY DIFFER SIGNIFICANTLY
FROM THOSE ANTICIPATED IN ANY FORWARD-LOOKING STATEMENTS AND THE VIEWS EXPRESSED
HEREIN ARE SUBJECT TO CHANGE AT ANY TIME, DUE TO NUMEROUS MARKET AND OTHER
FACTORS. THE FUNDS DISCLAIM ANY OBLIGATION TO UPDATE PUBLICLY OR REVISE ANY
FORWARD-LOOKING STATEMENTS OR VIEWS EXPRESSED HEREIN.
4 Nuveen Investments
of securities, which decreased valuations. In the municipal market, this
negative impact was felt across all credit ratings, particularly lower-rated
credits, reducing the net asset values of municipal bond funds. In addition,
some of the dealer firms that make markets in bonds were unwilling to commit
capital to purchase or continue serving as dealers. The reduction in dealer
involvement was accompanied by significant selling pressure by investors,
predominantly related to lower-rated municipal bonds. This was especially true
of institutional investors.
Municipal bond prices were further negatively impacted by concerns that a supply
overhang (such as a large backlog of new issues that had been postponed) would
cause selling pressure to persist. Additionally, greater price volatility,
including wider credit spreads (i.e., lower quality bonds fell in price more
than higher quality bonds); greatly reduced liquidity (i.e., the ability to sell
bonds at prices close to their carrying values), particularly for lower quality
bonds; and a lack of price transparency (i.e., the ability to accurately
determine the price at which a bond would likely trade) all weighed down the
market for much of this period.
Market conditions began to show some general signs of improvement in
mid-December 2008, and municipal bonds were on an improving trend during the
first five months of 2009. Another positive impact was the reduced supply of
tax-exempt municipal debt, in part because of the introduction of "Build
America" bonds in the final few months of the period. This new class of taxable
municipal debt - created as part of the February 2009 economic stimulus package
- provides municipal issuers with a 35% annual federal income tax credit on
their interest payments. For many borrowers, these bonds provided an attractive
alternative to issuing traditional tax-exempt debt. The Build America bond
program got off to a quick start and effectively diverted high-grade tax-exempt
new-issue supply into the taxable market. Therefore, a combination of lower
issuance along with higher demand provided additional support to municipal bond
prices.
Over the twelve months ended May 31, 2009, municipal bond issuance nationwide
totaled $410.3 billion, a drop of 12% compared with the twelve-month period
ended May 31, 2008. While market conditions during this period impacted the
demand for municipal bonds, investors, especially from the retail sector,
continued to be attracted by the high tax-equivalent yields of the municipal
bond market relative to taxable bonds.
HOW WERE ECONOMIC AND MARKET CONDITIONS IN MARYLAND AND VIRGINIA DURING THIS
PERIOD?
In 2008, the Maryland economy grew at a rate of 1.3%, ahead of the 0.7% national
average, which ranked the state 22nd in the nation in terms of GDP growth by
state. Maryland's economy continued to be led by education/health services and
professional and business services. With the state's proximity to the District
of Columbia, government employment--both military and civilian--exerted a strong
influence on the Maryland economy, accounting for 18% of jobs in the state
versus the national average of 16%. As a result of the 2005 Base Realignment and
Closure (BRAC) Commission recommendations, approximately 45,000 military jobs
were expected to be transferred to Maryland beginning in 2009 and Fort George G.
Meade continued to rank as the state's largest employer. While Maryland's
old-line manufacturing sector continued to shed jobs, employment in this sector
was about half the national average. As of May 2009, unemployment in Maryland
was 7.2%, up from 4.1% in May 2008. As of May 2009, Moody's, Standard & Poor's
(S&P) and Fitch confirmed their ratings on Maryland general
Nuveen Investments 5
obligation debt at Aaa/AAA/AAA, respectively, with stable outlooks. During the
twelve months ended May 31, 2009, state municipal issuance totaled $6.1 billion,
reflecting a year-over-year decrease of 20%. According to Moody's, Maryland's
debt levels are higher than the national medians, with tax-supported debt per
capital ranking 16th in the nation in 2008 and debt as a percentage of personal
income ranking 21st.
Virginia's economy continued to be led by the government and professional and
business services sectors. As in Maryland, proximity to Washington D.C. and a
large military presence added some stability to Virginia's economy. This was
especially evident in the area of employment, as Virginia has twice as many
federal government jobs as the national average. The commonwealth's
manufacturing sector, beleaguered by the disappearance of textile, furniture and
apparel factories, remained in decline. Both manufacturing and mining industries
in the southern sections continued to be an especially weak spot. In 2008,
Virginia's economy grew at a rate of 1.3%, ranking the state 25th in the country
according to GDP growth per state. Unemployment in the commonwealth rose from
3.8% in May 2008 to 7.1% in May 2009. As of May 2009, Virginia's general
obligation debt was rated Aaa/AAA/AAA by Moody's, Standard & Poor's (S&P) and
Fitch, respectively, with stable outlooks. During the twelve months ended May
31, 2009, issuance in Virginia totaled $9.2 billion, representing a
year-over-year increase of 14%.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
During this period, as the municipal market remained under pressure from price
volatility, reduced liquidity and fundamental economic concerns, we continued to
focus on finding bonds that offered relative value while seeking to manage
liquidity and invest for the long-term.
Some of our investment activity during this period was driven by opportunities
created by recent market conditions. We sought to capitalize on this environment
by continuing to take a bottom-up approach to finding undervalued sectors and
individual credits with the potential to perform well over the long-term. Among
the credits we added, especially in the Maryland Funds, were housing and
transportation bonds. We also were able to purchase health care bonds and a
non-rated real estate-backed credit at extremely discounted prices as the result
of selling by some municipal market participants, particularly during the last
part of 2008.
To generate cash for new purchases, we monitored the types of credits and bond
structures that were attractive to the retail market and took advantage of
strong bids to sell bonds into relatively consistent retail demand. In the
Maryland Funds, we also sold some higher quality intermediate securities, while
most of the sales in the Virginia Funds involved shorter maturity bonds.
During this period, we continued to use inverse floating rate securities(1) in
all seven Funds. We also added new inverse floaters to all of these Funds during
this time. We employ inverse floaters for a variety of reasons, including
duration(2) management, income enhancement and as a form of leverage. As of May
31, 2009, all of the Funds continued to hold positions in inverse floaters.
(1) An inverse floating rate security, also known as inverse floaters, is a
financial instrument designed to pay long-term tax-exempt interest at a
rate that varies inversely with a short-term tax-exempt interest rate
index. For the Nuveen Funds, the index typically used is the Securities
Industry and Financial Markets (SIFM) Municipal Swap Index (previously
referred to as the Bond Market Association Index or BMA). Inverse
floaters, including those inverse floating rate securities in which the
Funds invested during the reporting period, are further defined within the
Notes to Financial Statements and Glossary of Terms Used in this Report
sections of this report.
(2) 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 Nuveen Investments
HOW DID THE FUNDS PERFORM?
Individual results for the Nuveen Maryland and Virginia Funds, as well as
relevant index and peer group information, are presented in the accompanying
table.
AVERAGE ANNUAL TOTAL RETURNS ON COMMON SHARE NET ASSET VALUE FOR PERIODS ENDED
5/31/09
1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
MARYLAND FUNDS
NMY 0.66% 4.15% 5.06%
NFM -2.52% 3.49% N/A
NZR -2.43% 3.49% N/A
NWI -0.05% 4.13% N/A
VIRGINIA FUNDS
NPV 0.88% 3.95% 5.03%
NGB -2.92% 3.70% N/A
NNB -1.78% 3.81% N/A
Lipper Other States Municipal Debt Funds Average(3) -0.60% 3.80% 4.66%
Barclays Capital Municipal Bond Index(4) 3.57% 4.41% 4.95%
Standard & Poor's (S&P) National Municipal Bond
Index(5) 2.02% 4.21% 4.81%
--------------------------------------------------------------------------------
For the twelve months ended May 31, 2009, the total returns on common share net
asset value (NAV) for NMY, NWI, and NPV exceeded the average return for the
Lipper Other States Municipal Debt Funds Average, while NFM, NZR, NGB and NNB
lagged the Lipper average. All of the Funds underperformed the returns of the
national Barclays Capital Municipal Bond Index and the S&P National Municipal
Bond Index for the period. The three benchmarks shown in the accompanying table
all include bonds from states in addition to Maryland and Virginia, which may
make direct comparisons between the Funds and these benchmarks less meaningful.
Key management factors that influenced the Funds' returns during this period
included duration and yield curve positioning, credit exposure and sector
allocations, and individual security selection. In addition, the use of leverage
was an important factor affecting the Funds' performances over this period. The
impact of leverage is discussed in more detail on page 9.
Over the course of this twelve-month period, the municipal bond yield curve
remained steep. Bonds in the Barclays Capital Municipal Bond Index with
maturities of two to twelve years, especially those maturing in four to eight
years, benefited the most from the interest rate environment. Because they were
less sensitive to interest rate changes, these bonds generally outperformed
credits with longer maturities, with bonds having the longest maturities (22
years and longer) posting a loss for the period. In general, all of the Maryland
Funds had heavier weightings in the intermediate part of the yield curve
Past performance is not predictive of future results. Current performance
may be higher or lower than the data shown. Returns do not reflect the
deduction of taxes that shareholders may have to pay on Fund distributions
or upon the sale of Fund shares.
For additional information, see the individual Performance Overview for
your Fund in this report.
(3) The Lipper Other States Municipal Debt Funds Average is calculated using
the returns of all closed-end funds in this category for each period as
follows: 1-year, 46 funds; 5-year, 46 funds; and 10-year, 18 funds. Fund
and Lipper returns assume reinvestment of dividends.
(4) The Barclays Capital (formerly Lehman Brothers) Municipal Bond Index is an
unleveraged, unmanaged national index comprising a broad range of
investment-grade municipal bonds. Results for the Barclays Capital index
do not reflect any expenses.
(5) The Standard & Poor's (S&P) National Municipal Bond Index is an
unleveraged, market value-weighted index designed to measure the
performance of the investment-grade U.S. municipal bond market.
Nuveen Investments 7
that performed well. However, the positive impact of those weightings was offset
by other aspects of our duration and yield curve positioning, and the net effect
was negative across all four of the Maryland Funds. The story was similar in the
Virginia Funds, except in NNB. This Fund had the smallest exposure to the longer
end of the curve among these Funds, which meant that the net effect of its
positioning was slightly positive for performance.
As mentioned earlier, all of these Funds used inverse floating rate securities.
During this period, the impact of inverse floaters on performance varied, with
inverse floaters based on higher credit quality bonds outperforming those that
used lower quality credits. All of these inverse floaters benefited the Funds by
helping to support their income streams.
Given the difficult economic environment and the disruptions in the financial
markets during this period, risk-averse investors put a priority on quality
investments and bonds with higher credit quality exposure typically performed
relatively well over the past twelve months. Bonds rated BBB or below and
non-rated bonds generally posted poorer returns. NFM, NZR, NWI, NGB and NNB can
invest up to 20% of their assets in below-investment-grade securities (bonds
rated BB or below) or in non-rated bonds judged to be in the same credit quality
category. The greater exposure of these five Funds to this segment of the market
detracted from the performances of these Funds relative to NMY and NPV, which
overall represented higher credit quality. As of May 31, 2009, NMY and NPV had
allocated approximately 16% and 12%, respectively, to bonds rated BBB or lower
and non-rated bonds, while the allocations of the five other Funds ranged from
approximately 19% in NNB to 24% in NFM.
Pre-refunded(6) bonds, which are backed by U.S. Treasury securities, were one of
the top performing segments of the municipal bond market, due primarily to their
shorter effective maturities, higher credit quality and perceived safety.
Additional sectors of the market that generally made positive contributions to
the Funds' returns included general obligation and other tax-supported bonds,
water and sewer, education and housing credits. In general, the performances of
these seven Funds were boosted by their overexposure to the housing sector. The
Maryland Funds also benefited from their overweightings in tax-supported and
higher education bonds, while the Virginia Funds were positively impacted by
their heavier exposure to water and sewer credits.
Holdings that generally detracted from the Funds' performances included
industrial development revenue (IDR) and health care bonds, which performed
poorly during this period. All of the Funds except NPV were negatively impacted
by their exposure to IDRs and their overexposure to health care, especially
holdings of bonds issued for long-term care facilities (also known as continuing
care retirement centers) in NGB and NNB. Zero coupon bonds also performed
poorly, as did lower-rated tobacco bonds.
Individual security selection was also a factor in the Funds' performances
during this period. In particular, the Funds were impacted to varying degrees by
the downgrades of municipal bonds issuers and the subsequent impact on the
returns and values of insured bonds.
(6) Pre-refundings, also known as advance 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.
8 Nuveen Investments
IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE
In this unusual and volatile investment environment, another factor impacting
the returns of these Funds relative to the comparative indexes was the Funds'
use of financial leverage. The Funds use leverage because their managers believe
that, over time, leveraging provides opportunities for additional income and
total returns for common shareholders. However, use of leverage also can expose
common shareholders to additional risk--especially when market conditions are
unfavorable. For example, as the prices of securities held by a Fund declines,
the negative impact of these valuation changes on common share net asset value
and common shareholder total return is magnified by the use of leverage. During
this period, leverage had a mixed impact on the total return performance of
these Funds. Generally, leverage was a negative factor in the fall of 2008 and a
positive factor in the spring of 2009.
RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES MARKETS
As noted in the last shareholder report, beginning in February 2008, more shares
were submitted for sale in the regularly scheduled auctions for the auction rate
preferred shares issued by these Funds than there were offers to buy. This meant
that these auctions "failed to clear," and that many, or all, of the Funds'
auction rate preferred shareholders who wanted to sell their shares in these
auctions were unable to do so. This decline in liquidity in auction rate
preferred shares did not lower the credit quality of these shares, and auction
rate preferred shareholders unable to sell their shares received distributions
at the "maximum rate" applicable to failed auctions, as calculated in accordance
with the pre-established terms of the auction rate preferred shares.
These developments generally have not affected the portfolio management or
investment policies of these Funds. However, one continuing implication for
common shareholders of these auction failures is that the Funds' cost of
leverage will likely be higher, at least temporarily, than it otherwise would
have been had the auctions continued to be successful. As a result, the Funds'
future common share earnings may be lower than they otherwise might have been.
As noted in the last shareholder report, the Funds' Board of Trustees authorized
a plan to use tender option bonds (TOBs), also known as floating rate
securities, to refinance a portion of the Funds' outstanding auction rate
preferred shares. The amount of TOBs that a Fund may use varies according to the
composition of each Fund's portfolio. Some funds have a greater ability to use
TOBs than others. As of May 31, 2009, the amount of auction rate preferred
securities redeemed and/or noticed for redemption, at par, by the following
Funds are as shown in the accompanying table.
Nuveen Investments 9
AUCTION RATE
PREFERRED SHARES % OF ORIGINAL
REDEEMED AND/OR AUCTION RATE
FUND NOTICED FOR REDEMPTION PREFERRED SHARES
--------------------------------------------------------------------------------
NMY $ 8,225,000 10.4%
NFM $ 6,175,000 19.3%
NZR $ 5,375,000 16.8%
NWI $ 4,000,000 10.3%
NGB $ 4,500,000 18.8%
NNB $ 825,000 2.0%
--------------------------------------------------------------------------------
Subsequent to the reporting period, the following Funds noticed for redemption
additional auction rate preferred securities, at par, as shown in the
accompanying table.
AUCTION RATE
PREFERRED SHARES
FUND NOTICED FOR REDEMPTION
--------------------------------------------------------------------------------
NPV $ 6,800,000
NNB $ 4,250,000
--------------------------------------------------------------------------------
While the Funds' Board of Trustees and management continue to work to resolve
this situation, the Funds cannot provide any assurance on when the remaining
outstanding auction rate preferred shares might be redeemed.
As of May 31, 2009, sixty-eight Nuveen closed-end municipal funds have redeemed
and/or noticed for redemption, at par, a portion of their outstanding auction
rate preferred shares. These redemptions bring the total amount of Nuveen's
municipal closed-end funds' auction rate preferred share redemptions to
approximately $2.1 billion of the original $11 billion outstanding.
For up-to-date information, please visit the Nuveen CEF Auction Rate Preferred
Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
10 Nuveen Investments
Common Share Dividend
and Share Price Information
During the twelve-month reporting period ended May 31, 2009, NMY and NPV each
had three monthly dividend increases, NWI and NGB each had two increases and
NFM, NZR and NNB each had one increase.
Due to normal portfolio activity, common shareholders of the following Funds
received capital gains and net ordinary income distributions at the end of
December 2008 as follows:
SHORT-TERM CAPITAL GAINS
LONG-TERM CAPITAL GAINS AND/OR ORDINARY INCOME
FUND (PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NMY $ 0.0216 $ 0.0052
NZR $ 0.0223 $ 0.0125
NWI $ 0.0169 --
NPV $ 0.0388 $ 0.0091
NGB $ 0.0133 --
NNB $ 0.0073 $ 0.0024
--------------------------------------------------------------------------------
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, 2009, all of the
Funds in this report had positive UNII balances for both tax and financial
statement purposes.
COMMON SHARE REPURCHASES AND SHARE PRICE INFORMATION
The Funds' Board of Trustees approved an open-market share repurchase program on
July 30, 2008, under which each Fund may repurchase an aggregate of up to 10% of
its outstanding common shares. Since the inception of this program, the Funds
have not repurchased any of their outstanding common shares.
Nuveen Investments 11
As of May 31, 2009, the Funds' common share prices were trading at premiums or
discounts to their common share NAVs as shown in the accompanying table:
5/31/09 TWELVE-MONTH AVERAGE
FUND +PREMIUM/-DISCOUNT +PREMIUM/-DISCOUNT
--------------------------------------------------------------------------------
NMY -6.63% -12.88%
NFM +0.31% -4.87%
NZR -3.50% -5.41%
NWI -5.56% -11.22%
NPV +4.36% -2.35%
NGB +7.36% +1.27%
NNB +4.64% +1.73%
--------------------------------------------------------------------------------
12 Nuveen Investments
NMY Performance OVERVIEW | Nuveen Maryland Premium Income Municipal Fund
as of May 31, 2009
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 46%
AA 27%
A 11%
BBB 14%
BB or Lower 1%
N/R 1%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
Jun $ 0.0495
Jul 0.0495
Aug 0.0495
Sep 0.0515
Oct 0.0515
Nov 0.0515
Dec 0.0515
Jan 0.0515
Feb 0.0515
Mar 0.056
Apr 0.056
May 0.058
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 13.06
12.94
12.79
12.48
12.52
12.67
12.64
12.208
12.16
12.19
12.16
12.19
12.1499
12.345
12.38
12.35
11.606
11.096
10.55
7.98
9.3
10.25
10.89
10.73
10.24
9.25
9.43
9.3
8.55
9.1
9.49
10
11.04
11.541
10.9
11.36
11.55
11.7
10.68
11.14
10.976
11.3
11.5
11.5
11.85
12.1
12.2
12.25
12.55
12.48
12.98
12.48
5/31/09 12.68
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 12.68
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 13.58
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -6.63%
--------------------------------------------------------------------------------
Market Yield 5.49%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 8.03%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 144,504
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.19
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.72
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 2.57% 0.66%
--------------------------------------------------------------------------------
5-Year 2.63% 4.15%
--------------------------------------------------------------------------------
10-Year 3.68% 5.06%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/General 21.0%
--------------------------------------------------------------------------------
Health Care 15.2%
--------------------------------------------------------------------------------
U.S. Guaranteed 13.9%
--------------------------------------------------------------------------------
Education and Civic Organizations 11.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 10.2%
--------------------------------------------------------------------------------
Housing/Multifamily 8.3%
--------------------------------------------------------------------------------
Housing/Single Family 6.5%
--------------------------------------------------------------------------------
Other 13.1%
--------------------------------------------------------------------------------
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(2) The Fund paid shareholders capital gains and net ordinary income
distributions in December 2008 of $0.0268 per share.
Nuveen Investments 13
NFM Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund
as of May 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 13.05
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 13.01
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 0.31%
--------------------------------------------------------------------------------
Market Yield 5.52%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 8.07%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 54,507
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 17.83
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.73
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/23/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year -2.48% -2.52%
--------------------------------------------------------------------------------
5-Year 1.82% 3.49%
--------------------------------------------------------------------------------
Since
Inception 3.80% 4.57%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 22.3%
--------------------------------------------------------------------------------
U.S. Guaranteed 14.4%
--------------------------------------------------------------------------------
Tax Obligation/General 13.2%
--------------------------------------------------------------------------------
Housing/Multifamily 11.8%
--------------------------------------------------------------------------------
Tax Obligation/Limited 10.9%
--------------------------------------------------------------------------------
Education and Civic Organizations 8.0%
--------------------------------------------------------------------------------
Housing/Single Family 6.7%
--------------------------------------------------------------------------------
Other 12.7%
--------------------------------------------------------------------------------
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 41%
AA 17%
A 18%
BBB 17%
BB or Lower 1%
N/R 6%
2008-2009 Monthly Tax-Free Dividends Per Common Share
[BAR CHART]
Jun $ 0.0585
Jul 0.0585
Aug 0.0585
Sep 0.0585
Oct 0.0585
Nov 0.0585
Dec 0.0585
Jan 0.0585
Feb 0.0585
Mar 0.0585
Apr 0.0585
May 0.06
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 14.1
14.05
14
14.142
13.83
14.53
14.5
14.1
14
13.92
13.72
13.58
13.2999
13.23
13.345
13.12
12.58
11.5
11.04
8
10.7
10.7
11.1699
11.047
10.2
9.55
9.95
10
8.73
9.02
9.08
9.6
10.99
11.29
11.6
12.3
11.9
12.27
12.53
12.26
10.7101
11.3
11.64
12.17
11.95
12.12
12.335
12.044
12.5912
12.25
12.42
12.66
5/31/09 13.05
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
14 Nuveen Investments
NZR Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund 2
as of May 31, 2009
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 40%
AA 26%
A 12%
BBB 16%
BB or Lower 2%
N/R 4%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
Jun $ 0.0585
Jul 0.0585
Aug 0.0585
Sep 0.0585
Oct 0.0585
Nov 0.0585
Dec 0.0585
Jan 0.0585
Feb 0.0585
Mar 0.0585
Apr 0.0585
May 0.06
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 14.25
14.3
13.84
13.72
13.38
13.73
13.98
13.926
14.05
13.98
13.75
13.9
13.48
13.57
13.3799
13.1
12.6
11.5999
11.15
8.04
9.45
10.6034
12.15
11.38
11.34
10.07
9.87
9.63
8.4699
10.9056
9.75
10.24
11.04
11.75
11.04
12.06
13
12.3
11.5984
11.02
11.0801
11.86
11.926
12.46
11.95
12.68
12.3
12.074
12.46
12.49
12.37
12.6587
5/31/09 $ 12.6935
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 12.69
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 13.15
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -3.50%
--------------------------------------------------------------------------------
Market Yield 5.67%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 8.29%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 55,185
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.57
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.01
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year -5.21% -2.43%
--------------------------------------------------------------------------------
5-Year 3.27% 3.49%
--------------------------------------------------------------------------------
Since
Inception 3.39% 4.50%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 17.9%
--------------------------------------------------------------------------------
U.S. Guaranteed 16.0%
--------------------------------------------------------------------------------
Tax Obligation/General 16.0%
--------------------------------------------------------------------------------
Tax Obligation/Limited 11.9%
--------------------------------------------------------------------------------
Education and Civic Organizations 10.6%
--------------------------------------------------------------------------------
Housing/Single Family 7.0%
--------------------------------------------------------------------------------
Housing/Multifamily 6.3%
--------------------------------------------------------------------------------
Other 14.3%
--------------------------------------------------------------------------------
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(2) The Fund paid shareholders capital gains and net ordinary income
distributions in December 2008 of $0.0348 per share.
Nuveen Investments 15
NWI Performance OVERVIEW | Nuveen Maryland Dividend Advantage Municipal Fund 3
as of May 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 12.56
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 13.30
--------------------------------------------------------------------------------
Premium/(Discount) to NAV -5.56%
--------------------------------------------------------------------------------
Market Yield 5.54%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 8.10%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 71,332
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.29
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.38
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 2.35% -0.05%
--------------------------------------------------------------------------------
5-Year 4.19% 4.13%
--------------------------------------------------------------------------------
Since
Inception 2.56% 3.93%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited 21.2%
--------------------------------------------------------------------------------
Health Care 17.6%
--------------------------------------------------------------------------------
U.S. Guaranteed 16.2%
--------------------------------------------------------------------------------
Tax Obligation/General 12.1%
--------------------------------------------------------------------------------
Education and Civic Organizations 8.7%
--------------------------------------------------------------------------------
Housing/Single Family 5.3%
--------------------------------------------------------------------------------
Housing/Multifamily 5.1%
--------------------------------------------------------------------------------
Other 13.8%
--------------------------------------------------------------------------------
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 38%
AA 28%
A 12%
BBB 16%
BB or Lower 2%
N/R 4%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
Jun $ 0.0525
Jul 0.0525
Aug 0.0525
Sep 0.0535
Oct 0.0535
Nov 0.0535
Dec 0.0535
Jan 0.0535
Feb 0.0535
Mar 0.0535
Apr 0.0535
May 0.058
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 13.16
13.06
12.91
12.5499
12.53
12.76
12.61
12.24
12.35
12.4
12.19
12.13
12.09
12.28
12.45
12.27
11.65
10.65
10.6057
8.15
9.13
10.2
10.4999
10.3501
10.51
9.51
10.25
9.0899
8.58
9.045
9.2325
9.88
10.98
11.15
10.75
11.4
11.4
11.6
10.82
11.3261
11.08
11.3505
11.19
11.25
11.52
12.2329
11.95
11.756
12.26
11.92
12.22
12.42
5/31/09 12.56
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.6%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(2) The Fund paid shareholders a capital gains distribution in December 2008
of $0.0169 per share.
16 Nuveen Investments
NPV Performance OVERVIEW | Nuveen Virginia Premium Income Municipal Fund
as of May 31, 2009
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 34%
AA 43%
A 11%
BBB 7%
BB or Lower 1%
N/R 4%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
Jun $ 0.053
Jul 0.053
Aug 0.053
Sep 0.054
Oct 0.054
Nov 0.054
Dec 0.054
Jan 0.054
Feb 0.054
Mar 0.0555
Apr 0.0555
May 0.0605
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 14.08
14.01
13.48
13.24
12.99
13.24
13.02
12.99
13.4
13.81
13.75
13.51
13.54
13.43
13.43
13.47
13.08
12.92
12.44
8.9
10.81
12.11
11.96
12.08
11.99
11.1
11.49
11.62
10.78
11
11.15
11.58
13.14
12.64
12.51
13.15
13.814
13.75
13.09
13.4
12.83
13.47
13.25
13.82
13.39
13.6
13.57
13.7589
14.08
14.47
14.3
14.2111
5/31/09 14.3599
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $ 14.36
--------------------------------------------------------------------------------
Common Share
Net Asset Value $ 13.76
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 4.36%
--------------------------------------------------------------------------------
Market Yield 5.06%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.45%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $ 123,119
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 15.23
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.96
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 8.05% 0.88%
--------------------------------------------------------------------------------
5-Year 4.74% 3.95%
--------------------------------------------------------------------------------
10-Year 4.41% 5.03%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited 18.8%
--------------------------------------------------------------------------------
Health Care 18.8%
--------------------------------------------------------------------------------
Tax Obligation/General 13.2%
--------------------------------------------------------------------------------
U.S. Guaranteed 13.1%
--------------------------------------------------------------------------------
Transportation 7.1%
--------------------------------------------------------------------------------
Water and Sewer 5.8%
--------------------------------------------------------------------------------
Housing/Single Family 5.5%
--------------------------------------------------------------------------------
Utilities 4.9%
--------------------------------------------------------------------------------
Other 12.8%
--------------------------------------------------------------------------------
(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 32.1%. 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 2008 of $0.0479 per share.
Nuveen Investments 17
NGB Performance OVERVIEW | Nuveen Virginia Dividend Advantage Municipal Fund as
of May 31, 2009
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $14.00
--------------------------------------------------------------------------------
Common Share
Net Asset Value $13.04
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 7.36%
--------------------------------------------------------------------------------
Market Yield 5.31%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.82%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $40,881
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.49
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 10.59
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year -0.01% -2.92%
--------------------------------------------------------------------------------
5-Year 3.88% 3.70%
--------------------------------------------------------------------------------
Since
Inception 4.60% 4.70%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed 18.9%
--------------------------------------------------------------------------------
Transportation 17.7%
--------------------------------------------------------------------------------
Tax Obligation/Limited 13.6%
--------------------------------------------------------------------------------
Health Care 13.2%
--------------------------------------------------------------------------------
Tax Obligation/General 9.2%
--------------------------------------------------------------------------------
Long-Term Care 7.1%
--------------------------------------------------------------------------------
Housing/Single Family 6.8%
--------------------------------------------------------------------------------
Other 13.5%
--------------------------------------------------------------------------------
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 39%
AA 28%
A 11%
BBB 13%
N/R 9%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
Jun $ 0.0565
Jul 0.0565
Aug 0.0565
Sep 0.0575
Oct 0.0575
Nov 0.0575
Dec 0.0575
Jan 0.0575
Feb 0.0575
Mar 0.0575
Apr 0.0575
May 0.062
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 15
14.31
14.14
13.79
13.3675
13.64
13.6
13.14
13.68
13.93
13.74
14.26
14.13
13.468
13.9
13.45
13.17
12.26
12.48
9.5001
11.4
10.7
13
12.25
11.12
9.8
11.81
10.76
9.1
10.219
10.69
10.56
12.19
11.74
11.78
12.45
12.9
13.55
12.36
12.5899
12.6
13.21
14.03
12.94
13.4
13.51
13.09
13.4753
13.67
14.28
13.83
13.8001
5/31/09 14
(1) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32.1%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(2) The Fund paid shareholders a capital gains distribution in December 2008
of $0.0133 per share.
18 Nuveen Investments
NNB Performance OVERVIEW | Nuveen Virginia Dividend Advantage Municipal Fund 2
as of May 31, 2009
Credit Quality (as a % of total investments)
[PIE CHART]
AAA/U.S.
Guaranteed 35%
AA 30%
A 16%
BBB 11%
N/R 8%
2008-2009 Monthly Tax-Free Dividends Per Common Share(2)
[BAR CHART]
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 0.062
Common Share Price Performance -- Weekly Closing Price
[LINE CHART]
6/01/08 $ 14.5
14.32
14.15
13.57
13.84
14.31
14.35
13.95
14.56
14.55
14.47
14.75
14.256
14.12
14.1
14.17
14.25
13.8
13.36
10.99
11.5
12.445
13.42
13.37
12.1
11.32
12.52
10.7501
9.4
10.2
10.16
10.984
12.97
12.25
12.598
12.82
13
13.6
13
12.98
12.9688
13.79
13.855
13.8
13.79
13.66
13.99
13.99
13.938
13.98
13.964
14.28
5/31/09 13.98
FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price $13.98
--------------------------------------------------------------------------------
Common Share
Net Asset Value $13.36
--------------------------------------------------------------------------------
Premium/(Discount) to NAV 4.64%
--------------------------------------------------------------------------------
Market Yield 5.32%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(1) 7.84%
--------------------------------------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $76,726
--------------------------------------------------------------------------------
Average Effective Maturity
on Securities (Years) 16.51
--------------------------------------------------------------------------------
Leverage-Adjusted Duration 9.67
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
--------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------------------------------------
1-Year 0.96% -1.78%
--------------------------------------------------------------------------------
5-Year 4.72% 3.81%
--------------------------------------------------------------------------------
Since
Inception 4.68% 4.90%
--------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Health Care 18.4%
--------------------------------------------------------------------------------
Tax Obligation/General 15.4%
--------------------------------------------------------------------------------
Tax Obligation/Limited 14.8%
--------------------------------------------------------------------------------
Water and Sewer 12.0%
--------------------------------------------------------------------------------
U.S. Guaranteed 11.6%
--------------------------------------------------------------------------------
Housing/Single Family 9.7%
--------------------------------------------------------------------------------
Long-Term Care 6.6%
--------------------------------------------------------------------------------
Other 11.5%
--------------------------------------------------------------------------------
(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 32.1%. 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 2008 of $0.0097 per share.
Nuveen Investments 19
NMY | Shareholder MEETING REPORT
NFM |
The annual meeting of shareholders was held in the offices of Nuveen Investments
on November 18, 2008; at this meeting the shareholders were asked to vote on the
election of Board Members, the elimination of Fundamental Investment Policies
and the approval of new Fundamental Investment Policies. The meeting was
subsequently adjourned to January 13, 2009, and additionally adjourned to March
17, 2009, for NFM, NZR, NWI, NPV and NGB.
NMY NFM
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S FUNDAMENTAL
POLICY RELATING TO INVESTMENTS IN MUNICIPAL
SECURITIES AND BELOW INVESTMENT GRADE SECURITIES.
For 4,804,861 1,701 1,987,081 223
Against 309,925 257 117,173 72
Abstain 162,645 6 67,165 3
Broker Non-Votes 1,272,135 871 646,892 905
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 2,818,311 1,203
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES FOR THE FUND.
For 4,808,849 1,702 2,004,464 224
Against 308,368 256 106,636 73
Abstain 160,214 6 60,319 1
Broker Non-Votes 1,272,135 871 646,892 905
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 2,818,311 1,203
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY
PROHIBITING INVESTMENT IN OTHER INVESTMENT COMPANIES.
For 4,735,689 1,699 -- --
Against 364,961 261 -- --
Abstain 176,781 4 -- --
Broker Non-Votes 1,272,135 871 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY
RELATING TO DERIVATIVES AND SHORT SALES.
For 4,754,339 1,703 -- --
Against 346,253 255 -- --
Abstain 176,839 6 -- --
Broker Non-Votes 1,272,135 871 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL POLICY
RELATING TO COMMODITIES.
For 4,752,454 1,700 -- --
Against 341,059 256 -- --
Abstain 183,918 8 -- --
Broker Non-Votes 1,272,135 871 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 -- --
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For 4,760,170 1,697 -- --
Against 337,548 259 -- --
Abstain 179,713 8 -- --
Broker Non-Votes 1,272,135 871 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 2,835 -- --
==========================================================================================================================
20 Nuveen Investments
NMY NFM
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS
FOLLOWS:
John P. Amboian
For 6,260,872 -- 2,711,978 --
Withhold 288,694 -- 102,035 --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 -- 2,814,013 --
==========================================================================================================================
William C. Hunter
For -- 2,617 -- 1,106
Withhold -- 218 -- 94
--------------------------------------------------------------------------------------------------------------------------
Total -- 2,835 -- 1,200
==========================================================================================================================
David J. Kundert
For 6,260,543 -- 2,707,809 --
Withhold 289,023 -- 106,204 --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 -- 2,814,013 --
==========================================================================================================================
William J. Schneider
For -- 2,617 -- 1,106
Withhold -- 218 -- 94
--------------------------------------------------------------------------------------------------------------------------
Total -- 2,835 -- 1,200
==========================================================================================================================
Terence J. Toth
For 6,260,398 -- 2,711,978 --
Withhold 289,168 -- 102,035 --
--------------------------------------------------------------------------------------------------------------------------
Total 6,549,566 -- 2,814,013 --
==========================================================================================================================
Nuveen Investments 21
NZR | Shareholder MEETING REPORT (continued)
NWI |
NZR NWI
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN
MUNICIPAL SECURITIES AND BELOW INVESTMENT GRADE
SECURITIES.
For 2,001,599 267 2,599,994 384
Against 196,787 80 151,171 40
Abstain 95,921 5 89,909 7
Broker Non-Votes 643,798 789 827,973 1,035
--------------------------------------------------------------------------------------------------------------------------
Total 2,938,105 1,141 3,669,047 1,466
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES FOR THE FUND.
For 2,023,862 266 2,628,677 384
Against 188,432 80 128,152 40
Abstain 82,013 6 84,245 7
Broker Non-Votes 643,798 789 827,973 1,035
--------------------------------------------------------------------------------------------------------------------------
Total 2,938,105 1,141 3,669,047 1,466
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY PROHIBITING INVESTMENT IN OTHER INVESTMENT
COMPANIES.
For -- -- -- --
Against -- -- -- --
Abstain -- -- -- --
Broker Non-Votes -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For -- -- -- --
Against -- -- -- --
Abstain -- -- -- --
Broker Non-Votes -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- -- -- --
Against -- -- -- --
Abstain -- -- -- --
Broker Non-Votes -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For -- -- -- --
Against -- -- -- --
Abstain -- -- -- --
Broker Non-Votes -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
==========================================================================================================================
22 Nuveen Investments
NZR NWI
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS
FOLLOWS:
John P. Amboian
For 2,780,494 -- 3,531,114 --
Withhold 157,611 -- 134,878 --
--------------------------------------------------------------------------------------------------------------------------
Total 2,938,105 -- 3,665,992 --
==========================================================================================================================
William C. Hunter
For -- 1,122 -- 1,396
Withhold -- 19 -- 65
--------------------------------------------------------------------------------------------------------------------------
Total -- 1,141 -- 1,461
==========================================================================================================================
David J. Kundert
For 2,776,939 -- 3,542,322 --
Withhold 161,166 -- 123,670 --
--------------------------------------------------------------------------------------------------------------------------
Total 2,938,105 -- 3,665,992 --
==========================================================================================================================
William J. Schneider
For -- 1,122 -- 1,396
Withhold -- 19 -- 65
--------------------------------------------------------------------------------------------------------------------------
Total -- 1,141 -- 1,461
==========================================================================================================================
Terence J. Toth
For 2,783,094 -- 3,543,322 --
Withhold 155,011 -- 122,670 --
--------------------------------------------------------------------------------------------------------------------------
Total 2,938,105 -- 3,665,992 --
==========================================================================================================================
Nuveen Investments 23
NPV | Shareholder MEETING REPORT (continued)
NGB |
NPV NGB
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN
MUNICIPAL SECURITIES AND BELOW INVESTMENT GRADE
SECURITIES.
For 4,099,884 891 1,521,941 643
Against 257,767 161 77,126 148
Abstain 149,776 53 55,989 12
Broker Non-Votes 1,258,548 714 314,654 --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 1,969,710 803
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES FOR THE FUND.
For 4,124,117 907 1,540,866 643
Against 243,551 145 59,265 135
Abstain 139,759 53 54,925 25
Broker Non-Votes 1,258,548 714 314,654 --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 1,969,710 803
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY PROHIBITING INVESTMENT IN OTHER INVESTMENT
COMPANIES.
For 4,094,626 869 -- --
Against 275,348 209 -- --
Abstain 137,453 27 -- --
Broker Non-Votes 1,258,548 714 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For 4,084,945 917 -- --
Against 258,662 166 -- --
Abstain 163,820 22 -- --
Broker Non-Votes 1,258,548 714 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 -- --
==========================================================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For 4,093,553 925 -- --
Against 267,354 159 -- --
Abstain 146,520 21 -- --
Broker Non-Votes 1,258,548 714 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 -- --
==========================================================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For 4,084,124 935 -- --
Against 271,553 144 -- --
Abstain 151,750 26 -- --
Broker Non-Votes 1,258,548 714 -- --
--------------------------------------------------------------------------------------------------------------------------
Total 5,765,975 1,819 -- --
==========================================================================================================================
24 Nuveen Investments
NPV NGB
--------------------------------------------------------------------------------------------------------------------------
Common and Common and
Preferred Preferred Preferred Preferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
--------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS
FOLLOWS:
John P. Amboian
For 5,579,902 -- 1,917,843 --
Withhold 171,078 -- 51,802 --
--------------------------------------------------------------------------------------------------------------------------
Total 5,750,980 -- 1,969,645 --
==========================================================================================================================
William C. Hunter
For -- 1,586 -- 658
Withhold -- 141 -- 80
--------------------------------------------------------------------------------------------------------------------------
Total -- 1,727 -- 738
==========================================================================================================================
David J. Kundert
For 5,579,906 -- 1,917,184 --
Withhold 171,074 -- 52,461 --
--------------------------------------------------------------------------------------------------------------------------
Total 5,750,980 -- 1,969,645 --
==========================================================================================================================
William J. Schneider
For -- 1,586 -- 658
Withhold -- 141 -- 80
--------------------------------------------------------------------------------------------------------------------------
Total -- 1,727 -- 738
==========================================================================================================================
Terence J. Toth
For 5,581,465 -- 1,908,196 --
Withhold 169,515 -- 61,449 --
--------------------------------------------------------------------------------------------------------------------------
Total 5,750,980 -- 1,969,645 --
==========================================================================================================================
Nuveen Investments 25
NNB | Shareholder MEETING REPORT (continued)
NNB
--------------------------------------------------------------------------------------
Common and
Preferred Preferred
shares voting shares voting
together together
as a class as a class
--------------------------------------------------------------------------------------
TO APPROVE THE ELIMINATION OF THE FUND'S
FUNDAMENTAL POLICY RELATING TO INVESTMENTS IN
MUNICIPAL SECURITIES AND BELOW INVESTMENT GRADE
SECURITIES.
For 2,537,942 866
Against 110,227 303
Abstain 107,939 181
Broker Non-Votes 918,828 --
--------------------------------------------------------------------------------------
Total 3,674,936 1,350
======================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
INVESTMENTS IN MUNICIPAL SECURITIES FOR THE FUND.
For 2,560,228 856
Against 87,377 313
Abstain 108,503 181
Broker Non-Votes 918,828 --
--------------------------------------------------------------------------------------
Total 3,674,936 1,350
======================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY PROHIBITING INVESTMENT IN OTHER INVESTMENT
COMPANIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
--------------------------------------------------------------------------------------
Total -- --
======================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO DERIVATIVES AND SHORT SALES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
--------------------------------------------------------------------------------------
Total -- --
======================================================================================
TO APPROVE THE ELIMINATION OF THE FUNDAMENTAL
POLICY RELATING TO COMMODITIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
--------------------------------------------------------------------------------------
Total -- --
======================================================================================
TO APPROVE THE NEW FUNDAMENTAL POLICY RELATING TO
COMMODITIES.
For -- --
Against -- --
Abstain -- --
Broker Non-Votes -- --
--------------------------------------------------------------------------------------
Total -- --
======================================================================================
26 Nuveen Investments
NNB
--------------------------------------------------------------------------------------
Common and
Preferred Preferred
shares voting shares voting
together together
as a class as a class
--------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS
FOLLOWS:
John P. Amboian
For 3,525,767 --
Withhold 149,169 --
--------------------------------------------------------------------------------------
Total 3,674,936 --
======================================================================================
William C. Hunter
For -- 1,137
Withhold -- 213
--------------------------------------------------------------------------------------
Total -- 1,350
======================================================================================
David J. Kundert
For 3,526,865 --
Withhold 148,071 --
--------------------------------------------------------------------------------------
Total 3,674,936 --
======================================================================================
William J. Schneider
For -- 1,137
Withhold -- 213
--------------------------------------------------------------------------------------
Total -- 1,350
======================================================================================
Terence J. Toth
For 3,524,767 --
Withhold 150,169 --
--------------------------------------------------------------------------------------
Total 3,674,936 --
======================================================================================
Nuveen Investments 27
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, 2009, 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 five
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit 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, 2009, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2,
Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium
Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and
Nuveen Virginia Dividend Advantage Municipal Fund 2 at May 31, 2009, the results
of their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended in conformity with US generally
accepted accounting principles.
Ernst & Young LLP
/s/ Chicago, Illinois
Chicago, Illinois
July 23, 2009
28 Nuveen Investments
NMY | Nuveen Maryland Premium Income Municipal Fund
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.0% (1.4% OF TOTAL INVESTMENTS)
$ 4,825 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 Baa3 $ 2,964,335
Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY Insured
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.6% (1.1% OF TOTAL INVESTMENTS)
2,705 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,253,914
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 17.4% (11.8% OF TOTAL
INVESTMENTS)
1,250 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 952,825
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
1,000 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 943,050
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
Maryland Economic Development Corporation, Utility Infrastructure
Revenue Bonds, University of Maryland - College Park, Series 2001:
980 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 BBB 1,037,075
980 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 BBB 1,037,075
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 753,855
500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 488,755
1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,173,638
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
1,430 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,464,291
Revenue Bonds, Johns Hopkins Hospital, Series 2004, Inverse
1003, 14.058%, 7/01/33 (IF)
1,825 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 1,499,256
Revenue Bonds, Maryland Institute College of Art, Series 2006,
5.000%, 6/01/30
1,365 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 1,443,460
Bonds, Montgomery College Arts Center Project, Series 2005A,
5.000%, 5/01/19
9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AA- 11,091,263
Revenue Refunding Bonds, Academic Fees and Auxiliary
Facilities, Series 1993, 6.100%, 7/01/20 - MBIA Insured
1,685 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 1,850,113
Bonds, Series 2006A, 5.000%, 10/01/22
Westminster, Maryland, Educational Facilities Revenue Bonds,
McDaniel College, Series 2006:
910 5.000%, 11/01/31 11/16 at 100.00 BBB+ 796,550
850 4.500%, 11/01/36 11/16 at 100.00 BBB+ 646,927
------------------------------------------------------------------------------------------------------------------------------------
24,220 Total Education and Civic Organizations 25,178,133
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 22.3% (15.2% OF TOTAL INVESTMENTS)
1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,440,957
Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%,
7/01/36
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,249,805
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
NUVEEN INVESTMENTS 29
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 $ 347,952
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 BBB- 1,207,225
Revenue Bonds, Civista Medical Center, Series 2005, 5.000%,
7/01/37 - RAAI Insured
1,740 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa3 1,274,080
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,094,128
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+ 1,335,075
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34 - MBIA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.00 AA- 989,430
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+ 2,021,860
Revenue Bonds, Kaiser Permanente System, Series 1998A, 5.375%,
7/01/15
3,800 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 3,206,516
Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%,
7/01/33
1,175 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 1,201,614
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A- 1,775,638
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
3,310 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AAA 3,321,022
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46 -
BHAC Insured
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
1,010 5.000%, 7/01/37 7/17 at 100.00 BBB 822,170
670 5.500%, 7/01/42 7/17 at 100.00 BBB 580,106
1,700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 1,634,108
Revenue Bonds, Peninsula Regional Medical Center, Series 2006,
5.000%, 7/01/36
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,141,873
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 A 960,020
Revenue Bonds, University of Maryland Medical System, Series
2004B, 5.000%, 7/01/24 - AMBAC Insured
2,395 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 2,068,969
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
Prince George's County, Maryland, Revenue Bonds, Dimensions
Health Corporation, Series 1994:
420 5.375%, 7/01/14 7/09 at 100.00 B3 366,437
295 5.300%, 7/01/24 7/09 at 100.00 B3 186,062
------------------------------------------------------------------------------------------------------------------------------------
35,255 Total Health Care 32,225,047
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.2% (8.3% OF TOTAL INVESTMENTS)
1,450 Maryland Community Development Administration, FNMA Multifamily 2/11 at 101.00 Aaa 1,487,773
Development Revenue Bonds, Edgewater Village Apartments,
Series 2000B, 5.800%, 8/01/20 (Alternative Minimum Tax)
2,500 Maryland Community Development Administration, Housing Revenue 7/09 at 101.00 Aa2 2,396,475
Bonds, Series 1999A, 5.350%, 7/01/41 (Alternative Minimum Tax)
880 Maryland Community Development Administration, Housing Revenue 1/10 at 100.00 Aa2 883,520
Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative Minimum Tax)
30 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 1,000 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B2 $ 703,100
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 935,380
Revenue Bonds, Collegiate Housing Foundation - Salisbury
State University, Series 1999A, 6.000%, 6/01/19
1,145 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 Baa2 903,909
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
3,830 Montgomery County Housing Opportunities Commission, Maryland, 7/09 at 100.50 Aaa 3,841,069
FNMA/FHA-Insured Multifamily Housing Development Bonds,
Series 1998A, 5.200%, 7/01/30
360 Montgomery County Housing Opportunities Commission, Maryland, 7/09 at 100.00 Aa2 360,749
GNMA/FHA-Insured Multifamily Housing Revenue Bonds, Series
1995A, 5.900%, 7/01/15
2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 2,021,440
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 549,455
Collateralized Mortgage Revenue Bonds, University Landing
Apartments, Series 1999, 6.100%, 3/20/41 (Alternative Minimum
Tax)
Prince George's County Housing Authority, Maryland, GNMA
Collateralized Mortgage Revenue Refunding Bonds, Overlook
Apartments, Series 1995A:
1,890 5.700%, 12/20/15 6/09 at 100.00 AAA 1,894,007
1,670 5.750%, 12/20/19 6/09 at 100.00 AAA 1,672,488
------------------------------------------------------------------------------------------------------------------------------------
18,265 Total Housing/Multifamily 17,649,365
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.4% (6.5% OF TOTAL INVESTMENTS)
2,510 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 2,588,237
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 566,166
1,195 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 1,137,783
4,100 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 AA2 3,895,328
1,630 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 AA2 1,461,654
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
650 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 628,056
1,200 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 1,065,492
2,330 Maryland Community Development Administration, Department of 9/14 at 100.00 AA2 2,093,318
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
5 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 5,078
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage Revenue
Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative Minimum Tax)
315 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 286,275
Securities Program Home Mortgage Revenue Bonds, Series 2003A,
4.875%, 6/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
14,535 Total Housing/Single Family 13,727,387
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3% (0.9% OF TOTAL INVESTMENTS)
2,010 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 1,851,230
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.6% (1.7% OF TOTAL INVESTMENTS)
2,455 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 1,977,355
Series 2007A, 5.000%, 1/01/37
1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA Obligated 7/09 at 101.00 BBB- 903,190
Group, Series 1999A, 5.625%, 1/01/25 - RAAI Insured
1,065 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 811,147
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
4,520 Total Long-Term Care 3,691,692
------------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 31
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 31.0% (21.0% OF TOTAL INVESTMENTS)
$ 2,030 Anne Arundel County, Maryland, General Obligation Bonds, Series 4/14 at 100.00 AAA $ 2,271,672
2004, 5.000%, 4/01/16
1,000 Anne Arundel County, Maryland, General Obligation Bonds, Series 3/16 at 100.00 AAA 1,105,270
2006, 5.000%, 3/01/21
685 Anne Arundel County, Maryland, Water and Sewer Revenue Bonds, 3/16 at 100.00 AAA 787,551
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 2,587,750
3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,615,570
1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AA- 1,611,056
Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC
Insured
700 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 807,695
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 2,487,273
820 5.000%, 3/01/16 No Opt. Call AA 952,200
Howard County, Maryland, Consolidated Public Improvement Bonds,
Series 2004B:
1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,793,480
1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,284,430
1,725 Howard County, Maryland, Metropolitan District Refunding Bonds, 2/12 at 100.00 AAA 1,834,158
Series 2002A, 5.250%, 8/15/18
1,190 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,303,883
George's County, General Obligation Bonds, Park Acquisition
and Development, Series 2004EE-2, 5.000%, 1/15/17
3,000 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,479,880
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 1,912,120
2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,127,820
2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AAA 2,081,400
Consolidated Public Improvement Bonds, Series 2002, 4.100%,
9/15/19
5,770 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AAA 6,265,355
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 2,294,040
1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,336,505
1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,327,773
1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,320,474
------------------------------------------------------------------------------------------------------------------------------------
40,905 Total Tax Obligation/General 44,587,355
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.1% (10.2% OF TOTAL INVESTMENTS)
300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R 185,853
Point Project, Series 2005, 5.500%, 9/01/34
340 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- 291,706
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 - RAAI Insured
900 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 591,795
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+ 875,271
925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 930,208
4,250 Maryland Department of Transportation, Consolidated No Opt. Call AAA 5,034,635
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
32 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,875 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AA+ $ 2,016,806
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
1,700 Maryland Stadium Authority, Lease Revenue Bonds, Montgomery 6/13 at 100.00 AA+ 1,775,140
County Conference Center Facilities, Series 2003, 5.000%,
6/15/24
1,000 Montgomery County, Maryland, Lease Revenue Bonds, Metrorail 6/12 at 100.00 AA 1,058,280
Garage, Series 2002, 5.000%, 6/01/21
675 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 A3 576,902
Germantown Development District, Senior Series 2002A, 5.500%,
7/01/27 - RAAI Insured
635 New Baltimore City Board of School Commissioners, Maryland, 11/10 at 100.00 AA+ 667,309
School System Revenue Bonds, Series 2000, 5.125%, 11/01/15
Puerto Rico Highway and Transportation Authority, Highway
Revenue Bonds, Series 2007N:
1,000 5.500%, 7/01/29 - AMBAC Insured No Opt. Call BBB 954,360
2,500 5.250%, 7/01/31 - AMBAC Insured No Opt. Call A 2,294,900
1,000 5.250%, 7/01/33 - MBIA Insured No Opt. Call AA- 914,530
2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 5.250%, 8/12 at 100.00 AAA 2,118,816
8/01/21 - FSA Insured
1,500 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AA- 1,503,945
Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,575 Total Tax Obligation/Limited 21,790,456
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.6% (3.1% OF TOTAL INVESTMENTS)
1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking System No Opt. Call AA- 1,165,131
Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured
4,335 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA 4,525,263
Facilities Projects, Series 2007, 5.000%, 7/01/30 - FSA
Insured (UB)
2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/09 at 100.00 CCC+ 959,771
American Airlines Inc., Series 1996A, 6.250%, 6/01/26
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,470 Total Transportation 6,650,165
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.5% (13.9% OF TOTAL INVESTMENTS) (4)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AA (4) 2,173,600
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AA (4) 2,227,500
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured (ETM)
1,245 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA (4) 1,454,384
2006C, 5.000%, 7/01/31 (Pre-refunded 7/01/16) - AMBAC Insured
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
200 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 209,882
200 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 209,958
3,000 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA 3,043,080
Bonds, Series 1999, 5.250%, 7/01/18 (Pre-refunded 7/01/09)
275 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- (4) 296,057
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
1,860 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 2,024,424
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 635,622
Refunding Bonds, Series 2002A, 5.250%, 8/15/18 (Pre-refunded
2/15/12)
Maryland Economic Development Corporation, Health and Mental
Hygiene Providers Revenue Bonds, Series 1996A:
840 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 947,965
625 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 705,331
Nuveen Investments 33
NMY | Nuveen Maryland Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 3,200 Maryland Health and Higher Educational Facilities Authority, No Opt. Call BBB (4) $ 3,563,904
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 -
AMBAC Insured (ETM)
3,125 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.00 AAA 3,205,500
Revenue Bonds, Howard County General Hospital, Series 1993,
5.500%, 7/01/25 (ETM)
2,040 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 2,337,922
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34 (Pre-refunded 7/01/14)
1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A (4) 1,699,815
Revenue Bonds, University of Maryland Medical System, Series
2002, 6.000%, 7/01/22 (Pre-refunded 7/01/12)
195 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 227,945
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 1,050,530
Obligation Bonds, Series 2000A, 5.500%, 10/01/20
1,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation 7/16 at 100.00 Aaa 1,203,480
Authority, Series 1996Y, 5.500%, 7/01/36 (Pre-refunded
7/01/16)
235 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 243,761
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 2,175,380
Loan Note, Series 1999A, 6.500%, 10/01/24 (Pre-refunded
10/01/10)
------------------------------------------------------------------------------------------------------------------------------------
27,115 Total U.S. Guaranteed 29,636,040
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.7% (2.5% OF TOTAL INVESTMENTS)
2,500 Maryland Energy Financing Administration, Revenue Bonds, AES 9/09 at 100.00 N/R 1,929,825
Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/14 at 100.00 AA- 3,411,275
Series 2004PP, 5.000%, 7/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
6,000 Total Utilities 5,341,100
------------------------------------------------------------------------------------------------------------------------------------
34 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.5% (2.4% OF TOTAL INVESTMENTS)
$ 1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AA $ 1,124,347
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
1,655 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 1,711,783
2006C, 5.000%, 7/01/31 - AMBAC Insured
1,260 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 1,270,786
2007D, 5.000%, 7/01/32 - AMBAC Insured
860 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 999,053
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
4,820 Total Water and Sewer 5,105,969
------------------------------------------------------------------------------------------------------------------------------------
$ 214,220 Total Investments (cost $215,404,337) - 147.2% 212,652,188
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.9)% (9,962,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 8.7% 12,689,256
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.0)% (5) (70,875,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 144,504,444
=====================================================================================================================
(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 peri-odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(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) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 33.3%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
NUVEEN INVESTMENTS 35
NFM | Nuveen Maryland Dividend Advantage Municipal Fund
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 3.4% (2.2% OF TOTAL INVESTMENTS)
$ 2,115 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 Baa3 $ 1,299,393
Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 196,401
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 339,463
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,075 Total Consumer Discretionary 1,835,257
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.1% (1.4% OF TOTAL INVESTMENTS)
1,350 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,124,874
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.0% (8.0% OF TOTAL
INVESTMENTS)
645 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 608,267
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
980 Maryland Economic Development Corporation, Utility 7/11 at 100.00 A 998,238
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, 7/09 at 101.00 BBB- 1,253,940
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- 469,455
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 599,028
Revenue Bonds, Johns Hopkins Hospital, Series 2004, Inverse
1003, 14.058%, 7/01/33 (IF)
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 445,819
Revenue Bonds, Maryland Institute College of Art, Series
2007, 5.000%, 6/01/36
475 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 356,720
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
615 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 647,454
Bonds, Montgomery College Arts Center Project, Series 2005A,
5.000%, 5/01/20
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System, Series
1999:
215 5.375%, 2/01/19 8/09 at 101.00 BBB- 184,543
410 5.375%, 2/01/29 8/09 at 101.00 BBB- 299,189
900 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 684,981
McDaniel College, Series 2006, 4.500%, 11/01/36
------------------------------------------------------------------------------------------------------------------------------------
7,390 Total Education and Civic Organizations 6,547,634
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 33.6% (22.3% OF TOTAL INVESTMENTS)
1,325 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 1,163,032
Revenue Bonds, University of Maryland Medical System, Series
2006, 5.000%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.50 AAA 1,003,050
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/28 - FSA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101.00 A2 942,440
Revenue Bonds, Calvert Memorial Hospital, Series 1998,
5.000%, 7/01/28
36 NUVEEN INVESTMENTS
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 $ 1,017,370
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 347,952
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
750 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 BBB- 543,795
Revenue Bonds, Civista Medical Center, Series 2005, 5.000%,
7/01/37 - RAAI Insured
710 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa3 519,883
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 390,760
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+ 578,533
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34 - MBIA Insured
1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 A+ 1,265,463
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+ 2,249,319
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 843,820
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
485 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 495,985
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A- 710,255
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,360 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AAA 1,364,529
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46 -
BHAC Insured
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
415 5.000%, 7/01/37 7/17 at 100.00 BBB 337,822
270 5.500%, 7/01/42 7/17 at 100.00 BBB 233,774
1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 906,770
Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%,
7/01/31
700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 672,868
Revenue Bonds, Peninsula Regional Medical Center, Series
2006, 5.000%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/15 at 100.00 A3 890,600
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/35
980 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 846,593
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
570 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.00 A3 569,966
Revenue Refunding Bonds, Union Hospital of Cecil County,
Series 1998, 5.100%, 7/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 7/09 at 100.00 B3 441,504
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
19,990 Total Health Care 18,336,083
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 17.7% (11.8% OF TOTAL INVESTMENTS)
2,000 Maryland Community Development Administration, Housing Revenue 7/09 at 100.50 Aa2 1,999,980
Bonds, Series 1998A, 5.625%, 1/01/40 (Alternative Minimum Tax)
1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 984,020
Housing Revenue Bonds, Princess Anne Apartments, Series
2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
Maryland Economic Development Corporation, Senior Lien Student
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A:
215 4.250%, 10/01/10 No Opt. Call B2 206,065
50 5.000%, 10/01/15 10/13 at 100.00 B2 41,135
210 5.625%, 10/01/23 10/13 at 100.00 B2 147,651
Nuveen Investments 37
NFM | Nuveen Maryland Dividend Advantage Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 N/R $ 1,185,120
Revenue Bonds, Sheppard Pratt University Village, Series
2001, 6.000%, 7/01/33 - ACA Insured
475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 Baa2 374,984
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
750 Montgomery County Housing Opportunities Commission, Maryland, 7/09 at 100.50 Aaa 736,275
FNMA/FHA-Insured Multifamily Housing Development Bonds,
Series 1998A, 5.250%, 7/01/29 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 2,015,100
Multifamily Housing Development Bonds, Series 2000B, 6.200%,
7/01/30 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/11 at 100.00 Aaa 1,987,960
Multifamily Housing Development Bonds, Series 2001A, 5.600%,
7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,500 Total Housing/Multifamily 9,678,290
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.1% (6.7% OF TOTAL INVESTMENTS)
985 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 1,015,702
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 566,166
300 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 285,636
1,200 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 AA2 1,140,096
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 AA2 730,827
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
250 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 241,560
500 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 443,956
970 Maryland Community Development Administration, Department of 9/14 at 100.00 AA2 871,466
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB)
225 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 222,350
Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,845 Total Housing/Single Family 5,517,759
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.5% (1.6% OF TOTAL INVESTMENTS)
410 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 377,614
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 7/09 at 101.00 BBB 976,800
Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998,
4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,410 Total Industrials 1,354,414
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.1% (2.1% OF TOTAL INVESTMENTS)
850 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 684,624
Series 2007A, 5.000%, 1/01/37
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 207,027
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
720 Maryland Health and Higher Educational Facilities Authority, 1/17 at 100.00 N/R 464,573
Revenue Bonds, King Farm Presbyterian Community, Series
2007A, 5.250%, 1/01/27
440 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 335,122
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,310 Total Long-Term Care 1,691,346
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.0% (13.2% OF TOTAL INVESTMENTS)
565 Anne Arundel County, Maryland, General Obligation Bonds, Series 3/16 at 100.00 AAA 624,478
2006, 5.000%, 3/01/21
3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,608,708
Assessment Bonds, 67th Issue, 5.000%, 6/01/27
38 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ $ 346,155
Series 2005A, 5.000%, 12/01/16
600 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA 687,054
5.000%, 8/01/16 - MBIA Insured
1,360 Howard County, Maryland, Consolidated Public Improvement Bonds, 8/09 at 101.00 AAA 1,373,600
Series 2001A, 4.750%, 2/15/21
1,000 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,095,700
George's County, General Obligation Bonds, Park Acquisition
and Development, Series 2004EE-2, 5.000%, 1/15/17
1,360 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,588,983
Public Improvement Bonds, Series 2006, 5.000%, 5/01/16
740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AA- 757,982
4.875%, 3/01/19 - FGIC Insured
700 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 802,914
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
10,125 Total Tax Obligation/General 10,885,574
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.4% (10.9% OF TOTAL INVESTMENTS)
465 Anne Arundel County, Maryland, Tax Increment Financing Revenue No Opt. Call N/R 455,556
Bonds, Parole Town Center Project, Series 2002, 5.000%,
7/01/12
350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 230,143
Center Project, Series 2004, 5.750%, 7/01/34
1,500 Maryland Department of Transportation, Consolidated No Opt. Call AAA 1,776,930
Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,405 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AA+ 1,511,260
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
370 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 408,861
Montgomery County Town Square Parking Garage, Series 2002A,
5.000%, 9/15/13
740 Prince George's County, Maryland, Lease Revenue Bonds, Upper 6/13 at 100.00 AA+ 816,264
Marlboro Justice Center, Series 2003A, 5.000%, 6/30/14 - MBIA
Insured
895 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 555,804
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 240,183
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A 917,960
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
700 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AA- 701,841
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+ 1,313,207
Loan Note, Series 1999A, 6.375%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
9,165 Total Tax Obligation/Limited 8,928,009
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.5% (3.0% OF TOTAL INVESTMENTS)
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 573,580
Parking Facilities Revenue Bonds, Johns Hopkins Hospital,
Series 2001, 5.000%, 7/01/27 - AMBAC Insured
1,785 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA 1,863,344
Facilities Projects, Series 2007, 5.000%, 7/01/30 - FSA
Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
2,435 Total Transportation 2,436,924
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 21.7% (14.4% OF TOTAL INVESTMENTS) (4)
1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AA (4) 1,103,102
Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
465 5.700%, 9/01/20 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 487,799
500 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 524,705
Nuveen Investments 39
NFM | Nuveen Maryland Dividend Advantage Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) $ 555,350
Revenue Bonds, Collington Episcopal Life Care Community
Inc., Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 670,433
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34 (Pre-refunded 7/01/14)
625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 678,031
Revenue Bonds, Maryland Institute College of Art, Series
2001, 5.500%, 6/01/32 (Pre-refunded 6/01/11)
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A (4) 2,165,940
Revenue Bonds, University of Maryland Medical System, Series
2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
710 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 829,955
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 2,416,219
1,700 5.500%, 10/01/40 10/10 at 101.00 AAA 1,785,901
590 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 611,995
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
10,990 Total U.S. Guaranteed 11,829,430
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,000 Maryland Energy Financing Administration, Revenue Bonds, AES 9/09 at 100.00 N/R 771,930
Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.3% (1.5% OF TOTAL INVESTMENTS)
285 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 294,778
2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 544,623
2007D, 5.000%, 7/01/32 - AMBAC Insured
355 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 412,400
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
1,180 Total Water and Sewer 1,251,801
------------------------------------------------------------------------------------------------------------------------------------
$ 86,765 Total Investments (cost $86,511,674) - 150.8% 82,189,325
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (7.3)% (3,973,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.9% 2,115,509
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.4)% (5) (25,825,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 54,506,834
=====================================================================================================================
(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 peri-odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(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) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 31.4%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
40 Nuveen Investments
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 3.6% (2.3% OF TOTAL INVESTMENTS)
$ 2,320 Baltimore, Maryland, Senior Lien Convention Center Hotel 9/16 at 100.00 Baa3 $ 1,425,338
Revenue Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY
Insured
310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 196,401
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 339,463
Chesapeake Bay Hyatt Conference Center, Series 2006A,
5.000%, 12/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,280 Total Consumer Discretionary 1,961,202
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.2% (1.4% OF TOTAL INVESTMENTS)
680 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 566,603
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
800 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa3 624,832
Tobacco Settlement Asset-Backed Bonds, Series 2001, 5.000%,
5/15/31
------------------------------------------------------------------------------------------------------------------------------------
1,480 Total Consumer Staples 1,191,435
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.2% (10.6% OF TOTAL
INVESTMENTS)
1,100 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A3 1,123,012
Bonds, Community College Project, Series 2002, 5.125%,
9/01/22
500 Frederick County, Maryland, Educational Facilities Revenue 9/16 at 100.00 BBB- 381,130
Bonds, Mount Saint Mary's College, Series 2006, 5.625%,
9/01/38
645 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 608,267
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
250 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101.00 BBB- 208,990
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 405,667
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- 469,455
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 599,028
Revenue Bonds, Johns Hopkins Hospital, Series 2004, Inverse
1003, 14.058%, 7/01/33 (IF)
750 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 616,133
Revenue Bonds, Maryland Institute College of Art, Series
2006, 5.000%, 6/01/30
565 Maryland Health and Higher Educational Facilities Authority, 6/17 at 100.00 Baa1 445,819
Revenue Bonds, Maryland Institute College of Art, Series
2007, 5.000%, 6/01/36
500 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 375,495
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
590 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 628,728
Bonds, Montgomery College Arts Center Project, Series 2005A,
5.000%, 5/01/18
500 Morgan State University, Maryland, Student Tuition and Fee 7/12 at 100.00 AA- 509,890
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 AA- 517,145
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/20 - FGIC Insured
Nuveen Investments 41
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS (continued)
$ 1,140 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA+ $ 1,169,401
Bonds, Series 2001B, 4.500%, 4/01/19
650 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 713,694
Bonds, Series 2006A, 5.000%, 10/01/22
200 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 175,066
McDaniel College, Series 2006, 5.000%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
9,390 Total Education and Civic Organizations 8,946,920
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.2% (17.9% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.50 AAA 1,001,160
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 732,290
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,017,370
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 BBB- 543,795
Revenue Bonds, Civista Medical Center, Series 2005, 5.000%,
7/01/37 - RAAI Insured
715 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa3 523,544
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 390,760
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+ 578,533
Revenue Bonds, Greater Baltimore Medical Center, Series
2001, 5.000%, 7/01/34 - MBIA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 843,820
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
480 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 490,872
Revenue Bonds, LifeBridge Health System, Series 2008,
5.000%, 7/01/28 - AGC Insured
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A- 710,255
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,360 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AAA 1,364,529
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46
- BHAC Insured
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
415 5.000%, 7/01/37 7/17 at 100.00 BBB 337,822
280 5.500%, 7/01/42 7/17 at 100.00 BBB 242,432
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 1,360,155
Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%,
7/01/31
700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 672,868
Revenue Bonds, Peninsula Regional Medical Center, Series
2006, 5.000%, 7/01/36
1,500 Maryland Health and Higher Educational Facilities Authority, 7/15 at 100.00 A3 1,310,550
Revenue Bonds, Union Hospital of Cecil County, Series 2005,
5.000%, 7/01/40
980 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 846,593
Revenue Bonds, Washington County Hospital, Series 2008,
5.750%, 1/01/38
1,610 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 AA 1,628,644
Bonds, Trinity Healthcare Group, Series 2001, 5.125%,
12/01/22
700 Prince George's County, Maryland, Revenue Bonds, Dimensions 7/09 at 100.00 B3 441,504
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
16,615 Total Health Care 15,037,496
------------------------------------------------------------------------------------------------------------------------------------
42 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.6% (6.3% OF TOTAL INVESTMENTS)
$ 10 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 $ 10,029
Multifamily Housing Mortgage Loan Revenue Bonds, Series
2001A, 5.100%, 5/15/28
3,145 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 3,094,743
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 1,092,262
Housing Revenue Bonds, Princess Anne Apartments, Series
2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
1,000 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B2 703,100
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A, 5.625%, 10/01/23
520 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 Baa2 410,509
Revenue Refunding Bonds, University of Maryland College Park
Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
5,785 Total Housing/Multifamily 5,310,643
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.8% (7.0% OF TOTAL INVESTMENTS)
1,030 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 1,062,105
Housing and Community Development, Residential Revenue
Bonds, Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
600 4.750%, 9/01/25 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 566,166
300 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 285,636
1,000 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 AA2 950,080
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 AA2 730,827
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
250 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 241,560
500 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 443,956
970 Maryland Community Development Administration, Department of 9/14 at 100.00 AA2 871,468
Housing and Community Development, Residential Revenue
Bonds, Series 2005, 4.900%, 9/01/36 (Alternative Minimum
Tax) (UB)
810 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 789,944
Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,275 Total Housing/Single Family 5,941,742
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.7% (1.8% OF TOTAL INVESTMENTS)
410 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 377,614
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,150 Northeast Maryland Waste Disposal Authority, Baltimore, 7/09 at 101.00 BBB 1,123,320
Resource Recovery Revenue Bonds, RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,560 Total Industrials 1,500,934
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.2% (2.1% OF TOTAL INVESTMENTS)
860 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 692,678
Series 2007A, 5.000%, 1/01/37
300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 207,027
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, King Farm Presbyterian Community, Series 2007A:
500 5.000%, 1/01/17 No Opt. Call N/R 392,255
220 5.250%, 1/01/27 1/17 at 100.00 N/R 141,953
435 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 331,313
Revenue Bonds, Mercy Ridge Retirement Community, Series
2007, 4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,315 Total Long-Term Care 1,765,226
------------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 43
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 24.4% (16.0% OF TOTAL INVESTMENTS)
$ 750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AAA $ 759,255
Consolidated Water and Sewerage, Series 1999, 4.500%, 8/01/19
300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 346,155
Series 2005A, 5.000%, 12/01/16
Cecil County, Maryland, Consolidated General Obligation Public
Improvement Bonds, Series 2001B:
975 4.600%, 8/01/18 8/11 at 101.00 AA- 1,018,651
1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,061,575
600 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA 687,054
5.000%, 8/01/16 - MBIA Insured
510 Frederick, Maryland, General Obligation Refunding and Improvement 12/11 at 101.00 AA 542,237
Bonds, Series 2001, 4.750%, 12/01/19
1,000 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,159,960
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
4,730 Montgomery County, Maryland, Consolidated General Obligation 10/11 at 101.00 AAA 5,032,293
Public Improvement Refunding Bonds, Series 2001, 5.250%,
10/01/18
770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 770,416
Series 2001, 5.000%, 7/01/24 - FSA Insured
800 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 917,616
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,147,020
George's Counties, Maryland, Water Supply Bonds, Series 2005,
5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
12,455 Total Tax Obligation/General 13,442,232
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 18.1% (11.9% OF TOTAL INVESTMENTS)
465 Anne Arundel County, Maryland, Tax Increment Financing Revenue No Opt. Call N/R 455,556
Bonds, Parole Town Center Project, Series 2002, 5.000%, 7/01/12
530 Baltimore Board of School Commissioners, Maryland, Revenue Bonds, 5/13 at 100.00 AA+ 580,801
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+ 1,642,157
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,720,208
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- 94,376
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 - RAAI Insured
350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 230,143
Center Project, Series 2004, 5.750%, 7/01/34
1,000 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 1,184,620
Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,405 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AA+ 1,511,260
Department of Transportation Headquarters Building, Series
2002, 5.375%, 6/01/19
1,000 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 A3 854,670
Germantown Development District, Senior Series 2002A, 5.500%,
7/01/27 - RAAI Insured
895 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 555,804
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 253,527
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue No Opt. Call A 917,960
Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,470 Total Tax Obligation/Limited 10,001,082
------------------------------------------------------------------------------------------------------------------------------------
44 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.9% (3.9% 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 BBB $ 573,580
1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 BBB 815,540
1,780 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA 1,858,124
Facilities Projects, Series 2007, 5.000%, 7/01/30 - FSA Insured
(UB)
------------------------------------------------------------------------------------------------------------------------------------
3,430 Total Transportation 3,247,244
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 24.4% (16.0% OF TOTAL INVESTMENTS) (4)
1,000 Baltimore County, Maryland, Consolidated General Obligation Public 8/12 at 100.00 AAA 1,113,450
Improvement Bonds, Series 2002, 5.000%, 8/01/18 (Pre-refunded
8/01/12)
Frederick County, Maryland, Educational Facilities Revenue Bonds,
Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 104,941
100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 104,979
90 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- (4) 96,891
Development Special Obligation Bonds, Series 2001A, 5.700%,
7/01/29 (Pre-refunded 7/01/10) - RAAI Insured
25 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 27,768
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call BBB (4) 1,420,574
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 601,671
Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%,
7/01/34 (Pre-refunded 7/01/14)
1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 (4) 1,356,063
Revenue Bonds, Maryland Institute College of Art, Series 2001,
5.500%, 6/01/32 (Pre-refunded 6/01/11)
2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A (4) 2,165,940
Revenue Bonds, University of Maryland Medical System, Series
2001, 5.250%, 7/01/28 (Pre-refunded 7/01/11)
1,000 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,168,950
Transportation Facilities Projects, First Series 1978, 6.800%,
7/01/16 (ETM)
1,000 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA 1,114,340
Public Improvement Bonds, Series 2001, 5.250%, 12/01/20
(Pre-refunded 12/01/11) - FGIC Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 3,151,590
Bonds, Series 2000A, 5.500%, 10/01/40
1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,057,330
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded
7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
12,350 Total U.S. Guaranteed 13,484,487
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.8% (1.8% OF TOTAL INVESTMENTS)
1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 5.250%, 10/09 at 101.00 AA- 762,390
10/01/34 - MBIA Insured
1,000 Maryland Energy Financing Administration, Revenue Bonds, AES 9/09 at 100.00 N/R 771,930
Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Utilities 1,534,320
------------------------------------------------------------------------------------------------------------------------------------
Nuveen Investments 45
NZR | Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 1.5% (1.0% OF TOTAL INVESTMENTS)
$ 285 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA $ 294,778
2006C, 5.000%, 7/01/31 - AMBAC Insured
540 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA 544,621
2007D, 5.000%, 7/01/32 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
825 Total Water and Sewer 839,399
------------------------------------------------------------------------------------------------------------------------------------
$ 88,230 Total Investments (cost $87,970,712) - 152.6% 84,204,362
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (7.0)% (3,840,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.6% 1,446,052
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.2)% (5) (26,625,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 55,185,414
=====================================================================================================================
(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 peri-odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(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) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 31.6%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
46 Nuveen Investments
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.9% (1.9% OF TOTAL INVESTMENTS)
$ 2,385 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 Baa3 $ 1,465,272
Bonds, Series 2006A, 5.250%, 9/01/39 - SYNCORA GTY Insured
380 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 240,749
Revenue Bonds, Series 2006B, 5.875%, 9/01/39
700 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 365,575
Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%,
12/01/31
------------------------------------------------------------------------------------------------------------------------------------
3,465 Total Consumer Discretionary 2,071,596
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.8% (1.8% OF TOTAL INVESTMENTS)
2,360 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,966,446
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.1% (8.7% OF TOTAL
INVESTMENTS)
225 Anne Arundel County, Maryland, Economic Development Revenue Bonds, 9/12 at 102.00 A3 229,707
Community College Project, Series 2002, 5.125%, 9/01/22
625 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 476,413
Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38
690 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 650,705
Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34
625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 586,819
Revenue Bonds, Goucher College, Series 2004, 5.125%, 7/01/34
735 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 752,625
Revenue Bonds, Johns Hopkins Hospital, Series 2004, Inverse
1003, 14.058%, 7/01/33 (IF)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,001,650
Revenue Bonds, Johns Hopkins University, Series 2002A, 5.000%,
7/01/32
925 Maryland Health and Higher Educational Facilities Authority, 6/16 at 100.00 Baa1 759,897
Revenue Bonds, Maryland Institute College of Art, Series 2006,
5.000%, 6/01/30
625 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 469,369
Bonds, Our Lady of Good Counsel High School, Series 2005A,
6.000%, 5/01/35
710 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 756,604
Bonds, Montgomery College Arts Center Project, Series 2005A,
5.000%, 5/01/18
1,000 Morgan State University, Maryland, Student Tuition and Fee Revenue 7/13 at 100.00 AA- 987,810
Bonds, Academic Fees and Auxiliary Facilities, Series 2003A,
5.000%, 7/01/32 - FGIC Insured
985 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA+ 1,006,030
Bonds, Series 2001B, 4.625%, 4/01/21
800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA+ 878,392
Bonds, Series 2006A, 5.000%, 10/01/22
890 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 779,044
McDaniel College, Series 2006, 5.000%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
9,835 Total Education and Civic Organizations 9,335,065
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 26.6% (17.6% OF TOTAL INVESTMENTS)
700 Maryland Health and Higher Education Facilities Authority, Revenue 7/16 at 100.00 A 630,721
Bonds, University of Maryland Medical System, Series 2006,
5.000%, 7/01/31
Nuveen Investments 47
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 1,000 Maryland Health and Higher Educational Facilities Authority, 7/09 at 100.50 AAA $ 1,001,160
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 732,290
Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%,
7/01/36
1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,249,925
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
1,750 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A3 1,522,290
Revenue Bonds, Carroll Hospital Center, Series 2006, 5.000%,
7/01/40
870 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 BBB- 630,802
Revenue Bonds, Civista Medical Center, Series 2005, 5.000%,
7/01/37 - RAAI Insured
885 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa3 648,024
Revenue Bonds, Doctors Community Hospital, Series 2007A,
5.000%, 7/01/29
700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 547,064
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+ 712,040
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34 - MBIA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 A+ 1,012,370
Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%,
5/15/21
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa3 843,820
Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%,
7/01/33
595 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 AAA 608,477
Revenue Bonds, LifeBridge Health System, Series 2008, 5.000%,
7/01/28 - AGC Insured
900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A- 913,185
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,690 Maryland Health and Higher Educational Facilities Authority, 5/16 at 100.00 AAA 1,695,628
Revenue Bonds, MedStar Health, Series 2007, 5.250%, 5/15/46 -
BHAC Insured
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Mercy Medical Center Project, Series 2007A:
525 5.000%, 7/01/37 7/17 at 100.00 BBB 427,366
340 5.500%, 7/01/42 7/17 at 100.00 BBB 294,382
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 BBB 589,401
Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%,
7/01/31
850 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 A 817,054
Revenue Bonds, Peninsula Regional Medical Center, Series 2006,
5.000%, 7/01/36
1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,783,617
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
1,220 Maryland Health and Higher Educational Facilities Authority, 1/18 at 100.00 BBB- 1,053,921
Revenue Bonds, Washington County Hospital, Series 2008, 5.750%,
1/01/38
775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 691,323
Revenue Refunding Bonds, Adventist Healthcare, Series 2003A,
5.750%, 1/01/25
900 Prince George's County, Maryland, Revenue Bonds, Dimensions Health 7/09 at 100.00 B3 567,648
Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
21,020 Total Health Care 18,972,508
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.8% (5.1% OF TOTAL INVESTMENTS)
980 Maryland Community Development Administration, Housing Revenue 7/12 at 100.00 Aa2 905,138
Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative Minimum Tax)
1,250 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B2 878,875
Housing Revenue Bonds, University of Maryland - Baltimore,
Series 2003A, 5.625%, 10/01/23
48 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
Maryland Economic Development Corporation, Student Housing Revenue
Bonds, Sheppard Pratt University Village, Series 2001:
$ 20 5.875%, 7/01/21 - ACA Insured 7/11 at 101.00 N/R $ 14,916
150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 N/R 98,760
475 Maryland Economic Development Corporation, Student Housing Revenue 6/16 at 100.00 Baa2 374,984
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 483,085
3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 2,786,129
------------------------------------------------------------------------------------------------------------------------------------
6,390 Total Housing/Multifamily 5,541,887
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.0% (5.3% OF TOTAL INVESTMENTS)
1,280 Maryland Community Development Administration Department of 9/18 at 100.00 Aa2 1,319,898
Housing and Community Development, Residential Revenue Bonds,
Series 2008C, 5.375%, 9/01/39
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2006:
595 4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 9/15 at 100.00 AA2 566,511
1,200 4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 3/16 at 100.00 AA2 1,140,096
815 4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 9/16 at 100.00 AA2 730,827
Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2007:
350 5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 338,184
620 4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 3/17 at 100.00 AA2 550,504
1,160 Maryland Community Development Administration, Department of
Housing and Community Development, Residential Revenue Bonds,
Series 2005, 4.900%, 9/01/36 (Alternative Minimum Tax) (UB) 9/14 at 100.00 AA2 1,042,168
------------------------------------------------------------------------------------------------------------------------------------
6,020 Total Housing/Single Family 5,688,188
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 2.0% (1.4% OF TOTAL INVESTMENTS)
510 Maryland Economic Development Corporation, Solid Waste Disposal 4/12 at 101.00 BBB 469,715
Revenue Bonds, Waste Management Inc., Series 2002, 4.600%,
4/01/16 (Alternative Minimum Tax)
1,000 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 7/09 at 101.00 BBB 976,800
Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998,
4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
1,510 Total Industrials 1,446,515
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.9% (1.9% OF TOTAL INVESTMENTS)
1,050 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 845,712
Series 2007A, 5.000%, 1/01/37
400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 276,036
Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, King Farm Presbyterian Community, Series 2007A:
280 5.000%, 1/01/17 No Opt. Call N/R 219,663
520 5.250%, 1/01/27 1/17 at 100.00 N/R 335,525
540 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 A- 411,286
Revenue Bonds, Mercy Ridge Retirement Community, Series 2007,
4.750%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
2,790 Total Long-Term Care 2,088,222
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.3% (12.1% OF TOTAL INVESTMENTS)
1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,057,200
Refunding Bonds, Series 2002, 4.375%, 4/01/17
380 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA+ 438,463
Series 2005A, 5.000%, 12/01/16
1,260 Charles County, Maryland, Consolidated General Obligation Public 1/12 at 101.00 AA 1,336,104
Improvement Bonds, Series 2002, 4.400%, 1/15/16
Nuveen Investments 49
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 710 Frederick, Maryland, General Obligation Bonds, Series 2005, 8/15 at 100.00 AA $ 813,014
5.000%, 8/01/16 - MBIA Insured
1,000 Maryland National Capital Park Planning Commission, Prince 1/14 at 100.00 AAA 1,095,700
George's County, General Obligation Bonds, Park Acquisition and
Development, Series 2004EE-2, 5.000%, 1/15/17
1,850 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 2,145,926
Public Improvement Bonds, Series 2005A, 5.000%, 7/01/15
1,440 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,682,453
Public Improvement Bonds, Series 2006, 5.000%, 5/01/16
1,000 Prince George's County, Maryland, General Obligation Consolidated No Opt. Call AAA 1,096,120
Public Improvement Bonds, Series 2004C, 5.000%, 12/01/11
1,000 St. Mary's County, Maryland, General Obligation Hospital Bonds, No Opt. Call AA 1,118,060
Series 2002, 5.000%, 10/01/12
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,147,020
George's Counties, Maryland, Sewerage Disposal Bonds, Series
2005, 5.000%, 6/01/16
1,000 Washington Suburban Sanitary District, Montgomery and Prince 6/15 at 100.00 AAA 1,147,020
George's Counties, Maryland, Water Supply Bonds, Series 2005,
5.000%, 6/01/16
------------------------------------------------------------------------------------------------------------------------------------
11,640 Total Tax Obligation/General 13,077,080
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 32.0% (21.2% OF TOTAL INVESTMENTS)
1,000 Baltimore Board of School Commissioners, Maryland, Revenue Bonds, 5/13 at 100.00 AA+ 1,095,850
City Public School System, Series 2003A, 5.000%, 5/01/15
135 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- 124,393
Development Special Obligation Bonds, Series 2001A, 5.600%,
7/01/20 - RAAI Insured
450 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 295,898
Center Project, Series 2004, 5.750%, 7/01/34
5,000 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 5,923,097
Revenue Bonds, Series 2002, 5.500%, 2/01/16
2,200 Maryland Economic Development Corporation, Lease Revenue Bonds, 6/12 at 100.50 AA+ 2,259,510
Department of Transportation Headquarters Building, Series
2002, 4.750%, 6/01/22
450 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 497,264
Montgomery County Town Square Parking Garage, Series 2002A,
5.000%, 9/15/13
2,935 Maryland Economic Development Corporation, Lease Revenue Bonds, 9/12 at 100.00 AA+ 3,197,447
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+ 1,550,981
1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,703,381
1,210 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 751,422
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 306,901
Victoria Falls Project, Series 2005, 5.250%, 7/01/35
1,200 Puerto Rico Highway and Transportation Authority, Highway Revenue No Opt. Call A 1,101,552
Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Bonds, Series 2002G:
1,000 5.250%, 7/01/17 7/12 at 100.00 BBB- 971,740
1,205 5.250%, 7/01/20 7/12 at 100.00 BBB- 1,151,751
1,275 5.250%, 7/01/21 7/12 at 100.00 BBB- 1,207,706
700 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AA- 701,841
Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
22,420 Total Tax Obligation/Limited 22,840,734
------------------------------------------------------------------------------------------------------------------------------------
50 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.2% (2.1% OF TOTAL INVESTMENTS)
$ 2,210 Maryland Transportation Authority, Revenue Bonds, Transportation 7/17 at 100.00 AAA $ 2,306,997
Facilities Projects, Series 2007, 5.000%, 7/01/30 - FSA
Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 24.5% (16.2% OF TOTAL INVESTMENTS) (4)
255 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA (4) 297,886
2006C, 5.000%, 7/01/31 (Pre-refunded 7/01/16) - AMBAC Insured
Frederick County, Maryland, Educational Facilities Revenue Bonds,
Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 104,941
100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 104,979
100 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA 101,436
Bonds, Series 1999, 5.250%, 7/01/17 (Pre-refunded 7/01/09)
110 Frederick County, Maryland, Lake Linganore Village Community 7/10 at 102.00 BBB- (4) 118,304
Development Special Obligation Bonds, Series 2001A, 5.600%,
7/01/20 (Pre-refunded 7/01/10) - RAAI Insured
280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 310,996
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)
285 Maryland Health and Higher Educational Facilities Authority, No Opt. Call BBB (4) 321,320
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 -
AMBAC Insured (ETM)
725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 (4) 830,879
Revenue Bonds, LifeBridge Health System, Series 2004A, 5.125%,
7/01/34 (Pre-refunded 7/01/14)
855 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 999,452
Transportation Facilities Projects, First Series 1978, 6.800%,
7/01/16 (ETM)
4,860 Prince George's County Housing Authority, Maryland, GNMA 11/12 at 100.00 AAA 5,344,590
Collateralized Mortgage Revenue Bonds, Fairview and Hillside
Projects, Series 2002A, 4.700%, 11/20/22 (Pre-refunded
11/20/12)
1,525 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 7/10 at 101.00 AAA 1,616,561
2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) - FSA Insured
3,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,676,854
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,118,320
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC
Insured (ETM)
235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 AAA 257,999
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA+ (4) 2,212,200
Bonds, Series 2002A, 5.125%, 4/01/22 (Pre-refunded 4/01/12)
25 Washington Suburban Sanitary District, Montgomery and Prince 6/11 at 101.00 AAA 27,255
George's Counties, Maryland, General Obligation Construction
Bonds, Second Series 2001, 5.000%, 6/01/17 (Pre-refunded
6/01/11)
------------------------------------------------------------------------------------------------------------------------------------
15,955 Total U.S. Guaranteed 17,443,972
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,250 Maryland Energy Financing Administration, Revenue Bonds, AES 9/09 at 100.00 N/R 964,913
Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.7% (3.8% OF TOTAL INVESTMENTS)
2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AA 2,573,135
Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured
345 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/16 at 100.00 AA 356,837
2006C, 5.000%, 7/01/31 - AMBAC Insured
Nuveen Investments 51
NWI | Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 660 Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 7/17 at 100.00 AA $ 665,650
2007D, 5.000%, 7/01/32 - AMBAC Insured
430 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 499,529
Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15
------------------------------------------------------------------------------------------------------------------------------------
4,005 Total Water and Sewer 4,095,151
------------------------------------------------------------------------------------------------------------------------------------
$ 110,870 Total Investments (cost $111,725,039) - 151.2% 107,839,274
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.0)% (4,255,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.9% 2,747,662
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.1)% (5) (35,000,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 71,331,936
=====================================================================================================================
(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 peri- odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(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) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 32.5%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
52 Nuveen Investments
NPV | Nuveen Virginia Premium Income Municipal Fund
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.2% (2.2% OF TOTAL INVESTMENTS)
$ 6,640 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 3,936,257
Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.2% (4.9% OF TOTAL
INVESTMENTS)
1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 972,480
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 503,695
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- 571,039
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
2,815 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 2,888,331
Revenue Bonds, Series 2005, 5.000%, 6/01/37
2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,162,866
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26 - MBIA Insured
1,635 Virginia Commonwealth University, Revenue Bonds, Series 2004A, 5/14 at 101.00 AA- 1,790,832
5.000%, 5/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,770 Total Education and Civic Organizations 8,889,243
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.8% (18.8% OF TOTAL INVESTMENTS)
2,000 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 1,807,400
Hospital Revenue Bonds, Martha Jefferson Hospital, Series
2002, 5.250%, 10/01/35
650 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 600,119
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/27
1,705 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 1,803,106
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.339%, 5/15/35 (IF)
4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,162,677
Hospital Revenue Refunding Bonds, Inova Health System, Series
1993A, 5.000%, 8/15/23
1,000 Fredericksburg Economic Development Authority, Virginia, Hospital No Opt. Call A3 1,016,900
Facilities Revenue Bonds, MediCorp Health System, Series 2007,
5.250%, 6/15/23
1,250 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,173,600
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call AA- 1,114,640
Hospital Revenue Bonds, Memorial Regional Medical Center,
Series 1995, 6.375%, 8/15/18 - MBIA Insured
2,300 Harrisonburg Industrial Development Authority, Virginia, Hospital 8/16 at 100.00 A 1,957,024
Facilities Revenue Bonds, Rockingham Memorial Hospital, Series
2006, 5.000%, 8/15/31 - AMBAC Insured
1,440 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 1,449,850
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AA- 1,747,725
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 A3 1,354,665
Revenue Bonds, Prince William Hospital, Series 2002, 5.250%,
4/01/33
4,750 Medical College of Virginia Hospital Authority, General Revenue 7/09 at 101.00 AA- 4,529,647
Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured
Nuveen Investments 53
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 A+ $ 3,119,700
Revenue Bonds, Carilion Health System, Series 2002A, 5.500%,
7/01/19 - MBIA Insured
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System, Series
2006:
2,000 5.250%, 6/15/26 6/16 at 100.00 A3 1,962,420
1,010 5.250%, 6/15/31 6/16 at 100.00 A3 955,753
1,695 5.250%, 6/15/37 6/16 at 100.00 A3 1,525,551
2,210 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 1,483,551
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
1,425 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 1,437,854
Revenue Bonds, Winchester Medical Center, Series 2007, 5.125%,
1/01/31
------------------------------------------------------------------------------------------------------------------------------------
35,285 Total Health Care 34,202,182
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.4% (2.3% OF TOTAL INVESTMENTS)
1,375 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 AAA 1,395,309
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 467,365
1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,272,990
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, Vistas 4/10 at 102.00 AAA 1,018,940
GNMA Mortgage-Backed Revenue Bonds, Series 2000A, 6.200%,
1/20/40 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,375 Total Housing/Multifamily 4,154,604
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.1% (5.5% OF TOTAL INVESTMENTS)
325 Puerto Rico Housing Finance Authority, Mortgage-Backed Securities 6/13 at 100.00 AAA 295,363
Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%,
6/01/34 (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 1,008,790
Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured
1,500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 1,342,125
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
2,740 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 2,560,777
Bonds, Series 2006 D1, 4.900%, 1/01/33 (Alternative Minimum
Tax)
1,340 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 1,237,771
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
3,900 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 3,538,899
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,805 Total Housing/Single Family 9,983,725
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.2% (2.8% OF TOTAL INVESTMENTS)
2,765 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 2,054,119
Residential Care Facilities Mortgage Revenue Bonds, Goodwin
House, Inc., Series 2007A, 5.125%, 10/01/37
800 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB+ 571,600
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.875%, 10/01/36
1,495 Henrico County Economic Development Authority, Virginia, GNMA 7/09 at 102.00 AAA 1,514,031
Mortgage-Backed Securities Program Assisted Living Revenue
Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29
Henrico County Economic Development Authority, Virginia,
Residential Care Facility Revenue Bonds, Westminster Canterbury
of Richmond, Series 2006:
100 5.000%, 10/01/27 10/11 at 103.00 BBB- 80,302
1,345 5.000%, 10/01/35 No Opt. Call BBB- 986,450
------------------------------------------------------------------------------------------------------------------------------------
6,505 Total Long-Term Care 5,206,502
------------------------------------------------------------------------------------------------------------------------------------
54 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 0.8% (0.6% OF TOTAL INVESTMENTS)
$ 500 Bedford County Industrial Development Authority, Virginia, 8/09 at 101.00 B2 $ 355,750
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
1,000 Goochland County Industrial Development Authority, Virginia, 6/09 at 101.00 B2 688,330
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
------------------------------------------------------------------------------------------------------------------------------------
1,500 Total Materials 1,044,080
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 19.6% (13.2% OF TOTAL INVESTMENTS)
Chesapeake, Virginia, General Obligation Bonds, Water and
Sewerage Series 2003B:
1,880 5.000%, 6/01/21 6/13 at 100.00 AA+ 1,992,123
2,060 5.000%, 6/01/23 6/13 at 100.00 AA+ 2,163,391
1,355 Harrisonburg, Virginia, General Obligation Bonds, Public Safety 7/12 at 101.00 AA- 1,407,181
and Steam Plant, Series 2002, 5.000%, 7/15/19 - FGIC Insured
105 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 110,507
Bonds, Series 2002A, 5.250%, 5/01/22
1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,276,506
5.000%, 6/01/21
1,300 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 AA 1,459,198
5.000%, 5/01/16
1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call AA- 1,446,861
5.000%, 4/01/15 - MBIA Insured
1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,605,445
5.000%, 7/15/21 - FSA Insured
1,430 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,568,796
Series 2002A, 5.000%, 10/01/17
1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, 5.000%, No Opt. Call AA 1,307,702
12/01/15
2,000 Virginia Beach, Virginia, General Obligation Bonds, Series 2003B, 5/13 at 100.00 AAA 2,209,300
5.000%, 5/01/15
1,100 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 1,224,102
5.000%, 1/15/20
4,500 Virginia Beach, Virginia, General Obligation Bonds, 5.000%, 10/17 at 100.00 AAA 4,789,935
10/01/27 (UB)
1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,510,415
Bonds, Series 2001, 5.000%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
22,235 Total Tax Obligation/General 24,071,462
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.8% (18.8% OF TOTAL INVESTMENTS)
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
335 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 N/R 222,229
260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 146,492
1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AA- 1,401,694
Revenue Bonds, School Facilities Project, Series 2005, 5.000%,
1/01/20 - MBIA Insured
Cumberland County, Virginia, Certificates of Participation,
Series 1997:
890 6.200%, 7/15/12 No Opt. Call N/R 918,507
1,375 6.375%, 7/15/17 No Opt. Call N/R 1,313,675
1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AA- 1,078,210
Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 - MBIA
Insured
1,000 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 1,109,940
Revenue Bonds, Joint Public Uses Community Project, Series
2006, 5.000%, 5/15/18
Fairfax County Economic Development Authority, Virginia, Lease
Revenue Bonds, Laurel Hill Public Facilities Projects, Series
2003:
2,210 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,469,874
1,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 1,234,760
1,660 Front Royal and Warren County Industrial Development Authority, 4/14 at 100.00 AAA 1,776,748
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 1,379,741
Revenue Bonds, County Government Projects, Series 2005,
5.000%, 7/15/19
Nuveen Investments 55
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 445 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- $ 451,221
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
1,185 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/12 at 100.00 AAA 1,148,656
Bonds, Series 2002D, 5.000%, 7/01/32 - FSA Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway Revenue No Opt. Call A 1,835,920
Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
5,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 387,850
Revenue Bonds, Series 2005A, 0.000%, 7/01/43 - AMBAC Insured
5,875 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 1,500,945
Revenue Bonds, Series 2005C, 0.000%, 7/01/28 - AMBAC Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
265 5.250%, 7/01/27 7/12 at 100.00 BBB- 235,985
320 5.250%, 7/01/36 7/12 at 100.00 BBB- 274,010
1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 BBB 1,113,807
Lease Revenue Bonds, School Facilities, Series 2003B, 4.375%,
8/01/20 - AMBAC Insured
1,600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AA- 1,646,496
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - MBIA Insured
2,500 Stafford County Economic Development Authority, Virginia, Public 4/18 at 100.00 AAA 2,521,175
Project Lease Revenue Bonds, 5.000%, 4/01/33 - AGC Insured (UB)
1,400 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 1,488,298
Bonds, Series 2005A, 5.000%, 5/01/22
850 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 1,035,819
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.784%, 2/01/27 (IF)
850 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 1,019,006
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.710%, 2/01/28 (IF)
1,625 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 1,795,918
Resolution, Series 2005C, 5.000%, 8/01/17
Virginia Resources Authority, Infrastructure Revenue Bonds,
Pooled Loan Bond Program, Series 2000B:
95 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 98,800
550 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 553,256
1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,828,949
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
2,000 Virginia Transportation Board, Transportation Revenue Bonds, U.S. 5/14 at 100.00 AA+ 2,253,400
Route 58 Corridor Development Program, Series 2004B, 5.000%,
5/15/15
------------------------------------------------------------------------------------------------------------------------------------
41,915 Total Tax Obligation/Limited 34,241,381
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.5% (7.1% OF TOTAL INVESTMENTS)
2,500 Metropolitan Washington D.C. Airports Authority, System Revenue 10/17 at 100.00 AA- 2,225,300
Bonds, Series 2007B, 5.000%, 10/01/35 - AMBAC Insured
(Alternative Minimum Tax)
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AA- 3,883,999
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
1,000 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AA- 1,019,710
5.000%, 2/01/23 - MBIA Insured
2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AA- 2,676,275
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC
Insured
1,260 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 AA- 1,078,812
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,066,480
Bonds, Series 2001A, 5.250%, 8/01/23
------------------------------------------------------------------------------------------------------------------------------------
13,260 Total Transportation 12,950,576
------------------------------------------------------------------------------------------------------------------------------------
56 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 19.4% (13.1% OF TOTAL INVESTMENTS) (5)
$ 3,500 Alexandria Industrial Development Authority, Virginia, Fixed Rate 10/10 at 101.00 BBB (5) $ 3,778,495
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 839,910
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
925 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 1,028,748
Bonds, Series 2002, 5.375%, 4/01/19 (Pre-refunded 4/01/12)
600 Greater Richmond Convention Center Authority, Virginia, Hotel Tax 6/10 at 101.00 AAA 640,254
Revenue Bonds, Convention Center Expansion Project, Series
2000, 6.125%, 6/15/25 (Pre-refunded 6/15/10)
60 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (5) 68,441
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
375 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 429,131
800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 917,832
815 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/12 at 100.00 AAA 906,133
Bonds, Series 2002D, 5.000%, 7/01/32 (Pre-refunded 7/01/12) -
FSA Insured
2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,626,325
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- (5) 809,566
880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB- (5) 969,276
385 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 399,353
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded
7/01/10)
460 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 505,186
Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%,
7/15/21 (Pre-refunded 7/15/11)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
1,290 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,352,926
3,850 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 4,306,917
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (5) 2,175,380
Loan Note, Series 1999A, 6.500%, 10/01/24 (Pre-refunded
10/01/10)
2,000 Virginia Public School Authority, School Financing Bonds, 1997 8/10 at 101.00 AA+ (5) 2,123,160
Resolution, Series 2000B, 5.000%, 8/01/18 (Pre-refunded
8/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
21,925 Total U.S. Guaranteed 23,877,033
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.3% (4.9% OF TOTAL INVESTMENTS)
Bristol, Virginia, Utility System Revenue Refunding Bonds, Series
2003:
1,705 5.250%, 7/15/14 - MBIA Insured 7/13 at 100.00 AA- 1,842,849
1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AA- 1,941,984
2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AA- 2,797,339
2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,349,975
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
8,780 Total Utilities 8,932,147
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.5% (5.8% 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 111,484
800 5.000%, 4/01/27 4/12 at 100.00 AAA 812,888
1,000 Loudoun County Sanitation Authority, Virginia, Water and Sewerage 1/15 at 100.00 AAA 1,053,190
System Revenue Bonds, Series 2004, 5.000%, 1/01/26
Nuveen Investments 57
NPV | Nuveen Virginia Premium Income Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
$ 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AA+ $ 1,340,104
1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AA+ 1,429,266
2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,357,550
Series 2000, 6.000%, 9/01/24
1,800 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AA 1,834,128
Series 2005, 5.000%, 10/01/30
1,515 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 Aaa 1,566,222
Series 2007, Trust 3036, 13.070%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
10,160 Total Water and Sewer 10,504,832
------------------------------------------------------------------------------------------------------------------------------------
$ 192,155 Total Investments (cost $185,986,511) - 147.8% 181,994,024
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.8)% (4,630,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 7.8% 9,555,150
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.8)% (6) (63,800,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 123,119,174
=====================================================================================================================
(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 peri- odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) The issuer has received a formal adverse determination from the Internal
Revenue Service (the "IRS") regarding the tax-exempt status of the bond's
coupon payments. The Fund will continue to treat coupon payments as
tax-exempt income until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(6) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 35.1%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
58 Nuveen Investments
NGB | Nuveen Virginia Dividend Advantage Municipal Fund
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.2% (2.1% OF TOTAL INVESTMENTS)
$ 1,660 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 984,065
Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47
715 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 325,597
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
2,375 Total Consumer Staples 1,309,662
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.4% (4.3% OF TOTAL
INVESTMENTS)
500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 419,160
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 486,240
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 856,282
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 8/09 at 101.00 BBB- 137,334
320 5.375%, 2/01/29 8/09 at 101.00 BBB- 233,514
500 Virginia College Building Authority, Educational Facilities 7/09 at 100.50 BBB- 481,320
Revenue Refunding Bonds, Marymount University, Series 1998,
5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
2,830 Total Education and Civic Organizations 2,613,850
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 19.6% (13.2% OF TOTAL INVESTMENTS)
250 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 214,043
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/37
565 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 597,510
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.339%, 5/15/35 (IF)
100 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 106,447
Hospital Revenue Refunding Bonds, Inova Health System, Series
1993A, 5.000%, 8/15/23
1,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 BBB+ 908,920
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
500 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 508,450
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2007, 5.250%, 6/15/23
500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 469,440
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
820 Harrisonburg Industrial Development Authority, Virginia, 8/16 at 100.00 A 697,722
Hospital Facilities Revenue Bonds, Rockingham Memorial
Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured
480 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 483,283
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A3 474,133
Revenue Bonds, Prince William Hospital, Series 2002, 5.250%,
4/01/33
800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 N/R 665,000
Revenue Refunding and Improvement Bonds, Norton Community
Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured
Nuveen Investments 59
NGB | Nuveen Virginia Dividend Advantage Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System,
Series 2006:
$ 750 5.250%, 6/15/25 6/16 at 100.00 A3 $ 745,163
360 5.250%, 6/15/31 6/16 at 100.00 A3 340,664
605 5.250%, 6/15/37 6/16 at 100.00 A3 544,518
785 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 526,963
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 721,449
Revenue Bonds, Winchester Medical Center, Series 2007,
5.125%, 1/01/31
------------------------------------------------------------------------------------------------------------------------------------
8,755 Total Health Care 8,003,705
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.0% (3.4% OF TOTAL INVESTMENTS)
1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,031,270
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+ 1,010,830
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,000 Total Housing/Multifamily 2,042,100
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.2% (6.8% OF TOTAL INVESTMENTS)
1,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 1,008,790
Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured
600 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 536,850
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
960 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 897,206
Bonds, Series 2006 D1, 4.900%, 1/01/33 (Alternative Minimum
Tax)
480 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 443,381
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
1,400 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 1,270,374
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,440 Total Housing/Single Family 4,156,601
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 10.5% (7.1% OF TOTAL INVESTMENTS)
700 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 519,316
Residential Care Facilities Mortgage Revenue Bonds,
Westminster-Cantebury of the Blue Ridge, Series 2007, 5.000%,
1/01/31
350 Chesterfield County Health Center Commission, Virginia, Mortgage 12/15 at 100.00 N/R 226,940
Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%,
12/01/39
1,005 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 746,615
Residential Care Facilities Mortgage Revenue Bonds, Goodwin
House, Inc., Series 2007A, 5.125%, 10/01/37
500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB+ 395,210
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.750%, 10/01/26
540 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 396,047
Residential Care Facility Revenue Bonds, Westminster
Canterbury of Richmond, Series 2006, 5.000%, 10/01/35
700 Industrial Development Authority of the County of Prince 1/17 at 100.00 N/R 499,926
William, Virginia, Residential Care Facility Revenue Bonds,
Westminster at Lake, First Mortgage, Series 2006, 5.125%,
1/01/26
650 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 519,331
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%,
3/01/23
530 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 334,298
Revenue Bonds, Virginia Lutheran Homes Incorporated, Series
2006, 5.000%, 12/01/39
350 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 255,448
Facilities First Mortgage Revenue Bonds, Lake Prince Center,
Series 2006, 5.300%, 9/01/31
60 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 350 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R $ 288,708
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 134,495
Residential Care Facility Revenue Bonds,
Westminster-Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
5,850 Total Long-Term Care 4,316,334
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
100 Bedford County Industrial Development Authority, Virginia, 8/09 at 101.00 B2 71,150
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
20 Bedford County Industrial Development Authority, Virginia, 12/09 at 101.00 B2 15,260
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1999A, 6.550%, 12/01/25
(Alternative Minimum Tax) (4)
220 Goochland County Industrial Development Authority, Virginia, 6/09 at 101.00 B2 151,433
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
------------------------------------------------------------------------------------------------------------------------------------
340 Total Materials 237,843
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.7% (9.2% OF TOTAL INVESTMENTS)
700 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 758,254
5.000%, 12/01/25
500 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 579,945
Bonds, Series 2005B, 5.000%, 6/01/18
845 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 AA 948,479
5.000%, 5/01/16
620 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA 690,717
5.000%, 7/15/17 - FSA Insured
400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call AA 460,864
5.000%, 12/01/15
400 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 445,128
5.000%, 1/15/20
1,600 Virginia Beach, Virginia, General Obligation Bonds, 5.000%, 10/17 at 100.00 AAA 1,715,952
10/01/26 (UB)
------------------------------------------------------------------------------------------------------------------------------------
5,065 Total Tax Obligation/General 5,599,339
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 20.2% (13.6% OF TOTAL INVESTMENTS)
100 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 79,831
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
500 Broad Street Community Development Authority, Virginia, Revenue 6/13 at 102.00 N/R 386,455
Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
120 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 N/R 79,604
95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 53,526
500 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 554,970
Revenue Bonds, Joint Public Uses Community Project, Series
2006, 5.000%, 5/15/18
160 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- 162,237
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
580 Prince William County, Virginia, Certificates of Participation, 6/15 at 100.00 Aa2 607,318
County Facilities, Series 2005, 5.000%, 6/01/20 - AMBAC
Insured
700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A 642,572
Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 694,740
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 BBB 1,003,460
Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%,
8/01/23 - AMBAC Insured
Nuveen Investments 61
NGB | Nuveen Virginia Dividend Advantage Municipal Fund (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AA- $ 617,436
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - MBIA Insured
890 Stafford County Economic Development Authority, Virginia, Public 4/18 at 100.00 AAA 897,538
Project Lease Revenue Bonds, 5.000%, 4/01/33 - AGC Insured
(UB)
960 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ 977,270
Loan Note, Series 1999A, 6.375%, 10/01/19
195 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 207,299
Bonds, Series 2005A, 5.000%, 5/01/22
280 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 341,211
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.784%, 2/01/27 (IF)
280 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 335,672
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.710%, 2/01/28 (IF)
345 Virginia Gateway Community Development Authority, Prince William 3/13 at 102.00 N/R 248,224
County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30
345 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 381,287
Resolution, Series 2005C, 5.000%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
10,650 Total Tax Obligation/Limited 8,270,650
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 26.3% (17.7% OF TOTAL INVESTMENTS)
1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,085,010
Bonds, Richmond International Airport, Series 2005A, 5.000%,
7/01/18 - FSA Insured
1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, General No Opt. Call AA- 1,077,800
Resolution Revenue Refunding Bonds, Series 1998, 5.500%,
7/01/25 - MBIA Insured
3,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AA- 2,982,627
Revenue Bonds, Series 2001A, 5.500%, 10/01/27 - MBIA Insured
(Alternative Minimum Tax)
250 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AA- 255,860
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 AA- 1,456,500
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AA- 509,855
5.000%, 2/01/23 - MBIA Insured
500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AA- 535,255
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC
Insured
455 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 AA- 389,571
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
1,225 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,265,719
Bonds, Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,181,375
Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
10,680 Total Transportation 10,739,572
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 28.1% (18.9% OF TOTAL INVESTMENTS) (5)
500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (5) 559,515
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31 (Pre-refunded 1/01/12)
1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,129,520
Series 2001, 5.000%, 7/15/21 - FSA Insured (ETM)
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
30 5.000%, 5/15/22 (Pre-refunded 5/15/11) 5/11 at 100.00 N/R (5) 32,124
850 5.400%, 5/15/31 (Pre-refunded 5/15/11) 5/11 at 100.00 N/R (5) 916,742
20 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (5) 22,814
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
2,310 Leesburg, Virginia, General Obligation Public Improvement Bonds, 1/11 at 101.00 AA (5) 2,491,520
Series 2000, 5.125%, 1/15/21 (Pre-refunded 1/15/11) - FGIC
Insured
62 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (5) (continued)
$ 425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB (5) $ 486,349
Hospital Revenue Bonds, Loudoun Hospital Center, Series
2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12)
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,575,795
1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,575,795
155 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 160,778
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded 7/01/10)
175 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 (5) 184,756
Horse Center Revenue Refunding Bonds, Series 2001B, 6.125%,
7/15/11 (ETM)
915 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 1,004,880
Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%,
7/15/21 (Pre-refunded 7/15/11)
725 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/15 at 100.00 AAA 811,043
Settlement Asset-Backed Bonds, Series 2005, 5.500%, 6/01/26
(Pre-refunded 6/01/15)
500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ (5) 548,215
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22 (Pre-refunded 2/01/12)
------------------------------------------------------------------------------------------------------------------------------------
10,605 Total U.S. Guaranteed 11,499,846
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 939,990
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.6% (1.8% OF TOTAL INVESTMENTS)
500 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AA 509,480
Series 2005, 5.000%, 10/01/30
545 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 Aaa 563,426
Series 2007, Trust 3036, 13.070%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
1,045 Total Water and Sewer 1,072,906
------------------------------------------------------------------------------------------------------------------------------------
$ 65,635 Total Investments (cost $64,170,904) - 148.7% 60,802,398
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (4.0)% (1,640,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 1,218,256
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.7)% (6) (19,500,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 40,880,654
=====================================================================================================================
(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 peri- odic principal paydowns.
(3) Ratings (not covered by the report of independent registered public
accounting firm): Using the higher of Standard & Poor's Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) The issuer has received a formal adverse determination from the Internal
Revenue Service (the "IRS") regarding the tax-exempt status of the bond's
coupon payments. The Fund will continue to treat coupon payments as
tax-exempt income until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(6) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 32.1%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
Nuveen Investments 63
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.2% (2.2% OF TOTAL INVESTMENTS)
$ 3,100 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 1,837,711
Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47
1,430 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 651,193
Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
4,530 Total Consumer Staples 2,488,904
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 6.7% (4.5% OF TOTAL
INVESTMENTS)
1,000 Fairfax County Economic Development Authority, Virginia, Revenue 9/09 at 101.00 A3 1,003,340
Bonds, National Wildlife Federation, Series 1999, 5.375%,
9/01/29 - MBIA Insured
1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 972,480
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- 1,223,655
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez University
System, Series 2002, 5.375%, 12/01/21
2,000 Winchester Industrial Development Authority, Virginia, 10/10 at 100.00 AA- 1,961,760
Educational Facilities First Mortgage Revenue Bonds,
Shenandoah University, Series 1998, 5.250%, 10/01/28 - MBIA
Insured
------------------------------------------------------------------------------------------------------------------------------------
5,500 Total Education and Civic Organizations 5,161,235
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 27.5% (18.4% OF TOTAL INVESTMENTS)
1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A3 1,355,550
Hospital Revenue Bonds, Martha Jefferson Hospital, Series
2002, 5.250%, 10/01/35
450 Charlotte County Industrial Development Authority, Virginia, 9/17 at 100.00 A- 415,467
Hospital Revenue Bonds, Halifax Regional Hospital
Incorporated, Series 2007, 5.000%, 9/01/27
1,070 Fairfax County Industrial Development Authority, Virginia, 5/19 at 100.00 AA+ 1,131,568
Healthcare Revenue Bonds, Inova Health System, Series 2009,
Trust 11733, 14.339%, 5/15/35 (IF)
3,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 BBB+ 2,726,760
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
1,000 Fredericksburg Economic Development Authority, Virginia, Hospital No Opt. Call A3 1,016,900
Facilities Revenue Bonds, MediCorp Health System, Series 2007,
5.250%, 6/15/23
675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 633,744
Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%,
6/15/33
1,500 Harrisonburg Industrial Development Authority, Virginia, Hospital 8/16 at 100.00 A 1,276,320
Facilities Revenue Bonds, Rockingham Memorial Hospital, Series
2006, 5.000%, 8/15/31 - AMBAC Insured
960 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 966,566
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30
1,155 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A3 1,043,092
Revenue Bonds, Prince William Hospital, Series 2002, 5.250%,
4/01/33
1,200 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 N/R 997,500
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, Virginia, 10/09 at 101.00 Aa3 1,009,540
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 A+ 4,053,942
Revenue Bonds, Carilion Health System, Series 2002A, 5.500%,
7/01/20 - MBIA Insured
64 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
Stafford County Economic Development Authority, Virginia,
Hospital Facilities Revenue Bonds, MediCorp Health System, Series
2006:
$ 1,250 5.250%, 6/15/25 6/16 at 100.00 A3 $ 1,241,938
655 5.250%, 6/15/31 6/16 at 100.00 A3 619,820
1,095 5.250%, 6/15/37 6/16 at 100.00 A3 985,533
1,430 Virginia Small Business Financing Authority, Wellmont Health 9/17 at 100.00 BBB+ 959,945
System Project Revenue Bonds, Series 2007A, 5.250%, 9/01/37
715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 721,449
Revenue Bonds, Winchester Medical Center, Series 2007, 5.125%,
1/01/31
------------------------------------------------------------------------------------------------------------------------------------
22,570 Total Health Care 21,155,634
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 14.5% (9.7% OF TOTAL INVESTMENTS)
7,485 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 7,550,790
Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured
500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 447,375
Bonds, Series 2005C-2, 4.750%, 10/01/32 (Alternative Minimum
Tax)
870 Virginia Housing Development Authority, Commonwealth Mortgage 7/15 at 100.00 AAA 803,628
Bonds, Series 2006, 4.800%, 7/01/29 (Alternative Minimum Tax)
2,600 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 2,359,266
Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
11,455 Total Housing/Single Family 11,161,059
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 10.0% (6.6% OF TOTAL INVESTMENTS)
1,300 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 964,444
Residential Care Facilities Mortgage Revenue Bonds,
Westminster-Cantebury of the Blue Ridge, Series 2007, 5.000%,
1/01/31
650 Chesterfield County Health Center Commission, Virginia, Mortgage 12/15 at 100.00 N/R 421,460
Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%, 12/01/39
1,815 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 1,348,364
Residential Care Facilities Mortgage Revenue Bonds, Goodwin
House, Inc., Series 2007A, 5.125%, 10/01/37
500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB+ 395,210
Retirement Center Revenue Bonds, Greenspring Village, Series
2006A, 4.750%, 10/01/26
855 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 627,074
Residential Care Facility Revenue Bonds, Westminster
Canterbury of Richmond, Series 2006, 5.000%, 10/01/35
1,300 Industrial Development Authority of the County of Prince William, 1/17 at 100.00 N/R 928,434
Virginia, Residential Care Facility Revenue Bonds, Westminster
at Lake, First Mortgage, Series 2006, 5.125%, 1/01/26
1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,078,610
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23
970 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 611,828
Revenue Bonds, Virginia Lutheran Homes Incorporated, Series
2006, 5.000%, 12/01/39
650 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 474,403
Facilities First Mortgage Revenue Bonds, Lake Prince Center,
Series 2006, 5.300%, 9/01/31
650 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R 536,172
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 249,776
Residential Care Facility Revenue Bonds,
Westminster-Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
10,365 Total Long-Term Care 7,635,775
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
165 Bedford County Industrial Development Authority, Virginia, 8/09 at 101.00 B2 117,398
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (4)
Nuveen Investments 65
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS (continued)
$ 460 Goochland County Industrial Development Authority, Virginia, 6/09 at 101.00 B2 $ 316,632
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation Project, Series 1998, 5.650%, 12/01/25
(Alternative Minimum Tax) (4)
------------------------------------------------------------------------------------------------------------------------------------
625 Total Materials 434,030
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.1% (15.4% OF TOTAL INVESTMENTS)
1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA+ 1,913,660
5.500%, 12/01/16
1,000 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 1,083,220
5.000%, 12/01/25
95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 99,983
Bonds, Series 2002A, 5.250%, 5/01/22
Powhatan County, Virginia, General Obligation Bonds, Series 2001:
660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 A+ 673,550
1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 A+ 1,003,360
Roanoke, Virginia, General Obligation Public Improvement Bonds,
Series 2002A:
1,950 5.000%, 10/01/18 10/12 at 101.00 AA 2,105,493
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,629,167
1,280 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,331,226
Series 2002B, 5.000%, 10/01/15 - FGIC Insured (Alternative
Minimum Tax)
600 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AAA 667,692
5.000%, 1/15/20
2,900 Virginia Beach, Virginia, General Obligation Bonds, 5.000%, 10/17 at 100.00 AAA 3,110,163
10/01/26 (UB)
1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AAA 1,589,910
Bonds, Series 2001, 5.000%, 6/01/19
1,420 Virginia Beach, Virginia, General Obligation Refunding and Public 3/12 at 100.00 AAA 1,490,659
Improvement Bonds, Series 2002, 5.000%, 3/01/21
------------------------------------------------------------------------------------------------------------------------------------
16,590 Total Tax Obligation/General 17,698,083
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.2% (14.8% OF TOTAL INVESTMENTS)
124 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 98,990
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
1,000 Broad Street Community Development Authority, Virginia, Revenue 6/13 at 102.00 N/R 772,910
Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
210 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 N/R 139,308
165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 N/R 92,966
800 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 887,952
Revenue Bonds, Joint Public Uses Community Project, Series
2006, 5.000%, 5/15/18
1,800 Loudoun County Industrial Development Authority, Virginia, Lease 3/13 at 100.00 AA+ 1,915,686
Revenue Refunding Bonds, Public Facility Project, Series 2003,
5.000%, 3/01/19
285 Montgomery County Industrial Development Authority, Virginia, 2/18 at 100.00 AA- 288,984
Public Facility Lease Revenue Bonds, Public Projects Series
2008, 5.000%, 2/01/29
1,300 Puerto Rico Highway and Transportation Authority, Highway Revenue No Opt. Call A 1,193,348
Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured
2,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call BBB+ 463,160
Revenue Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured
400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- 356,204
Facilities Revenue Refunding Bonds, Series 2002D, 5.250%,
7/01/27
1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 BBB 1,003,460
Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%,
8/01/23 - AMBAC Insured
1,000 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AA- 1,029,060
Virginia, Revenue Bonds, Virginia Municipal League and
Virginia Association of Counties Finance Program, Series
2006A, 5.000%, 8/01/23 - MBIA Insured
66 Nuveen Investments
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,610 Stafford County Economic Development Authority, Virginia, Public 4/18 at 100.00 AAA $ 1,623,637
Project Lease Revenue Bonds, 5.000%, 4/01/33 - AGC Insured (UB)
700 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA+ 744,149
Bonds, Series 2005A, 5.000%, 5/01/22
535 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 651,956
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-3B, 12.784%, 2/01/27 (IF)
535 Virginia College Building Authority, Educational Facilities 2/19 at 100.00 AA+ 641,374
Revenue Bonds, 21st Century College Program, Series 2009,
Trust 09-4B, 12.710%, 2/01/28 (IF)
673 Virginia Gateway Community Development Authority, Prince William 3/13 at 102.00 N/R 484,217
County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30
2,540 Virginia Public School Authority, School Financing Bonds, 1997 8/11 at 101.00 AA+ 2,702,433
Resolution, Series 2001B, 5.000%, 8/01/19
570 Virginia Public School Authority, School Financing Bonds, 1997 8/15 at 100.00 AA+ 629,953
Resolution, Series 2005C, 5.000%, 8/01/17
1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA 1,286,973
Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26
------------------------------------------------------------------------------------------------------------------------------------
18,512 Total Tax Obligation/Limited 17,006,720
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.2% (2.8% OF TOTAL INVESTMENTS)
1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AA- 958,360
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 AA- 1,529,565
5.000%, 2/01/23 - MBIA Insured
825 Virginia Port Authority, Revenue Bonds, Port Authority 7/13 at 100.00 AA- 706,365
Facilities, Series 2006, 5.000%, 7/01/36 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,325 Total Transportation 3,194,290
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 17.4% (11.6% OF TOTAL INVESTMENTS) (5)
165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (5) 184,640
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31 (Pre-refunded 1/01/12)
1,000 Bristol, Virginia, General Obligation Utility System Revenue No Opt. Call AAA 1,119,880
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM)
40 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A3 (5) 45,627
Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%,
11/15/30 (Pre-refunded 11/15/12)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A:
250 6.000%, 6/01/22 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 286,088
600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (5) 688,374
1,000 Newport News, Virginia, General Obligation Bonds, Series 2003B, 11/13 at 100.00 AA (5) 1,144,170
5.000%, 11/01/22 (Pre-refunded 11/01/13)
2,750 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,888,957
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- (5) 1,211,595
Facilities Revenue Refunding Bonds, Series 2002D, 5.250%,
7/01/27 (Pre-refunded 7/01/12)
455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 AAA 499,531
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded 2/01/12)
460 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (5) 505,186
Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%,
7/15/21 (Pre-refunded 7/15/11)
1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 Aa3 (5) 1,209,020
6.250%, 2/01/25 (Pre-refunded 2/01/14) - AMBAC Insured
Nuveen Investments 67
NNB | Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued)
| Portfolio of INVESTMENTS May 31, 2009
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (5) (continued)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
$ 490 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA $ 513,902
2,700 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 3,020,435
------------------------------------------------------------------------------------------------------------------------------------
12,010 Total U.S. Guaranteed 13,317,405
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 2.4% (1.6% OF TOTAL INVESTMENTS)
2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 1,879,980
Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002,
6.500%, 10/15/17 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 17.9% (12.0% OF TOTAL INVESTMENTS)
805 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 817,969
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 1,170,910
3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,521,189
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,080 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AA+ 1,126,991
1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AA+ 1,235,851
1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AA+ 1,557,284
1,000 Virginia Beach, Virginia, Water and Sewer System Revenue Bonds, 10/15 at 100.00 AA 1,018,960
Series 2005, 5.000%, 10/01/30
2,250 Virginia Resources Authority, Water and Sewerage System Revenue 5/11 at 101.00 AA 2,283,503
Bonds, Caroline County Public Improvements Project, Series
2001, 5.000%, 5/01/32
990 Virginia State Resources Authority, Clean Water Revenue Bonds, 10/17 at 100.00 Aaa 1,023,473
Series 2007, Trust 3036, 13.070%, 10/01/29 (IF)
------------------------------------------------------------------------------------------------------------------------------------
12,840 Total Water and Sewer 13,756,130
------------------------------------------------------------------------------------------------------------------------------------
$ 120,322 Total Investments (cost $119,426,244) - 149.7% 114,889,245
============------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.9)% (2,980,000)
---------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 7.9% 5,992,087
---------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.7)% (6) (41,175,000)
---------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 76,726,332
=====================================================================================================================
(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 Group ("Standard &
Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings
below BBB by Standard & Poor's or Baa by Moody's are considered to be
below investment grade.
(4) The issuer has received a formal adverse determination from the Internal
Revenue Service (the "IRS") regarding the tax-exempt status of the bond's
coupon payments. The Fund will continue to treat coupon payments as
tax-exempt income until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities which ensure the timely payment of principal
and interest. Such investments are normally considered to be equivalent to
AAA rated securities.
(6) Preferred Shares, at Liquidation Value as a percentage of Total
Investments is 35.8%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected as a financing
transaction pursuant to the provisions of SFAS No. 140. See notes to
Financial Statements, Footnote 1 - Inverse Floating Rate Securities for
more information.
See accompanying notes to financial statements.
68 NUVEEN INVESTMENTS
| Statement of ASSETS & LIABILITIES May 31, 2009
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $215,404,337, $86,511,674,
$87,970,712 and $111,725,039, respectively) $ 212,652,188 $ 82,189,325 $ 84,204,362 $ 107,839,274
Cash 6,831,099 436,252 154,690 1,264,063
Receivables:
Interest 4,042,665 1,605,881 1,589,729 1,853,330
Investments sold 2,560,000 370,000 -- --
Other assets 27,957 16,325 13,038 14,990
------------------------------------------------------------------------------------------------------------------------------------
Total assets 226,113,909 84,617,783 85,961,819 110,971,657
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Floating rate obligations 9,962,000 3,973,000 3,840,000 4,255,000
Payables:
Preferred shares noticed for redemption,
at liquidation value -- -- -- --
Common share dividends 568,597 234,165 236,452 292,318
Preferred share dividends 3,537 2,463 2,535 2,780
Accrued expenses:
Management fees 117,310 37,225 34,469 43,968
Other 83,021 39,096 37,949 45,655
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 10,734,465 4,285,949 4,151,405 4,639,721
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 70,875,000 25,825,000 26,625,000 35,000,000
====================================================================================================================================
Net assets applicable to Common shares $ 144,504,444 $ 54,506,834 $ 55,185,414 $ 71,331,936
====================================================================================================================================
Common shares outstanding 10,640,076 4,190,350 4,195,443 5,363,909
====================================================================================================================================
Net asset value per Common share outstanding (net assets
applicable to Common shares, divided by Common shares outstanding) $ 13.58 $ 13.01 $ 13.15 $ 13.30
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 106,401 $ 41,904 $ 41,954 $ 53,639
Paid-in surplus 147,794,543 59,464,915 59,530,455 75,721,849
Undistributed (Over-distribution of) net investment income 1,235,082 295,908 287,921 492,853
Accumulated net realized gain (loss) from investments and
derivative transactions (1,879,433) (973,544) (908,566) (1,050,640)
Net unrealized appreciation (depreciation) of investments (2,752,149) (4,322,349) (3,766,350) (3,885,765)
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 144,504,444 $ 54,506,834 $ 55,185,414 $ 71,331,936
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
Nuveen Investments 69
| Statement of ASSETS & LIABILITIES (continued) May 31, 2009
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $185,986,511, $64,170,904
and $119,426,244, respectively) $ 181,994,024 $ 60,802,398 $ 114,889,245
Cash 6,610,119 2,593,498 4,460,912
Receivables:
Interest 3,030,177 1,007,282 1,798,810
Investments sold 535,000 95,000 150,050
Other assets 25,643 14,125 17,481
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 192,194,963 64,512,303 121,316,498
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Floating rate obligations 4,630,000 1,640,000 2,980,000
Payables:
Preferred shares noticed for redemption,
at liquidation value -- 2,250,000 --
Common share dividends 476,195 185,935 340,880
Preferred share dividends 3,402 1,342 3,925
Accrued expenses:
Management fees 102,223 29,105 49,781
Other 63,969 25,267 40,580
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,275,789 4,131,649 3,415,166
-----------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 63,800,000 19,500,000 41,175,000
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 123,119,174 $ 40,880,654 $ 76,726,332
===================================================================================================================================
Common shares outstanding 8,947,012 3,135,986 5,740,879
===================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 13.76 $ 13.04 $ 13.36
===================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-----------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 89,470 $ 31,360 $ 57,409
Paid-in surplus 125,966,824 44,478,848 81,483,803
Undistributed (Over-distribution of) net investment income 1,141,646 266,298 396,944
Accumulated net realized gain (loss) from investments and derivative transactions (86,279) (527,346) (674,825)
Net unrealized appreciation (depreciation) of investments (3,992,487) (3,368,506) (4,536,999)
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 123,119,174 $ 40,880,654 $ 76,726,332
===================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
===================================================================================================================================
See accompanying notes to financial statements.
70 Nuveen Investments
| Statement of OPERATIONS Year Ended May 31, 2009
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 11,292,985 $ 4,622,071 $ 4,582,197 $ 5,513,124
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,387,394 537,109 544,082 687,729
Preferred shares - auction fees 189,860 74,637 75,103 93,257
Preferred shares - dividend disbursing agent fees 19,996 10,000 9,989 9,989
Shareholders' servicing agent fees and expenses 18,279 1,548 1,006 1,186
Interest expense on floating rate obligations 69,173 28,174 27,813 33,308
Custodian's fees and expenses 46,437 25,454 25,129 33,050
Trustees' fees and expenses 6,761 2,583 2,526 3,344
Professional fees 24,006 15,544 15,525 17,299
Shareholders' reports - printing and mailing expenses 49,549 23,655 25,372 30,654
Stock exchange listing fees 9,218 591 592 758
Investor relations expense 26,001 10,089 10,365 12,918
Other expenses 19,257 16,606 16,560 17,158
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,865,931 745,990 754,062 940,650
Custodian fee credit (22,505) (2,288) (2,833) (1,436)
Expense reimbursement -- (111,743) (141,615) (200,603)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,843,426 631,959 609,614 738,611
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 9,449,559 3,990,112 3,972,583 4,774,513
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments (1,683,796) (792,574) (904,510) (1,006,050)
Change in net unrealized appreciation (depreciation) of investments (5,452,149) (4,198,728) (4,008,113) (3,207,766)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (7,135,945) (4,991,302) (4,912,623) (4,213,816)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,728,826) (710,514) (687,710) (858,983)
From accumulated net realized gains (112,500) -- (49,933) (32,339)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,841,326) (710,514) (737,643) (891,322)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ 472,288 $ (1,711,704) $ (1,677,683) $ (330,625)
====================================================================================================================================
See accompanying notes to financial statements.
Nuveen Investments 71
| Statement of OPERATIONS (continued) Year Ended May 31, 2009
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 9,667,256 $ 3,419,441 $ 6,395,902
---------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,167,367 405,538 749,131
Preferred shares - auction fees 154,607 56,435 101,174
Preferred shares - dividend disbursing agent fees 19,991 10,000 9,984
Shareholders' servicing agent fees and expenses 15,681 1,003 1,282
Interest expense on floating rate obligations 90,316 32,067 58,216
Custodian's fees and expenses 39,291 18,689 31,933
Trustees' fees and expenses 5,697 1,948 3,456
Professional fees 21,236 13,855 17,941
Shareholders' reports - printing and mailing expenses 44,436 17,689 28,667
Stock exchange listing fees 9,241 442 809
Investor relations expense 21,976 7,453 13,277
Other expenses 18,934 15,420 17,327
---------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,608,773 580,539 1,033,197
Custodian fee credit (18,554) (6,619) (3,628)
Expense reimbursement -- (84,277) (203,959)
---------------------------------------------------------------------------------------------------------------------
Net expenses 1,590,219 489,643 825,610
---------------------------------------------------------------------------------------------------------------------
Net investment income 8,077,037 2,929,798 5,570,292
---------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from investments (88,740) (527,444) (661,202)
Change in net unrealized appreciation (depreciation) of investments (5,786,157) (3,315,707) (5,657,242)
---------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (5,874,897) (3,843,151) (6,318,444)
---------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,346,825) (533,312) (940,842)
From accumulated net realized gains (146,513) (12,768) (13,944)
---------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,493,338) (546,080) (954,786)
---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ 708,802 $(1,459,433) $(1,702,938)
=====================================================================================================================
See accompanying notes to financial statements.
72 Nuveen Investments
| Statement of CHANGES in NET ASSETS
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
---------------------------- --------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/09 5/31/08 5/31/09 5/31/08 5/31/09 5/31/08
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 9,449,559 $ 9,368,257 $ 3,990,112 $ 3,995,294 $ 3,972,583 $ 3,958,121
Net realized gain (loss) from:
Investments (1,683,796) (16,478) (792,574) 306,804 (904,510) 268,320
Forward swaps -- 363,696 -- 115,883 -- 69,275
Change in net unrealized appreciation
(depreciation) of:
Investments (5,452,149) (4,721,520) (4,198,728) (2,733,280) (4,008,113) (2,314,193)
Forward swaps -- -- -- 39,197 -- --
Distributions to Preferred Shareholders:
From net investment income (1,728,826) (2,550,899) (710,514) (1,005,532) (687,710) (1,008,770)
From accumulated net realized gains (112,500) -- -- -- (49,933) (42,112)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 472,288 2,443,056 (1,711,704) 718,366 (1,677,683) 930,641
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (6,676,649) (6,484,065) (2,946,556) (2,936,953) (2,950,782) (2,949,879)
From accumulated net realized gains (285,154) -- -- -- (145,966) (137,096)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (6,961,803) (6,484,065) (2,946,556) (2,936,953) (3,096,748) (3,086,975)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- 30,834 65,451 56,801 39,025 12,749
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 30,834 65,451 56,801 39,025 12,749
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (6,489,515) (4,010,175) (4,592,809) (2,161,786) (4,735,406) (2,143,585)
Net assets applicable to Common
shares at the beginning of year 150,993,959 155,004,134 59,099,643 61,261,429 59,920,820 62,064,405
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $144,504,444 $ 150,993,959 $ 54,506,834 $ 59,099,643 $ 55,185,414 $ 59,920,820
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 1,235,082 $ 199,876 $ 295,908 $ (27,384) $ 287,921 $ (42,143)
====================================================================================================================================
See accompanying notes to financial statements.
Nuveen Investments 73
| Statement of CHANGES in NET ASSETS (continued)
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
--------------------------- ----------------------------- ---------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/09 5/31/08 5/31/09 5/31/08 5/31/09 5/31/08
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,774,513 $ 4,770,568 $ 8,077,037 $ 7,845,477 $ 2,929,798 $ 2,980,096
Net realized gain (loss) from:
Investments (1,006,050) 203,469 (88,740) 831,194 (527,444) 60,379
Forward swaps -- -- -- 109,060 -- --
Change in net unrealized appreciation
(depreciation) of:
Investments (3,207,766) (2,833,522) (5,786,157) (4,632,677) (3,315,707) (2,198,596)
Forward swaps -- -- -- 39,197 -- --
Distributions to Preferred Shareholders:
From net investment income (858,983) (1,213,876) (1,346,825) (1,939,555) (533,312) (678,177)
From accumulated net realized gains (32,339) -- (146,513) (258,821) (12,768) (97,853)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (330,625) 926,639 708,802 1,993,875 (1,459,433) 65,849
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,451,676) (3,379,332) (5,849,607) (5,687,847) (2,167,450) (2,183,084)
From accumulated net realized gains (90,650) -- (428,050) (770,964) (41,689) (306,068)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (3,542,326) (3,379,332) (6,277,657) (6,458,811) (2,209,139) (2,489,152)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions -- 17,895 175,724 77,205 37,122 27,521
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 17,895 175,724 77,205 37,122 27,521
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (3,872,951) (2,434,798) (5,393,131) (4,387,731) (3,631,450) (2,395,782)
Net assets applicable to Common
shares at the beginning of year 75,204,887 77,639,685 128,512,305 132,900,036 44,512,104 46,907,886
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 71,331,936 $ 75,204,887 $ 123,119,174 $ 128,512,305 $ 40,880,654 $ 44,512,104
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 492,853 $ 38,423 $ 1,141,646 $ 263,247 $ 266,298 $ 37,356
====================================================================================================================================
See accompanying notes to financial statements.
74 Nuveen Investments
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------
YEAR YEAR
ENDED ENDED
5/31/09 5/31/08
----------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 5,570,292 $ 5,485,024
Net realized gain (loss) from:
Investments (661,202) 66,158
Forward swaps -- --
Change in net unrealized appreciation (depreciation) of:
Investments (5,657,242) (3,628,537)
Forward swaps -- --
Distributions to Preferred Shareholders:
From net investment income (940,842) (1,366,380)
From accumulated net realized gains (13,944) (102,026)
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (1,702,938) 454,239
----------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (4,123,820) (4,107,601)
From accumulated net realized gains (41,880) (326,601)
----------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (4,165,700) (4,434,202)
----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued
to shareholders due to reinvestment
of distributions 123,400 69,440
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 123,400 69,440
----------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (5,745,238) (3,910,523)
Net assets applicable to Common
shares at the beginning of year 82,471,570 86,382,093
----------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $ 76,726,332 $ 82,471,570
========================================================================================
Undistributed (Over-distribution of)
net investment income at the
end of year $ 396,944 $ (107,261)
========================================================================================
See accompanying notes to financial statements.
Nuveen Investments 75
| Notes to FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds covered in this report and their corresponding Common share stock
exchange symbols are Nuveen Maryland Premium Income Municipal Fund (NMY), Nuveen
Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland Dividend
Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage Municipal
Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV), Nuveen
Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia Dividend
Advantage Municipal Fund 2 (NNB) (collectively, the "Funds"). Common shares of
Maryland Premium Income (NMY) and Virginia Premium Income (NPV) are traded on
the New York Stock Exchange while Common shares of Maryland Dividend Advantage
(NFM), Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI),
Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are
traded on the NYSE Amex (formerly, 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 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 US
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. Prices of forward
swap contracts are also provided by an independent pricing service approved by
each Fund's Board of Trustees. When market price quotes are not readily
available (which is usually the case for municipal securities), the pricing
service or, in the absence of a pricing service for a particular investment or
derivative instrument, the Board of Trustees of the Fund, or its designee, may
establish fair value using a wide variety of market data including yields or
prices of investments of comparable quality, type of issue, coupon, maturity and
rating, market quotes or indications of value from security dealers, evaluations
of anticipated cash flows or collateral, general market conditions and other
information and analysis, including the obligor's credit characteristics
considered relevant. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At May 31, 2009, there were
no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Interest income also includes paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. Net realized capital gains and ordinary income distributions paid
by the Funds are subject to federal taxation.
76 Nuveen Investments
For all open tax years and all major taxing jurisdictions, management of the
Funds has concluded that there are no significant uncertain tax positions that
would require recognition in the financial statements. Open tax years are those
that are open for examination by taxing authorities (i.e., generally the last
four tax year ends and the interim tax period since then). Furthermore,
management of the Funds is also not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will
significantly change in the next twelve months.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders at least annually. Furthermore, capital
gains are distributed only to the extent they exceed available capital loss
carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from US
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. As
of May 31, 2009, the number of Preferred shares outstanding (excluding Preferred
shares noticed for redemption), 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 -- 1,033 -- --
Series T -- -- -- 1,400
Series W 1,258 -- -- --
Series TH 1,577 -- -- --
Series F -- -- 1,065 --
--------------------------------------------------------------------------------
Total 2,835 1,033 1,065 1,400
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,647
Series T 832 -- --
Series W -- 780 --
Series TH 1,720 -- --
Series F -- -- --
--------------------------------------------------------------------------------
Total 2,552 780 1,647
================================================================================
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the Preferred shares issued by the Funds than there were
offers to buy. This meant that these auctions "failed to clear," and that many
Preferred shareholders who wanted to sell their shares in these auctions were
unable to do so. Preferred shareholders unable to sell their shares received
distributions at the "maximum rate" applicable to failed auctions as calculated
in accordance with the pre-established terms of the Preferred shares.
Nuveen Investments 77
| Notes to FINANCIAL STATEMENTS (continued)
These developments have generally not affected the portfolio management or
investment policies of these Funds. However, one implication of these auction
failures for Common shareholders is that the Funds' cost of leverage will likely
be higher, at least temporarily, than it otherwise would have been had the
auctions continued to be successful. As a result, the Funds' future Common share
earnings may be lower than they otherwise would have been. As of May 31, 2009,
the aggregate amount of outstanding Preferred shares redeemed and/or noticed for
redemption by each Fund is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------
Preferred shares redeemed and/or noticed for
redemption, at liquidation value $ 8,225,000 $ 6,175,000 $ 5,375,000 $ 4,000,000
======================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------
Preferred shares redeemed and/or noticed for
redemption, at liquidation value $ -- $ 4,500,000 $ 825,000
======================================================================================================
Effective May 1, 2009, auction participation fees for Nuveen Investments, Inc.
("Nuveen") Preferred shares with respect to auctions that have failed have been
reduced from 25 bps (annualized) to 15 bps (annualized). All auction
participants have signed new agreements incorporating this change.
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An
inverse floating rate security is created by depositing a municipal bond,
typically with a fixed interest rate, into a special purpose trust created by a
broker-dealer. In turn, this trust (a) issues floating rate certificates, in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b) issues to a long-term investor (such as one of the Funds) an inverse
floating rate certificate (sometimes referred to as an "inverse floater") that
represents all remaining or residual interest in the trust. The income received
by the inverse floater holder varies inversely with the short-term rate paid to
the floating rate certificates' holders, and in most circumstances the inverse
floater holder bears substantially all of the underlying bond's downside
investment risk and also benefits disproportionately from any potential
appreciation of the underlying bond's value. The price of an inverse floating
rate security will be more volatile than that of the underlying bond because the
interest rate is dependent on not only the fixed coupon rate of the underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse floating rate security essentially bears the risk of
loss of the greater face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). The inverse floater held by a Fund gives the
Fund the right (a) to cause the holders of the floating rate certificates to
tender their notes at par, and (b) to have the broker transfer the fixed-rate
bond held by the trust to the Fund, thereby collapsing the trust. An investment
in an externally-deposited inverse floater is identified in the Portfolio of
Investments as "(IF) - Inverse floating rate investment." An investment in a
self-deposited inverse floater is accounted for as a financing transaction in
accordance with Statement of Financial Accounting Standards No. 140 (SFAS No.
140) "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities." In such instances, a fixed-rate bond deposited
into a special purpose trust is identified in the Portfolio of Investments as
"(UB) - Underlying bond of an inverse floating rate trust," with the Fund
accounting for the short-term
78 Nuveen Investments
floating rate certificates issued by the trust as "Floating rate obligations" on
the Statement of Assets and Liabilities. In addition, the Fund reflects in
Investment Income the entire earnings of the underlying bond and the related
interest paid to the holders of the short-term floating rate certificates is
recognized as "Interest expense on floating rate obligations" on the Statement
of Operations.
During the fiscal year ended May 31, 2009, each Fund invested in
externally-deposited inverse floaters and/or self-deposited inverse floaters.
Each Fund may also enter into shortfall and forbearance agreements (sometimes
referred to as a "recourse trust" or "credit recovery swap") (such agreements
referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund
agrees to reimburse the broker-dealer, in certain circumstances, for the
difference between the liquidation value of the fixed-rate bond held by the
trust and the liquidation value of the floating rate certificates issued by the
trust plus any shortfalls in interest cash flows. Under these agreements, a
Fund's potential exposure to losses related to or on inverse floaters may
increase beyond the value of a Fund's inverse floater investments as a Fund may
potentially be liable to fulfill all amounts owed to holders of the floating
rate certificates. At period end, any such shortfall is included as "Unrealized
depreciation on Recourse Trusts" on the Statement of Assets and Liabilities.
At May 31, 2009, the Funds were not invested in externally-deposited Recourse
Trusts.
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------
Maximum exposure to Recourse Trusts $ -- $ -- $ -- $ --
======================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------
Maximum exposure to Recourse Trusts $ -- $ -- $ --
======================================================================================================
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended May 31, 2009, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------
Average floating rate obligations $ 4,168,688 $ 1,690,562 $ 1,661,205 $ 1,958,381
Average annual interest rate and fees 1.66% 1.67% 1.67% 1.70%
======================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------
Average floating rate obligations $ 5,047,205 $ 1,791,096 $ 3,252,452
Average annual interest rate and fees 1.79% 1.79% 1.79%
======================================================================================================
Swap Contracts
Each Fund is authorized to enter into swap contracts consistent with their
investment objectives and policies to reduce, increase or otherwise alter its
risk profile or to alter its portfolio characteristics (i.e. duration, yield
curve positioning and credit quality).
Each Fund is subject to interest rate risk in the normal course of pursuing its
investment objectives. Each Fund's use of forward interest rate swap
transactions is intended to help the Fund manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Fund's interest rate sensitivity with that of the broader municipal market.
Forward interest rate swap transactions involve each Fund's agreement with a
counterparty to pay, in the future, a fixed or variable rate payment in exchange
for the counterparty paying the Fund a variable or fixed rate payment, the
accruals for which would begin at a specified date in the future (the "effective
date"). The amount of the payment obligation is based on the notional amount of
the forward swap contract and the termination date of the swap (which is akin to
a bond's maturity). The value of the Fund's swap commitment would increase or
decrease based primarily on the extent to which long-term interest rates for
bonds having a maturity of the swap's termination date increases or decreases.
The Funds may terminate a swap contract prior to the effective date, at which
point a realized gain or loss is recognized. When a forward swap is terminated,
it ordinarily does not involve the delivery of securities or other underlying
assets or principal, but rather is settled in cash on a net basis. Each Fund
intends, but is not obligated, to terminate its forward swaps before the
effective date. The Funds did not invest in forward interest rate swap
transactions during the fiscal year ended May 31, 2009.
Nuveen Investments 79
| Notes to FINANCIAL STATEMENTS (continued)
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments
and enter into financial transactions where risk of potential loss exists due to
changes in the market (market risk) or failure of the other party to the
transaction to perform (counterparty credit risk). The potential loss could
exceed the value of the financial assets recorded on the financial statements.
Financial assets, which potentially expose each Fund to counterparty credit
risk, consist principally of cash due from counterparties on forward, option and
swap transactions. The extent of each Fund's exposure to counterparty credit
risk in respect to these financial assets approximates their carrying value as
recorded on the Statement of Assets and Liabilities. Futures contracts expose a
Fund to minimal counterparty credit risk as they are exchange traded and the
exchange's clearinghouse, which is counterparty to all exchange traded futures,
guarantees futures contracts against default.
Each Fund helps manage counterparty credit risk by entering into agreements only
with counterparties Nuveen Asset Management (the "Adviser"), a wholly owned
subsidiary of Nuveen Investments, Inc. ("Nuveen"), believes have the financial
resources to honor their obligations and by having the Adviser monitor the
financial stability of the counterparties. Additionally, counterparties may be
required to pledge collateral daily (based on the daily valuation of the
financial asset) on behalf of each Fund with a value approximately equal to the
amount of any unrealized gain above a pre-determined threshold. Reciprocally,
when each Fund has an unrealized loss, the Funds have instructed the custodian
to pledge assets of the Funds as collateral with a value approximately equal to
the amount of the unrealized loss above a pre-determined threshold. Collateral
pledges are monitored and subsequently adjusted if and when the valuations
fluctuate, either up or down, by at least the predetermined threshold amount.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with US 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.
80 Nuveen Investments
2. FAIR VALUE MEASUREMENTS
During the current fiscal period, the Funds adopted the provisions of Statement
of Financial Accounting Standards No. 157 (SFAS No. 157) "Fair Value
Measurements." SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles and expands
disclosure about fair value measurements. In determining the value of each
Fund's investments various inputs are used. These inputs are summarized in the
three broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risk, etc.).
Level 3 - Significant unobservable inputs (including management's assumptions
in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of
the risk associated with investing in those securities. The following is a
summary of each Fund's fair value measurements as of May 31, 2009:
MARYLAND PREMIUM INCOME (NMY) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 212,652,188 $ -- $ 212,652,188
=====================================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 82,189,325 $ -- $ 82,189,325
=====================================================================================================
MARYLAND DIVIDEND ADVANTAGE 2 (NZR) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 84,204,362 $ -- $ 84,204,362
=====================================================================================================
MARYLAND DIVIDEND ADVANTAGE 3 (NWI) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 107,839,274 $ -- $ 107,839,274
=====================================================================================================
VIRGINIA PREMIUM INCOME (NPV) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 181,944,024 $ -- $ 181,944,024
=====================================================================================================
VIRGINIA DIVIDEND ADVANTAGE (NGB) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 60,802,398 $ -- $ 60,802,398
=====================================================================================================
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
-----------------------------------------------------------------------------------------------------
Investments $ -- $ 114,889,245 $ -- $ 114,889,245
=====================================================================================================
3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
During the current fiscal period, the Funds adopted the provisions of Statement
of Financial Accounting Standards No. 161 (SFAS No. 161) "Disclosures about
Derivative Instruments and Hedging Activities." This standard is intended to
enhance financial statement disclosures for derivative instruments and hedging
activities and enable investors to better understand: a) how and why a fund uses
derivative instruments; b) how derivative instruments are accounted for; and c)
how derivative instruments affect a fund's financial position, results of
operations and cash flows, if any. The Funds record derivative instruments at
fair value with changes in fair value recognized on the Statement of Operations.
Even though the Funds' investments in derivatives may represent economic hedges,
they are considered to be non-hedge transactions for SFAS No. 161 disclosure
purposes. The Funds did not invest in derivative instruments during the fiscal
year ended May 31, 2009.
4. FUND SHARES
Common Shares
On July 30, 2008, the Funds' Board of Trustees approved an open-market share
repurchase program under which each Fund may repurchase an aggregate of up to
approximately 10% of its outstanding Common shares. Since the inception of this
program, the Funds have not repurchased any of their outstanding Common shares.
Transactions in Common shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
-------------------- ------------------ -----------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/09 5/31/08 5/31/09 5/31/08 5/31/09 5/31/08
---------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- 2,122 5,006 3,983 2,892 863
=========================================================================================================
Nuveen Investments 81
Notes to
FINANCIAL STATEMENTS (continued)
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
-------------------- ------------------ -----------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
5/31/09 5/31/08 5/31/09 5/31/08 5/31/09 5/31/08
---------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- 1,239 13,477 5,228 2,924 1,821
=========================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------
YEAR YEAR
ENDED ENDED
5/31/09 5/31/08
---------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions 9,369 4,680
=========================================================================================================
Preferred Shares
Transactions in Preferred shares were as follows:
MARYLAND MARYLAND
PREMIUM INCOME (NMY) DIVIDEND ADVANTAGE (NFM)
--------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/09 5/31/08 5/31/09 5/31/08
--------------------------------------------- --------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------------------------------------
Preferred shares redeemed and/or
noticed for redemption:
Series M -- $ -- -- $ -- 247 $ 6,175,000 -- $ --
Series W 146 3,650,000 -- -- -- -- -- --
Series TH 183 4,575,000 -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------
Total 329 $8,225,000 -- $ -- 247 $ 6,175,000 -- $ --
==============================================================================================================================
MARYLAND MARYLAND
DIVIDEND ADVANTAGE 2 (NZR) DIVIDEND ADVANTAGE 3 (NWI)
------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/09 5/31/08 5/31/09 5/31/08
------------------------------------------- --------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------------------------------------------
Preferred shares redeemed and/ or
noticed for redemption:
Series T -- $ -- -- $ -- 160 $ 4,000,000 -- $ --
Series F 215 5,375,000 -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------
Total 215 $ 5,375,000 -- $ -- 160 $ 4,000,000 -- $ --
============================================================================================================================
82 Nuveen Investments
VIRGINIA VIRGINIA
DIVIDEND ADVANTAGE (NGB) DIVIDEND ADVANTAGE 2 (NNB)
-------------------------------------------- --------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/09 5/31/08 5/31/09 5/31/08
-------------------------------------------- --------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------------------------------------------------------
Preferred shares redeemed and/or
noticed for redemption:
Series M -- $ -- -- $ -- 33 $ 825,000 -- $ --
Series W 180 4,500,000 -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
Total 180 $ 4,500,000 -- $ -- 33 $ 825,000 -- $ --
=============================================================================================================================
During the fiscal years ended May 31, 2009 and May 31, 2008, Virginia Premium
Income (NPV) did not have any transactions in its Preferred shares.
5. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments)
during the fiscal year ended May 31, 2009, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-------------------------------------------------------------------------------------------------------------------------------
Purchases $ 10,481,777 $ 4,209,227 $ 5,011,781 $ 5,870,658
Sales and maturities 16,788,104 7,175,551 6,959,798 7,413,599
===============================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Purchases $ 10,740,445 $ 2,744,750 $ 5,073,850
Sales and maturities 14,866,649 6,172,627 9,713,306
===============================================================================================================================
6. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing taxable market discount,
timing differences in recognizing certain gains and losses on investment
transactions and the treatment of investments in inverse floating rate
transactions subject to SFAS No. 140, if any. To the extent that differences
arise that are permanent in nature, such amounts are reclassified within the
capital accounts on the Statement of Assets and Liabilities presented in the
annual report, based on their federal tax basis treatment; temporary differences
do not require reclassification. Temporary and permanent differences do not
impact the net asset values of the Funds.
At May 31, 2009, 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 $ 206,436,836 $ 82,837,303 $ 84,405,489 $ 107,816,551
===============================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Cost of investments $ 181,291,610 $ 62,512,781 $ 116,418,464
===============================================================================================================================
Nuveen Investments 83
| Notes to FINANCIAL STATEMENTS (continued)
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 2009, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 8,816,459 $ 2,113,359 $ 2,572,686 $ 3,472,005
Depreciation (12,571,672) (6,740,823) (6,618,249) (7,710,050)
-------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments $ (3,755,213) $ (4,627,464) $ (4,045,563) $ (4,238,045)
===============================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 6,450,935 $ 1,621,804 $ 3,829,451
Depreciation (10,378,628) (4,972,110) (8,338,685)
-------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments $ (3,927,693) $ (3,350,306) $ (4,509,234)
===============================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at May 31, 2009, the Funds' tax year end, were
as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
-------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $ 1,696,207 $ 483,436 $ 470,204 $ 749,367
Undistributed net ordinary income ** 1,855 1,079 1,893 942
Undistributed net long-term capital gains -- -- -- --
===============================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
-------------------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $ 1,327,566 $ 443,872 $ 697,366
Undistributed net ordinary income ** 293,982 -- 22,698
Undistributed net long-term capital gains -- -- --
===============================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on May 1, 2009, paid on June 1, 2009.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
84 Nuveen Investments
The tax character of distributions paid during the Funds' tax years ended May
31, 2009 and May 31, 2008, 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
2009 (NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $ 8,324,864 $ 3,659,376 $ 3,640,847 $ 4,289,441
Distributions from net ordinary income ** 77,563 -- 70,350 237
Distributions from net long-term capital gains **** 320,091 -- 125,548 122,752
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2009 (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income *** $ 7,136,962 $ 2,687,055 $ 5,042,415
Distributions from net ordinary income ** 109,247 -- 18,305
Distributions from net long-term capital gains **** 465,316 54,457 55,824
====================================================================================================================================
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2008 (NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $ 9,009,735 $ 3,953,181 $ 3,960,918 $ 4,602,748
Distributions from net ordinary income ** 106,313 -- 8,769 3,541
Distributions from net long-term capital gains -- -- 179,208 --
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2008 (NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $ 7,666,828 $ 2,850,082 $ 5,465,830
Distributions from net ordinary income ** 8,291 28,583 21,724
Distributions from net long-term capital gains 1,029,785 403,921 428,627
====================================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
*** The Funds hereby designate these amounts paid during the fiscal year ended
May 31, 2009, as Exempt Interest Dividends.
**** 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
earnings and profits of the Funds related to net capital gain to zero for
the tax year ended May 31, 2009.
At May 31, 2009, the Funds' tax year end, the Funds had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Expiration:
May 31, 2012 $ -- $ 106,052 $ -- $ --
May 31, 2013 -- 15,613 -- --
May 31, 2014 -- 62,054 -- --
May 31, 2017 718,691 419,436 559,268 641,931
------------------------------------------------------------------------------------------------------------------------------------
Total $ 718,691 $ 603,155 $ 559,268 $ 641,931
====================================================================================================================================
Nuveen Investments 85
| Notes to FINANCIAL STATEMENTS (continued)
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Expiration:
May 31, 2012 $ -- $ -- $ --
May 31, 2013 -- -- --
May 31, 2014 -- -- --
May 31, 2017 86,279 167,151 118,100
------------------------------------------------------------------------------------------------------------------------------------
Total $ 86,279 $ 167,151 $ 118,100
====================================================================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2008 through May 31, 2009, the Funds' tax year end,
("post-October losses") in accordance with federal income tax regulations.
Post-October losses are treated as having arisen on the first day of the
following fiscal year:
VIRGINIA VIRGINIA
DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2
(NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Post-October capital losses $ 360,192 $ 547,756
====================================================================================================================================
7. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser 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 of each Fund as follows:
MARYLAND PREMIUM INCOME (NMY)
VIRGINIA PREMIUM INCOME (NPV)
AVERAGE DAILY NET ASSETS (1) 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
================================================================================
86 Nuveen Investments
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
VIRGINIA DIVIDEND ADVANTAGE (NGB)
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
AVERAGE DAILY NET ASSETS (1) 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 net assets managed as stated in the following
table. As of May 31, 2009, the complex-level fee rate was .1982%.
The complex-level fee schedule is as follows:
COMPLEX-LEVEL NET ASSET BREAKPOINT
LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate daily managed net assets of all Nuveen
funds, with such daily managed net assets defined separately for each fund
in its management agreement, but excluding assets attributable to
investments in other Nuveen funds. For the complex-level and fund-level
fee components, daily managed net assets, for funds that use financial
leverage, includes assets managed by the Adviser that are attributable to
such financial leverage. For these purposes, financial leverage includes
the funds' use of preferred stock and borrowings and investments in the
residual interest certificates (also called inverse floating rate
securities) in tender option bond (TOB) trusts, including the portion of
assets held by the TOB trust that has been effectively financed by the
trust's issuance of floating rate securities, subject to an agreement by
the Adviser to limit the amount of such assets for determining managed net
assets in certain circumstances.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to its Officers, all of whom receive remuneration for their services
to the Funds from the Adviser or its affiliates. The Board of Trustees has
adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia
Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the
Funds, as a percentage of average daily net assets, for fees and expenses in the
amounts and for the time periods set forth below:
Nuveen Investments 87
| Notes to FINANCIAL STATEMENTS (continued)
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and
Virginia Dividend Advantage (NGB) for any portion of their fees and expenses
beyond January 31, 2011.
For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets, for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for
any portion of its fees and expenses beyond September 30, 2011.
For the first eight years of Maryland Dividend Advantage 3's (NWI) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets, for fees and expenses in the amounts and for the time periods set
forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for
any portion of its fees and expenses beyond September 30, 2010.
88 Nuveen Investments
For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets, for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for
any portion of its fees and expenses beyond November 30, 2011.
8. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Staff Position No. 157-4 (FSP No. 157-4)
During April 2009, the Financial Accounting Standards Board issued FSP No.
157-4, "Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly." FSP No. 157-4 provides additional guidance for estimating
fair value in accordance with SFAS No. 157, "Fair Value Measurements," when the
volume and level of activity for the asset or liability have significantly
decreased. FSP No. 157-4 also requires additional disaggregation of the current
SFAS No. 157 required disclosures. FSP No. 157-4 is effective for interim and
annual reporting periods ending after June 15, 2009, and shall be applied
prospectively. At this time, management is evaluating the implications of FSP
No. 157-4 and the impact it will have on the financial statement disclosures.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 166 (SFAS No. 166)
During June 2009, the Financial Accounting Standards Board issued SFAS No. 166,
"Accounting for Transfers of Financial Assets -an amendment of SFAS No. 140."
The objective of SFAS No. 166 is to improve the relevance, representational
faithfulness, and comparability of the information that a reporting entity
provides in its financial statements about a transfer of financial assets; the
effects of a transfer on its financial position, financial performance, and cash
flows; and a transferor's continuing involvement, if any, in transferred
financial assets.
SFAS No. 166 is effective as of the beginning of each reporting entity's first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. The recognition and
measurement provisions of SFAS No. 166 must be applied to transfers occurring on
or after the effective date. Additionally, the disclosure provisions of SFAS No.
166 should be applied to transfers that occurred both before and after the
effective date of SFAS No. 166. At this time, management is evaluating the
implications of SFAS No. 166 and the impact it will have on the financial
statement amounts and disclosures, if any.
9. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 1, 2009, to shareholders of record on
June 15, 2009, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Dividend per share $ .0580 $ .0600 $ .0600 $ .0580
====================================================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Dividend per share $ .0605 $ .0620 $ .0620
====================================================================================================================================
Preferred Shares
On June 2, 2009, Virginia Premium Income (NPV) and Virginia Dividend Advantage 2
(NNB), noticed for redemption $6.8 million and $4.25 million, respectively, of
their outstanding Preferred shares, at liquidation value, using TOBs.
Nuveen Investments 89
| Financial HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations
------------------------------------------------------------------
Distributions Distributions
from Net from
Beginning Investment Capital
Common Net Income to Gains to
Share Net Realized/ Preferred Preferred
Net Asset Investment Unrealized Share- Share-
Value Income Gain (Loss) holders+ holders+ Total
----------------------------------------------------------------------------------------------------------------------
MARYLAND PREMIUM INCOME (NMY)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 14.19 $ .89 $ (.67) $ (.16) $ (.01) $ .05
2008 14.57 .88 (.41) (.24) -- .23
2007 14.47 .88 .12 (.23) -- .77
2006 15.12 .89 (.56) (.18) -- .15
2005 14.28 .92 .92 (.10) -- 1.74
MARYLAND DIVIDEND ADVANTAGE (NFM)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 14.12 .95 (1.19) (.17) -- (.41)
2008 14.65 .95 (.54) (.24) -- .17
2007 14.57 .95 .12 (.24) -- .83
2006 15.13 .95 (.47) (.19) -- .29
2005 14.43 .98 .75 (.10) -- 1.63
======================================================================================================================
Less Distributions
------------------------------------
Net
Investment Capital Ending
Income to Gains to Common
Common Common Share Ending
Share- Share- Net Asset Market
holders holders Total Value Value
---------------------------------------------------------------------------------------------------
MARYLAND PREMIUM INCOME (NMY)
---------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ (.63) $ (.03) $ (.66) $ 13.58 $ 12.68
2008 (.61) -- (.61) 14.19 13.10
2007 (.67) -- (.67) 14.57 14.84
2006 (.78) (.02) (.80) 14.47 14.52
2005 (.90) -- (.90) 15.12 15.78
MARYLAND DIVIDEND ADVANTAGE (NFM)
---------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (.70) -- (.70) 13.01 13.05
2008 (.70) -- (.70) 14.12 14.19
2007 (.75) -- (.75) 14.65 15.28
2006 (.85) -- (.85) 14.57 15.19
2005 (.93) -- (.93) 15.13 15.63
===================================================================================================
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:
2009 $ 70,875 $ 25,000 $ 75,972
2008 79,100 25,000 72,722
2007 79,100 25,000 73,990
2006 79,100 25,000 73,620
2005 79,100 25,000 75,726
MARYLAND DIVIDEND ADVANTAGE (NFM)
------------------------------------------------------------------------------------
Year Ended 5/31:
2009 25,825 25,000 77,766
2008 32,000 25,000 71,172
2007 32,000 25,000 72,860
2006 32,000 25,000 72,470
2005 32,000 25,000 74,259
====================================================================================
90 Nuveen Investments
Ratios/Supplemental Data
----------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
Total Returns Before Credit/Reimbursement
----------------------- ------------------------------------------
Based Ending
on Net
Based Common Assets
on Share Net Applicable Expenses Expenses Net
Market Asset to Common Including Excluding Investment
Value* Value* Shares (000) Interest++(a) Interest++(a) Income++
--------------------------------------------------------------------------------------------------------------------------
MARYLAND PREMIUM INCOME (NMY)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 2.57% .66% $ 144,504 1.35% 1.30% 6.80%
2008 (7.55) 1.63 150,994 1.25 1.24 6.13
2007 6.96 5.35 155,004 1.27 1.23 5.95
2006 (2.94) 1.08 153,834 1.23 1.23 6.05
2005 15.64 12.52 160,496 1.24 1.24 6.22
MARYLAND DIVIDEND ADVANTAGE (NFM)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (2.48) (2.52) 54,507 1.42 1.36 7.37
2008 (2.31) 1.25 59,100 1.30 1.28 6.39
2007 5.51 5.74 61,261 1.30 1.26 6.06
2006 2.51 1.95 60,762 1.26 1.26 5.99
2005 6.22 11.60 63,051 1.26 1.26 6.11
==========================================================================================================================
Ratios/Supplemental Data
----------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
After Credit/Reimbursement**
--------------------------------------------
Expenses Expenses Net Portfolio
Including Excluding Investment Turnover
Interest++(a) Interest++(a) Income++ Rate
-----------------------------------------------------------------------------------------------
MARYLAND PREMIUM INCOME (NMY)
-----------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.33% 1.28% 6.81% 5%
2008 1.23 1.22 6.15 14
2007 1.26 1.22 5.96 13
2006 1.21 1.21 6.07 13
2005 1.23 1.23 6.22 10
MARYLAND DIVIDEND ADVANTAGE (NFM)
-----------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.20 1.15 7.59 5
2008 .99 .98 6.69 12
2007 .93 .89 6.43 12
2006 .81 .81 6.44 14
2005 .79 .79 6.57 11
===============================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** 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) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 91
| Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations
------------------------------------------------------------------
Distributions Distributions
from Net from
Beginning Investment Capital
Common Net Income to Gains to
Share Net Realized/ Preferred Preferred
Net Asset Investment Unrealized Share- Share-
Value Income Gain (Loss) holders+ holders+ Total
-------------------------------------------------------------------------------------------------------------------------
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
-------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 14.29 $ .95 $ (1.19) $ (.16) $ (.01) $ (.41)
2008 14.81 .94 (.48) (.24) (.01) .21
2007 14.76 .94 .10 (.23) -- .81
2006 15.45 .94 (.59) (.18) -- .17
2005 14.64 .94 .90 (.09) -- 1.75
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
-------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 14.02 .89 (.78) (.16) (.01) (.06)
2008 14.48 .89 (.49) (.23) -- .17
2007 14.33 .88 .16 (.22) -- .82
2006 14.82 .86 (.46) (.18) -- .22
2005 13.88 .86 .97 (.10) -- 1.73
=========================================================================================================================
Less Distributions
----------------------------------
Net
Investment Capital Ending
Income to Gains to Common
Common Common Share Ending
Share- Share- Net Asset Market
holders holders Total Value Value
--------------------------------------------------------------------------------------------------
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ (.70) $ (.03) $(.73) $ 13.15 $ 12.69
2008 (.70) (.03) (.73) 14.29 14.25
2007 (.76) -- (.76) 14.81 15.38
2006 (.83) (.03) (.86) 14.76 14.76
2005 (.88) (.06) (.94) 15.45 15.41
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (.64) (.02) (.66) 13.30 12.56
2008 (.63) -- (.63) 14.02 13.01
2007 (.67) -- (.67) 14.48 14.74
2006 (.71) -- (.71) 14.33 13.85
2005 (.78) (.01) (.79) 14.82 14.40
==================================================================================================
Preferred Shares at End of Period
-----------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
---------------------------------------------------------------------------------------
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
---------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 26,625 $ 25,000 $ 76,817
2008 32,000 25,000 71,813
2007 32,000 25,000 73,488
2006 32,000 25,000 73,224
2005 32,000 25,000 75,390
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
---------------------------------------------------------------------------------------
Year Ended 5/31:
2009 35,000 25,000 75,951
2008 39,000 25,000 73,208
2007 39,000 25,000 74,769
2006 39,000 25,000 74,237
2005 39,000 25,000 75,925
=======================================================================================
92 Nuveen Investments
Ratios/Supplemental Data
---------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
Total Returns Before Credit/Reimbursement
----------------------- -----------------------------------------
Based Ending
on Net
Based Common Assets
on Share Net Applicable Expenses Expenses Net
Market Asset to Common Including Excluding Investment
Value* Value* Shares (000) Interest++(a) Interest++(a) Income++
----------------------------------------------------------------------------------------------------------------------------
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
----------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (5.21)% (2.43)% $55,185 1.41% 1.36% 7.16%
2008 (2.30) 1.54 59,921 1.29 1.28 6.18
2007 9.32 5.56 62,064 1.32 1.28 5.86
2006 1.13 1.14 61,726 1.25 1.25 5.76
2005 14.71 12.22 64,500 1.23 1.23 5.74
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
----------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 2.35 (.05) 71,332 1.38 1.33 6.70
2008 (7.38) 1.24 75,205 1.26 1.25 5.86
2007 11.47 5.75 77,640 1.28 1.24 5.52
2006 1.09 1.55 76,809 1.23 1.23 5.41
2005 14.98 12.67 79,443 1.23 1.23 5.40
============================================================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
After Credit/Reimbursement**
---------------------------------------------
Expenses Expenses Net Portfolio
Including Excluding Investment Turnover
Interest++(a) Interest++(a) Income++ Rate
--------------------------------------------------------------------------------------------------
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.14% 1.09% 7.43% 6%
2008 .94 .92 6.53 13
2007 .90 .86 6.28 10
2006 .77 .77 6.23 15
2005 .77 .77 6.20 10
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.08 1.03 7.00 5
2008 .84 .83 6.29 13
2007 .79 .75 6.01 11
2006 .73 .73 5.91 14
2005 .74 .74 5.89 12
==================================================================================================
* Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
** 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) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 93
| Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations
------------------------------------------------------------------
Distributions Distributions
from Net from
Beginning Investment Capital
Common Net Income to Gains to
Share Net Realized/ Preferred Preferred
Net Asset Investment Unrealized Share- Share-
Value Income Gain (Loss) holders+ holders+ Total
----------------------------------------------------------------------------------------------------------------------
VIRGINIA PREMIUM INCOME (NPV)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 14.39 $ .90 $ (.66) $ (.15) $ (.02) $ .07
2008 14.89 .88 (.40) (.22) (.03) .23
2007 14.89 .88 .07 (.23) --* .72
2006 15.82 .88 (.59) (.15) (.03) .11
2005 14.95 .93 .93 (.09) -- 1.77
VIRGINIA DIVIDEND ADVANTAGE (NGB)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 14.21 .93 (1.23) (.17) --* (.47)
2008 14.98 .95 (.67) (.22) (.03) .03
2007 14.91 .96 .14 (.24) -- .86
2006 15.52 .97 (.54) (.17) -- .26
2005 14.42 .99 1.13 (.09) -- 2.03
======================================================================================================================
Less Distributions
------------------------------------
Net
Investment Capital Ending
Income to Gains to Common
Common Common Share Ending
Share- Share- Net Asset Market
holders holders Total Value Value
--------------------------------------------------------------------------------------------------
VIRGINIA PREMIUM INCOME (NPV)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ (.65) $ (.05) $ (.70) $ 13.76 $ 14.36
2008 (.64) (.09) (.73) 14.39 14.04
2007 (.70) (.02) (.72) 14.89 15.24
2006 (.80) (.24) (1.04) 14.89 14.91
2005 (.90) -- (.90) 15.82 17.65
VIRGINIA DIVIDEND ADVANTAGE (NGB)
--------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (.69) (.01) (.70) 13.04 14.00
2008 (.70) (.10) (.80) 14.21 14.81
2007 (.79) -- (.79) 14.98 17.51
2006 (.87) -- (.87) 14.91 17.10
2005 (.93) -- (.93) 15.52 16.99
==================================================================================================
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:
2009 $ 63,800 $ 25,000 $ 73,244
2008 63,800 25,000 75,357
2007 63,800 25,000 77,077
2006 63,800 25,000 76,970
2005 63,800 25,000 79,992
VIRGINIA DIVIDEND ADVANTAGE (NGB)
-----------------------------------------------------------------------------------------
Year Ended 5/31:
2009 21,750 25,000 71,989
2008 24,000 25,000 71,367
2007 24,000 25,000 73,862
2006 24,000 25,000 73,568
2005 24,000 25,000 75,493
=========================================================================================
94 Nuveen Investments
Ratios/Supplemental Data
-------------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
Total Returns Before Credit/Reimbursement
----------------------- --------------------------------------------
Based Ending
on Net
Based Common Assets
on Share Net Applicable Expenses Expenses Net
Market Asset to Common Including Excluding Investment
Value** Value** Shares (000) Interest++(a) Interest++(a) Income++
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA PREMIUM INCOME (NPV)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 8.05% .88% $ 123,119 1.36% 1.28% 6.82%
2008 (2.94) 1.56 128,512 1.25 1.23 6.02
2007 7.18 4.89 132,900 1.20 1.20 5.80
2006 (9.98) 0.71 132,626 1.19 1.19 5.75
2005 24.54 12.13 140,340 1.20 1.20 5.98
VIRGINIA DIVIDEND ADVANTAGE (NGB)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 (.01) (2.92) 40,881 1.47 1.38 7.17
2008 (10.58) .23 44,512 1.30 1.28 6.28
2007 7.24 5.82 46,908 1.27 1.27 5.99
2006 5.86 1.74 46,626 1.26 1.26 5.93
2005 19.11 14.46 48,474 1.28 1.28 6.13
==============================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
After Credit/Reimbursement***
-------------------------------------------
Expenses Expenses Net Portfolio
Including Excluding Investment Turnover
Interest++(a) Interest++(a) Income++ Rate
----------------------------------------------------------------------------------------------
VIRGINIA PREMIUM INCOME (NPV)
----------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.35% 1.27% 6.83% 6%
2008 1.24 1.22 6.03 14
2007 1.19 1.19 5.82 16
2006 1.17 1.17 5.77 16
2005 1.19 1.19 5.99 17
VIRGINIA DIVIDEND ADVANTAGE (NGB)
----------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.24 1.16 7.40 4
2008 1.00 .98 6.59 10
2007 .90 .90 6.36 23
2006 .82 .82 6.38 16
2005 .81 .81 6.59 15
==============================================================================================
* Rounds to less than $.01 per share.
** Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
*** 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) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 95
| Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations
---------------------------------------------------------------------
Distributions Distributions
from Net from
Beginning Investment Capital
Common Net Income to Gains to
Share Net Realized/ Preferred Preferred
Net Asset Investment Unrealized Share- Share-
Value Income Gain (Loss) holders+ holders+ Total
-----------------------------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
-----------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 14.39 $ .97 $ (1.11) $ (.16) $ --* $ (.30)
2008 15.08 .96 (.61) (.24) (.02) .09
2007 15.02 .96 .11 (.24) -- .83
2006 15.70 .95 (.52) (.18) (.01) .24
2005 14.79 .96 1.13 (.09) (.01) 1.99
=============================================================================================================================
Less Distributions
-------------------------------------
Net
Investment Capital Ending
Income to Gains to Common
Common Common Share Ending
Share- Share- Net Asset Market
holders holders Total Value Value
-------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
-------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ (.72) $ (.01) $ (.73) $ 13.36 $ 13.98
2008 (.72) (.06) (.78) 14.39 14.65
2007 (.77) -- (.77) 15.08 16.73
2006 (.85) (.07) (.92) 15.02 16.40
2005 (.89) (.19) (1.08) 15.70 16.74
=======================================================================================================
Preferred Shares at End of Period
---------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------
Year Ended 5/31:
2009 $ 41,175 $ 25,000 $ 71,586
2008 42,000 25,000 74,090
2007 42,000 25,000 76,418
2006 42,000 25,000 76,123
2005 42,000 25,000 78,349
====================================================================================
96 Nuveen Investments
Ratios/Supplemental Data
-----------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
Total Returns Before Credit/Reimbursement
---------------------- ------------------------------------------
Based Ending
on Net
Based Common Assets
on Share Net Applicable Expenses Expenses Net
Market Asset to Common Including Excluding Investment
Value** Value** Shares (000) Interest++(a) Interest++(a) Income++(a)
--------------------------------------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 .96% (1.78)% $ 76,726 1.39% 1.31% 7.21%
2008 (7.58) .63 82,472 1.24 1.22 6.21
2007 6.96 5.60 86,382 1.21 1.21 5.89
2006 3.45 1.53 85,887 1.19 1.19 5.75
2005 21.96 13.75 89,626 1.19 1.19 5.74
================================================================================================================================
Ratios/Supplemental Data
--------------------------------------------------------
Ratios to Average Net Assets
Applicable to Common Shares
After Credit/Reimbursement***
--------------------------------------------
Expenses Expenses Net Portfolio
Including Excluding Investment Turnover
Interest++(a) Interest++(a) Income++ Rate
------------------------------------------------------------------------------------------------
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009 1.11% 1.03% 7.49% 4%
2008 .90 .88 6.56 10
2007 .78 .78 6.31 19
2006 .73 .73 6.21 10
2005 .74 .74 6.19 13
================================================================================================
* Rounds to less than $.01 per share.
** Total Return Based on Market Value is the combination of changes in the
market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. The last dividend declared in the
period, which is typically paid on the first business day of the following
month, is assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return Based on Common Share Net Asset Value is the combination of
changes in Common share net asset value, reinvested dividend income at net
asset value and reinvested capital gains distributions at net asset value,
if any. The last dividend declared in the period, which is typically paid
on the first business day of the following month, is assumed to be
reinvested at the ending net asset value. The actual reinvest price for
the last dividend declared in the period may often be based on the Fund's
market price (and not its net asset value), and therefore may be different
from the price used in the calculation. Total returns are not annualized.
*** 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) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
Nuveen Investments 97
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at nine. None of the board members who are not "interested" persons of the Funds
(referred to herein as "independent board members") has ever been a director or
employee of, or consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Funds, their principal
occupations and other affiliations during the past five years, the number of
portfolios each oversees and other directorships they hold are set forth below.
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o ROBERT P. BREMNER Private Investor and Management Consultant; Treasurer
8/22/40 Chairman of and Director, Humanities Council of Washington D.C.
333 W. Wacker Drive the Board 1997 199
Chicago, IL 60606 and Board Member
o JACK B. EVANS President, The Hall-Perrine Foundation, a private
10/22/48 philanthropic corporation (since 1996); Director and
333 W. Wacker Drive Board Member 1999 199 Vice Chairman, United Fire Group, a publicly held
Chicago, IL 60606 company; Member of the Board of Regents for the State
of Iowa University System; Director, Gazette
Companies; Life Trustee of Coe College; Director,
Iowa College Foundation; Member of the Advisory
Council of the Department of Finance in the Tippie
College of Business, University of Iowa; formerly,
Director, Alliant Energy; formerly, Director, Federal
Reserve Bank of Chicago; formerly, President and
Chief Operating Officer, SCI Financial Group, Inc., a
regional financial services firm.
o WILLIAM C. HUNTER Dean, Tippie College of Business, University of Iowa
3/6/48 (since 2006); Director (since 2004) of Xerox
333 W. Wacker Drive Board Member 2004 199 Corporation; Director (since 2005), Beta Gamma Sigma
Chicago, IL 60606 International Honor Society; formerly, Dean and
Distinguished Professor of Finance, School of
Business at the University of Connecticut
(2003-2006); previously, Senior Vice President and
Director of Research at the Federal Reserve Bank of
Chicago (1995-2003); Director, SS&C Technologies,
Inc. (May 2005-October 2005); formerly, Director
(1997-2007), Credit Research Center at Georgetown
University.
o DAVID J. KUNDERT Director, Northwestern Mutual Wealth Management
10/28/42 Company; retired (since 2004) as Chairman, JPMorgan
333 W. Wacker Drive Board Member 2005 199 Fleming Asset Management, President and CEO, Banc One
Chicago, IL 60606 Investment Advisors Corporation, and President, One
Group Mutual Funds; prior thereto, Executive Vice
President, Banc One Corporation and Chairman and CEO,
Banc One Investment Management Group; Member, Board
of Regents, Luther College; member of the Wisconsin
Bar Association; member of Board of Directors,
Friends of Boerner Botanical Gardens; member of
Investment Committee, Greater Milwaukee Foundation.
o WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners Ltd., a real
9/24/44 estate investment company; formerly, Senior Partner
333 W. Wacker Drive Board Member 1997 199 and Chief Operating Officer (retired, 2004) of
Chicago, IL 60606 Miller-Valentine Group; member, University of Dayton
Business School Advisory Council; member, Dayton
Philharmonic Orchestra Association; formerly, member,
Business Advisory Council, Cleveland Federal Reserve
Bank; formerly, Director, Dayton Development
Coalition.
98 Nuveen Investments
NUMBER PRINCIPAL
YEAR FIRST OF PORTFOLIOS OCCUPATION(S)
NAME, ELECTED OR IN FUND COMPLEX INCLUDING OTHER
BIRTHDATE POSITION(S) HELD APPOINTED OVERSEEN BY DIRECTORSHIPS
& ADDRESS WITH THE FUNDS AND TERM(1) BOARD MEMBER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS:
o JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy Donnelley
12/29/47 Foundation (since 1994); prior thereto, Executive
333 W. Wacker Drive Board Member 1997 199 Director, Great Lakes Protection Fund (from 1990 to
Chicago, IL 60606 1994).
o CAROLE E. STONE Director, Chicago Board Options Exchange (since
6/28/47 2006); Commissioner, New York State Commission on
333 W. Wacker Drive Board Member 2007 199 Public Authority Reform (since 2005); formerly,
Chicago, IL 60606 Chair, New York Racing Association Oversight Board
(2005-2007).
o TERENCE J. TOTH Director, Legal & General Investment Management
9/29/59 America, Inc. (since 2008); Managing Partner, Musso
333 W. Wacker Drive Board Member 2008 199 Capital Management (since 2008); CEO and President,
Chicago, IL 60606 Northern Trust Investments (2004-2007); Executive
Vice President, Quantitative Management & Securities
Lending (2004-2007); prior thereto, various positions
with Northern Trust Company (since 1994); Member:
Goodman Theatre Board (since 2004), Chicago
Fellowship Boards (since 2005), University of
Illinois Leadership Council Board (since 2007) and
Catalyst Schools of Chicago Board (since 2008);
formerly, Member: Northern Trust Mutual Funds Board
(2005-2007), Northern Trust Investments Board
(2004-2007), Northern Trust Japan Board (2004-2007),
Northern Trust Securities Inc. Board (2003-2007) and
Northern Trust Hong Kong Board (1997-2004).
INTERESTED BOARD MEMBER:
o JOHN P. AMBOIAN(2) Chief Executive Officer (since July 2007) and
6/14/61 Director (since 1999) of Nuveen Investments, Inc.;
333 W. Wacker Drive Board Member 2008 199 Chief Executive Officer (since 2007) of Nuveen Asset
Chicago, IL 60606 Management, Nuveen Investments Advisors, Inc.
formerly, President (1999-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory Corp.(3)
Nuveen Investments 99
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant Secretary
9/9/56 Chief and Associate General Counsel of Nuveen Investments,
333 W. Wacker Drive Administrative 1988 199 LLC; Managing Director, Associate General Counsel and
Chicago, IL 60606 Officer Assistant Secretary, of Nuveen Asset Management
(since 2002) and of Symphony Asset Management LLC,
(since 2003); Vice President and Assistant Secretary
of NWQ Investment Management Company, LLC. (since
2002), Nuveen Investments Advisers Inc. (since 2002),
Tradewinds Global Investors, LLC, and Santa Barbara
Asset Management, LLC (since 2006), Nuveen HydePark
Group LLC and Nuveen Investment Solutions, Inc.
(since 2007); Managing Director (since 2004) and
Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; formerly, Managing Director
(2002-2004), General Counsel (1998-2004) and
Assistant Secretary of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3); Chartered
Financial Analyst.
o WILLIAM ADAMS IV Executive Vice President of Nuveen Investments, Inc.;
6/9/55 Executive Vice President, U.S. Structured Products of
333 W. Wacker Drive Vice President 2007 125 Nuveen Investments, LLC, (since 1999), prior thereto,
Chicago, IL 60606 Managing Director of Structured Investments.
o MARK J.P. ANSON President and Executive Director of Nuveen
6/10/59 Investments, Inc. (since 2007); President of Nuveen
333 W. Wacker Drive Vice President 2009 199 Investments Institutional Services Group LLC (since
Chicago, IL 60606 2007); previously, Chief Executive Officer of the
British Telecom Pension Scheme (2006-2007) and Chief
Investment Officer of Calpers (1999-2006); PhD,
Chartered Financial Analyst, Chartered Alternative
Investment Analyst, Certified Public Accountant,
Certified Management Accountant and Certified
Internal Auditor.
o CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004), previously, Vice
1/11/62 President (1993-2004) of Nuveen Investments, LLC.
333 W. Wacker Drive Vice President 2007 125
Chicago, IL 60606
o NIZIDA ARRIAGA Vice President (since 2007) of Nuveen Investments,
6/1/68 LLC; previously, Portfolio Manager, Allstate
333 W. Wacker Drive Vice President 2009 199 Investments, LLC (1996-2006); Chartered Financial
Chicago, IL 60606 Analyst.
o MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen Investments,
2/3/66 Vice President LLC.; Vice President of Nuveen Asset Management
333 W. Wacker Drive and Assistant 2000 199 (since 2005).
Chicago, IL 60606 Secretary
o MARGO L. COOK Executive Vice President (since Oct 2008) of Nuveen
4/11/64 Investments, Inc.; previously, Head of Institutional
333 W. Wacker Drive Vice President 2009 199 Asset Management (2007-2008) of Bear Stearns Asset
Chicago, IL 60606 Management; Head of Institutional Asset Mgt
(1986-2007) of Bank of NY Mellon; Chartered Financial
Analyst.
o LORNA C. FERGUSON Managing Director (since 2004) of Nuveen Investments,
10/24/45 LLC; Managing Director (since 2005) of Nuveen Asset
333 W. Wacker Drive Vice President 1998 199 Management; Managing Director (2004-2005), of Nuveen
Chicago, IL 60606 Advisory Corp. and Nuveen Institutional Advisory
Corp.(3)
100 Nuveen Investments
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o STEPHEN D. FOY Vice President (since 1993) and Funds Controller
5/31/54 Vice President (since 1998) of Nuveen Investments, LLC; Vice
333 W. Wacker Drive and Controller 1998 199 President (since 2005) of Nuveen Asset Management;
Chicago, IL 60606 Certified Public Accountant.
o WILLIAM T. HUFFMAN Chief Operating Officer, Municipal Fixed Income
5/7/69 (since 2008) of Nuveen Asset Management; previously,
333 W. Wacker Drive Vice President 2009 199 Chairman, President and Chief Executive Officer (2002
Chicago, IL 60606 - 2007) of Northern Trust Global Advisors, Inc. and
Chief Executive Officer (2007) of Northern Trust
Global Investments Limited; CPA.
o WALTER M. KELLY Senior Vice President (since 2008), Vice President
2/24/70 Chief Compliance (2006-2008) formerly, Assistant Vice President and
333 W. Wacker Drive Officer and 2003 199 Assistant General Counsel (2003-2006) of Nuveen
Chicago, IL 60606 Vice President Investments, LLC; Vice President (since 2006) and
Assistant Secretary (since 2008) of Nuveen Asset
Management.
o DAVID J. LAMB Senior Vice President (since 2009), formerly, Vice
3/22/63 President (2000-2009) of Nuveen Investments, LLC;
333 W. Wacker Drive Vice President 2000 199 Vice President (since 2005) of Nuveen Asset
Chicago, IL 60606 Management; Certified Public Accountant.
o TINA M. LAZAR Senior Vice President (since 2009), formerly, Vice
8/27/61 President of Nuveen Investments, LLC (1999-2009);
333 W. Wacker Drive Vice President 2002 199 Vice President of Nuveen Asset Management (since
Chicago, IL 60606 2005).
o LARRY W. MARTIN Vice President, Assistant Secretary and Assistant
7/27/51 Vice President General Counsel of Nuveen Investments, LLC; Vice
333 W. Wacker Drive and Assistant 1988 199 President (since 2005) and Assistant Secretary of
Chicago, IL 60606 Secretary Nuveen Investments, Inc.; Vice President (since 2005)
and Assistant Secretary (since 1997) of Nuveen Asset
Management; Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); NWQ
Investment Management Company, LLC (since 2002),
Symphony Asset Management LLC (since 2003),
Tradewinds Global Investors, LLC, Santa Barbara Asset
Management LLC (since 2006) and of Nuveen HydePark
Group, LLC and Nuveen Investment Solutions, Inc.
(since 2007); formerly, Vice President and Assistant
Secretary of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3)
o KEVIN J. MCCARTHY Managing Director (since 2008), formerly, Vice
3/26/66 Vice President President (2007-2008), Nuveen Investments, LLC;
333 W. Wacker Drive and Secretary 2007 199 Managing Director (since 2008), formerly, Vice
Chicago, IL 60606 President, and Assistant Secretary, Nuveen Asset
Management, and Nuveen Investments Holdings, Inc.;
Vice President (since 2007) and Assistant Secretary,
Nuveen Investment Advisers Inc., Nuveen Investment
Institutional Services Group LLC, NWQ Investment
Management Company, LLC, Tradewinds Global Investors
LLC, NWQ Holdings, LLC, Symphony Asset Management
LLC, Santa Barbara Asset Management LLC, Nuveen
HydePark Group, LLC and Nuveen Investment Solutions,
Inc. (since 2007); prior thereto, Partner, Bell, Boyd
& Lloyd LLP (1997-2007).
Nuveen Investments 101
NUMBER
OF PORTFOLIOS
NAME, YEAR FIRST IN FUND COMPLEX PRINCIPAL
BIRTHDATE POSITION(S) HELD ELECTED OR OVERSEEN OCCUPATION(S)
AND ADDRESS WITH THE FUNDS APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
o JOHN V. MILLER Managing Director (since 2007), formerly, Vice
4/10/67 Vice President 2007 199 President (2002-2007) of Nuveen Asset Management and
333 W. Wacker Drive Nuveen Investments, LLC; Chartered Financial Analyst.
Chicago, IL 60606
o GREGORY MINO Vice President of Nuveen Investments, LLC (since
1/4/71 Vice President 2009 199 2008); previously, Director (2004-2007) and Executive
333 W. Wacker Drive Director (2007-2008) of UBS Global Asset Management;
Chicago, IL 60606 previously, Vice President (2000-2003) and Director
(2003-2004) of Merrill Lynch Investment Managers;
Chartered Financial Analyst.
o CHRISTOPHER M. ROHRBACHER Vice President, Nuveen Investments, LLC (since 2008);
8/1/71 Vice President Vice President and Assistant Secretary, Nuveen Asset
333 W. Wacker Drive and Assistant 2008 199 Management (since 2008); prior thereto, Associate,
Chicago, IL 60606 Secretary Skadden, Arps, Slate Meagher & Flom LLP (2002-2008).
o JAMES F. RUANE Vice President, Nuveen Investments, LLC (since 2007);
7/3/62 Vice President prior thereto, Partner, Deloitte & Touche USA LLP
333 W. Wacker Drive and Assistant 2007 199 (2005-2007), formerly, senior tax manager
Chicago, IL 60606 Secretary (2002-2005); Certified Public Accountant.
o MARK L. WINGET Vice President, Nuveen Investments, LLC (since 2008);
12/21/68 Vice President Vice President and Assistant Secretary, Nuveen Asset
333 W. Wacker Drive and Assistant 2008 199 Management (since 2008); prior thereto, Counsel,
Chicago, IL 60606 Secretary Vedder Price P.C. (1997-2007).
(1) Board Members serve three year terms, except for two board members who are
elected by the holders of Preferred Shares. The Board of Trustees is
divided into three classes, Class I, Class II, and Class III, with each
being elected to serve until the third succeeding annual shareholders'
meeting subsequent to its election or thereafter in each case when its
respective successors are duly elected or appointed, except two board
members are elected by the holders of Preferred Shares to serve until the
next annual shareholders' meeting subsequent to its election or thereafter
in each case when its respective successors are duly elected or appointed.
The first year elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(2) Mr. Amboian is an interested trustee because of his position and certain
of its subsidiaries, which are affiliates of the with Nuveen Investments,
Inc. Nuveen Funds.
(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.
102 Nuveen Investments
Annual Investment Management Agreement Approval Process
The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in
substance, that each investment advisory agreement between a fund and its
investment adviser will continue in effect from year to year only if its
continuance is approved at least annually by the fund's board members, including
by a vote of a majority of the board members who are not parties to the advisory
agreement or "interested persons" of any parties (the "Independent Board
Members"), cast in person at a meeting called for the purpose of considering
such approval. In connection with such approvals, the fund's board members must
request and evaluate, and the investment adviser is required to furnish, such
information as may be reasonably necessary to evaluate the terms of the advisory
agreement. Accordingly, at a meeting held on May 27-29, 2009 (the "May
Meeting"), the Boards of Trustees or Directors (as the case may be) (each a
"Board" and each Trustee or Director, a "Board Member") of the Funds, including
a majority of the Independent Board Members, considered and approved the
continuation of the advisory agreements (each an "Advisory Agreement") between
each Fund and Nuveen Asset Management ("NAM") for an additional one-year period.
In preparation for their considerations at the May Meeting, the Board also held
a separate meeting on April 21-22, 2009 (the "April Meeting"). Accordingly, the
factors considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April Meeting.
In addition, in evaluating the Advisory Agreements, the Independent Board
Members reviewed a broad range of information relating to the Funds and NAM,
including absolute performance, fee and expense information for the Funds as
well as comparative performance, fee and expense information for a comparable
peer group of funds, the performance information of recognized and/or customized
benchmarks (as applicable) of the Funds, the profitability of Nuveen for its
advisory activities (which includes its wholly owned subsidiaries other than
Winslow Capital Management, Inc. ("Winslow Capital") which was recently acquired
in December 2008), and other information regarding the organization, personnel,
and services provided by NAM. The Independent Board Members also met quarterly
as well as at other times as the need arose during the year and took into
account the information provided at such meetings and the knowledge gained
therefrom. Prior to approving the renewal of the Advisory Agreements, the
Independent Board Members reviewed the foregoing information with their
independent legal counsel and with management, reviewed materials from
independent legal counsel describing applicable law and their duties in
reviewing advisory contracts, and met with independent legal counsel in private
sessions without management present. The Independent Board Members considered
the legal advice provided by independent legal counsel and relied upon their
knowledge of NAM, its services and the Funds resulting from their meetings and
other interactions throughout the year and their own
Nuveen Investments 103
Annual Investment Management Agreement Approval Process (continued)
business judgment in determining the factors to be considered in evaluating the
Advisory Agreements. Each Board Member may have accorded different weight to the
various factors in reaching his or her conclusions with respect to a Fund's
Advisory Agreement. The Independent Board Members did not identify any single
factor as all-important or controlling. The Independent Board Members'
considerations were instead based on a comprehensive consideration of all the
information presented. The principal factors considered by the Board and its
conclusions are described below.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering renewal of the Advisory Agreements, the Independent Board Members
considered the nature, extent and quality of NAM's services, including advisory
services and administrative services. The Independent Board Members reviewed
materials outlining, among other things, NAM's organization and business; the
types of services that NAM or its affiliates provide and are expected to provide
to the Funds; the performance record of the applicable Fund (as described in
further detail below); and any initiatives Nuveen had taken for the applicable
fund product line.
In reviewing the services provided and the initiatives undertaken during the
past year, the Independent Board Members recognized the severe market turmoil
experienced in the capital markets during recent periods, including sustained
periods of high volatility, credit disruption and government intervention. The
Independent Board Members considered NAM's efforts, expertise and other actions
taken to address matters as they arose that impacted the Funds. The Independent
Board Members recognized the role of the Investment Services group which, among
other things, monitors the various positions throughout the Nuveen fund complex
to identify and address any systematic risks. In addition, the Capital Markets
Committee of NAM provides a multi-departmental venue for developing new policies
to mitigate any risks. The Independent Board Members further recognized NAM's
continuous review of the Funds' investment strategies and mandates in seeking to
continue to refine and improve the investment process for the Funds,
particularly in light of market conditions. With respect to closed-end funds
that issued auction rate preferred shares ("ARPs") or that otherwise utilize
leverage, the Independent Board Members noted, in particular, NAM's efforts in
refinancing the preferred shares of such funds frozen by the collapse of the
auction rate market and managing leverage during a period of rapid market
declines, particularly for the non-equity funds. Such efforts included
negotiating and maintaining the availability of bank loan facilities and other
sources of credit used for investment purposes or to satisfy liquidity needs,
liquidating portfolio securities during difficult times to meet leverage ratios,
and seeking alternative forms of debt and other leverage that may over time
reduce financing costs associated with ARPs and enable the funds that have
issued ARPs to restore liquidity to ARPs holders. The Independent Board Members
also noted Nuveen's continued commitment and efforts to keep investors and
financial advisers informed as to its progress with the ARPs through, among
other things, conference calls, emails, press releases, information posted on
its website, and telephone calls and in-person meetings with financial advisers.
In addition to the foregoing, the Independent Board Members also noted the
additional services that NAM or its affiliates provide to closed-end funds,
including, in particular, Nuveen's continued
104 Nuveen Investments
commitment to supporting the secondary market for the common shares of its
closed-end funds through a variety of programs designed to raise investor and
analyst awareness and understanding of closed-end funds. These efforts include
maintaining an investor relations program to timely provide information and
education to financial advisers and investors; providing advertising and
marketing for the closed-end funds; maintaining websites; and providing
educational seminars.
As part of their review, the Independent Board Members also evaluated the
background, experience and track record of NAM's investment personnel. In this
regard, the Independent Board Members considered any changes in the personnel,
and the impact on the level of services provided to the Funds, if any. The
Independent Board Members also reviewed information regarding portfolio manager
compensation arrangements to evaluate NAM's ability to attract and retain high
quality investment personnel, preserve stability, and reward performance but not
provide an incentive for taking undue risks.
In addition to advisory services, the Independent Board Members considered the
quality of administrative services provided by NAM and its affiliates including
product management, fund administration, oversight of service providers,
shareholder services, administration of Board relations, regulatory and
portfolio compliance and legal support. Given the importance of compliance, the
Independent Board Members considered NAM's compliance program, including the
report of the chief compliance officer regarding the Funds' compliance policies
and procedures.
Based on their review, the Independent Board Members found that, overall, the
nature, extent and quality of services provided (and expected to be provided) to
the respective Funds under the Advisory Agreements were satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
The Board considered the investment performance of each Fund, including the
Fund's historic performance as well as its performance compared to funds with
similar investment objectives (the "Performance Peer Group") based on data
provided by an independent provider of mutual fund data as well as recognized
and/or customized benchmarks (as applicable). The Independent Board Members
reviewed performance information including, among other things, total return
information compared with the Fund's Performance Peer Group and recognized
and/or customized benchmarks (as applicable) for the quarter-, one-, three- and
five-year periods (as applicable) ending December 31, 2008 and for the same
periods (as applicable) ending March 31, 2009. The Independent Board Members
also reviewed performance information of the Funds managed by NAM in the
aggregate ranked by peer group and the performance of such Funds, in the
aggregate, relative to their benchmark. This information supplemented the Fund
performance information provided to the Board at each of its quarterly meetings.
In comparing a Fund's performance with that of its Performance Peer Group, the
Independent Board Members took into account that the closest Performance Peer
Group in certain instances may not adequately reflect the respective fund's
investment objectives and strategies thereby hindering a meaningful comparison
of the fund's performance with that of the Performance Peer Group. The
Independent Board Members further considered the performance of the Funds in the
context of the volatile
Nuveen Investments 105
Annual Investment Management Agreement Approval Process (continued)
market conditions during the past year, and their impact on various asset
classes and the portfolio management of the Funds.
Based on their review and factoring in the severity of market turmoil in 2008,
the Independent Board Members determined that each Fund's investment performance
over time had been satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
The Board evaluated the management fees and expenses of each Fund reviewing,
among other things, such Fund's gross management fees, net management fees and
total expense ratios (before and after expense reimbursements and/or waivers) in
absolute terms as well as compared to the fee and expenses of a comparable
universe of unaffiliated funds based on data provided by an independent fund
data provider (the "Peer Universe") and in certain cases, to a more focused
subset of funds in the Peer Universe (the "Peer Group").
The Independent Board Members further reviewed data regarding the construction
of the applicable Peer Universe and Peer Group. In reviewing the comparisons of
fee and expense information, the Independent Board Members took into account
that in certain instances various factors such as the asset level of the Fund
relative to peers, the size and particular composition of the Peer Universe or
Peer Group, the investment objectives of the peers, expense anomalies, changes
in the funds comprising the Peer Universe or Peer Group from year to year,
levels of reimbursement and the timing of information used may impact the
comparative data, thereby limiting the ability to make a meaningful comparison.
In addition, the Independent Board Members considered, among other things, the
differences in the use and type of leverage compared to the peers. The
Independent Board Members also considered the differences in the states
reflected in the respective Peer Group. In reviewing the fee schedule for a
Fund, the Independent Board Members also considered the fund-level and
complex-wide breakpoint schedules (described in further detail below) and any
fee waivers and reimbursements provided by Nuveen (applicable, in particular,
for certain closed-end funds launched since 1999).
Based on their review of the fee and expense information provided, the
Independent Board Members determined that each Fund's management fees and net
total expense ratio were reasonable in light of the nature, extent and quality
of services provided to the Fund.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Independent Board Members further reviewed information regarding the nature
of services and fee rates offered by NAM to other clients. Such other clients
include NAM's municipal separately managed accounts. In evaluating the
comparisons of fees, the Independent Board Members noted that the fee rates
charged to the Funds and other clients vary, among other things, because of the
different services involved and the additional regulatory and compliance
requirements associated with registered investment companies, such as the Funds.
Accordingly, the
106 Nuveen Investments
Independent Board Members considered the differences in the product types,
including, but not limited to, the services provided, the structure and
operations, product distribution and costs thereof, portfolio investment
policies, investor profiles, account sizes and regulatory requirements. The
Independent Board Members noted, in particular, that the range of services
provided to the Funds (as discussed above) is much more extensive than that
provided to separately managed accounts. Given the inherent differences in
the products, particularly the extensive services provided to the Funds,
the Independent Board Members believe such facts justify the different
levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the Independent Board Members also
considered the profitability of Nuveen for its advisory activities (which
incorporated Nuveen's wholly-owned affiliated sub-advisers other than
Winslow Capital) and its financial condition. The Independent Board Members
reviewed the revenues and expenses of Nuveen's advisory activities for the
last two years, the allocation methodology used in preparing the
profitability data and an analysis of the key drivers behind the changes in
revenues and expenses that impacted profitability in 2008. In addition, the
Independent Board Members reviewed information regarding the financial
results of Nuveen for 2008 based on its Form 8-K filed on March 31, 2009.
The Independent Board Members noted this information supplemented the
profitability information requested and received during the year to help
keep them apprised of developments affecting profitability (such as changes
in fee waivers and expense reimbursement commitments). In this regard, the
Independent Board Members noted that they had also appointed an Independent
Board Member as a point person to review and keep them apprised of changes
to the profitability analysis and/or methodologies during the year. The
Independent Board Members also considered Nuveen's revenues for advisory
activities, expenses, and profit margin compared to that of various
unaffiliated management firms with similar amounts of assets under
management and relatively comparable asset composition prepared by Nuveen.
In reviewing profitability, the Independent Board Members recognized the
subjective nature of determining profitability which may be affected by
numerous factors including the allocation of expenses. Further, the
Independent Board Members recognized the difficulties in making comparisons
as the profitability of other advisers generally is not publicly available
and the profitability information that is available for certain advisers or
management firms may not be representative of the industry and may be
affected by, among other things, the adviser's particular business mix,
capital costs, types of funds managed and expense allocations.
Notwithstanding the foregoing, the Independent Board Members reviewed
Nuveen's methodology and assumptions for allocating expenses across product
lines to determine profitability. In reviewing profitability, the
Independent Board Members recognized Nuveen's investment in its fund
business.
Based on its review, the Independent Board Members concluded that Nuveen's
level of profitability for its advisory activities was reasonable in light
of the services provided.
Nuveen Investments 107
Annual Investment Management Agreement Approval Process (continued)
In evaluating the reasonableness of the compensation, the Independent Board
Members also considered other amounts paid to NAM by the Funds as well as
any indirect benefits (such as soft dollar arrangements, if any) NAM and
its affiliates receive, or are expected to receive, that are directly
attributable to the management of the Funds, if any. See Section E below
for additional information on indirect benefits NAM may receive as a result
of its relationship with the Funds. Based on their review of the overall
fee arrangements of each Fund, the Independent Board Members determined
that the advisory fees and expenses of the respective Fund were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Independent Board Members have
recognized the potential benefits resulting from the costs of a fund being
spread over a larger asset base, although economies of scale are difficult to
measure and predict with precision, particularly on a fund-by-fund basis. One
method to help ensure the shareholders share in these benefits is to include
breakpoints in the advisory fee schedule. Generally, management fees for funds
in the Nuveen complex are comprised of a fund-level component and a
complex-level component, subject to certain exceptions. Accordingly, the
Independent Board Members reviewed and considered the applicable fund-level
breakpoints in the advisory fee schedules that reduce advisory fees as asset
levels increase. In this regard, the Independent Board Members noted that
although closed-end funds may from time-to-time make additional share offerings,
the growth of their assets will occur primarily through the appreciation of such
funds' investment portfolio. While economies of scale result when costs can be
spread over a larger asset base, the Independent Board Members recognized that
the asset levels generally declined in 2008 due to, among other things, the
market downturn. Accordingly, for Funds with a reduction in assets under
management, advisory fee levels may have increased as breakpoints in the fee
schedule were no longer surpassed.
In addition to fund-level advisory fee breakpoints, the Board also considered
the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee
arrangement, the fees of the funds in the Nuveen complex generally are reduced
as the assets in the fund complex reach certain levels. The complex-wide fee
arrangement seeks to provide the benefits of economies of scale to fund
shareholders when total fund complex assets increase, even if assets of a
particular fund are unchanged or have decreased. The approach reflects the
notion that some of Nuveen's costs are attributable to services provided to all
its funds in the complex and therefore all funds benefit if these costs are
spread over a larger asset base. Generally, the complex-wide pricing reduces
Nuveen's revenue because total complex fund assets have consistently grown in
prior years. As noted, however, total fund assets declined in 2008 resulting in
a smaller downward adjustment of revenues due to complex-wide pricing compared
to the prior year.
108 Nuveen Investments
Based on their review, the Independent Board Members concluded that the
breakpoint schedules and complex-wide fee arrangement were acceptable and
reflect economies of scale to be shared with shareholders when assets under
management increase.
E. INDIRECT BENEFITS
In evaluating fees, the Independent Board Members received and considered
information regarding potential "fall out" or ancillary benefits NAM or its
affiliates may receive as a result of its relationship with each Fund. In this
regard, the Independent Board Members considered revenues received by affiliates
of NAM for serving as agent at Nuveen's trading desk.
In addition to the above, the Independent Board Members considered whether NAM
received any benefits from soft dollar arrangements whereby a portion of the
commissions paid by a Fund for brokerage may be used to acquire research that
may be useful to NAM in managing the assets of the Funds and other clients. The
Independent Board Members noted that NAM does not currently have any soft dollar
arrangements; however, to the extent certain bona fide agency transactions that
occur on markets that traditionally trade on a principal basis and riskless
principal transactions are considered as generating "commissions," NAM intends
to comply with the applicable safe harbor provisions.
Based on their review, the Independent Board Members concluded that any indirect
benefits received by NAM as a result of its relationship with the Funds were
reasonable and within acceptable parameters.
F. OTHER CONSIDERATIONS
The Independent Board Members did not identify any single factor discussed
previously as all-important or controlling. The Board Members, including the
Independent Board Members, unanimously concluded that the terms of the Advisory
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the Advisory Agreements be renewed.
Nuveen Investments 109
Reinvest Automatically Easily and Conveniently
Nuveen makes reinvesting easy. A phone call is all it takes to set up your
reinvestment account.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price
110 Nuveen Investments
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.
Nuveen Investments 111
Glossary of Terms Used in this Report
o AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
o AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time
period. It expresses the return that would have been necessary each year
to equal the investment's actual cumulative performance (including change
in NAV or market price and reinvested dividends and capital gains
distributions, if any) over the time period being considered.
o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments
or the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
o INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
112 Nuveen Investments
o LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to
changes when market interest rates change. Generally, the longer a bond's
or Fund's duration, the more the price of the bond or Fund will change as
interest rates change. Leverage-adjusted duration takes into account the
leveraging process for a Fund and therefore is longer than the duration of
the Fund's portfolio of bonds.
o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
o NET ASSET VALUE (NAV): A Fund's NAV per common share is calculated by
subtracting the liabilities of the Fund (including any Preferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of common shares outstanding. Fund
NAVs are calculated at the end of each business day.
o TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
o ZERO COUPON BOND: A zero coupon bond does not pay a regular interest
coupon to its holders during the life of the bond. Tax-exempt income to
the holder of the bond comes from accretion of the difference between the
original purchase price of the bond at issuance and the par value of the
bond at maturity and is effectively paid at maturity. The market prices of
zero coupon bonds generally are more volatile than the market prices of
bonds that pay interest periodically.
Nuveen Investments 113
Notes
114 Nuveen Investments
Other Useful Information
BOARD OF TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box
43071 Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2008, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
(NYSE) the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.
Each Fund has filed with the SEC the certification of its Chief Executive
Officer and Chief Financial Officer required by Section 302 of the
Sarbanes-Oxley Act.
COMMON AND PREFERRED SHARE INFORMATION
Each Fund intends to repurchase and/or redeem shares of its own common or
preferred stock in the future at such times and in such amounts as is deemed
advisable. During the period covered by this report, the Funds repurchased
and/or redeemed/noticed for redemption shares of their common and/or preferred
stock as shown in the accompanying table.
Preferred Shares
Common Shares Redeemed and/or
Fund Repurchased Noticed for Redemption
NMY -- 329
NFM -- 247
NZR -- 215
NWI -- 160
NPV -- --
NGB -- 180
NNB -- 33
Any future repurchases and/or redemptions will be reported to shareholders in
the next annual or semi-annual report.
NUVEEN INVESTMENTS 115
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.
Nuveen Investments is a global investment management firm that seeks to help
secure the long-term goals of institutions and high net worth investors as well
as the consultants and financial advisors who serve them. Nuveen Investments
markets its growing range of specialized investment solutions under the
high-quality brands of HydePark, NWQ, Nuveen, Santa Barbara, Symphony,
Tradewinds and Winslow Capital. In total, the Company managed $115 billion of
assets on March 31, 2009.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or NUVEEN INVESTMENTS, 333 W. WACKER DR., CHICAGO, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Distributed by It's not what you earn,
Nuveen Investments, LLC it's what you keep.(R)
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
EAN-A-0509D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/CEF/Info/Shareholder.
(To view the code, click on Fund Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees ("Board") determined that the
registrant has at least one "audit committee financial expert" (as defined in
Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit
committee financial expert is Jack B. Evans, who is "independent" for purposes
of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Maryland Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND (1) BILLED TO FUND (2) BILLED TO FUND (3) BILLED TO FUND (4)
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2009 $ 10,899 $ 0 $ 0 $ 850
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2008 $ 10,711 $ 0 $ 500 $ 800
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees."
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
for agreed upon procedures engagements performed for leveraged funds.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM that provides ongoing services to
the Fund ("Affiliated Fund Service Provider"), for engagements directly related
to the Fund's operations and financial reporting, during the Fund's last two
full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2009 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2008 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. The Audit
Committee is required to pre-approve non-audit services that Ernst & Young LLP
provides to the Adviser and any Affiliated Fund Services Provider, if the
engagement related directly to the Fund's operations and financial reporting
(except for those subject to the pre-approval exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2009 $ 850 $ 0 $ 0 $ 850
May 31, 2008 $ 1,300 $ 0 $ 0 $ 1,300
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board has a separately designated Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are
Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and
David J. Kundert.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The registrant invests its assets primarily in municipal bonds and cash
management securities. On rare occasions the registrant may acquire, directly or
through a special purpose vehicle, equity securities of a municipal bond issuer
whose bonds the registrant already owns when such bonds have deteriorated or are
expected shortly to deteriorate significantly in credit quality. The purpose of
acquiring equity securities generally will be to acquire control of the
municipal bond issuer and to seek to prevent the credit deterioration or
facilitate the liquidation or other workout of the distressed issuer's credit
problem. In the course of exercising control of a distressed municipal issuer,
NAM may pursue the registrant's interests in a variety of ways, which may entail
negotiating and executing consents, agreements and other arrangements, and
otherwise influencing the management of the issuer. NAM does not consider such
activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but
nevertheless provides reports to the registrant's Board on its control
activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM
would either engage an independent third party to determine how the proxy should
be voted or vote the proxy with the consent, or based on the instructions, of
the registrant's Board or its representative. A member of NAM's legal department
would oversee the administration of the voting, and ensure that records were
maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on
Form N-PX, and the results provided to the registrant's Board and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
THE PORTFOLIO MANAGER
The following individual has primary responsibility for the day-to-day
implementation of the registrant's investment strategies:
NAME FUND
Cathryn P. Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3
Other Accounts Managed. In addition to managing the registrant, the portfolio
manager is also primarily responsible for the day-to-day portfolio management of
the following accounts:
NUMBER OF
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
Cathryn P. Steeves Registered Investment Company 44 $7.700 billion
Other Pooled Investment Vehicles 0 $0
Other Accounts 0 $0
* Assets are as of May 31, 2009. None of the assets in these accounts are
subject to an advisory fee based on performance.
Compensation. Each portfolio manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
compensation strategy is to annually compare overall compensation to the market
in order to create a compensation structure that is competitive and consistent
with similar financial services companies. As discussed below, several factors
are considered in determining each portfolio manager's total compensation. In
any year these factors may include, among others, the effectiveness of the
investment strategies recommended by the portfolio manager's investment team,
the investment performance of the accounts managed by the portfolio manager, and
the overall performance of Nuveen Investments, Inc. (the parent company of NAM).
Although investment performance is a factor in determining the portfolio
manager's compensation, it is not necessarily a decisive factor. The portfolio
manager's performance is evaluated in part by comparing manager's performance
against a specified investment benchmark. This fund-specific benchmark is a
customized subset (limited to bonds in each Fund's specific state and with
certain maturity parameters) of the S&P/Investortools Municipal Bond index, an
index comprised of bonds held by managed municipal bond fund customers of
Standard & Poor's Securities Pricing, Inc. that are priced daily and whose fund
holdings aggregate at least $2 million. As of May 31, 2009, the
S&P/Investortools Municipal Bond index was comprised of 52,924 securities with
an aggregate current market value of $1,076 billion.
Base salary. Each portfolio manager is paid a base salary that is set at a level
determined by NAM in accordance with its overall compensation strategy discussed
above. NAM is not under any current contractual obligation to increase a
portfolio manager's base salary.
Cash bonus. Each portfolio manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each portfolio manager's supervisors, along with reviews submitted by his
peers. These reviews and evaluations often take into account a number of
factors, including the effectiveness of the investment strategies recommended to
the NAM's investment team, the performance of the accounts for which he serves
as portfolio manager relative to any benchmarks established for those accounts,
his effectiveness in communicating investment performance to stockholders and
their representatives, and his contribution to the NAM's investment process and
to the execution of investment strategies. The cash bonus component is also
impacted by the overall performance of Nuveen Investments, Inc. in achieving its
business objectives.
Long-term incentive compensation. In connection with the acquisition of Nuveen
Investments, Inc., by a group of investors led by Madison Dearborn Partners in
November 2007, certain employees, including portfolio managers, received profit
interests in Nuveen's parent. These profit interests entitle the holders to
participate in the appreciation in the value of Nuveen beyond the issue date and
vest over five to seven years, or earlier in the case of a liquidity event.
Material Conflicts of Interest. Each portfolio manager's simultaneous management
of the registrant and the other accounts noted above may present actual or
apparent conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the registrant and the other account. NAM,
however, believes that such potential conflicts are mitigated by the fact that
the NAM has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of May 31, 2009, the portfolio manager
beneficially owned the following dollar range of equity securities issued by the
registrant and other Nuveen Funds managed by NAM's municipal investment team.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE BENEFICIALLY OWNED
OF EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
NAME OF BENEFICIALLY BY NAM'S MUNICIPAL
PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
----------------------------------------------------------------------------------------------------------------------------
Cathryn P. Steeves Nuveen Maryland Dividend Advantage Municipal Fund 3 $0 $10,001-$50,000
PORTFOLIO MANAGER BIO:
Cathryn P. Steeves, PhD is currently a portfolio manager for 45 state-specific
municipal bond funds. She joined Nuveen in 1996 and worked as a senior analyst
in the healthcare sector. Ms. Steeves has an undergraduate degree from Wake
Forest University as well as an MA, an MPhil and a PhD from Columbia University.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/CEF/Info/
Shareholder and there were no amendments during the period covered by this
report. (To view the code, click on Fund Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Maryland Dividend Advantage Municipal Fund 3
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By (Signature and Title) /s/ Kevin J. McCarthy
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Kevin J. McCarthy
Vice President and Secretary
Date: August 6, 2009
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Gifford R. Zimmerman
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Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: August 6, 2009
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By (Signature and Title) /s/ Stephen D. Foy
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Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: August 6, 2009
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