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 811-21212
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Nuveen Insured California Tax-Free Advantage Municipal Fund
------------------------------------------------------------------------------
(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)
Jessica R. Droeger
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: August 31
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Date of reporting period: February 29, 2004
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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.
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
SEMIANNUAL REPORT February 29, 2004
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NPC
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NCL
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
NCU
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NAC
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NVX
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NZH
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NKL
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
NKX
Photo of: Man holding up small boy.
Photo of: 2 women with 2 girls looking at seashells.
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
Logo: NUVEEN Investments
FASTER INFORMATION
RECEIVE YOUR
NUVEEN FUND REPORT
ELECTRONICALLY
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WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR
MAIL DELIVERY AGAIN?
If you decide you do not like receiving your reports electronically, it's a
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IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.INVESTORDELIVERY.COM and follow the simple instructions, using
the address sheet that accompanied this report as a guide.
2 You'll be taken to a page with several options. Select the NEW
ENROLLMENT-CREATE screen and follow the simple instructions.
3 Click Submit. Confirm the information you just entered is correct, then
click Submit again.
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back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME DIRECTLY TO YOU FROM NUVEEN,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.NUVEEN.COM
2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click
on Enrollment Today.
3 You'll be taken to a screen that asks for your Social Security number and
e-mail address. Fill in this information, then click Enroll.
4 You should get a confirmation e-mail within 24 hours. If you do not, go
back through these steps to make sure all the information is correct.
5 Use this same process if you need to change your registration information
or cancel internet viewing.
Logo: NUVEEN Investments
Timothy R. Schwertfeger
Chairman of the Board
Photo of: Timothy R. Schwertfeger
Sidebar text: WE THINK THAT MUNICIPAL BOND INVESTMENTS LIKE YOUR NUVEEN FUND CAN
BE IMPORTANT BUILDING BLOCKS IN A WELL-BALANCED PORTFOLIO.
Dear
SHAREHOLDER
By coincidence, this letter is dated April 15 - the one day every year when the
value of tax-free income may be the most obvious.
So on this date in particular, I am very pleased to report that for the period
ended February 29, 2004, your Nuveen California Fund continued to provide you
with attractive monthly tax-free income.
While tax-free income always is welcome, many of you may have begun to wonder
whether interest rates will rise, and whether that possibility should cause you
to adjust your holdings of tax-free municipal bond investments. We believe that
these are questions that should be thought through with a clear focus on your
long-term financial goals and not on day-to-day market movements. By maintaining
a carefully balanced portfolio with the help of a trusted investment
professional, you may be able to reduce your overall investment risk over the
long-term, and give yourself a better chance to meet your ultimate financial
goals. We think that municipal bond investments like your Nuveen Fund can be
important building blocks in a well-balanced portfolio - not only on April 15,
but on every other day of the year as well.
As you read through this report, please don't skip the inside front cover. I
urge you to consider receiving future Fund reports and other Fund information by
e-mail and the Internet. Not only will you be able to receive the information
faster, but this also may help lower your Fund's expenses. Sign up is quick and
easy.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
April 15, 2004
1
Nuveen California Municipal Closed-End Exchange-Traded Funds
(NPC, NCL, NCU, NAC, NVX, NZH, NKL, NKX)
Portfolio Managers'
COMMENTS
Portfolio managers Tom O'Shaughnessy and Scott Romans review national and state
economic and market conditions, key investment strategies, and the six-month
performance of the Funds. With 21 years of experience at Nuveen, Tom has managed
NPC and NCL since January 2003. Scott, who joined Nuveen in 2000, also assumed
portfolio management responsibility for the remaining six Funds in January 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE REPORTING
PERIOD ENDED FEBRUARY 29, 2004?
During this reporting period, the greatest influences on the national economy
and the municipal market continued to be historically low interest rates, little
movement in the reported rate of inflation, and growing evidence of economic
improvement. Since its last credit easing in June 2003, the Federal Reserve has
maintained the fed funds rate at 1.0%, the lowest level since 1958. This
accommodative monetary policy helped to spur economic growth of 4.1%
(annualized) in the fourth quarter of 2003, bringing the growth in the gross
domestic product (GDP) for all of 2003 to a solid 3.1%. Over the six-month
reporting period, inflation remained under control, with the increase in the
core CPI averaging 1.2% year-over-year.
In this generally favorable environment, many municipal bonds performed well
during the six months ended February 29, 2004. Although municipal supply
nationally in 2003 reached $382.7 billion, breaking the record set in 2002,
issuance slowed somewhat during the last half of 2003. Tighter supply continued
into the first two months of 2004, with national issuance totaling $42.5
billion, a decrease of 26% from January-February 2003. For the entire six-month
period ended February 2004, we saw $26 billion less in new bonds coming to
market than in the preceding six months.
HOW WERE ECONOMIC AND MARKET CONDITIONS IN CALIFORNIA?
Despite a period of enormous political and financial uncertainty, California
generally managed to track the national economic recovery over the six months
ended February 29, 2004. While the state economy remained hindered by the slow
recovery of the technology sector, a strong housing market helped to fuel growth
in construction, financial services (driven by demand for mortgage financing),
and consumer spending. Increased defense spending also had positive implications
for the state's aerospace industry. In addition, California's $100 billion
export industry, covering agricultural, computer, and electronic products, was
aided by the decline in the U.S. dollar. In general, the Bay Area and Silicon
Valley remained the weakest areas in the aftermath of the technology downturn,
while other parts of the state, especially Riverside County in southern
California, showed stronger economic growth. Although the state continued to
lose jobs in the government, manufacturing, and business services sectors, the
educational and health services, the leisure and hospitality and construction
industries all experienced recent gains.
Following the October 2003 governor's recall election, attention turned to
developing potential solutions to the state's fiscal crisis. Legal challenges to
two bond proposals ($1.9 billion in pension obligation bonds and $10.7 billion
in fiscal recovery bonds) caused both Moody's and Fitch to downgrade
California's general obligation debt to Baa1/BBB from A3/A in December 2003.
Standard & Poor's, which had downgraded the state in July 2003, kept its rating
at BBB, and all three agencies maintained negative outlooks for the state. In
January 2004, the governor proposed a $79 billion
2
budget for fiscal 2005. The budget proposal avoids tax increases and includes
expenditure cuts and spending deferrals, among other measures. To take effect,
this budget must be passed by a two-thirds legislative majority before June 30,
2004. We believe a punctual budget agreement would send a strong positive signal
to investors, facilitate the issuance of future bonds at more cost-effective
yields for the state, and strengthen California's credit outlook.
On March 2, 2004 (following the close of this reporting period), California
voters approved the issuance of $15 billion in economic recovery bonds (ERBs) as
well as a resolution calling for future limits on spending and borrowing.
Moody's and S&P subsequently revised their outlooks for California to stable and
positive, respectively.
California continued to rank as the nation's largest issuer of municipal bonds,
with $57.9 billion in new bonds in 2003, up 18% over 2002. In the first two
months of 2004, however, supply fell 57% from January-February 2003 levels, as
state issuance totaled $5.4 billion. This decline was due primarily to a delay
in some issuance as issuing authorities waited for the outcome of the March 2004
referenda.
IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING
THE SIX MONTHS ENDED FEBRUARY 29, 2004?
Over this reporting period, our major focus continued to be on careful
management of the Funds' durations1 as a way to mitigate some of the inherent
interest rate risk within each Fund's portfolio and better position each Fund
for potentially more consistent returns over time. Interest rate risk is the
risk that the value of a Fund's portfolio will decline if market interest rates
rise (since bond prices move in the opposite direction of interest rates). The
longer the duration of a Fund's portfolio, the greater its interest rate risk.
Overall, we were able to shorten the durations of all of these Funds during the
course of the six-month period.
As noted earlier, the supply of new issue municipal bonds in California began to
soften during the course of this six-month reporting period. This presented some
challenges in finding securities that we believed had the potential to add value
and carried the types of structures and features we prefer. The supply of
attractive insured bonds was particularly tight at times, which meant there were
occasional periods in managing NPC, NCL, NKL and NKX when it took a little
longer than normal to make a desired purchase.
For NCU, NAC, NVX and NZH, one of our strategies over the longer term has
centered on purchasing and selling California general obligation bonds (GOs) to
take advantage of general market moves. In February 2004, we bought part of the
$2 billion issuance of state GOs for each of these four Funds, with the goal of
modestly increasing their GO holdings. As the state continues to work its way
out of its current credit problems, we anticipate that the yield spreads on
these bonds relative to national AAA credits with similar maturities may narrow.
If this occurs, it may provide us with the opportunity to sell some of these GO
holdings at attractive prices in the future.
In NCU, NAC, NVX and NZH, we also continued to purchase both investment-grade
and smaller, unrated land-secured offerings. In our opinion, the market prices
did not reflect our assessment of the actual risks of holding these securities,
resulting in some opportunities to buy bonds we considered to be undervalued.
Two such additions to NAC, NVX and NZH during this six-month period were issues
by the Capistrano Unified School District on behalf of the Talega development,
and by the Patterson Community Facilities District. On the other side, in
September 2003 our research indicated a weakening credit picture for bonds
issued for the Sacramento-Yolo Port District, and we were able to close out
NVX's $3.84 million position in that credit shortly before the issue was
downgraded.
In NPC and NCL, we focused on taking advantage of some of the beneficial tax
positions within both Funds. NCL, in particular, had a large amount of tax loss
carryforward, which over time can
1 Duration is a measure of a Fund's NAV volatility in reaction to interest rate
movements. Fund duration, also known as leverage-adjusted duration, takes into
account the leveraging process for a Fund and therefore is generally longer
than the duration of the actual portfolio of individual bonds that make up the
Fund. References to duration in this commentary are intended to indicate Fund
duration unless otherwise noted.
3
serve to offset realized capital gains within the portfolio.
HOW DID THE FUNDS PERFORM?
Individual results for the Funds, as well as for relevant benchmarks, are
presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE
For periods ended 2/29/04
(6-mo. cumulative, all others annualized)
Uninsured Funds 6-Mo. 1-yr. 5-Yr. 10-Yr.
--------------------------------------------------
NCU 12.14% 9.63% 6.97% 7.00%
--------------------------------------------------
NAC 11.54% 10.39% -- --
--------------------------------------------------
NVX 11.81% 9.97% -- --
--------------------------------------------------
NZH 12.99% 10.87% -- --
--------------------------------------------------
Lehman Brothers CA
Tax-Exempt Municipal
Bond Index2 6.97% 6.17% 5.85% 6.40%
--------------------------------------------------
Lipper CA Municipal
Debt Funds category
average3 11.51% 9.11% 6.32% 6.67%
--------------------------------------------------
Insured Funds 6-Mo. 1-yr. 5-Yr. 10-Yr.
--------------------------------------------------
NPC 10.46% 9.07% 6.55% 7.08%
--------------------------------------------------
NCL 10.44% 9.12% 6.90% 6.99%
--------------------------------------------------
NKL 12.73% 10.38% -- --
--------------------------------------------------
NKX 13.17% 11.12% -- --
--------------------------------------------------
Lehman Brothers CA
Insured Tax-Exempt
Municipal Bond
Index2 7.05% 6.53% 6.12% 6.55%
--------------------------------------------------
Lipper CA Insured
Municipal Debt Funds
category average3 11.14% 8.91% 6.26% 6.77%
--------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the six months ended February 29, 2004, the total returns of all eight of
the Funds in this report outperformed their respective Lehman Brothers
California Municipal Bond benchmarks. The use of leverage was the primary factor
that influenced the Funds'six-month returns relative to these unmanaged,
unleveraged indexes. While leveraging can add volatility to net asset value and
share price, this strategy can also provide opportunities for additional income
and total return for common shareholders during periods of low or falling
interest rates, which was the case during this relatively short reporting
period.
The Funds' total return performances during this period, when compared with each
other, also were influenced by their durations. Generally, the longer the
duration of a Fund, the more its value will be affected by changes in prevailing
interest rates. Over this six-month reporting period, interest rates generally
declined which caused bond prices to rise and helped enhance the Funds'
cumulative returns. Among the Funds shown in this report, the best performers
over the reporting period were the ones with the longest durations as of
February 29, 2004.
In addition to leverage and duration, NCU, NAC, NVX, NZH, NKL and NKX all held
bonds backed by revenues from the 1998 master tobacco settlement agreement.
Recently, in the wake of some favorable legal developments, the market took a
more optimistic view of these securities. As a result, over the six-month
reporting period, tobacco bonds generally appreciated and made strong
contributions to these Fund's returns.
Looking at other factors that affected each Fund's performance over the
reporting period, NCU was helped by its water and sewer bond holdings. NAC
benefited from its allocation to non-rated, land-secured offerings, but saw some
of its multifamily housing bonds trail the general market. NVX and NZH had good
performance from their toll road holdings, although NVX's allocation to
multifamily housing bonds constrained its performance since this sector did not
do as well as many others over this reporting period.
Among the insured Funds, NPC and NCL benefited from the generally strong
performance of insured California bonds over a period of budget and political
uncertainty and generally falling interest rates. NKL and NKX took advantage of
their ability to invest up to 20% of their assets in uninsured, investment-grade
quality bonds to enhance their returns over the reporting period. In particular,
NKL was helped by the performance of some of its multifamily housing bonds,
while NKX benefited
2 The Lehman Brothers California Tax-Exempt Municipal Bond Index is an
unleveraged, unmanaged index comprising a broad range of investment-grade
California municipal bonds. The Lehman Brothers California Insured Tax-Exempt
Municipal Bond Index is an unleveraged, unmanaged index comprised of a broad
range of insured California municipal bonds. Results for the Lehman indexes do
not reflect any expenses.
3 The Lipper California Municipal Debt Funds category average is calculated
using all the California leveraged and unleveraged closed-end
exchange-traded funds in the Lipper peer group for the respective periods.
The Lipper California Insured Municipal Debt Funds category average is
calculated using all the insured California leveraged and unleveraged
closed-end exchange-traded funds in the Lipper peer group for the
respective periods. Fund and Lipper returns assume reinvestment of
dividends.
4
from rising prices among some of its water and sewer bonds.
WHAT ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining at historically low levels, the
dividend-paying capabilities of these Funds benefited from their leveraged
structure over the six months ended February 2004. The extent of this benefit is
tied in part to the short-term rates the Funds pay their MuniPreferred(R)
shareholders. During periods of low short-term rates, the Funds generally pay
relatively low dividends to their MuniPreferred shareholders, which can leave
more earnings to support common share dividends. During this six-month period,
continued low short-term rates enabled us to increase the dividends of NPC, NAC
and NVX. Leverage also helped to support the dividends of NCL and NCU, both of
which had offered shareholders 45 consecutive months of steady or increasing
dividends as of February 29, 2004. NZH, NKL and NKX, which were introduced in
late 2001 and 2002, each have continued to provide stable, attractive dividends
since their inceptions.
All of these Funds 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 net asset value. 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 February 29, 2004, all of
the Funds in this report except NKX had positive UNII.
As of February 29, 2004, all eight Funds were trading at share price discounts
to their net asset values (see charts on individual Performance Overview pages).
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
FEBRUARY 29, 2004?
We believed that, given the current geopolitical and economic climate,
maintaining strong credit quality was a vital requirement. NPC and NCL continued
to be 100% invested in insured and/or U.S. guaranteed securities. NKL and NKX,
which are allowed to invest up to 20% of their assets in uninsured,
investment-grade quality securities, held 80% and 82% of their portfolios,
respectively, in insured bonds as of February 29, 2004. The other Funds also
offered excellent credit quality, with allocations of bonds rated AAA/U.S.
guaranteed and AA ranging from 63% in NAC to 67% in NCU and NZH, and 71% in NVX.
At the same time, NCU, NVX and NZH had modest increases in their holdings rated
BBB or lower over the course of the reporting period, due in part to the
downgrade of California general obligation bonds by Moody's in December 2003.
As of February 29, 2004, potential call exposure during 2004-2005 ranged from
zero in NKL and NKX to 1% in NVX, 2% in NAC and NZH, and 8% in NPC and NCL. NCU,
which marked its ten-year anniversary in mid-2003, faces potential calls on 19%
of its portfolio over this period as the Fund continues to work its way through
a period typically associated with increased call exposure. The actual number of
bond calls in all of these Funds will depend largely on market interest rates.
In general, we believe that these Funds can continue to serve as attractive
sources of tax-free income, while simultaneously offering the potential for
portfolio diversification. In our opinion, the Funds represent a quality
component of a well-balanced core investment portfolio that can continue to
benefit shareholders over time.
5
Nuveen Insured California Premium Income Municipal Fund, Inc.
Performance
OVERVIEW As of February 29, 2004
NPC
Pie Chart:
CREDIT QUALITY
Insured 78%
Insured and U.S. Guaranteed 3%
U.S. Guaranteed 19%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $16.22
--------------------------------------------------
Common Share Net Asset Value $16.68
--------------------------------------------------
Premium/(Discount) to NAV -2.76%
--------------------------------------------------
Market Yield 5.70%
--------------------------------------------------
Taxable-Equivalent Yield1 8.70%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $107,420
--------------------------------------------------
Average Effective Maturity (Years) 18.89
--------------------------------------------------
Leverage-Adjusted Duration 8.49
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 11/19/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.18% 9.07%
--------------------------------------------------
5-Year 5.99% 6.55%
--------------------------------------------------
10-Year 7.38% 7.08%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 25%
--------------------------------------------------
U.S. Guaranteed 22%
--------------------------------------------------
Water and Sewer 18%
--------------------------------------------------
Utilities 12%
--------------------------------------------------
Tax Obligation/Limited 10%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.077
Jan 0.077
Feb 0.077
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 15.8
15.9
16.25
15.67
15.91
16
15.85
16.1
15.82
16.25
16.39
16.42
16.6
16.75
16.35
16.2
16.27
15.9
15.25
14.55
15.03
14.85
14.81
15.07
15.02
15.16
15.2
15.04
15.35
15.36
15.3
15.32
15.44
15.39
15.75
15.79
15.72
15.64
15.88
16.07
16.12
16.31
16.42
16.09
16.06
16.21
16.09
16.27
2/29/04 16.22
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2003 of $0.0615 per share.
6
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Performance
OVERVIEW As of February 29, 2004
NCL
Pie Chart:
CREDIT QUALITY
Insured 95%
Insured and U.S. Guaranteed 3%
U.S. Guaranteed 2%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $15.55
--------------------------------------------------
Common Share Net Asset Value $15.65
--------------------------------------------------
Premium/(Discount) to NAV -0.64%
--------------------------------------------------
Market Yield 5.86%
--------------------------------------------------
Taxable-Equivalent Yield1 8.95%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $198,683
--------------------------------------------------
Average Effective Maturity (Years) 19.54
--------------------------------------------------
Leverage-Adjusted Duration 7.88
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 10.07% 9.12%
--------------------------------------------------
5-Year 6.37% 6.90%
--------------------------------------------------
10-Year 7.74% 6.99%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 31%
--------------------------------------------------
Tax Obligation/General 19%
--------------------------------------------------
Water and Sewer 14%
--------------------------------------------------
Education and Civic Organizations 11%
--------------------------------------------------
Utilities 8%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 15
15.3
15.2
14.99
15.14
15.18
15.2
15.41
15.48
15.43
15.65
15.51
15.77
16.35
15.75
15.5
15.52
15.28
14.71
14.37
14.42
14.36
14.29
14.32
14.69
14.62
14.74
14.7
14.95
14.84
14.92
14.93
15.2
15.26
15.19
15.32
15.33
15.3
15.33
15.43
15.6
15.59
15.53
15.52
15.46
15.44
15.51
15.53
2/29/04 15.55
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
7
Nuveen California Premium Income Municipal Fund
Performance
OVERVIEW As of February 29, 2004
NCU
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 59%
AA 8%
A 7%
BBB 17%
NR 4%
BB or lower 5%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $13.87
--------------------------------------------------
Common Share Net Asset Value $14.86
--------------------------------------------------
Premium/(Discount) to NAV -6.66%
--------------------------------------------------
Market Yield 6.32%
--------------------------------------------------
Taxable-Equivalent Yield1 9.65%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $85,810
--------------------------------------------------
Average Effective Maturity (Years) 17.92
--------------------------------------------------
Leverage-Adjusted Duration 10.28
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 6/18/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 10.76% 9.63%
--------------------------------------------------
5-Year 5.58% 6.97%
--------------------------------------------------
10-Year 7.06% 7.00%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 32%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
Healthcare 14%
--------------------------------------------------
Water and Sewer 10%
--------------------------------------------------
Utilities 8%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.073
Apr 0.073
May 0.073
Jun 0.073
Jul 0.073
Aug 0.073
Sep 0.073
Oct 0.073
Nov 0.073
Dec 0.073
Jan 0.073
Feb 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 13.35
13.55
13.48
13.19
13.47
13.47
13.47
13.5
13.51
13.78
13.85
14.09
14.35
14.6
14.47
14.29
14.37
14.24
13.65
13.1
13.08
12.8
12.91
13.02
13.02
13.18
13.19
13.31
13.45
13.43
13.28
13.35
13.57
13.65
13.65
13.69
13.66
13.64
13.6
13.61
13.62
13.71
13.8
13.87
13.77
13.78
13.77
13.84
2/29/04 13.87
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
8
Nuveen California Dividend Advantage Municipal Fund
Performance
OVERVIEW As of February 29, 2004
NAC
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 56%
AA 7%
A 12%
BBB 17%
NR 8%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $15.25
--------------------------------------------------
Common Share Net Asset Value $16.02
--------------------------------------------------
Premium/(Discount) to NAV -4.81%
--------------------------------------------------
Market Yield 6.45%
--------------------------------------------------
Taxable-Equivalent Yield1 9.85%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $375,070
--------------------------------------------------
Average Effective Maturity (Years) 19.37
--------------------------------------------------
Leverage-Adjusted Duration 8.84
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 15.31% 10.39%
--------------------------------------------------
Since Inception 6.66% 8.66%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 26%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Healthcare 9%
--------------------------------------------------
Utilities 9%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.08
Apr 0.08
May 0.08
Jun 0.08
Jul 0.08
Aug 0.08
Sep 0.081
Oct 0.081
Nov 0.081
Dec 0.082
Jan 0.082
Feb 0.082
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 14.35
14.4
14.62
14.89
15.04
15.35
15.66
15.89
15.69
15.44
15.49
15.2
14.6
14.07
14.36
14.36
14.06
14.3
14.48
14.56
14.68
14.75
14.74
14.54
14.52
14.7
14.88
14.82
14.72
14.97
15.13
15.13
15.33
15.21
15.29
15.33
15.29
15.46
15.13
15.2
15.17
15.14
2/29/04 15.25
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
9
Nuveen California Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of February 29, 2004
NVX
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 69%
A 7%
BBB 17%
NR 7%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $14.32
--------------------------------------------------
Common Share Net Asset Value $15.40
--------------------------------------------------
Premium/(Discount) to NAV -7.01%
--------------------------------------------------
Market Yield 6.37%
--------------------------------------------------
Taxable-Equivalent Yield1 9.73%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $227,745
--------------------------------------------------
Average Effective Maturity (Years) 19.68
--------------------------------------------------
Leverage-Adjusted Duration 9.79
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 12.37% 9.97%
--------------------------------------------------
Since Inception 4.61% 8.70%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 31%
--------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------
Education and Civic Organizations 13%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
Housing/Multifamily 7%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.074
Apr 0.074
May 0.074
Jun 0.075
Jul 0.075
Aug 0.075
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 13.55
13.7
13.91
14.06
14.04
14.42
14.72
14.8
14.52
14.52
14.71
14.35
13.97
13.03
13.4
13.19
13.17
13.24
13.52
13.5
13.55
13.72
13.8
13.59
13.65
13.74
13.97
14
13.82
14.1
14.18
14.01
14.05
14.02
14.02
14.2
14.26
14.28
14.11
14.31
14.3
14.2
2/29/04 14.32
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
10
Nuveen California Dividend Advantage Municipal Fund 3
Performance
OVERVIEW As of February 29, 2004
NZH
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 66%
AA 1%
A 8%
BBB 18%
NR 7%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $13.70
--------------------------------------------------
Common Share Net Asset Value $15.05
--------------------------------------------------
Premium/(Discount) to NAV -8.97%
--------------------------------------------------
Market Yield 6.31%
--------------------------------------------------
Taxable-Equivalent Yield1 9.63%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $362,820
--------------------------------------------------
Average Effective Maturity (Years) 19.24
--------------------------------------------------
Leverage-Adjusted Duration 10.55
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 11.16% 10.87%
--------------------------------------------------
Since Inception 2.40% 8.17%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 33%
--------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
Utilities 8%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.072
Apr 0.072
May 0.072
Jun 0.072
Jul 0.072
Aug 0.072
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 13.12
13.23
13.3
13.63
13.7
13.97
14.24
14.39
13.92
14.02
14.2
14.15
13.42
12.89
13.16
12.68
12.71
12.71
12.87
12.85
13.11
13.2
13.17
13.1
13.12
13.13
13.29
13.41
13.54
13.4
13.62
13.55
13.43
13.32
13.31
13.5
13.74
13.71
13.51
13.69
13.81
13.61
2/29/04 13.7
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
11
Nuveen Insured California Dividend Advantage Municipal Fund
Performance
OVERVIEW As of February 29, 2004
NKL
Pie Chart:
CREDIT QUALITY
Insured 80%
AAA (uninsured) 1%
AA (uninsured) 3%
A (uninsured) 5%
BBB (uninsured) 11%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $15.16
--------------------------------------------------
Common Share Net Asset Value $15.85
--------------------------------------------------
Premium/(Discount) to NAV -4.35%
--------------------------------------------------
Market Yield 6.02%
--------------------------------------------------
Taxable-Equivalent Yield1 9.19%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $241,880
--------------------------------------------------
Average Effective Maturity (Years) 21.55
--------------------------------------------------
Leverage-Adjusted Duration 10.07
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 10.78% 10.38%
--------------------------------------------------
Since Inception 7.26% 12.17%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 28%
--------------------------------------------------
Tax Obligation/General 27%
--------------------------------------------------
Utilities 14%
--------------------------------------------------
Water and Sewer 11%
--------------------------------------------------
Education and Civic Organizations 6%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 14.71
14.75
14.85
15
15
15.18
15.47
15.37
15.38
15.27
15.25
15.02
14.36
13.8
13.9
13.71
13.91
14
14.55
14.26
14.35
14.42
14.47
14.32
14.36
14.51
14.84
14.75
14.65
14.8
14.6
14.74
14.74
14.6
14.75
14.83
14.97
14.96
14.76
14.9
14.97
15
2/29/04 15.16
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
2 The Fund also paid shareholders a capital gains distribution in December 2003
of $0.1252 per share.
12
Nuveen Insured California Tax-Free Advantage Municipal Fund
Performance
OVERVIEW As of February 29, 2004
NKX
Pie Chart:
CREDIT QUALITY
Insured 82%
A (uninsured) 5%
BBB (uninsured) 13%
PORTFOLIO SNAPSHOT
--------------------------------------------------
Share Price $15.04
--------------------------------------------------
Common Share Net Asset Value $15.13
--------------------------------------------------
Premium/(Discount) to NAV -0.59%
--------------------------------------------------
Market Yield 6.02%
--------------------------------------------------
Taxable-Equivalent Yield1 9.19%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $88,974
--------------------------------------------------
Average Effective Maturity (Years) 21.81
--------------------------------------------------
Leverage-Adjusted Duration 10.39
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 11/21/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.62% 11.12%
--------------------------------------------------
Since Inception 6.07% 10.47%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 32%
--------------------------------------------------
Tax Obligation/Limited 30%
--------------------------------------------------
Healthcare 12%
--------------------------------------------------
Transportation 9%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar 0.0755
Apr 0.0755
May 0.0755
Jun 0.0755
Jul 0.0755
Aug 0.0755
Sep 0.0755
Oct 0.0755
Nov 0.0755
Dec 0.0755
Jan 0.0755
Feb 0.0755
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
3/1/03 14.7
14.76
14.85
14.82
14.78
15.15
15.45
15.95
15.19
15.02
15.5
15.3
15.06
14.2
14.45
14.08
13.85
13.56
13.64
14.2
14.15
14.02
14.64
14.35
14.37
14.26
14.55
14.66
14.42
14.56
14.48
14.1
14.07
14
14.07
14.55
14.74
15
14.89
14.97
14.8
14.94
2/29/04 15.04
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 34.5%.
For investments that generate qualified dividend income, the
taxable-equivalent yield is lower.
13
Shareholder
MEETING REPORT
The Shareholder Meeting was held in Chicago, Illinois, on November 17, 2003.
NPC NCL NCU
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
William E. Bennett
For 5,822,643 -- 11,840,525 -- 5,293,753 --
Withhold 72,948 -- 92,030 -- 57,063 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Robert P. Bremner
For 5,827,310 -- 11,842,695 -- 5,293,453 --
Withhold 68,281 -- 89,860 -- 57,363 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Lawrence H. Brown
For 5,825,593 -- 11,842,895 -- 5,297,764 --
Withhold 69,998 -- 89,660 -- 53,052 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Jack B. Evans
For 5,827,093 -- 11,841,295 -- 5,294,059 --
Withhold 68,498 -- 91,260 -- 56,757 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Anne E. Impellizzeri
For 5,826,410 -- 11,841,995 -- 5,293,764 --
Withhold 69,181 -- 90,560 -- 57,052 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
William L. Kissick
For 5,827,410 -- 11,841,995 -- 5,297,364 --
Withhold 68,181 -- 90,560 -- 53,452 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Thomas E. Leafstrand
For 5,826,193 -- 11,842,595 -- 5,297,864 --
Withhold 69,398 -- 89,960 -- 52,952 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Peter R. Sawers
For 5,825,193 -- 11,842,595 -- 5,293,864 --
Withhold 70,398 -- 89,960 -- 56,952 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
14
NPC NCL NCU
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS
WAS REACHED AS FOLLOWS: (CONTINUED)
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
William J. Schneider
For -- 1,711 -- 3,331 -- 1,595
Withhold -- 4 -- 7 -- 1
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,715 -- 3,338 -- 1,596
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,711 -- 3,331 -- 1,595
Withhold -- 4 -- 7 -- 1
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,715 -- 3,338 -- 1,596
====================================================================================================================================
Judith M. Stockdale
For 5,823,310 -- 11,841,695 -- 5,298,153 --
Withhold 72,281 -- 90,860 -- 52,663 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
Sheila W. Wellington
For 5,823,410 -- 11,840,995 -- 5,293,764 --
Withhold 72,181 -- 91,560 -- 57,052 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,591 -- 11,932,555 -- 5,350,816 --
====================================================================================================================================
15
Shareholder
MEETING REPORT (continued)
NAC NVX NZH
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
William E. Bennett
For 22,471,003 -- 14,392,024 -- 23,471,950 --
Withhold 146,371 -- 87,046 -- 189,218 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Robert P. Bremner
For 22,475,129 -- 14,399,117 -- 23,474,303 --
Withhold 142,245 -- 79,953 -- 186,865 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Lawrence H. Brown
For 22,475,937 -- 14,397,091 -- 23,477,403 --
Withhold 141,437 -- 81,979 -- 183,765 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Jack B. Evans
For 22,459,337 -- 14,394,917 -- 23,477,403 --
Withhold 158,037 -- 84,153 -- 183,765 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Anne E. Impellizzeri
For 22,475,379 -- 14,397,412 -- 23,477,400 --
Withhold 141,995 -- 81,658 -- 183,768 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
William L. Kissick
For 22,474,079 -- 14,320,231 -- 23,477,070 --
Withhold 143,295 -- 158,839 -- 184,098 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Thomas E. Leafstrand
For 22,473,379 -- 14,398,096 -- 23,477,070 --
Withhold 143,995 -- 80,974 -- 184,098 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Peter R. Sawers
For 22,456,079 -- 14,393,896 -- 23,477,400 --
Withhold 161,295 -- 85,174 -- 183,768 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
16
NAC NVX NZH
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS
WAS REACHED AS FOLLOWS: (CONTINUED)
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting shares voting shares voting
together together together together together together
as a class as a class as a class as a class as a class as a class
====================================================================================================================================
William J. Schneider
For -- 6,435 -- 4,038 -- 6,847
Withhold -- 77 -- 8 -- 9
------------------------------------------------------------------------------------------------------------------------------------
Total -- 6,512 -- 4,046 -- 6,856
====================================================================================================================================
Timothy R. Schwertfeger
For -- 6,435 -- 4,017 -- 6,847
Withhold -- 77 -- 29 -- 9
------------------------------------------------------------------------------------------------------------------------------------
Total -- 6,512 -- 4,046 -- 6,856
====================================================================================================================================
Judith M. Stockdale
For 22,462,479 -- 14,378,621 -- 23,477,403 --
Withhold 154,895 -- 100,449 -- 183,765 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
Sheila W. Wellington
For 22,456,729 -- 14,372,916 -- 23,473,970 --
Withhold 160,645 -- 106,154 -- 187,198 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,617,374 -- 14,479,070 -- 23,661,168 --
====================================================================================================================================
17
Shareholder
MEETING REPORT (continued)
NKL NKX
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
====================================================================================================================================
William E. Bennett
For 14,978,316 -- 5,740,890 --
Withhold 96,605 -- 19,800 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Robert P. Bremner
For 14,979,491 -- 5,741,640 --
Withhold 95,430 -- 19,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Lawrence H. Brown
For 14,978,866 -- 5,741,640 --
Withhold 96,055 -- 19,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Jack B. Evans
For 14,981,166 -- 5,742,640 --
Withhold 93,755 -- 18,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Anne E. Impellizzeri
For 14,979,866 -- 5,731,640 --
Withhold 95,055 -- 29,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
William L. Kissick
For 14,978,533 -- 5,732,640 --
Withhold 96,388 -- 28,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Thomas E. Leafstrand
For 14,979,533 -- 5,731,640 --
Withhold 95,388 -- 29,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Peter R. Sawers
For 14,979,866 -- 5,731,640 --
Withhold 95,055 -- 29,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
18
NKL NKX
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: (CONTINUED)
Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class as a class
====================================================================================================================================
William J. Schneider
For -- 4,546 -- 1,731
Withhold -- 30 -- 13
------------------------------------------------------------------------------------------------------------------------------------
Total -- 4,576 -- 1,744
====================================================================================================================================
Timothy R. Schwertfeger
For -- 4,546 -- 1,731
Withhold -- 30 -- 13
------------------------------------------------------------------------------------------------------------------------------------
Total -- 4,576 -- 1,744
====================================================================================================================================
Judith M. Stockdale
For 14,979,866 -- 5,741,640 --
Withhold 95,055 -- 19,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
Sheila W. Wellington
For 14,965,358 -- 5,741,640 --
Withhold 109,563 -- 19,050 --
------------------------------------------------------------------------------------------------------------------------------------
Total 15,074,921 -- 5,760,690 --
====================================================================================================================================
19
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 11.2%
$ 2,000 California Educational Facilities Authority, Revenue Bonds, 9/06 at 102.00 AAA $ 2,226,080
Santa Clara University, Series 1996, 5.750%, 9/01/26 -
MBIA Insured
5,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 5,278,500
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) -
MBIA Insured
2,000 University of California, Revenue Bonds, Multiple Purpose 9/10 at 101.00 AAA 2,108,580
Projects, Series 2002O, 5.125%, 9/01/31 - FGIC Insured
2,350 University of California, Multiple Purpose Projects, Revenue 5/13 at 100.00 AAA 2,469,380
Bonds, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.5%
3,000 California Health Facilities Financing Authority, Insured 8/08 at 101.00 AAA 3,163,950
Revenue Bonds, Sutter Health, Series 1998A,
5.375%, 8/15/30 - MBIA Insured
1,500 California Statewide Communities Development 8/09 at 101.00 AAA 1,687,095
Authority, Certificates of Participation, Members of the
Sutter Health Obligated Group, 5.500%, 8/15/19 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.9%
1,000 ABAG Finance Authority for Nonprofit Corporations, 9/09 at 100.00 AAA 1,066,640
California, Multifamily Housing Revenue Bonds, Civic
Center Drive Apartments Project, Series 1999A,
5.800%, 9/01/20 (Alternative Minimum Tax) -
FSA Insured
980 Los Angeles, California, FHA-Insured Section 8 Revenue 7/04 at 100.00 AAA 981,313
Refunding Mortgage Loan Bonds, Series 1993A,
6.300%, 1/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.5%
545 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 576,119
Bonds II, Series 1997A-1, 6.000%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 35.0%
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 - MBIA Insured 3/10 at 101.00 AAA 8,841,830
2,000 5.750%, 3/01/27 - MBIA Insured 3/10 at 101.00 AAA 2,196,280
2,000 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 2,053,380
Series 2001BZ, 5.375%, 12/01/24 (Alternative
Minimum Tax) - MBIA Insured
3,570 California, General Obligation Bonds, Series 2004, 2/14 at 100.00 AAA 3,932,319
5.000%, 2/01/17 - AMBAC Insured
1,225 Fresno Unified School District, Fresno County, California, 2/13 at 103.00 AAA 1,533,798
General Obligation Refunding Bonds, Series 1998A,
6.550%, 8/01/20 - MBIA Insured
2,500 Fresno Unified School District, Fresno County, California, 8/09 at 102.00 AAA 2,754,100
General Obligation Bonds, Election of 2001, Series 2001A,
5.125%, 8/01/26 - FSA Insured
2,000 Los Angeles Unified School District, California, General 7/08 at 102.00 AAA 2,136,060
Obligation Bonds, Series 1997A, 5.000%, 7/01/21 -
FGIC Insured
3,000 Pomona Unified School District, California, General 8/11 at 103.00 AAA 3,739,290
Obligation Refunding Bonds, Series 1997A,
6.500%, 8/01/19 - MBIA Insured
San Diego Unified School District, San Diego County, California,
General Obligation Bonds, Election of 1998, Series 2001C:
1,335 5.000%, 7/01/21 - FSA Insured 7/11 at 102.00 AAA 1,435,472
3,500 5.000%, 7/01/22 - FSA Insured 7/11 at 102.00 AAA 3,738,105
4,895 5.000%, 7/01/23 - FSA Insured 7/11 at 102.00 AAA 5,212,343
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 14.6%
$ 2,000 California State Public Works Board, Department of Health 11/09 at 101.00 AAA $ 2,193,660
Services Lease Revenue Bonds, Series 1999A,
5.750%, 11/01/24 - MBIA Insured
1,900 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 2,020,327
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2002, 5.100%, 9/01/25 -
AMBAC Insured
5,000 El Monte, California, Senior Lien Certificates of 1/11 at 100.00 AAA 5,352,500
Participation, Department of Public Services Facility -
Phase II, Series 2001, 5.250%, 1/01/34 -
AMBAC Insured
3,000 Santa Clara County Financing Authority, California, 11/07 at 102.00 AAA 3,178,590
Lease Revenue Bonds, VMC Facility Replacement
Project, Series 1994A, 5.000%, 11/15/22 -
AMBAC Insured
2,805 Yucaipa-Calimesa Joint Unified School District, 10/11 at 100.00 AAA 2,924,493
San Bernardino County, California, General Obligation
Refunding Bonds, Series 2001A, 5.000%, 10/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 31.3%
6,000 Huntington Park Redevelopment Agency, California, No Opt. Call AAA 8,944,080
Single Family Residential Mortgage Revenue Refunding
Bonds, Series 1986A, 8.000%, 12/01/19
5,135 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 7,344,334
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative
Minimum Tax)
6,220 Riverside County, California, Single Family Mortgage No Opt. Call AAA 9,678,320
Revenue Bonds, GNMA Mortgage-Backed Securities
Program, Series 1987A, 9.000%, 5/01/21 (Alternative
Minimum Tax)
1,485 San Jose, California, Single Family Mortgage Revenue No Opt. Call AAA 2,267,996
Bonds, Series 1985A, 9.500%, 10/01/13
4,800 University of California, Hospital Revenue Bonds, Davis 7/06 at 101.00 AAA 5,352,960
Medical Center, Series 1996, 5.750%, 7/01/24 (Pre-refunded
to 7/01/06) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 16.3%
4,000 California Pollution Control Financing Authority, 6/04 at 101.00 AAA 4,056,360
Pollution Control Revenue Bonds, Southern California
Edison Company, Series 1992B, 6.400%, 12/01/24
(Alternative Minimum Tax) - MBIA Insured
4,000 Chula Vista, California, Industrial Development Revenue 6/04 at 101.00 A- 4,049,160
Bonds, San Diego Gas and Electric Company,
Series 1992A, 6.400%, 12/01/27 (Alternative
Minimum Tax)
3,600 Sacramento Municipal Utility District, California, No Opt. Call AAA 4,143,168
Electric Revenue Refunding Bonds, Series 2003S,
5.000%, 11/15/13 - MBIA Insured
5,000 Turlock Irrigation District, California, Certificates 1/13 at 100.00 AAA 5,238,100
of Participation, Series 2003A, 5.000%, 1/01/33 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 25.5%
3,000 Los Angeles, California, Wastewater System Revenue 5/04 at 102.00 AAA 3,034,620
Bonds, Series 1993D, 4.700%, 11/01/19 - FGIC Insured
5,500 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 5,776,045
of Participation, Series 2003, 5.000%, 2/01/33 -
FGIC Insured
3,400 San Diego Public Facilities Financing Authority, 5/07 at 101.00 AAA 3,685,702
California, Sewer Revenue Bonds, Series 1997A,
5.250%, 5/15/22 - FGIC Insured
Santa Clara Valley Water District, California, Certificates
of Participation, Series 2004A:
1,400 5.000%, 2/01/19 - FGIC Insured 2/14 at 100.00 AAA 1,529,948
445 5.000%, 2/01/20 - FGIC Insured 2/14 at 100.00 AAA 482,865
2,150 Santa Clara Valley Water District, California, Water 6/10 at 100.00 AAA 2,249,309
Utility System Revenue Bonds, Series 2000A,
5.125%, 6/01/31 - FGIC Insured
Santa Fe Springs Public Financing Authority, California,
Water Revenue Bonds, Series 2003A:
1,045 5.000%, 5/01/28 - MBIA Insured 5/13 at 100.00 AAA 1,101,953
2,310 5.000%, 5/01/33 - MBIA Insured 5/13 at 100.00 AAA 2,426,955
21
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (CONTINUED)
$ 1,345 West Basin Municipal Water District, Revenue Certificates 8/13 at 100.00 AAA $ 1,456,878
of Participation, Series 2003A, 5.000%, 8/01/20 -
MBIA Insured
5,000 Wheeler Ridge-Maricopa Water Storage District, 11/06 at 102.00 AAA 5,610,900
Kern County, California, Water Revenue Refunding
Bonds, Series 1996, 5.700%, 11/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 132,935 Total Long-Term Investments (cost $135,489,010) - 140.8% 151,229,857
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 1,190,331
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (41.9)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 107,420,188
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
See accompanying notes to financial statements.
22
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 16.9%
California Educational Facilities Authority, Revenue Bonds,
Santa Clara University, Series 1996:
$ 2,400 5.750%, 9/01/21 - MBIA Insured 9/06 at 102.00 AAA $ 2,674,464
3,000 5.750%, 9/01/26 - MBIA Insured 9/06 at 102.00 AAA 3,339,120
2,000 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 2,332,880
University of the Pacific, Series 2000, 5.875%, 11/01/20 -
MBIA Insured
5,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 5,278,500
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
California Infrastructure Economic Development Bank, Revenue
Bonds, Asian Art Museum of San Francisco Project, Series 2000:
1,295 5.500%, 6/01/19 - MBIA Insured 6/10 at 101.00 AAA 1,470,641
1,000 5.500%, 6/01/20 - MBIA Insured 6/10 at 101.00 AAA 1,131,680
5,380 California State University, Systemwide Revenue Bonds, 5/14 at 100.00 AAA 6,019,252
Series 2004A, 5.000%, 11/01/16 - FSA Insured
University of California, Multiple Purpose Projects,
Revenue Bonds, Series 2003A:
6,000 5.000%, 5/15/27 - AMBAC Insured 5/13 at 100.00 AAA 6,332,820
4,750 5.000%, 5/15/33 - AMBAC Insured 5/13 at 100.00 AAA 4,991,300
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.1%
1,450 California Health Facilities Financing Authority, Insured 7/06 at 102.00 AAA 1,623,594
Health Facility Revenue Refunding Bonds, Mark Twain
St. Joseph's Healthcare Corporation, Series 1996A,
6.000%, 7/01/19 - MBIA Insured
5,000 California Health Facilities Financing Authority, 7/06 at 102.00 AAA 5,552,350
Insured Health Facility Revenue Refunding Bonds,
Catholic Healthcare West, Series 1996A,
6.000%, 7/01/25 - MBIA Insured
2,500 Oakland, California, Insured Revenue Bonds, 1/10 at 100.00 AAA 2,886,150
1800 Harrison Foundation - Kaiser Permanente,
Series 1999A, 6.000%, 1/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.6%
ABAG Finance Authority for Nonprofit Corporations, California,
Multifamily Housing Revenue Bonds, Civic Center Drive Apartments
Project, Series 1999A:
4,000 5.800%, 9/01/20 (Alternative Minimum Tax) - FSA Insured 9/09 at 100.00 AAA 4,266,560
1,370 5.875%, 3/01/32 (Alternative Minimum Tax) - FSA Insured 9/09 at 100.00 AAA 1,445,994
3,110 Los Angeles Community Redevelopment Agency, 6/05 at 105.00 AAA 3,393,041
California, FNMACollateralized Multifamily Housing
Revenue Refunding Bonds, Angelus Plaza Section 8
Project, Series 1995A, 7.400%, 6/15/10
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.8%
1,505 California Housing Finance Agency, Single Family 8/07 at 101.50 AAA 1,585,412
Mortgage Bonds II, Series 1997C-2, 5.625%, 8/01/20
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.7%
1,460 ABC Unified School District, Los Angeles County, 8/10 at 101.00 AAA 1,711,792
California, General Obligation Bonds, Election of 1997,
Series 2000B, 5.750%, 8/01/16 - FGIC Insured
2,770 Anaheim Union High School District, Orange County, 8/13 at 100.00 AAA 2,926,616
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/27 - MBIA Insured
485 California State, General Obligation Veterans Welfare 6/04 at 102.00 AAA 491,567
Bonds, Series 1997BH, 5.500%, 12/01/24 (Alternative
Minimum Tax) - FSA Insured
State of California, Various Purpose General
Obligation Bonds:
7,995 5.750%, 3/01/22 - MBIA Insured 3/10 at 101.00 AAA 8,841,830
2,500 5.500%, 9/01/24 - FSA Insured 9/09 at 101.00 AAA 2,700,700
2,000 5.750%, 3/01/27 - MBIA Insured 3/10 at 101.00 AAA 2,196,280
8,900 California, General Obligation Bonds, Series 2003, 2/13 at 100.00 AAA 9,300,500
5.000%, 2/01/31 - MBIA Insured
23
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 3,000 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA $ 3,080,070
Series 2001BZ, 5.375%, 12/01/24 (Alternative
Minimum Tax) - MBIA Insured
2,500 California, General Obligation Bonds, Series 2004, 2/14 at 100.00 AAA 2,736,350
5.000%, 2/01/18 - AMBAC Insured
2,575 Calipatria Unified School District, Imperial County, 8/06 at 102.00 AAA 2,860,490
California, General Obligation Bonds, Series 1996A,
5.625%, 8/01/13 - AMBAC Insured
Campbell Union High School District, Santa Clara County,
California, General Obligation Bonds, Series 2003:
2,520 5.000%, 8/01/27 - FGIC Insured 8/11 at 102.00 Aaa 2,662,481
4,000 5.000%, 8/01/32 - FGIC Insured 8/11 at 102.00 Aaa 4,208,360
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Election of 1995, Series 2001F:
1,065 5.125%, 8/01/21 - FSA Insured 8/09 at 102.00 AAA 1,174,077
1,160 5.125%, 8/01/22 - FSA Insured 8/09 at 102.00 AAA 1,278,540
1,220 5.125%, 8/01/23 - FSA Insured 8/09 at 102.00 AAA 1,340,487
1,500 Hacienda La Puente Unified School District, Los Angeles 8/10 at 101.00 AAA 1,612,335
County, California, General Obligation Bonds, Election
of 2000, Series 2000A, 5.250%, 8/01/25 - MBIA Insured
1,750 Lake Tahoe Unified School District, El Dorado County, 8/09 at 100.00 AAA 1,889,195
California, General Obligation Bonds, Election of 1999,
Series A, 5.250%, 8/01/24 - FGIC Insured
1,270 Merced City School District, Merced County, California, 8/13 at 100.00 AAA 1,357,059
General Obligation Bonds, Series 2004,
5.000%, 8/01/22 (WI, settling 3/04/04) - FGIC Insured
1,125 San Diego Unified School District, California, General No Opt. Call AAA 490,399
Obligation Bonds, Election of 1998, Series 1999A,
0.000%, 7/01/21 - FGIC Insured
2,000 San Francisco Community College District, California, 6/10 at 102.00 Aaa 2,104,580
General Obligation Bonds, Series 2002A, 5.000%, 6/15/26 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 46.6%
Anaheim Public Financing Authority, California, Subordinate
Lease Revenue Bonds, Anaheim Public Improvements
Project, Series 1997C:
5,130 0.000%, 9/01/18 - FSA Insured No Opt. Call AAA 2,683,760
8,000 0.000%, 9/01/21 - FSA Insured No Opt. Call AAA 3,447,760
3,500 California Department of Transportation, Federal No Opt. Call AAA 3,971,555
Highway Grant Anticipation Bonds, Series 2004A,
5.000%, 2/01/15 (WI, settling 3/10/04) - FGIC Insured
3,450 California State Public Works Board, Department of 11/09 at 101.00 AAA 3,784,064
Health Services Lease Revenue Bonds, Series 1999A,
5.750%, 11/01/24 - MBIA Insured
5,000 Compton Community Redevelopment Agency, California, 8/05 at 102.00 AAA 5,457,650
Tax Allocation Refunding Bonds, Merged Area
Redevelopment Projects, Series 1995A,
6.500%, 8/01/13 - FSA Insured
4,000 Contra Costa County, California, Refunding Certificates 11/07 at 102.00 AAA 4,402,800
of Participation, Merrithew Memorial Hospital
Replacement Project, Series 1997, 5.500%, 11/01/22 -
MBIA Insured
1,835 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 1,937,888
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2002, 5.100%, 9/01/32 -
AMBAC Insured
6,000 El Monte, California, Senior Lien Certificates of 1/11 at 100.00 AAA 6,339,300
Participation, Department of Public Services Facility -
Phase II, Series 2001, 5.000%, 1/01/21 - AMBAC Insured
3,000 Galt Schools Joint Powers Authority, Sacramento County, 11/07 at 102.00 AAA 3,459,600
California, Revenue Refunding Bonds, High School
and Elementary School Facilities, Series 1997A,
5.875%, 11/01/24 - MBIA Insured
5,000 Kern County Board of Education, California, Refunding 5/08 at 102.00 AAA 5,257,350
Certificates of Participation, Series 1998A,
5.200%, 5/01/28 - MBIA Insured
5,000 La Quinta Redevelopment Agency, California, Tax 9/07 at 102.00 AAA 5,222,950
Allocation Refunding Bonds, Project Area 1, Series 1998,
5.200%, 9/01/28 - AMBAC Insured
6,000 City of Los Angeles, California, Certificates of 6/13 at 100.00 AAA 6,291,960
Participation, Municipal Improvement Corporation,
Series 2003AW, 5.000%, 6/01/33 - AMBAC Insured
3,865 Los Angeles County Metropolitan Transportation 7/10 at 101.00 AAA 4,158,044
Authority, California, Proposition C Sales Tax Revenue
Bonds, Second Senior Lien, Series 2000A,
5.250%, 7/01/30 - FGIC Insured
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,935 Menifee Union School District, Riverside County, California, 9/06 at 102.00 AAA $ 2,172,986
Certificates of Participation, School Project, Series 1996,
6.125%, 9/01/24 - FSA Insured
2,690 Norwalk Community Facilities Financing Authority, 9/05 at 102.00 AAA 2,938,314
Los Angeles County, California, Tax Allocation Revenue
Refunding Bonds, Series 1995A, 6.000%, 9/01/15 -
FSA Insured
2,780 Pittsburg Redevelopment Agency, California, Tax No Opt. Call AAA 3,185,046
Allocation Refunding Bonds, Los Medanos Community
Development Project, Series 2003A, 5.000%, 8/01/12 -
MBIA Insured
4,140 Plumas County, California, Certificates of Participation, 6/13 at 101.00 AAA 4,379,872
Capital Improvement Program, Series 2003A,
5.000%, 6/01/28 - AMBAC Insured
2,000 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 2,292,760
Refunding Bonds, Paguay Redevelopment Project,
Series 2000, 5.750%, 6/15/33 - MBIA Insured
5,000 City of San Bernardino, California, San Bernardino 9/09 at 102.00 AAA 5,627,150
Joint Powers Financing Authority, Refunding Certificates
of Participation, Police Station, South Valle Refundings
and 201 Building Projects, 5.500%, 9/01/20 - MBIA Insured
3,500 San Francisco Bay Area Rapid Transit District, California, 7/09 at 101.00 AAA 3,902,395
Sales Tax Revenue Bonds, Series 1999, 5.500%, 7/01/34 -
FGIC Insured
1,930 Santa Margarita/Dana Point Authority, Orange County, No Opt. Call AAA 2,095,710
California, Revenue Bonds Refinancing, Improvement
Districts 1, 2, 2A and 8, Series 1994A, 7.250%, 8/01/05 - MBIA
Insured
3,000 South Orange County Public Financing Authority, California, No Opt. Call AAA 3,760,320
Special Tax Revenue Bonds, Foothill Area, Series 1994C,
8.000%, 8/15/08 - FGIC Insured
5,450 Visalia, California, Refunding Certificates of 12/06 at 102.00 AAA 5,939,410
Participation, Motor Vehicle License Fee Enhancement,
Series 1996A, 5.375%, 12/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.5%
6,500 Foothill-Eastern Transportation Corridor Agency, 1/10 at 65.32 AAA 3,229,785
California, Toll Road Refunding Revenue Bonds,
Series 1999, 0.000%, 1/15/18 - MBIA Insured
4,000 Orange County Transportation Authority, California, 8/13 at 100.00 AAA 4,393,640
Toll Road Revenue Bonds, 91 Express Lanes Project,
Series 2003A, 5.000%, 8/15/18 - AMBAC Insured
5,000 San Francisco City and County Airports Commission, 5/11 at 100.00 AAA 5,216,600
California, Revenue Refunding Bonds, San Francisco
International Airport, Series 2, Issue 27A, 5.250%, 5/01/31
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 7.6%
2,865 Central Unified School District, Fresno County, California, 3/04 at 101.00 AAA 2,933,846
General Obligation Bonds, Election of 1992, Series 1993,
5.625%, 3/01/18 - AMBAC Insured
3,000 Escondido Union High School District, San Diego County, 11/06 at 102.00 AAA 3,317,340
California, General Obligation Bonds, Election of 1996,
Series 1996, 5.700%, 11/01/10 - MBIA Insured
4,320 Riverside County, California, Single Family Mortgage No Opt. Call AAA 6,366,643
Revenue Bonds, GNMA Mortgage-Backed Securities
Program, Series 1987B, 8.625%, 5/01/16 (Alternative
Minimum Tax)
2,500 San Francisco City and County Airports Commission, 5/04 at 101.00 AAA 2,548,025
California, Revenue Bonds, San Francisco International
Airport, Series 2, Issue 8B, 6.100%, 5/01/20 (Pre-refunded
to 5/01/04) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.0%
3,740 California Pollution Control Financing Authority, 9/09 at 101.00 AAA 4,041,481
Pollution Control Revenue Refunding Bonds, Southern
California Edison Company, Series 1999B,
5.450%, 9/01/29 - MBIA Insured
3,215 Modesto Irrigation District, California, Revenue Refunding 10/06 at 102.00 AAA 3,638,448
Bonds, Series 1996A, 6.000%, 10/01/15 - MBIA Insured
3,500 Puerto Rico Electric Power Authority, Power Revenue 7/12 at 101.00 AAA 3,778,180
Bonds, Series 2002-II, 5.125%, 7/01/26 - FSA Insured
1,790 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 2,100,207
Improvement Revenue Bonds, Solid Waste and
Redevelopment Projects, Series 1999,
5.800%, 12/01/19 - AMBAC Insured
1,950 Salinas Valley Solid Waste Authority, California, 8/12 at 100.00 AAA 2,051,439
Revenue Bonds, Series 2002, 5.250%, 8/01/27
(Alternative Minimum Tax) - AMBAC Insured
25
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
Santa Clara, California, Electric Revenue Subordinate
Bonds, Series 2003A:
$ 2,800 5.000%, 7/01/24 - MBIA Insured 7/13 at 100.00 AAA $ 2,968,168
5,000 5.000%, 7/01/28 - MBIA Insured 7/13 at 100.00 AAA 5,268,700
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 20.4%
3,530 Castaic Lake Water Agency, California, Revenue Refunding No Opt. Call AAA 3,633,994
Certificates of Participation, Water System Improvement
Projects, Series 1994A, 8.000%, 8/01/04 - MBIA Insured
2,975 Chino Basin Regional Financing Authority, California, 8/04 at 102.00 AAA 3,096,886
Revenue Bonds, Chino Basin Municipal Water District
Sewer System Project, Series 1994, 6.000%, 8/01/16 -
AMBAC Insured
12,500 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 13,127,375
of Participation, Series 2003, 5.000%, 2/01/33 -
FGIC Insured
2,775 Pomona Public Financing Authority, California, Revenue 5/09 at 101.00 AAA 3,085,689
Bonds, Water Facilities Project, Series 1999AC,
5.500%, 5/01/29 - FGIC Insured
1,000 Sacramento County Sanitation District Financing Authority, 12/10 at 101.00 AAA 1,134,510
California, Revenue Bonds, Series 2000A,
5.500%, 12/01/20 - AMBAC Insured
3,675 San Dieguito Water District, California, Water Revenue 10/14 at 100.00 AAA 3,938,828
Bonds, Series 2004, 5.000%, 10/01/23 - FGIC Insured
465 Santa Clara Valley Water District, California, 2/14 at 100.00 AAA 501,000
Certificates of Participation, Series 2004A,
5.000%, 2/01/21 - FGIC Insured
2,000 South San Joaquin Irrigation District, San Joaquin 7/04 at 102.00 AAA 2,046,900
County, California, Revenue Refunding Certificates
of Participation, Series 1993, 5.500%, 1/01/15 -
AMBAC Insured
5,000 West Basin Municipal Water District, Revenue Certificates 8/13 at 100.00 AAA 5,266,800
of Participation, Series 2003A, 5.000%, 8/01/30 -
MBIA Insured
Yorba Linda Water District, California, Certificates of
Participation, Highland Reservoir Renovation, Series 2003:
2,010 5.000%, 10/01/28 - FGIC Insured 10/13 at 100.00 AAA 2,123,624
2,530 5.000%, 10/01/33 - FGIC Insured 10/13 at 100.00 AAA 2,662,850
------------------------------------------------------------------------------------------------------------------------------------
$ 282,400 Total Long-Term Investments (cost $270,921,090) - 148.2% 294,467,068
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (0.4)% (784,188)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.8)% (95,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 198,682,880
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
26
Nuveen California Premium Income Municipal Fund (NCU)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.8%
$ 1,500 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa2 $ 1,400,685
Settlement Asset-Backed Bonds, Alameda County
Tobacco Asset Securitization Corporation, Series 2002,
5.750%, 6/01/29
3,870 California Statewide Financing Authority, Tobacco 5/12 at 100.00 Baa2 3,553,357
Settlement Asset-Backed Bonds, Pooled Tobacco
Securitization Program, Series 2002A, 5.625%, 5/01/29
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 2.0%
1,500 University of California, Multiple Purpose Projects, 5/13 at 100.00 AAA 1,673,625
Revenue Bonds, Series 2003A, 5.125%, 5/15/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 21.5%
1,500 California Health Facilities Financing Authority, 12/09 at 101.00 A3 1,627,230
Revenue Bonds, Cedars-Sinai Medical Center,
Series 1999A, 6.125%, 12/01/30
5,150 California Health Facilities Financing Authority, 5/04 at 101.00 BB+ 4,452,690
Hospital Revenue Bonds, Downey Community Hospital,
Series 1993, 5.750%, 5/15/15
1,500 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 1,581,075
Revenue Bonds, Kaiser Hospital Assistance LLC,
Series 2001A, 5.550%, 8/01/31
8,100 California Statewide Community Development Authority, No Opt. Call AAA 8,778,537
Revenue Refunding Bonds, Sherman Oaks Project,
Series 1998A, 5.000%, 8/01/22 - AMBAC Insured
2,000 Loma Linda, California, Hospital Revenue Bonds, Loma 6/04 at 102.00 BB 2,043,700
Linda University Medical Center Project, Series 1993A,
6.000%, 12/01/06
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.1%
1,600 California Statewide Community Development Authority, 7/08 at 101.00 BBB 1,687,824
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 5.250%, 5/15/25
(Mandatory put 5/15/13)
5,580 Los Angeles Community Redevelopment Agency, 6/05 at 105.00 AAA 6,087,836
California, Multifamily Housing Revenue Refunding
Bonds, Angelus Plaza Project, Series 1995A,
7.400%, 6/15/10
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.7%
1,020 California Housing Finance Agency, Single Family 2/07 at 102.00 AAA 1,078,242
Mortgage Bonds II, Series 1997A-1, 6.000%, 8/01/20
(Alternative Minimum Tax) - MBIA Insured
1,000 California Housing Finance Agency, Home Mortgage 8/05 at 102.00 AAA 1,037,140
Revenue Bonds, Series 1994F-3, 6.100%, 8/01/15
(Alternative Minimum Tax) - MBIA Insured
225 California Rural Home Mortgage Finance Authority, No Opt. Call AAA 241,184
Single Family Mortgage Revenue Bonds, Mortgage-Backed
Securities Program, Series 1996C, 7.500%, 8/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 21.6%
4,000 California State, General Obligation Veterans Welfare 6/04 at 101.00 A 4,011,000
Bonds, Series 1999BR, 5.300%, 12/01/29 (Alternative
Minimum Tax)
California, General Obligation Bonds, Series 2003:
1,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 1,083,150
1,055 5.250%, 2/01/21 8/13 at 100.00 Baa1 1,110,651
1,500 5.000%, 2/01/31 - MBIA Insured 2/13 at 100.00 AAA 1,567,500
1,750 California, General Obligation Bonds, Series 2004, 2/14 at 100.00 Baa1 1,783,548
5.000%, 2/01/23
1,000 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 1,078,280
General Obligation Bonds, Series 2002A, 5.000%, 8/01/21 -
FGIC Insured
2,250 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 2,403,068
California, General Obligation Bonds, Series 2003A,
5.000%, 7/01/22 - FSA Insured
27
Nuveen California Premium Income Municipal Fund (NCU) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 6,000 North Orange County Community College District, No Opt. Call AAA $ 1,829,280
California, General Obligation Bonds, Series 2003B,
0.000%, 8/01/27 - FGIC Insured
3,000 Pomona Unified School District, California, General 8/11 at 103.00 AAA 3,643,680
Obligation Refunding Bonds, Series 1997A,
6.150%, 8/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 47.3%
1,000 Bell Community Redevelopment Agency, California, 10/13 at 100.00 AA 1,087,240
Bell Redevelopment Area Tax Allocation Bonds,
Series 2003, 5.625%, 10/01/33 - RAAI Insured
985 Beverly Hills Public Financing Authority, California, 6/13 at 100.00 Aaa 1,125,737
Lease Revenue Refunding Bonds, Series 2003A,
5.250%, 6/01/15 - MBIA Insured
5,920 California State Public Works Board, Lease Revenue 11/09 at 101.00 AAA 6,527,155
Bonds, Department of Veterans Affairs, Southern
California Veterans Home - Chula Vista Facility,
Series 1999A, 5.600%, 11/01/19 - AMBAC Insured
2,330 Carlsbad, California, Limited Obligation Improvement 3/04 at 100.50 N/R 2,332,144
Bonds, Assessment District 96-1, Series 1998,
5.500%, 9/02/28
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B:
1,000 5.625%, 6/01/33 6/13 at 100.00 Baa2 1,033,430
1,000 5.500%, 6/01/33 6/13 at 100.00 Baa2 1,024,330
3,500 Livermore Redevelopment Agency, California, Tax Allocation 8/11 at 100.00 AAA 3,659,915
Revenue Bonds, Livermore Redevelopment Project Area,
Series 2001A, 5.000%, 8/01/26 - MBIA Insured
1,840 City of Los Angeles, California, Certificates of 6/13 at 100.00 AAA 1,929,534
Participation, Municipal Improvement Corporation,
Series 2003AW, 5.000%, 6/01/33 - AMBAC Insured
1,890 Los Angeles Community Redevelopment Agency, 6/04 at 101.00 BBB- 1,890,832
California, Tax Allocation Multifamily Housing Bonds,
Grand Central Square Project, Series 1993A,
5.750%, 12/01/13 (Alternative Minimum Tax)
2,000 Oakland Redevelopment Agency, California, 3/13 at 100.00 AAA 2,309,860
Subordinate Lien Tax Allocation Bonds, Central
District Redevelopment Project, Series 2003,
5.500%, 9/01/15 - FGIC Insured
1,000 Poway, California, Community Facilities District 88-1, 8/08 at 102.00 N/R 1,140,390
Special Tax Refunding Bonds, Parkway Business
Centre, Series 1998, 6.500%, 8/15/09
6,570 Sacramento City Finance Authority, California, Lease No Opt. Call AA- 7,586,313
Revenue Refunding Bonds, Series 1993B,
5.400%, 11/01/20
1,500 Sacramento City Finance Authority, California, Lease No Opt. Call AAA 1,751,700
Revenue Refunding Bonds, Series 1993A,
5.400%, 11/01/20 - MBIA Insured
1,500 San Marcos Public Facilities Authority, California, 9/08 at 101.00 Baa3 1,585,980
Revenue Refunding Bonds, Series 1998, 5.800%, 9/01/18
1,000 San Marcos Public Facilities Authority, California, 9/08 at 101.00 Baa3 1,041,720
Revenue Refunding Bonds, Series 1998, 5.800%, 9/01/27
2,050 Santa Barbara County, California, Certificates of 12/11 at 102.00 AAA 2,279,108
Participation, Series 2001, 5.250%, 12/01/19 -
AMBAC Insured
2,000 Vista, California, Mobile Home Park Revenue Bonds, 3/09 at 102.00 N/R 2,298,480
Vista Manor Mobile Home Park Project, Series 1999A,
5.750%, 3/15/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.5%
3,000 California Infrastructure Economic Development Bank, 7/13 at 100.00 AAA 3,204,090
Revenue Bonds, Bay Area Toll Bridges, 1st Lien
Series 2003A, 5.000%, 7/01/22 - FSA Insured
2,000 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,931,280
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
2,000 San Francisco City and County Airports Commission, 5/06 at 102.00 AAA 2,168,800
California, Revenue Bonds, San Francisco International
Airport, Series 2, Issue 10A, 5.700%, 5/01/26
(Alternative Minimum Tax) - MBIA Insured
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 4.9%
$ 3,500 Puerto Rico, Public Improvement General Obligation Bonds, 7/10 at 100.00 AAA $ 4,182,675
Series 2000, 5.750%, 7/01/21 (Pre-refunded to
7/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.0%
1,000 California Pollution Control Financing Authority, 6/04 at 101.00 AAA 1,014,090
Pollution Control Revenue Bonds, Southern California
Edison Company, Series 1992B, 6.400%, 12/01/24
(Alternative Minimum Tax) - FGIC Insured
2,250 California Department of Water Resources, Power 5/12 at 101.00 A3 2,407,905
Supply Revenue Bonds, Series 2002A, 5.125%, 5/01/18
275 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 295,254
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
1,500 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 1,565,220
Bonds, Electric System Project, Series 2001,
6.500%, 9/01/22
4,580 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 5,041,206
Revenue Refunding Bonds, Series 2002Q,
5.250%, 8/15/20 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.5%
5,000 Culver City, California, Wastewater Facilities Revenue 9/09 at 102.00 AAA 5,698,600
Refunding Bonds, Series 1999A, 5.700%, 9/01/29 -
FGIC Insured
3,495 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 3,851,104
of Participation, Series 2003, 5.250%, 2/01/21 -
FGIC Insured
1,000 Sacramento County Water Financing Authority, California, 6/13 at 100.00 AAA 1,067,520
Revenue Bonds, Agency Zones 40-41 System Projects,
Series 2003, 5.000%, 6/01/22 - AMBAC Insured
1,795 Woodbridge Irrigation District, California, Certificates 7/13 at 100.00 BBB+ 1,848,383
of Participation, Water Systems Project, Series 2003,
5.500%, 7/01/33
------------------------------------------------------------------------------------------------------------------------------------
$ 124,580 Total Long-Term Investments (cost $121,108,384) - 149.9% 128,633,277
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.2% 176,516
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.1)% (43,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 85,809,793
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
29
Nuveen California Dividend Advantage Municipal Fund (NAC)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.4%
$ 5,000 California Statewide Community Development Authority, 11/09 at 102.00 N/R $ 5,280,350
Certificates of Participation, Pride Industries and Pride
One, Inc., Series 1999, 7.250%, 11/01/29
5,200 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 5,007,132
California, Tobacco Settlement Asset-Backed Bonds,
Series 2003A-1, 6.250%, 6/01/33
Northern California Tobacco Securitization Authority,
Tobacco Settlement Asset-Backed Bonds, Series 2001A:
2,500 5.250%, 6/01/31 6/11 at 100.00 BBB 2,167,150
4,500 5.375%, 6/01/41 6/11 at 100.00 BBB 3,720,015
3,940 Southern California Tobacco Securitization Authority, 6/12 at 100.00 BBB 3,896,896
Tobacco Settlement Asset-Backed Bonds, Senior
Series 2001A, 5.250%, 6/01/27
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.4%
615 California Statewide Community Development 10/13 at 100.00 N/R 615,166
Authority, Revenue Bonds, Notre Dame de Namur
University, Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, 11/11 at 100.00 AAA 3,446,460
Lease Revenue Refunding Bonds, Long Beach Aquarium
of the South Pacific, Series 2001, 5.500%, 11/01/17 -
AMBAC Insured
700 University of California, Certificates of Participation, 1/10 at 101.00 Aa2 745,255
San Diego and Sacramento Campus Projects,
Series 2002A, 5.250%, 1/01/22
6,000 University of California, Revenue Bonds, Multiple 9/08 at 101.00 Aa2 6,743,400
Purpose Projects, Series 2000K, 5.000%, 9/01/12
University of California, Revenue Bonds, Multiple
Purpose Projects, Series 2002O:
10,770 5.000%, 9/01/20 - FGIC Insured 9/10 at 101.00 AAA 11,506,668
11,305 5.000%, 9/01/21 - FGIC Insured 9/10 at 101.00 AAA 12,018,006
3,500 University of California, Multiple Purpose Projects, 5/13 at 100.00 AAA 3,905,125
Revenue Bonds, Series 2003A, 5.125%, 5/15/17 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 13.4%
8,400 California Health Facilities Financing Authority, Kaiser 10/08 at 101.00 A 9,514,596
Permanente, Revenue Bonds, Series 1998B,
5.250%, 10/01/14 (Optional put 10/01/08)
15,000 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 16,272,300
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.125%, 12/01/30
8,000 Central California Joint Powers Health Financing 2/10 at 101.00 BBB 8,333,760
Authority, Certificates of Participation, Community
Hospitals of Central California Obligated Group
Project, Series 2000, 6.000%, 2/01/30
10,500 Duarte, California, Certificates of Participation, City 4/09 at 101.00 BBB 10,575,495
of Hope National Medical Center, Series 1999A,
5.250%, 4/01/31
2,800 Upland, California, Certificates of Participation, 7/04 at 102.00 A 2,861,740
San Antonio Community Hospital, Series 1993,
5.250%, 1/01/08
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 2,636,875
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.1%
10,250 California Statewide Community Development Authority, 7/08 at 101.00 BBB 11,022,748
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 4.900%, 5/15/25
(Mandatory put 5/15/08)
5,250 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 6,067,320
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
5,000 Contra Costa County, California, Multifamily Housing 6/09 at 102.00 N/R 4,993,150
Revenue Bonds, Delta View Apartments Project,
Series 1999C, 6.750%, 12/01/30 (Alternative
Minimum Tax)
7,500 Housing Authority of the County of San Bernardino, No Opt. Call BBB+ 8,241,675
California, Multifamily Housing Revenue Refunding Bonds,
Equity Residential/Redlands Lawn & Tennis Apartments,
Issue 1999A, 5.200%, 6/15/29 (Mandatory put 6/15/09)
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.3%
$ 8,500 Riverside County Public Financing Authority, California, 5/09 at 101.00 BBB- $ 8,730,350
Certificates of Participation, Air Force Village West,
Series 1999, 5.800%, 5/15/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 19.9%
California, General Obligation Refunding Bonds, Series 2002:
8,000 5.000%, 2/01/12 No Opt. Call Baa1 8,765,120
6,435 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 7,934,741
California, General Obligation Bonds, Series 2003:
2,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 2,166,300
5,200 5.250%, 2/01/20 8/13 at 100.00 Baa1 5,507,008
3,000 Contra Costa County Community College District, California, 8/12 at 100.00 AAA 3,184,620
General Obligation Bonds, Series 2002,
4.900%, 8/01/20 - FGIC Insured
1,000 Los Angeles Community College District, Los Angeles 8/11 at 100.00 AAA 1,052,320
County, California, General Obligation Bonds,
Election of 2001, Series 2001A, 5.000%, 6/01/26 -
MBIA Insured
18,500 Los Angeles Unified School District, California, General 7/09 at 101.00 AAA 19,967,605
Obligation Bonds, Election of 1997, Series 1999C,
5.250%, 7/01/24 - MBIA Insured
10,845 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,731,362
Obligation Bonds, Election of 1997, Series 2002E,
5.000%, 7/01/19 - MBIA Insured
1,750 Oakland Unified School District, Alameda County, 8/08 at 101.00 AAA 1,841,980
California, General Obligation Bonds, Series 2001,
5.125%, 8/01/21 - FSA Insured
5,000 San Diego Unified School District, San Diego County, 7/13 at 101.00 AAA 5,590,200
California, General Obligation Bonds, Series 2003E,
5.250%, 7/01/20 - FSA Insured
2,700 Ventura County Community College District, California, 8/12 at 101.00 AAA 3,016,629
General Obligation Bonds, Series 2002A, 5.000%, 8/01/15 -
MBIA Insured
3,605 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 3,853,997
County, California, General Obligation Bonds,
Series 2003B, 5.000%, 8/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 37.5%
Brentwood Infrastructure Financing Authority, Contra
Costa County, California, Capital Improvement
Revenue Bonds, Series 2001:
1,110 5.375%, 11/01/18 - FSA Insured 11/11 at 100.00 AAA 1,254,666
1,165 5.375%, 11/01/19 - FSA Insured 11/11 at 100.00 AAA 1,308,388
1,990 Brentwood Infrastructure Financing Authority, California, 9/12 at 100.00 AAA 2,125,758
Infrastructure Revenue Refunding Bonds, Series 2002A,
5.125%, 9/02/24 - FSA Insured
2,300 Capistrano Unified School District, Orange County, 9/13 at 100.00 N/R 2,356,028
California, Special Tax Bonds, Community Facilities
District 90-2, Talega, Series 2003, 6.000%, 9/01/33
3,515 Dinuba Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA 3,712,156
Refunding Bonds, Redevelopment Project 2, Series 2001,
4.875%, 9/01/21 - MBIA Insured
3,490 Fontana, California, Senior Special Tax Refunding Bonds, 9/08 at 102.00 AAA 3,902,553
Heritage Village Community Facilities District 2 Project,
Series 1998A, 5.250%, 9/01/17 - MBIA Insured
3,980 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 4,452,466
Financing Project, Series 2002A, 5.500%, 3/01/22 -
AMBAC Insured
4,500 Inglewood Redevelopment Agency, California, No Opt. Call AAA 5,117,130
Tax Allocation Refunding Bonds, Merged Area
Redevelopment Project, Series 1998A,
5.250%, 5/01/23 - AMBAC Insured
2,000 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 2,145,060
Special Tax Bonds, Community Facilities District 1
of Sycamore Creek, Series 2003, 6.500%, 9/01/24
2,200 Lincoln, California, Special Tax Bonds, Community 9/13 at 102.00 N/R 2,359,566
Facilities District No. 2003-1, Lincoln Crossing Project,
Series A, 6.500%, 9/01/25
5,000 Los Angeles County Metropolitan Transportation 7/08 at 101.00 AAA 5,178,550
Authority, California, Proposition C Sales Tax Revenue
Refunding Bonds, Second Senior Lien, Series 1998A,
5.000%, 7/01/23 - AMBAC Insured
10,000 Los Angeles County Public Works Financing Authority, 10/07 at 101.00 AA- 10,926,400
California, Revenue Bonds, Los Angeles County Regional
Park and Open Space District, Series 1997A,
5.000%, 10/01/16
31
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 9,200 Norco Redevelopment Agency, California, Tax Allocation 3/11 at 102.00 AAA $ 9,952,928
Refunding Bonds, Project Area 1, Series 2001,
5.000%, 3/01/19 - MBIA Insured
5,545 Oakland Joint Power Financing Authority, California, No Opt. Call AAA 6,570,770
Lease Revenue Refunding Bonds, Oakland Convention
Centers, Series 2001, 5.500%, 10/01/14 - AMBAC Insured
3,290 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,784,619
Lien Tax Allocation Bonds, Central District
Redevelopment Project, Series 2003,
5.500%, 9/01/16 - FGIC Insured
4,000 Orange County Local Transportation Authority, California, No Opt. Call AAA 4,588,000
Limited Sales Tax Revenue Refunding Bonds,
Measure M, Series 1997A, 5.700%, 2/15/08 -
AMBAC Insured
5,600 Palm Springs Financing Authority, California, Lease 11/11 at 101.00 AAA 5,956,440
Revenue Refunding Bonds, Convention Center Project,
Series 2001A, 5.000%, 11/01/22 - MBIA Insured
8,100 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 9,285,678
Refunding Bonds, Paguay Redevelopment Project,
Series 2000, 5.750%, 6/15/33 - MBIA Insured
1,055 Poway Redevelopment Agency, California, Tax Allocation 12/11 at 101.00 AAA 1,191,981
Bonds, Paguay Redevelopment Project, Series 2001,
5.375%, 12/15/16 - AMBAC Insured
2,000 Puerto Rico Public Finance Corporation, Commonwealth 8/11 at 100.00 AAA 2,300,780
Appropriation Bonds, Series 2001A, 5.500%, 8/01/19 -
MBIA Insured
1,860 Riverside Redevelopment Agency, California, 8/13 at 100.00 AAA 2,028,088
Tax Allocation Refunding Bonds, Merged Project Areas,
Series 2003, 5.250%, 8/01/22 - MBIA Insured
7,800 Riverside County Public Financing Authority, California, No Opt. Call N/R 8,289,528
Reassessment Revenue Bonds, Rancho Village
Project/AD No. 159, Junior Lien, Series 1999B,
6.000%, 9/02/07
1,725 Rohnert Park Finance Authority, California, Rancho 9/13 at 100.00 BBB 1,712,132
Feliz Mobile Home Park Revenue Bonds, Senior Lien,
Series 2003A, 5.750%, 9/15/38
1,120 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 1,114,221
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38
2,500 Sacramento City Financing Authority, California, No Opt. Call AAA 2,927,850
Lease Revenue Refunding Bonds, Series 1993A,
5.400%, 11/01/20 - AMBAC Insured
1,150 Sacramento, California, Special Tax Bonds, North 3/04 at 102.00 N/R 1,180,188
Natomas Community Facilities District No. 4,
Series 2003C, 6.000%, 9/01/33
1,205 San Francisco City and County, California, Certificates 9/09 at 101.00 AAA 1,256,996
of Participation, 30 Van Ness Avenue Property,
Series 2001A, 4.600%, 9/01/18 - MBIA Insured
24,060 San Jose Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 A 24,846,521
Bonds, Merged Area Redevelopment Project,
Series 1998, 5.250%, 8/01/29
2,695 City of San Jose Financing Authority, California, 6/12 at 100.00 AAA 2,995,924
Lease Revenue Refunding Bonds, Civic Center Project,
Series 2002B, 5.250%, 6/01/19 - AMBAC Insured
1,595 San Marcos Public Facilities Authority, California, 9/09 at 102.00 N/R 1,621,461
Special Tax Bonds, Community Facilities District 99-01,
Series 2003B, 6.000%, 9/01/24
2,810 West Patterson Financing Authority, California, Community 9/13 at 103.00 N/R 2,924,929
Facilities District 01-1, Special Tax Bonds,
Series 2003B, 7.000%, 9/01/38
1,350 West Patterson Financing Authority, California, Community 9/13 at 103.00 N/R 1,325,457
Facilities District No. 1, Special Tax Bonds, Series 2004A,
6.125%, 9/01/39 (WI, settling 3/09/04)
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 19.8%
8,150 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 101.00 BBB- 8,449,105
Toll Road Refunding Revenue Bonds, Series 1999,
5.750%, 1/15/40
8,515 Los Angeles Harbors Department, California, Revenue 8/11 at 100.00 AAA 9,365,819
Refunding Bonds, Series 2001B, 5.500%, 8/01/18
(Alternative Minimum Tax) - AMBAC Insured
23,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 25,362,330
5.750%, 11/01/29 (Alternative Minimum Tax) -
FGIC Insured
5,000 San Francisco City and County Airports Commission, 5/06 at 101.00 AAA 5,377,900
California, Revenue Bonds, San Francisco International
Airport, Series 2, Issue 13B, 5.625%, 5/01/21
(Alternative Minimum Tax) - MBIA Insured
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ 23,275 Airports Commission of the City and County of 5/10 at 101.00 AAA $ 25,579,923
San Francisco, California, San Francisco International
Airport, Second Series Revenue Bonds, Issue 24A,
5.750%, 5/01/30 (Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 2.7%
3,600 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 4,320,396
Obligation Bonds, Election of 1997, Series 2000D,
5.625%, 7/01/14 (Pre-refunded to 7/01/10)
5,000 Puerto Rico, Public Improvement General Obligation 7/10 at 100.00 AAA 5,975,250
Bonds, Series 2000, 5.750%, 7/01/16 (Pre-refunded
to 7/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.3%
9,750 California Department of Water Resources, Power 5/12 at 101.00 A3 10,434,255
Supply Revenue Bonds, Series 2002A,
5.125%, 5/01/18
3,630 Imperial Irrigation District, California, Certificates 11/13 at 100.00 AAA 3,965,049
of Participation, Electric System Revenue Bonds,
Series 2003, 5.250%, 11/01/23 - FSA Insured
7,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 7,672,070
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
8,370 Los Angeles Department of Water and Power, 7/11 at 100.00 AAA 9,384,025
California, Power System Revenue Refunding Bonds,
Series 2001A-2, 5.375%, 7/01/19 - MBIA Insured
1,200 Los Angeles Department of Water and Power, 7/13 at 100.00 AAA 1,288,380
California, Power System Revenue Bonds,
Series 2003A-2, 5.000%, 7/01/21 - MBIA Insured
7,000 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 7,328,510
Bonds, Electric System Project, Series 2001,
6.750%, 9/01/31
5,630 Southern California Public Power Authority, 7/12 at 100.00 AAA 5,945,224
Subordinate Revenue Refunding Bonds, Transmission
Project, Series 2002A, 4.750%, 7/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.0%
11,000 California Department of Water Resources, Water 12/11 at 100.00 AAA 11,993,960
System Revenue Bonds, Central Valley Project,
Series 2001W, 5.250%, 12/01/22 - FSA Insured
14,000 Orange County, California, Water District, Revenue 8/09 at 101.00 AA+ 15,298,780
Certificates of Participation, Series 1999A,
5.375%, 8/15/29
8,250 Pico Rivera Water Authority, California, Revenue 12/11 at 102.00 N/R 8,500,553
Bonds, Series 2001A, 6.250%, 12/01/32
5,115 San Francisco City and County Public Utilities 11/12 at 100.00 AAA 5,574,735
Commission, California, Water Revenue Bonds,
Series 2002A, 5.000%, 11/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 496,160 Total Long-Term Investments (cost $497,519,550) - 142.8% 535,422,990
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.9% 14,646,547
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (46.7)% (175,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 375,069,537
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
33
Nuveen California Dividend Advantage Municipal Fund 2 (NVX)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.4%
$ 4,625 California County Tobacco Securitization Agency, 6/12 at 100.00 Baa2 $ 4,146,960
Tobacco Settlement Asset-Backed Bonds, Stanislaus
County Tobacco Funding Corporation, Series 2002A,
5.500%, 6/01/33
3,200 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 3,081,312
California, Tobacco Settlement Asset-Backed Bonds,
Series 2003A-1, 6.250%, 6/01/33
3,000 Northern California Tobacco Securitization Authority, 6/11 at 100.00 BBB 2,480,010
Tobacco Settlement Asset-Backed Bonds, Series 2001A,
5.375%, 6/01/41
2,800 Southern California Tobacco Securitization Authority, 6/12 at 100.00 BBB 2,501,016
Tobacco Settlement Asset-Backed Bonds, Senior
Series 2001A, 5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 19.2%
2,000 California Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 2,147,000
Bonds, Stanford University, Series 2001Q,
5.250%, 12/01/32
15,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 15,835,500
Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) -
MBIA Insured
California State Public Works Board, Lease Revenue Bonds,
University of California System, Series 2002A:
8,880 5.375%, 10/01/16 - FSA Insured 10/12 at 100.00 AAA 10,039,462
10,570 5.375%, 10/01/18 - FSA Insured 10/12 at 100.00 AAA 11,850,450
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 620,167
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 3,210,030
Revenue Refunding Bonds, Long Beach Aquarium of
the South Pacific, Series 2001, 5.250%, 11/01/30 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 8.0%
2,000 California Health Facilities Financing Authority, Revenue 4/12 at 100.00 BBB+ 2,118,720
Bonds, Casa Colina, Inc., Series 2001, 6.000%, 4/01/22
500 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 527,025
Revenue Bonds, Kaiser Hospital Assistance LLC,
Series 2001A, 5.550%, 8/01/31
5,355 California Statewide Community Development Authority, No Opt. Call A 5,818,743
Revenue Bonds, Kaiser Permanente System,
Series 2002E, 4.700%, 11/01/36 (Mandatory
put 6/01/09)
2,185 California Statewide Community Development Authority, No Opt. Call A 2,547,710
Health Facility Revenue Refunding Bonds, Memorial
Health Services, Series 2003A, 6.000%, 10/01/11
3,000 Central California Joint Powers Health Financing 2/10 at 101.00 BBB 3,125,160
Authority, Certificates of Participation, Community
Hospitals of Central California Obligated Group Project,
Series 2000, 6.000%, 2/01/30
2,500 Torrance, California, Revenue Bonds, Torrance Memorial 6/11 at 101.00 A+ 2,601,550
Medical Center, Series 2001A, 5.500%, 6/01/31
1,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 1,582,125
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 10.2%
2,450 ABAG Finance Authority for Nonprofit Corporations, No Opt. Call BBB- 2,735,670
California, Multifamily Housing Revenue Refunding Bonds,
United Dominion/2000 Post Apartments, Series 2000B,
6.250%, 8/15/30 (Mandatory put 8/15/08)
4,750 California Statewide Community Development Authority, 7/08 at 101.00 BBB 5,108,103
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 4.900%, 5/15/25
(Mandatory put 5/15/08)
5,962 California Statewide Community Development Authority, 6/11 at 102.00 AAA 6,275,184
Multifamily Housing Revenue Refunding Bonds,
Claremont Village Apartments, Series 2001D,
5.500%, 6/01/31 (Alternative Minimum Tax) (Mandatory
put 6/01/16)
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 3,500 California Statewide Community Development Authority, 8/12 at 105.00 Aaa $ 4,044,880
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
4,650 San Francisco Redevelopment Agency, California, 10/11 at 100.00 Aaa 5,073,476
GNMA Collateralized Multifamily Housing Revenue Bonds,
Kokoro Assisted Living Facility, Series 2001A,
5.675%, 4/20/43
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.7%
3,585 California Rural Home Mortgage Finance Authority, 6/11 at 102.00 AAA 3,782,390
Single Family Mortgage Revenue Bonds, Mortgage-Backed
Securities Program, Series 2001A, 5.650%, 12/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.7%
1,550 California Health Facilities Financing Authority, Revenue 1/13 at 100.00 BBB 1,581,930
Bonds, Northern California Retired Officers Community
Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.0%
5,000 California, General Obligation Refunding Bonds, No Opt. Call Baa1 5,478,200
Series 2002, 5.000%, 2/01/12
7,225 California, General Obligation Veterans Welfare Bonds, 6/06 at 101.00 AAA 7,505,186
Series 2001BV, 5.600%, 12/01/32 - FSA Insured
California, General Obligation Bonds, Series 2003:
3,000 5.250%, 2/01/20 8/13 at 100.00 Baa1 3,177,120
1,400 5.250%, 2/01/21 8/13 at 100.00 Baa1 1,473,850
3,615 Colton Joint Unified School District, San Bernardino 8/12 at 102.00 AAA 4,050,535
County, California, General Obligation Bonds,
Series 2002A, 5.500%, 8/01/22 - FGIC Insured
Contra Costa County Community College District, California,
General Obligation Bonds, Series 2002:
3,005 5.000%, 8/01/21 - FGIC Insured 8/12 at 100.00 AAA 3,212,555
3,300 5.000%, 8/01/22 - FGIC Insured 8/12 at 100.00 AAA 3,506,118
1,325 Golden West Schools Financing Authority, California, No Opt. Call AAA 1,698,570
Revenue Bonds, School District General Obligation
Refunding Program, Series 1998A, 6.650%, 8/01/13 -
MBIA Insured
8,330 Los Angeles Unified School District, California, 7/10 at 100.00 AAA 9,067,955
General Obligation Bonds, Election of 1997, Series 2000D,
5.375%, 7/01/25 - FGIC Insured
10,840 Los Angeles Unified School District, California, 7/12 at 100.00 AAA 11,725,953
General Obligation Bonds, Election of 1997, Series 2002E,
5.000%, 7/01/19 - MBIA Insured
1,250 Los Angeles Unified School District, Los Angeles 7/13 at 100.00 AAA 1,388,787
County, California, General Obligation Bonds,
Series 2003A, 5.250%, 7/01/20 - FSA Insured
4,050 Santa Rosa High School District, Sonoma County, 5/11 at 101.00 AAA 4,370,922
California, General Obligation Bonds, Series 2001,
5.300%, 5/01/26 - FGIC Insured
1,160 Saugus Union School District, Los Angeles County, 8/12 at 100.00 AAA 1,240,121
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/21 - FGIC Insured
7,600 Southwestern Community College District, San Diego 8/11 at 101.00 AAA 8,294,032
County, California, General Obligation Bonds, Series 2001,
5.375%, 8/01/25 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 45.7%
9,000 Anitoch Area Public Facilities Financing Agency, 8/11 at 100.00 AAA 9,670,410
California, Special Tax Bonds, Community Facilities
District 1989-1, Series 2001, 5.250%, 8/01/25 -
MBIA Insured
4,900 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 Baa2 5,419,939
Department of Corrections, Series 2003C, 5.500%, 6/01/16
1,400 Capistrano Unified School District, Orange County, 9/13 at 100.00 N/R 1,434,104
California, Special Tax Bonds, Community Facilities
District 90-2, Talega, Series 2003, 6.000%, 9/01/33
4,000 Daly City Housing Development Finance Agency, 12/13 at 102.00 A- 4,251,160
California, Mobile Home Park Revenue Bonds, Franciscan
Mobile Home Park Project, Series 2002A,
5.850%, 12/15/32
4,845 Encinitas Public Financing Authority, California, 4/08 at 102.00 AAA 5,231,147
Lease Revenue Bonds, Acquistion Project, Series 2001A,
5.250%, 4/01/31 - MBIA Insured
5,000 Industry Urban Development Agency, California, 5/07 at 101.50 AAA 5,576,350
Tax Allocation Refunding Bonds, Civic, Recreational
and Industrial Redevelopment Project 1, Series 2002,
5.500%, 5/01/19 - MBIA Insured
35
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,000 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R $ 2,047,540
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
1,265 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 1,356,750
Special Tax Bonds, Community Facilities District 1 of
Sycamore Creek, Series 2003, 6.500%, 9/01/24
1,320 Lincoln, California, Special Tax Bonds, Community 9/13 at 102.00 N/R 1,415,740
Facilities District No. 2003-1, Lincoln Crossing Project,
Series A, 6.500%, 9/01/25
8,000 Los Angeles County Metropolitan Transportation 7/08 at 101.00 AAA 8,285,680
Authority, California, Proposition C Sales Tax Revenue
Refunding Bonds, Second Senior Lien, Series 1998A,
5.000%, 7/01/23 - AMBAC Insured
5,000 Los Angeles County Metropolitan Transportation No Opt. Call AAA 5,833,000
Authority, California, Proposition C Sales Tax Revenue
Refunding Bonds, Second Senior Lien, Series 2003A,
5.250%, 7/01/13 - MBIA Insured
3,295 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,790,370
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/16 - FGIC Insured
615 Oceanside, California, Community Facilities Special 3/14 at 100.00 N/R 610,929
Tax Revenue Bonds, Morro Hills, Series 2004,
5.750%, 9/01/33
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 2,029,360
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
4,400 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 5,280,352
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
6,000 Riverside County Redevelopment Agency, California, 10/11 at 102.00 AAA 6,446,460
Tax Allocation Bonds, Jurupa Valley Project Area,
Series 2001, 5.250%, 10/01/35 - AMBAC Insured
1,055 Rohnert Park Finance Authority, California, Rancho 9/13 at 100.00 BBB 1,047,130
Feliz Mobile Home Park Revenue Bonds, Senior Lien,
Series 2003A, 5.750%, 9/15/38
700 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 696,388
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38
700 Sacramento, California, Special Tax Bonds, North 3/04 at 102.00 N/R 718,375
Natomas Community Facilities District No. 4, Series 2003C,
6.000%, 9/01/33
975 San Marcos Public Facilities Authority, California, 9/09 at 102.00 N/R 991,175
Special Tax Bonds, Community Facilities District 99-01,
Series 2003B, 6.000%, 9/01/24
Santa Clara Valley Transportation Authority, California,
Sales Tax Revenue Bonds, Series 2001A:
16,090 5.000%, 6/01/25 - MBIA Insured 6/11 at 100.00 AAA 16,851,540
4,000 5.000%, 6/01/26 - MBIA Insured 6/11 at 100.00 AAA 4,181,680
1,930 West Patterson Financing Authority, California, 9/13 at 103.00 N/R 2,018,838
Community Facilities District 01-1, Special Tax Bonds,
Series 2003B, 6.750%, 9/01/30
850 West Patterson Financing Authority, California, 9/13 at 103.00 N/R 834,547
Community Facilities District No. 1, Special Tax Bonds,
Series 2004A, 6.125%, 9/01/39 (WI, settling 3/09/04)
3,045 Yucaipa Redevelopment Agency, California, Mobile 5/11 at 102.00 N/R 3,091,071
Home Park Revenue Bonds, Rancho del Sol and
Grandview, Series 2001A, 6.750%, 5/15/36
5,100 Yucaipa, California, Special Tax Bonds, Chapman 9/09 at 102.00 N/R 5,150,541
Heights Community Facilities District 98-1, Series 1998,
6.000%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.9%
7,000 Foothill-Eastern Transportation Corridor Agency, 1/14 at 101.00 BBB- 5,432,980
California, Toll Road Refunding Revenue Bonds,
Series 1999, 0.000%, 1/15/27
5,585 Port of Oakland, California, Revenue Bonds, Series 2002N, 11/12 at 100.00 AAA 6,052,576
5.000%, 11/01/16 (Alternative Minimum Tax) -
MBIA Insured
2,000 San Francisco City and County Airports Commission, 5/12 at 100.00 AAA 2,172,060
California, Revenue Refunding Bonds, San Francisco
International Airport, Series 2, Issue 28A, 5.250%, 5/01/17
(Alternative Minimum Tax) - MBIA Insured
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
San Francisco City and County Airports Commission, California,
Revenue Bonds, San Francisco International Airport, Series 2,
Issue 29A:
$ 2,430 5.250%, 5/01/18 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA $ 2,642,771
2,555 5.250%, 5/01/19 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,760,448
1,000 Airports Commission of the City and County 5/13 at 100.00 AAA 1,115,340
of San Francisco, California, San Francisco International
Airport Revenue Bonds, Second Series 29B,
5.125%, 5/01/17 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.5%
6,000 California Department of Water Resources, Power 5/12 at 101.00 A3 6,421,080
Supply Revenue Bonds, Series 2002A, 5.125%, 5/01/18
Los Angeles Department of Water and Power, California, Power
System Revenue Bonds, Series 2003A-2:
750 5.000%, 7/01/21 - MBIA Insured 7/13 at 100.00 AAA 805,237
1,000 5.000%, 7/01/23 - MBIA Insured 7/13 at 100.00 AAA 1,063,240
3,000 Merced Irrigation District, California, Revenue 9/05 at 102.00 Baa3 3,144,930
Refunding Bonds, Electric System Project, Series 2001,
6.850%, 9/01/36
1,000 Merced Irrigation District, California, Revenue 9/05 at 103.00 Baa3 1,055,630
Certificates of Participation, Electric System Project,
Series 2002, 6.500%, 9/01/34
2,000 Santa Clara, California, Electric Revenue Subordinate 7/13 at 100.00 AAA 2,218,740
Bonds, Series 2003A, 5.250%, 7/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.7%
2,740 California Department of Water Resources, Water System 12/12 at 100.00 AAA 2,988,244
Revenue Bonds, Central Valley Project, Series 2002Z,
5.000%, 12/01/18 - FGIC Insured
4,900 East Bay Municipal Utility District, Alameda and Contra 6/11 at 100.00 AAA 5,128,781
Costa Counties, California, Water System Subordinated
Revenue Bonds, Series 2001, 5.000%, 6/01/26 -
MBIA Insured
6,885 San Diego Public Facilities Financing Authority, 8/12 at 100.00 AAA 7,350,425
California, Subordinate Lien Water Revenue Bonds,
Series 2002, 5.000%, 8/01/21 - MBIA Insured
10,000 San Francisco City and County Public Utilities 4/13 at 100.00 AAA 11,085,500
Commission, California, Clean Water Revenue
Refunding Bonds, Series 2003A, 5.250%, 10/01/20 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 314,612 Total Long-Term Investments (cost $316,987,317) - 147.0% 334,723,035
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 3,021,866
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.3)% (110,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 227,744,901
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
37
Nuveen California Dividend Advantage Municipal Fund 3 (NZH)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.4%
$ 11,240 California County Tobacco Securitization Agency, 6/12 at 100.00 Baa2 $ 10,078,234
Tobacco Settlement Asset-Backed Bonds, Merced
County Tobacco Funding Corporation, Series 2002A,
5.500%, 6/01/33
6,100 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB 5,873,751
California, Tobacco Settlement Asset-Backed Bonds,
Series 2003A-1, 6.250%, 6/01/33
4,200 Southern California Tobacco Securitization Authority, 6/12 at 100.00 BBB 3,751,524
Tobacco Settlement Asset-Backed Bonds, Senior
Series 2001A, 5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.2%
9,000 California Educational Facilities Authority, Student 3/08 at 102.00 Aaa 9,501,300
Loan Revenue Bonds, Cal Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) -
MBIA Insured
3,600 California State Public Works Board, Lease Revenue 10/12 at 100.00 AAA 4,053,024
Bonds, University of California System, Series 2002A,
5.375%, 10/01/17 - FSA Insured
620 California Statewide Community Development 10/13 at 100.00 N/R 620,167
Authority, Revenue Bonds, Notre Dame de Namur
University, Series 2003, 6.500%, 10/01/23
7,595 San Francisco State University Foundation, Inc., 9/11 at 100.00 AAA 8,001,029
California, Auxiliary Organization Revenue Bonds,
Student Housing, Series 2001, 5.000%, 9/01/26 -
MBIA Insured
2,990 University of California, Revenue Bonds, Multiple 9/08 at 101.00 Aa2 3,106,520
Purpose Projects, Series 2000K, 5.000%, 9/01/23
3,820 University of California, Revenue Bonds, Research 9/09 at 101.00 AAA 3,990,678
Facilities, Series 2001E, 5.000%, 9/01/26 - AMBAC Insured
4,000 University of California, Multiple Purpose Projects, 5/13 at 100.00 AAA 4,256,360
Revenue Bonds, Series 2003A, 5.000%, 5/15/23 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.9%
California Health Facilities Financing Authority, Revenue
Bonds, Casa Colina, Inc., Series 2001:
4,000 6.000%, 4/01/22 4/12 at 100.00 BBB+ 4,237,440
2,000 6.125%, 4/01/32 4/12 at 100.00 BBB+ 2,093,280
9,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 9,486,450
Revenue Bonds, Kaiser Hospital Assistance LLC,
Series 2001A, 5.550%, 8/01/31
7,665 California Statewide Community Development 11/09 at 102.00 BBB 7,992,219
Authority, Insured Mortgage Hospital Revenue Bonds,
Mission Community Hospital, Series 2001,
5.375%, 11/01/21
6,525 California Statewide Community Development No Opt. Call A 7,602,669
Authority, Health Facility Revenue Refunding Bonds,
Memorial Health Services, Series 2003A,
6.000%, 10/01/12
6,450 California Statewide Community Development 6/13 at 100.00 AAA 7,176,657
Authority, Hospital Revenue Bonds, Monterey Peninsula
Hospital, Series 2003B, 5.250%, 6/01/18 - FSA Insured
1,740 Central California Joint Powers Health Financing 2/10 at 101.00 BBB 1,812,593
Authority, Certificates of Participation, Community
Hospitals of Central California Obligated Group
Project, Series 2000, 6.000%, 2/01/30
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 2,636,875
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.5%
4,000 ABAG Finance Authority for Nonprofit Corporations, No Opt. Call BBB- 4,466,400
California, Multifamily Housing Revenue Refunding
Bonds, United Dominion/2000 Post Apartments,
Series 2000B, 6.250%, 8/15/30 (Mandatory put 8/15/08)
5,250 California Statewide Community Development 8/12 at 105.00 Aaa 6,067,320
Authority, GNMA Collateralized Housing Revenue
Refunding Bonds, Crowne Pointe Project, Series 2002F,
6.750%, 8/20/37
7,500 Housing Authority of the County of San Bernardino, No Opt. Call BBB+ 8,241,675
California, Multifamily Housing Revenue Refunding
Bonds, Equity Residential/Redlands Lawn & Tennis
Apartments, Series 1999A, 5.200%, 6/15/29
(Mandatory put 6/15/09)
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 3,610 San Bernardino County Housing Authority, California, 11/11 at 105.00 Aaa $ 3,981,541
GNMA Collateralized Multifamily Mortgage Revenue
Bonds, Pacific Palms Mobile Home Park, Series 2001A,
6.700%, 12/20/41
San Jose, California, Multifamily Housing Revenue Bonds, GNMA
Mortgage-Backed Securities Program, Lenzen Housing, Series
2001B:
1,250 5.350%, 2/20/26 (Alternative Minimum Tax) 8/11 at 102.00 AAA 1,314,300
2,880 5.450%, 2/20/43 (Alternative Minimum Tax) 8/11 at 102.00 AAA 3,023,453
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.8%
2,865 California Housing Finance Agency, Home Mortgage 2/08 at 101.50 AAA 3,007,734
Revenue Bonds, Series 1998B, 5.150%, 2/01/18
(Alternative Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3%
4,715 California Pollution Control Financing Authority, No Opt. Call BBB 4,808,970
Solid Waste Disposal Revenue Bonds, Waste Management,
Inc. Project, Series 2002B, 4.450%, 7/01/27 (Alternative
Minimum Tax) (Mandatory put 7/01/05)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.5%
California Health Facilities Financing Authority, Insured
Senior Living Revenue Bonds, Aldersly, Series 2002A:
1,500 5.125%, 3/01/22 3/12 at 101.00 BBB 1,531,470
1,315 5.250%, 3/01/32 3/12 at 101.00 BBB 1,327,493
2,450 California Health Facilities Financing Authority, 1/13 at 100.00 BBB 2,500,470
Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates,
Series 2002, 5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.3%
8,500 California, General Obligation Veterans Welfare 6/04 at 102.00 A 8,656,910
Bonds, Series 1997BH, 5.500%, 12/01/18 (Alternative
Minimum Tax)
10 California, General Obligation Veterans Welfare Bonds, 12/06 at 102.00 A 10,466
Series 1997BJ, 5.500%, 12/01/18 (Alternative
Minimum Tax)
9,335 California, General Obligation Bonds, Series 2002, No Opt. Call AAA 11,466,274
6.000%, 2/01/16 - FSA Insured
California, General Obligation Refunding Bonds, Series 2002:
8,450 5.000%, 2/01/12 No Opt. Call Baa1 9,258,158
2,780 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 3,427,907
5,000 5.000%, 4/01/21 - AMBAC Insured 4/12 at 100.00 AAA 5,305,350
1,950 California, Various Purpose General Obligation Bonds, 11/11 at 100.00 AAA 2,028,644
Series 2001, 5.000%, 11/01/30 - MBIA Insured
14,300 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 14,772,758
Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum
Tax) - MBIA Insured
1,840 Compton Unified School District, Los Angeles County, 9/13 at 100.00 AAA 2,075,557
California, General Obligation Bonds, Series 2003A,
5.250%, 9/01/18 - MBIA Insured
3,000 Contra Costa County Community College District, California, 8/12 at 100.00 AAA 3,178,620
General Obligation Bonds, Series 2002, 5.000%, 8/01/23 -
FGIC Insured
2,500 Fullerton Joint Union High School District, Orange County, 8/12 at 100.00 Aaa 2,633,750
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/23 - FSA Insured
2,260 Jurupa Unified School District, Riverside County, 8/11 at 101.00 AAA 2,425,952
California, General Obligation Bonds, Series 2002,
5.125%, 8/01/22 - FGIC Insured
Los Angeles Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003A:
3,750 5.250%, 7/01/20 - FSA Insured 7/13 at 100.00 AAA 4,166,362
7,200 5.000%, 7/01/22 - FSA Insured 7/13 at 100.00 AAA 7,689,816
2,710 Pajaro Valley Unified School District, Santa Cruz County, 8/13 at 100.00 AAA 2,895,771
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/22 - FSA Insured
2,250 Puerto Rico, Public Improvement General Obligation 7/11 at 100.00 AAA 2,417,333
Refunding Bonds, Series 2001, 5.000%, 7/01/24 -
FSA Insured
39
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 5,000 Riverside Unified School District, Riverside County, 2/12 at 101.00 AAA $ 5,270,350
California, General Obligation Bonds, Series 2002A,
5.000%, 2/01/27 - FGIC Insured
10,810 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 11,433,521
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/26 - FSA Insured
4,000 San Diego Unified School District, San Diego County, 7/12 at 101.00 AAA 4,402,760
California, General Obligation Bonds, Election of 1998,
Series 2002D, 5.250%, 7/01/21 - FGIC Insured
1,000 Saugus Union School District, Los Angeles County, 8/12 at 100.00 AAA 1,056,620
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/24 - FGIC Insured
1,630 West Contra Costa Unified School District, 8/11 at 101.00 AAA 1,731,810
Contra Costa County, California, General Obligation
Bonds, Series 2003C, 5.000%, 8/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 48.9%
4,000 Beaumont Financing Authority, California, Local Agency 9/12 at 102.00 N/R 4,220,200
Revenue Bonds, Series 2002A, 6.750%, 9/01/25
7,135 Brentwood Infrastructure Financing Authority, Contra 11/11 at 100.00 AAA 7,498,742
Costa County, California, Capital Improvement Revenue
Bonds, Series 2001, 5.000%, 11/01/25 - FSA Insured
3,350 California State Public Works Board, Lease Revenue 12/12 at 100.00 AAA 3,739,337
Bonds, Department of General Services, Capital
East End, Series 2002A, 5.250%, 12/01/17 -
AMBAC Insured
8,210 California State Public Works Board, Lease Revenue 12/13 at 100.00 Baa2 9,081,163
Bonds, Department of Corrections, Series 2003C,
5.500%, 6/01/16
2,630 California State Public Works Board, Lease Revenue No Opt. Call AAA 3,012,086
Bonds, Department of Corrections, Series 2001B,
5.250%, 1/01/12 - AMBAC Insured
4,510 California State Public Works Board, Lease Revenue 12/11 at 102.00 AAA 4,753,675
Bonds, Department of Mental Health, Hospital
Addition, Series 2001A, 5.000%, 12/01/26 -
AMBAC Insured
15,000 California State Public Works Board, Lease Revenue 3/12 at 100.00 AAA 15,669,000
Bonds, Department of General Services, Series 2002B,
5.000%, 3/01/27 - AMBAC Insured
Capistrano Unified School District, Orange County, California,
Special Tax Bonds, Community Facilities District 90-2, Talega,
Series 2003:
1,750 5.875%, 9/01/23 9/13 at 100.00 N/R 1,798,738
550 6.000%, 9/01/33 9/13 at 100.00 N/R 563,398
1,810 Cerritos Public Financing Authority, California, No Opt. Call AAA 2,071,780
Tax Allocation Revenue Bonds, Los Cerritos
Redevelopment Projects, Series 2002A,
5.000%, 11/01/14 - AMBAC Insured
1,270 Coalinga Public Financing Authority, California, No Opt. Call AAA 1,577,619
Local Obligation Senior Lien Revenue Bonds,
Series 1998A, 6.000%, 9/15/18 - AMBAC Insured
2,000 Daly City Housing Development Finance Agency, 12/13 at 102.00 A- 2,131,040
California, Mobile Home Park Revenue Bonds,
Franciscan Mobile Home Park Project, Series 2002A,
5.800%, 12/15/25
1,000 Fullerton Community Facilities District 1, California, 9/12 at 100.00 N/R 1,043,860
Special Tax Bonds, Amerige Heights, Series 2002,
6.100%, 9/01/22
3,000 Lake Elsinore Public Financing Authority, California, 10/13 at 102.00 N/R 3,071,310
Local Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
5,250 Lammersville School District, San Joaquin County, 9/12 at 101.00 N/R 5,414,640
California, Special Tax Bonds, Community Facilities
District of Mountain House, Series 2002, 6.300%, 9/01/24
2,000 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 2,145,060
Special Tax Bonds, Community Facilities District 1 of
Sycamore Creek, Series 2003, 6.500%, 9/01/24
2,200 Lincoln, California, Special Tax Bonds, Community 9/13 at 102.00 N/R 2,359,566
Facilities District No. 2003-1, Lincoln Crossing Project,
Series A, 6.500%, 9/01/25
5,425 Lodi, California, Certificates of Participation, 10/12 at 100.00 AAA 5,709,162
Public Improvement Financing Project, Series 2002,
5.000%, 10/01/26 - MBIA Insured
6,075 Los Angeles County Metropolitan Transportation No Opt. Call AAA 7,087,095
Authority, California, Proposition C Sales Tax Revenue
Refunding Bonds, Second Senior Lien, Series 2003A,
5.250%, 7/01/13 - MBIA Insured
1,000 Monterey County, California, Certificates of Participation, 8/11 at 100.00 Aaa 1,125,400
Master Plan Financing, Series 2001, 5.250%, 8/01/15 -
MBIA Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,000 Norco, California, Special Tax Bonds, Community Facilities 9/12 at 102.00 N/R $ 1,028,010
District 01-1, Series 2002, 6.750%, 9/01/22
3,000 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,401,970
Lien Tax Allocation Bonds, Central District
Redevelopment Project, Series 2003, 5.500%, 9/01/19 -
FGIC Insured
1,000 Oceanside, California, Community Facilities Special 3/14 at 100.00 N/R 993,380
Tax Revenue Bonds, Morro Hills, Series 2004,
5.750%, 9/01/33
4,520 Ontario Redevelopment Financing Authority, California, 8/11 at 101.00 AAA 4,783,245
Lease Revenue Bonds, Capital Projects, Series 2001,
5.000%, 8/01/24 - AMBAC Insured
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 2,029,360
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
11,165 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA 11,843,720
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.100%, 4/01/30 - MBIA Insured
5,000 Pomoma Public Financing Authority, California, Revenue 2/11 at 100.00 AAA 5,218,250
Refunding Bonds, Merged Redevelopment Projects,
Series 2001AD, 5.000%, 2/01/27 - MBIA Insured
5,500 Puerto Rico Highway and Transportation Authority, 7/12 at 100.00 A 5,972,010
Highway Revenue Bonds, Series 2002D, 5.375%, 7/01/36
4,400 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 5,280,352
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
1,735 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 BBB 1,722,057
Mobile Home Park Revenue Bonds, Senior Lien,
Series 2003A, 5.750%, 9/15/38
1,125 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 1,119,195
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38
1,700 Roseville, California, Special Tax Bonds, Community 9/09 at 103.00 N/R 1,731,127
Facilities District 1 - Crocker, Series 2003,
6.000%, 9/01/27
1,150 Sacramento, California, Special Tax Bonds, North Natomas 3/04 at 102.00 N/R 1,180,188
Community Facilities District No. 4, Series 2003C,
6.000%, 9/01/33
14,505 San Diego Redevelopment Agency, California, 9/11 at 101.00 AAA 15,280,002
Subordinate Tax Allocation Bonds, Centre City
Redevelopment Project, Series 2001A,
5.000%, 9/01/26 - FSA Insured
8,725 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 9,125,216
Sales Tax Revenue Bonds, Series 2001,
5.000%, 7/01/26 - AMBAC Insured
10,000 San Jose Redevelopment Agency, California, Tax 8/10 at 101.00 AAA 10,444,000
Allocation Bonds, Merged Area Redevelopment Project,
Series 2002, 5.000%, 8/01/27 - MBIA Insured
2,100 San Marcos Public Facilities Authority, California, 9/07 at 102.00 N/R 2,169,363
Special Tax Revenue Bonds, Series 2002, 6.300%, 9/01/20
1,595 San Marcos Public Facilities Authority, California, 9/09 at 102.00 N/R 1,621,461
Special Tax Bonds, Community Facilities District 99-01,
Series 2003B, 6.000%, 9/01/24
1,595 Santa Clara Valley Transportation Authority, California, 6/11 at 100.00 AAA 1,680,683
Sales Tax Revenue Bonds, Series 2001A,
5.000%, 6/01/22 - MBIA Insured
2,810 West Patterson Financing Authority, California, 9/13 at 103.00 N/R 2,924,929
Community Facilities District 01-1, Special Tax Bonds,
Series 2003B, 7.000%, 9/01/38
1,375 West Patterson Financing Authority, California, 9/13 at 103.00 N/R 1,350,003
Community Facilities District No. 1, Special Tax
Bonds, Series 2004A, 6.125%, 9/01/39 (WI,
settling 3/09/04)
2,500 Yucaipa-Calimesa Joint Unified School District, 10/11 at 100.00 AAA 2,618,050
San Bernardino County, California, General Obligation
Refunding Bonds, Series 2001A, 5.000%, 10/01/26 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.2%
11,750 Foothill-Eastern Transportation Corridor Agency, 1/14 at 101.00 BBB- 9,002,968
California, Toll Road Refunding Revenue Bonds,
Series 1999, 0.000%, 1/15/28
1,500 Port of Oakland, California, Revenue Refunding Bonds, 11/07 at 102.00 AAA 1,703,190
Series 1997I, 5.600%, 11/01/19 - MBIA Insured
1,000 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 1,104,330
5.250%, 11/01/20 - FGIC Insured
41
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ 3,000 Airports Commission of the City and County of 5/10 at 101.00 AAA $ 3,129,960
San Francisco, California, Revenue Bonds, San Francisco
International Airport, Series 2, Issue 26B, 5.000%, 5/01/30 -
FGIC Insured
Airports Commission of the City and County of San Francisco,
California, Revenue Bonds, San Francisco International Airport,
Second Series, Issue 29B:
4,110 5.125%, 5/01/17 - FGIC Insured 5/13 at 100.00 AAA 4,584,047
10,625 5.125%, 5/01/18 - FGIC Insured 5/13 at 100.00 AAA 11,789,181
5,140 5.125%, 5/01/19 - FGIC Insured 5/13 at 100.00 AAA 5,661,196
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.0%
15,000 California Pollution Control Financing Authority, 4/11 at 102.00 AAA 16,417,200
Pollution Control Revenue Refunding Bonds, Pacific Gas
and Electric Company, Series 1996A Remarketed,
5.350%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured
9,000 California Department of Water Resources, Power 5/12 at 101.00 A3 9,631,620
Supply Revenue Bonds, Series 2002A, 5.125%, 5/01/18
1,200 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 1,288,380
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
1,600 Merced Irrigation District, California, Revenue 9/05 at 103.00 Baa3 1,689,008
Certificates of Participation, Electric System Project,
Series 2002, 6.500%, 9/01/34
5,000 Merced Irrigation District, California, Revenue 9/13 at 102.00 Baa3 5,102,800
Certificates of Participation, Electric System Project,
Series 2003, 5.700%, 9/01/36
2,250 Salinas Valley Solid Waste Authority, California, 8/12 at 100.00 AAA 2,361,015
Revenue Bonds, Series 2002, 5.125%, 8/01/22
(Alternative Minimum Tax) - AMBAC Insured
6,085 Southern California Public Power Authority, Revenue 7/13 at 100.00 AAA 6,888,342
Bonds, Magnolia Power Project, Series 2003-1A,
5.250%, 7/01/16 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.1%
8,000 California Department of Water Resources, Water 6/13 at 100.00 AAA 9,316,960
System Revenue Bonds, Central Valley Project,
Series 2003Y, 5.250%, 12/01/13 - FGIC Insured
7,000 Carmichael Water District, Sacramento County, California, 9/09 at 102.00 AAA 7,369,600
Water Revenue Certificates of Participation, Series 1999,
5.125%, 9/01/29 - MBIA Insured
1,000 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 1,030,370
Series 2001A, 6.250%, 12/01/32
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,645,200
6,260 5.000%, 8/01/24 - MBIA Insured 8/12 at 100.00 AAA 6,605,361
San Francisco City and County Public Utilities Commission,
California, Clean Water Revenue Refunding Bonds, Series 2003A:
3,315 5.250%, 10/01/18 - MBIA Insured 4/13 at 100.00 AAA 3,723,607
12,000 5.250%, 10/01/19 - MBIA Insured 4/13 at 100.00 AAA 13,390,560
------------------------------------------------------------------------------------------------------------------------------------
$ 512,655 Total Long-Term Investments (cost $522,264,223) - 150.1% 544,870,622
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 4,949,253
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.5)% (187,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 362,819,875
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
42
Nuveen Insured California Dividend Advantage Municipal Fund (NKL)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.5%
$ 5,500 Golden State Tobacco Securitization Corporation, 6/13 at 100.00 BBB $ 5,974,815
California, Tobacco Settlement Asset-Backed
Revenue Bonds, Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.5%
1,000 California Educational Facilities Authority, Revenue Bonds, 3/09 at 101.00 Aa3 1,101,280
Claremont University Center, Series 1999B,
5.250%, 3/01/18
1,675 California Educational Facilities Authority, Revenue Bonds, 10/12 at 100.00 A2 1,767,929
University of San Diego, Series 2002A, 5.250%, 10/01/30
9,000 California State University, Systemwide Revenue Bonds, 11/12 at 100.00 AAA 9,562,680
Series 2002A, 5.125%, 11/01/26 - AMBAC Insured
1,000 California Statewide Community Development Authority, 8/12 at 100.00 A 1,061,890
Student Housing Revenue Bonds, EAH - Irvine East
Campus Apartments, LLC Project, Series 2002A,
5.500%, 8/01/22 - ACA Insured
9,000 University of California, Revenue Bonds, Multiple 9/08 at 101.00 Aa2 9,431,010
Purpose Projects, Series 2000K, 5.300%, 9/01/30
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.6%
5,000 ABAG Finance Authority for Non-Profit Corporations, 4/12 at 100.00 BBB 5,204,550
California, Insured Revenue Bonds, Sansum-Santa Barbara
Medical Foundation Clinic, Series 2002A, 5.600%, 4/01/26
California Health Facilities Financing Authority, Revenue
Bonds, Cedars-Sinai Medical Center, Series 1999A:
2,500 6.125%, 12/01/30 12/09 at 101.00 A3 2,712,050
3,000 6.250%, 12/01/34 12/09 at 101.00 A3 3,262,290
2,160 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 2,292,689
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/15
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 0.9%
1,905 Los Angeles, California, GNMA Mortgage-Backed 7/11 at 102.00 AAA 2,061,191
Securities Program, Multifamily Housing Revenue Bonds,
Park Plaza West Senior Apartments Project, Series 2001B,
5.300%, 1/20/21 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.4%
3,000 ABAG Finance Authority for Non-Profit Corporations, 11/12 at 100.00 BBB 3,079,500
California, Insured Senior Living Revenue Bonds, Odd
Fellows Home of California, Series 2003A,
5.200%, 11/15/22
5,000 California Statewide Community Development Authority, 11/13 at 100.00 BBB 5,204,700
Revenue Bonds, Jewish Home for the Aging Project,
Series 2003, 5.000%, 11/15/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 40.0%
5,920 Cajon Valley Union School District, San Diego County, 8/10 at 102.00 AAA 6,261,584
California, General Obligation Bonds, Series 2002B,
5.125%, 8/01/32 - MBIA Insured
9,000 California, General Obligation Refunding Bonds, 2/12 at 100.00 AAA 9,484,110
Series 2002, 5.000%, 2/01/22 - MBIA Insured
2,900 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 Baa1 2,991,176
5.000%, 2/01/21
2,000 California, General Obligation Bonds, Series 2004, 2/14 at 100.00 Baa1 2,076,860
5.000%, 2/01/20
1,490 Campbell Union High School District, Santa Clara County, 8/11 at 102.00 Aaa 1,567,614
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/32 - FGIC Insured
Compton Community College District, Los Angeles County,
California, General Obligation Bonds, Series 2004A:
2,315 5.250%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 2,552,889
2,560 5.250%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 2,813,978
2,415 El Monte Union High School District, Los Angeles County, 6/13 at 100.00 AAA 2,547,583
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/28 - FSA Insured
43
Nuveen Insured California Dividend Advantage Municipal Fund (NKL) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 10,000 Fremont Unified School District, Alameda County, 8/12 at 101.00 AAA $ 10,629,200
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/25 - FSA Insured
2,070 Fresno Unified School District, Fresno County, California, 8/10 at 102.00 AAA 2,203,908
General Obligation Bonds, Election of 1995, Series 2002G,
5.125%, 8/01/26 - FSA Insured
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Election of 2001, Series 2002B:
1,135 5.125%, 8/01/23 - FGIC Insured 8/10 at 102.00 AAA 1,215,074
1,190 5.125%, 8/01/24 - FGIC Insured 8/10 at 102.00 AAA 1,270,456
1,245 5.125%, 8/01/25 - FGIC Insured 8/10 at 102.00 AAA 1,325,539
1,255 5.125%, 8/01/26 - FGIC Insured 8/10 at 102.00 AAA 1,336,186
5,000 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 5,302,600
Obligation Bonds, Election of 1997, Series 2002E,
5.125%, 1/01/27 - MBIA Insured
Los Angeles Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003A:
4,700 5.000%, 7/01/22 - FSA Insured 7/13 at 100.00 AAA 5,019,741
5,500 5.000%, 1/01/28 - MBIA Insured 7/13 at 100.00 AAA 5,804,205
1,500 Madera Unified School District, Madera County, California, 8/12 at 100.00 AAA 1,576,230
General Obligation Bonds, Series 2002, 5.000%, 8/01/28 -
FSA Insured
1,155 Montara Sanitary District, California, General Obligation 8/11 at 101.00 AAA 1,216,215
Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured
2,500 Oakland Unified School District, Alameda County, California, 8/12 at 100.00 AAA 2,720,700
General Obligation Bonds, Series 2002, 5.250%, 8/01/21 -
FGIC Insured
3,300 Peralta Community College District, Alameda County, 8/09 at 102.00 AAA 3,442,263
California, General Obligation Bonds, Election of 2000,
Series 2001A, 5.000%, 8/01/31 - FGIC Insured
3,250 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 3,471,098
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/22 - FSA Insured
3,500 San Mateo County Community College District, California, 9/12 at 100.00 AAA 3,687,110
General Obligation Bonds, Series 2002A, 5.000%, 9/01/26 -
FGIC Insured
2,980 Santa Clarita Community College District, Los Angeles 8/11 at 101.00 AAA 3,166,250
County, California, General Obligation Bonds, Series 2002,
5.125%, 8/01/26 - FGIC Insured
2,460 Vacaville Unified School District, Solano County, 8/11 at 101.00 AAA 2,590,355
California, General Obligation Bonds, Series 2002,
5.000%, 8/01/26 - FSA Insured
10,000 Vista Unified School District, San Diego County, 8/12 at 100.00 AAA 10,595,400
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 40.7%
1,450 Baldwin Park Public Financing Authority, California, 8/13 at 102.00 BBB 1,495,835
Sales Tax and Tax Allocation Bonds, Puente Merced
Redevelopment Project, Series 2003, 5.250%, 8/01/21
6,895 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 7,315,871
California, Refunding Certificates of Participation,
Series 2002A, 5.125%, 8/01/26 - FSA Insured
2,290 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 2,571,464
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/19 - AMBAC Insured
2,200 California Infrastructure Economic Development Bank, 9/13 at 101.00 AAA 2,330,086
Los Angeles County, Revenue Bonds, Department of
Public Social Services, Series 2003, 5.000%, 9/01/28 -
AMBAC Insured
5,100 California State Public Works Board, Lease Revenue 12/13 at 100.00 Baa2 5,684,511
Bonds, Department of Corrections, Series 2003C,
5.500%, 6/01/15
7,035 Corona-Norco Unified School District, Riverside County, 9/13 at 100.00 AAA 7,430,156
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2003, 5.000%, 9/01/28 -
MBIA Insured
3,145 Culver City Redevelopment Agency, California, 5/11 at 101.00 AAA 3,329,895
Tax Allocation Revenue Bonds, Redevelopment Project,
Series 2002A, 5.125%, 11/01/25 - MBIA Insured
1,020 Desert Sands Unified School District, Riverside 3/12 at 101.00 AAA 1,094,542
County, California, Refunding Certificates of Participation,
Series 2002, 5.000%, 3/01/20 - MBIA Insured
44
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 8,720 El Monte, California, Senior Lien Certificates of 1/11 at 100.00 AAA $ 9,213,116
Participation, Department of Public Services Facility -
Phase II, Series 2001, 5.000%, 1/01/21 - AMBAC Insured
2,115 Inglewood Redevelopment Agency, California, No Opt. Call AAA 2,405,051
Tax Allocation Refunding Bonds, Merged Area
Redevelopment Project, Series 1998A, 5.250%, 5/01/23 -
AMBAC Insured
1,400 Irvine Assessment District, California, Limited 3/04 at 103.00 N/R 1,403,570
Obligation Improvement Bonds, Assessment District 00-18,
Group 3, Series 2003, 5.550%, 9/02/26
3,500 La Quinta Redevelopment Agency, California, 9/11 at 102.00 AAA 3,700,165
Tax Allocation Bonds, Project Area 1, Series 2001,
5.100%, 9/01/31 - AMBAC Insured
3,400 La Quinta Redevelopment Agency, California, 9/12 at 102.00 AAA 3,636,674
Tax Allocation Bonds, Project Area 1, Series 2002,
5.000%, 9/01/22 - AMBAC Insured
1,460 City of Los Angeles, California, Certificates 6/13 at 100.00 AAA 1,531,044
of Participation, Municipal Improvement Corporation,
Series 2003AW, 5.000%, 6/01/33 - AMBAC Insured
7,000 Los Angeles, California, Certificates of Participation, 4/12 at 100.00 AAA 7,459,550
Real Property Acquisition Program, Series 2002,
5.200%, 4/01/27 - AMBAC Insured
4,690 Los Angeles County Metropolitan Transportation 7/08 at 101.00 AAA 4,857,480
Authority, California, Proposition C Sales Tax Revenue
Refunding Bonds, Second Senior Lien, Series 1998A,
5.000%, 7/01/23 - AMBAC Insured
8,470 Ontario Redevelopment Financing Authority, California, 8/11 at 101.00 AAA 9,049,179
Lease Revenue Bonds, Capital Projects, Series 2001,
5.200%, 8/01/29 - AMBAC Insured
5,000 Palm Desert Financing Authority, California, 4/12 at 102.00 AAA 5,307,150
Tax Allocation Revenue Refunding Bonds, Project Area 1,
Series 2002, 5.000%, 4/01/25 - MBIA Insured
4,475 Riverside County, California, Asset Leasing Corporate 6/12 at 101.00 AAA 4,840,518
Leasehold Revenue Bonds, Riverside County Hospital
Project, Series 1997B, 5.000%, 6/01/19 - MBIA Insured
3,175 San Buenaventura Public Facilities Financing Authority, 2/11 at 101.00 AAA 3,388,423
California, Certificates of Participation, Series 2001C,
5.250%, 2/01/31 - AMBAC Insured
3,730 San Diego Redevelopment Agency, California, 9/09 at 101.00 Baa2 3,812,358
Centre City Project Subordinate Tax Increment and
Parking Revenue Bonds, Series 2003B, 5.250%, 9/01/26
4,000 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 4,338,840
Refunding Bonds, Convention Center Project,
Series 2001F, 5.000%, 9/01/19 - MBIA Insured
2,160 Temecula Redevelopment Agency, California, 8/08 at 102.00 AAA 2,257,222
Tax Allocation Revenue Bonds, Redevelopment Project 1,
Series 2002, 5.125%, 8/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.4%
2,250 California Infrastructure Economic Development Bank, 7/13 at 100.00 AAA 2,365,605
Revenue Bonds, Bay Area Toll Bridges, 1st Lien
Series 2003A, 5.000%, 7/01/36 - AMBAC Insured
7,500 Foothill-Eastern Transportation Corridor Agency, 1/14 at 101.00 BBB- 5,731,950
California, Toll Road Refunding Revenue Bonds,
Series 1999, 0.000%, 1/15/29
San Francisco City and County Airports Commission, California,
Revenue Bonds, San Francisco International Airport, Series 2,
Issue 29A:
2,185 5.250%, 5/01/16 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,406,188
2,300 5.250%, 5/01/17 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,517,971
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 2.1%
4,500 Southern California Metropolitan Water District, 1/08 at 101.00 AAA 5,098,770
Water Revenue Bonds, Series 1997A, 5.000%, 7/01/30
(Pre-refunded to 1/01/08) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 21.3%
9,000 Anaheim Public Financing Authority, California, 10/12 at 100.00 AAA 9,458,190
Electric System Distribution Facilities Revenue Bonds,
Series 2002A, 5.000%, 10/01/27 - FSA Insured
10,000 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 10,944,800
Control Revenue Refunding Bonds, Pacific Gas and
Electric Company, Series 1996A Remarketed,
5.350%, 12/01/16 (Alternative Minimum Tax) -
MBIA Insured
6,000 California Department of Water Resources, Power 5/12 at 101.00 A3 6,421,080
Supply Revenue Bonds, Series 2002A, 5.125%, 5/01/18
45
Nuveen Insured California Dividend Advantage Municipal Fund (NKL) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 3,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA $ 3,288,030
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
Los Angeles Department of Water and Power, California, Power
System Revenue Bonds, Series 2003A-2:
775 5.000%, 7/01/21 - MBIA Insured 7/13 at 100.00 AAA 832,079
5,000 5.000%, 7/01/30 - MBIA Insured 7/13 at 100.00 AAA 5,256,900
6,000 Northern California Power Agency, Revenue Refunding 7/08 at 101.00 AAA 6,266,760
Bonds, Hydroelectric Project 1, Series 1998A,
5.200%, 7/01/32 - MBIA Insured
3,000 Sacramento Municipal Utility District, California, 8/11 at 100.00 AAA 3,137,730
Electric Revenue Bonds, Series 2001N,
5.000%, 8/15/28 - MBIA Insured
5,630 Southern California Public Power Authority, Subordinate 7/12 at 100.00 AAA 5,945,224
Revenue Refunding Bonds, Transmission Project,
Series 2002A, 4.750%, 7/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.6%
3,000 California Department of Water Resources, Water 12/12 at 100.00 AAA 3,222,150
System Revenue Bonds, Central Valley Project,
Series 2002X, 5.150%, 12/01/23 - FGIC Insured
6,100 East Bay Municipal Utility District, Alameda and 6/11 at 100.00 AAA 6,384,809
Contra Costa Counties, California, Water System
Subordinated Revenue Bonds, Series 2001,
5.000%, 6/01/26 - MBIA Insured
9,000 Eastern Municipal Water District, California, 7/11 at 100.00 AAA 9,378,270
Water and Sewer Revenue Certificates of Participation,
Series 2001B, 5.000%, 7/01/30 - FGIC Insured
4,500 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 4,798,170
California, Capital Projects Revenue Bonds, Senior
Lien Series 2003A, 5.000%, 10/01/23 - FSA Insured
3,650 Manteca Financing Authority, California, Sewer Revenue 12/13 at 100.00 Aaa 3,844,251
Bonds, Series 2003A, 5.000%, 12/01/33 - MBIA Insured
12,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 12,602,280
of Participation, Series 2003, 5.000%, 2/01/33 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 338,900 Total Long-Term Investments (cost $333,952,635) - 148.0% 357,938,805
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.8% 1,941,576
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.8)% (118,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 241,880,381
====================================================================================================================
At least 80% of the Fund's net assets (including net assets
applicable to Preferred shares) are invested in municipal
securities that are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance
which ensures the timely payment of principal and interest.
Up to 20% of the Fund's net assets (including net assets
applicable to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities (also ensuring the timely payment of
principal and interest), or (ii) municipal bonds that are
rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or
unrated but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
46
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX)
Portfolio of
INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4%
$ 2,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB $ 2,172,660
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 18.6%
2,700 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 2,936,061
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.250%, 12/01/34
1,500 California Health Facilities Financing Authority, Revenue 11/08 at 101.00 AAA 1,549,755
Bonds, USCF - Stanford Health Care, Series 1998A,
5.000%, 11/15/31 - FSA Insured
1,500 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 1,512,450
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/28
1,800 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 1,897,290
Revenue Bonds, Kaiser Hospital Assistance LLC,
Series 2001A, 5.550%, 8/01/31
6,000 California Statewide Community Development Authority, No Opt. Call AAA 6,502,620
Revenue Refunding Bonds, Sherman Oaks Project,
Series 1998A, 5.000%, 8/01/22 - AMBAC Insured
2,000 California Statewide Community Development Authority, 6/13 at 100.00 AAA 2,157,220
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 5.6%
1,000 ABAG Finance Authority for Non-Profit Corporations, 11/12 at 100.00 BBB 1,026,500
California, Insured Senior Living Revenue Bonds, Odd
Fellows Home of California, Series 2003A,
5.200%, 11/15/22
2,000 California Health Facilities Financing Authority, Revenue 1/13 at 100.00 BBB 2,025,980
Bonds, Northern California Retired Officers Community
Corporation - Paradise Valley Estates, Series 2002,
5.250%, 1/01/26
1,815 California Statewide Community Development Authority, 11/13 at 100.00 BBB 1,889,306
Revenue Bonds, Jewish Home for the Aging Project,
Series 2003, 5.000%, 11/15/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 47.4%
1,000 Berryessa Union School District, Santa Clara County, 8/12 at 100.00 AAA 1,069,070
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/21 - FSA Insured
2,000 Butte-Glenn Community College District, Butte and Glenn 8/12 at 101.00 Aaa 2,116,260
Counties, California, General Obligation Bonds,
Series 2002A, 5.000%, 8/01/26 - MBIA Insured
California, General Obligation Refunding Bonds, Series 2002:
1,500 5.000%, 2/01/12 No Opt. Call Baa1 1,643,460
3,750 5.000%, 4/01/27 - AMBAC Insured 4/12 at 100.00 AAA 3,918,563
3,000 5.250%, 4/01/30 - XLCA Insured 4/12 at 100.00 AAA 3,204,600
450 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 478,314
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FSA Insured
Hacienda La Puente Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003B:
4,500 5.000%, 8/01/26 - FSA Insured 8/13 at 100.00 AAA 4,761,585
2,030 5.000%, 8/01/27 - FSA Insured 8/13 at 100.00 AAA 2,144,776
2,000 The City of Los Angeles, California, General Obligation 9/12 at 100.00 AAA 2,126,000
Bonds, Series 2002A, 5.000%, 9/01/22 - MBIA Insured
10,750 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 11,481,323
California, General Obligation Bonds, Series 2003A,
5.000%, 7/01/22 - FSA Insured
1,000 Murrieta Valley Unified School District, Riverside 9/13 at 100.00 AAA 1,058,570
County, California, General Obligation Bonds, Series 2003A,
5.000%, 9/01/26 - FGIC Insured
47
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX) (continued)
Portfolio of INVESTMENTS February 29, 2004 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (CONTINUED)
$ 3,000 San Diego Unified School District, California, General 7/10 at 100.00 AAA $ 3,176,100
Obligation Bonds, Election of 1998, Series 2000B,
5.125%, 7/01/22 - MBIA Insured
3,855 San Rafael City High School District, Marin County, 8/12 at 100.00 AAA 4,050,911
California, General Obligation Bonds, Series 2003A,
5.000%, 8/01/28 - FSA Insured
905 San Rafael Elementary School District, Marin County, 8/12 at 100.00 AAA 950,992
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 44.2%
550 Baldwin Park Public Financing Authority, California, Sales 8/13 at 102.00 BBB 567,386
Tax and Tax Allocation Bonds, Puente Merced
Redevelopment Project, Series 2003, 5.250%, 8/01/21
2,025 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 2,223,470
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/22 - AMBAC Insured
4,000 California State Public Works Board, Lease Revenue 12/12 at 100.00 AAA 4,206,840
Bonds, Department of General Services, Capital East End,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
2,000 California State Public Works Board, Lease Revenue 12/13 at 100.00 Baa2 2,212,220
Bonds, Department of Corrections, Series 2003C,
5.500%, 6/01/16
600 Irvine Assessment District, California, Limited Obligation 3/04 at 103.00 N/R 601,530
Improvement Bonds, Assessment District 00-18, Group 3,
Series 2003, 5.550%, 9/02/26
5,540 Irvine, California, Public Facilities and Infrastructure 9/13 at 100.00 AAA 5,727,695
Authority, Assessment Revenue Bonds, Series 2003C,
5.000%, 9/02/21 - AMBAC Insured
2,000 City of Los Angeles, California, Certificates of 6/13 at 100.00 AAA 2,097,320
Participation, Municipal Improvement Corporation,
Series 2003AW, 5.000%, 6/01/33 - AMBAC Insured
1,770 Los Angeles Unified School District, Los Angeles 10/12 at 100.00 AAA 1,860,111
County, California, Certificates of Participation,
Series 2002C, Administration Building Project II,
5.000%, 10/01/27 - AMBAC Insured
1,500 Los Osos, California, Community Services Wastewater 9/10 at 103.00 AAA 1,574,910
Assessment District No. 1, Improvement Bonds,
Series 2002, 5.000%, 9/02/33 - MBIA Insured
1,165 Poway, California, Housing Revenue Bonds, Poinsettia 5/13 at 102.00 BBB+ 1,136,854
Mobile Home Park Project Revenue Bonds, Series 2003,
5.000%, 5/01/23
San Buenaventura, California, Certificates of Participation,
Golf Course Financing Project, Series 2002D:
3,000 5.000%, 2/01/27 - AMBAC Insured 2/12 at 100.00 AAA 3,142,800
3,300 5.000%, 2/01/32 - AMBAC Insured 2/12 at 100.00 AAA 3,445,563
2,405 San Diego Redevelopment Agency, California, Centre 9/11 at 101.00 Aaa 2,528,761
City Project, Subordinate Lien Tax Allocation Bonds,
Series 2003A, 5.000%, 9/01/28 - MBIA Insured
1,200 San Diego Redevelopment Agency, California, Centre 9/09 at 101.00 Baa2 1,226,496
City Project, Subordinate Tax Increment and Parking
Revenue Bonds, Series 2003B, 5.250%, 9/01/26
1,220 San Jose Redevelopment Agency, California, Tax 8/10 at 101.00 AAA 1,269,752
Allocation Bonds, Merged Area Redevelopment Project,
Series 2002, 5.000%, 8/01/32 - MBIA Insured
2,770 City of San Jose Financing Authority, California, 6/12 at 100.00 AAA 2,893,847
Lease Revenue Refunding Bonds, Civic Center Project,
Series 2002B, 5.000%, 6/01/32 - AMBAC Insured
2,390 Solano County, California, Certificates of Participation, 11/12 at 100.00 AAA 2,584,331
Series 2002, 5.250%, 11/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.8%
5,480 Bay Area Government Association, California, 8/12 at 100.00 AAA 5,762,494
BART SFO Extension Airport Premium Fare Revenue Bonds,
Series 2002A, 5.000%, 8/01/26 - AMBAC Insured
2,000 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,931,280
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
3,135 Airports Commission of the City and County of 5/08 at 101.00 AAA 3,256,952
San Francisco, California, Revenue Bonds, San Francisco
International Airport, Second Series, Issue 16B,
5.000%, 5/01/24 - FSA Insured
1,300 Airports Commission of the City and County of 5/10 at 101.00 AAA 1,362,803
San Francisco, California, Revenue Bonds, San Francisco
International Airport, Series 2, Issue 26B, 5.000%, 5/01/25 -
FGIC Insured
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 1.9%
$ 1,495 Southern California Metropolitan Water District, Water 1/08 at 101.00 AAA $ 1,693,925
Revenue Bonds, Series 1997A, 5.000%, 7/01/30
(Pre-refunded to 1/01/08) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.1%
3,055 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,327,017
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/22 - FSA Insured
275 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 295,254
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.3%
1,350 Manteca Financing Authority, California, Sewer Revenue 12/13 at 100.00 Aaa 1,421,844
Bonds, Series 2003A, 5.000%, 12/01/33 - MBIA Insured
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
3,000 5.000%, 8/01/22 - MBIA Insured 8/12 at 100.00 AAA 3,183,000
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,645,200
1,180 South Feather Water and Power Agency, California, 4/13 at 100.00 BBB 1,165,663
Water Revenue Certificates of Participation, Solar
Photovoltaic Project, Series 2003, 5.375%, 4/01/24
1,600 Sunnyvale Financing Authority, California, Water and 10/11 at 100.00 AAA 1,675,552
Wastewater Revenue Bonds, Series 2001,
5.000%, 10/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 125,860 Total Long-Term Investments (cost $126,697,752) - 149.3% 132,871,236
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 1,102,381
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.6)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 88,973,617
====================================================================================================================
At least 80% of the Fund's net assets (including net assets
applicable to Preferred shares) are invested in municipal
securities that are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance
which ensures the timely payment of principal and interest.
Up to 20% of the Fund's net assets (including net assets
applicable to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities (also ensuring the timely payment of
principal and interest), or (ii) municipal bonds that are
rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or
unrated but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions: 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.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
49
Statement of
ASSETS AND LIABILITIES February 29, 2004 (Unaudited)
INSURED INSURED CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $135,489,010,
$270,921,090, $121,108,384 and
$497,519,550, respectively) $151,229,857 $294,467,068 $128,633,277 $535,422,990
Receivables:
Interest 2,201,467 3,695,806 1,680,947 7,598,762
Investments sold 4,210,176 3,291,433 15,375 11,228,100
Other assets 518 9,719 6,820 18,625
------------------------------------------------------------------------------------------------------------------------------------
Total assets 157,642,018 301,464,026 130,336,419 554,268,477
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 5,079,366 2,230,535 1,389,015 2,575,322
Payable for investments purchased -- 5,329,487 -- 1,326,011
Accrued expenses:
Management fees 77,620 148,025 65,813 143,815
Other 59,598 64,638 65,783 134,897
Preferred share dividends payable 5,246 8,461 6,015 18,895
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 5,221,830 7,781,146 1,526,626 4,198,940
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 45,000,000 95,000,000 43,000,000 175,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $107,420,188 $198,682,880 $ 85,809,793 $375,069,537
====================================================================================================================================
Common shares outstanding 6,441,830 12,695,896 5,774,216 23,412,013
====================================================================================================================================
Net asset value per Common share outstanding (net assets
applicable to Common
shares, divided by Common
shares outstanding) $ 16.68 $ 15.65 $ 14.86 $ 16.02
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 64,418 $ 126,959 $ 57,742 $ 234,120
Paid-in surplus 89,139,083 175,908,488 80,188,301 332,500,168
Undistributed (Over-distribution of) net investment income 1,523,995 2,220,162 994,069 4,234,416
Accumulated net realized gain (loss) from investments 951,845 (3,118,707) (2,955,212) 197,393
Net unrealized appreciation of investments 15,740,847 23,545,978 7,524,893 37,903,440
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $107,420,188 $198,682,880 $ 85,809,793 $375,069,537
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
50
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $316,987,317,
$522,264,223, $333,952,635 and
$126,697,752, respectively) $334,723,035 $544,870,622 $357,938,805 $132,871,236
Receivables:
Interest 4,517,622 7,688,984 4,068,431 1,485,334
Investments sold -- 15,300 -- --
Other assets 11,531 1,688 9,302 970
------------------------------------------------------------------------------------------------------------------------------------
Total assets 339,252,188 552,576,594 362,016,538 134,357,540
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 519,942 1,190,094 1,984,147 317,562
Payable for investments purchased 834,896 1,350,566 -- --
Accrued expenses:
Management fees 90,056 143,776 95,591 34,661
Other 44,368 51,894 38,847 29,849
Preferred share dividends payable 18,025 20,389 17,572 1,851
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,507,287 2,756,719 2,136,157 383,923
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 110,000,000 187,000,000 118,000,000 45,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $227,744,901 $362,819,875 $241,880,381 $ 88,973,617
====================================================================================================================================
Common shares outstanding 14,790,660 24,112,833 15,259,759 5,882,388
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common
shares, divided by Common
shares outstanding) $ 15.40 $ 15.05 $ 15.85 $ 15.13
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 147,907 $ 241,128 $ 152,598 $ 58,824
Paid-in surplus 210,031,294 342,481,873 216,623,411 82,987,172
Undistributed (Over-distribution of) net investment income 1,959,577 2,172,611 716,356 (45,294)
Accumulated net realized gain (loss) from investments (2,129,595) (4,682,136) 401,846 (200,569)
Net unrealized appreciation of investments 17,735,718 22,606,399 23,986,170 6,173,484
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $227,744,901 $362,819,875 $241,880,381 $ 88,973,617
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
51
Statement of
OPERATIONS Six Months Ended February 29, 2004 (Unaudited)
INSURED INSURED CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 3,830,399 $ 7,333,832 $3,244,522 $13,487,964
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 480,182 915,141 405,245 1,687,961
Preferred shares - auction fees 56,165 118,572 53,669 218,421
Preferred shares - dividend disbursing agent fees 4,986 9,973 4,986 9,973
Shareholders' servicing agent fees and expenses 5,516 8,142 5,152 3,332
Custodian's fees and expenses 20,411 39,771 14,705 55,883
Directors'/Trustees' fees and expenses 1,823 3,589 1,500 6,174
Professional fees 6,166 6,999 5,322 8,964
Shareholders' reports - printing and mailing expenses 4,348 4,725 4,997 15,582
Stock exchange listing fees 5,535 7,770 257 7,730
Investor relations expense 2,934 4,715 2,240 11,934
Portfolio insurance expense 1,080 2,217 -- --
Other expenses 7,486 11,276 4,075 13,411
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 596,632 1,132,890 502,148 2,039,365
Custodian fee credit (2,853) (2,888) (6,240) (9,121)
Expense reimbursement -- -- -- (800,117)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 593,779 1,130,002 495,908 1,230,127
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,236,620 6,203,830 2,748,614 12,257,837
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 982,926 5,514,534 184,520 2,156,054
Change in net unrealized appreciation
(depreciation) of investments 6,302,355 7,705,140 6,702,919 25,906,341
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 7,285,281 13,219,674 6,887,439 28,062,395
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (157,677) (363,506) (156,434) (720,719)
From accumulated net realized gains from investments (18,045) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (175,722) (363,506) (156,434) (720,719)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $10,346,179 $19,059,998 $9,479,619 $39,599,513
====================================================================================================================================
See accompanying notes to financial statements.
52
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 8,067,455 $13,014,951 $ 8,654,995 $ 3,127,636
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,046,183 1,682,944 1,113,134 420,228
Preferred shares - auction fees 137,293 233,398 147,278 56,165
Preferred shares - dividend disbursing agent fees 9,973 9,973 9,973 4,986
Shareholders' servicing agent fees and expenses 1,028 2,662 1,265 491
Custodian's fees and expenses 35,720 55,469 35,427 15,581
Directors'/Trustees' fees and expenses 3,820 5,972 3,907 1,656
Professional fees 11,290 15,592 11,260 7,906
Shareholders' reports - printing and mailing expenses 13,611 21,042 15,008 3,248
Stock exchange listing fees 683 1,099 696 162
Investor relations expense 13,664 10,394 7,803 7,091
Portfolio insurance expense -- -- -- --
Other expenses 10,593 14,098 10,319 3,758
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,283,858 2,052,643 1,356,070 521,272
Custodian fee credit (17,066) (6,776) (12,893) (6,723)
Expense reimbursement (490,979) (797,660) (523,116) (207,038)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 775,813 1,248,207 820,061 307,511
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 7,291,642 11,766,744 7,834,934 2,820,125
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 84,588 (287,799) 596,820 120,526
Change in net unrealized appreciation
(depreciation) of investments 17,798,372 31,715,557 20,110,372 7,718,657
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 17,882,960 31,427,758 20,707,192 7,839,183
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (407,516) (787,217) (396,322) (163,077)
From accumulated net realized gains from investments -- -- (143,985) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (407,516) (787,217) (540,307) (163,077)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $24,767,086 $42,407,285 $28,001,819 $10,496,231
====================================================================================================================================
See accompanying notes to financial statements.
53
Statement of
CHANGES IN NET ASSETS (Unaudited)
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA PREMIUM
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) INCOME (NCU)
--------------------------------- ---------------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/29/04 8/31/03 2/29/04 8/31/03 2/29/04 8/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,236,620 $ 6,404,829 $ 6,203,830 $ 12,528,913 $ 2,748,614 $ 5,563,735
Net realized gain (loss)
from investments 982,926 524,720 5,514,534 (166,188) 184,520 982,095
Change in net unrealized
appreciation (depreciation)
of investments 6,302,355 (3,552,084) 7,705,140 (6,281,308) 6,702,919 (5,507,976)
Distributions to Preferred
Shareholders:
From net investment income (157,677) (382,478) (363,506) (863,570) (156,434) (383,629)
From accumulated net realized
gains from investments (18,045) (42,365) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common
shares from operations 10,346,179 2,952,622 19,059,998 5,217,847 9,479,619 654,225
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (3,013,115) (6,218,425) (5,785,405) (11,323,762) (2,529,108) (5,043,780)
From accumulated net realized
gains from investments (339,859) (490,993) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares from
distributions to
Common shareholders (3,352,974) (6,709,418) (5,785,405) (11,323,762) (2,529,108) (5,043,780)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- 47,136 227,627 416,645 -- --
Preferred shares offering costs -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 47,136 227,627 416,645 -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares 6,993,205 (3,709,660) 13,502,220 (5,689,270) 6,950,511 (4,389,555)
Net assets applicable to
Common shares
at the beginning of period 100,426,983 104,136,643 185,180,660 190,869,930 78,859,282 83,248,837
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $107,420,188 $100,426,983 $198,682,880 $185,180,660 $85,809,793 $78,859,282
====================================================================================================================================
Undistributed
(Over-distribution of)
net investment income
at the end of period $ 1,523,995 $ 1,458,167 $ 2,220,162 $ 2,165,243 $ 994,069 $ 930,997
====================================================================================================================================
See accompanying notes to financial statements.
54
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND ADVANTAGE (NAC) DIVIDEND ADVANTAGE 2 (NVX) DIVIDEND ADVANTAGE 3 (NZH)
--------------------------------- -------------------------------- ---------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/29/04 8/31/03 2/29/04 8/31/03 2/29/04 8/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 12,257,837 $ 24,749,658 $ 7,291,642 $ 14,805,600 $ 11,766,744 $ 23,556,209
Net realized gain (loss)
from investments 2,156,054 1,584,946 84,588 (1,481,214) (287,799) 2,071,600
Change in net unrealized
appreciation (depreciation)
of investments 25,906,341 (12,671,586) 17,798,372 (7,762,388) 31,715,557 (17,764,997)
Distributions to Preferred
Shareholders:
From net investment income (720,719) (1,616,891) (407,516) (1,015,700) (787,217) (1,834,161)
From accumulated net realized
gains from investments -- -- -- (49,489) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common
shares from operations 39,599,513 12,046,127 24,767,086 4,496,809 42,407,285 6,028,651
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (11,448,475) (21,948,762) (6,744,542) (13,178,729) (10,416,743) (20,833,487)
From accumulated net
realized gains
from investments -- -- -- (430,161) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares from
distributions to
Common shareholders (11,448,475) (21,948,762) (6,744,542) (13,608,890) (10,416,743) (20,833,487)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- (1,664) -- 171,736
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- -- -- -- -- --
Preferred shares offering costs -- -- -- 21,719 -- (7,528)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- -- -- 20,055 -- 164,208
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares 28,151,038 (9,902,635) 18,022,544 (9,092,026) 31,990,542 (14,640,628)
Net assets applicable
to Common shares
at the beginning of period 346,918,499 356,821,134 209,722,357 218,814,383 330,829,333 345,469,961
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares
at the end of period $375,069,537 $346,918,499 $227,744,901 $209,722,357 $362,819,875 $330,829,333
====================================================================================================================================
Undistributed
(Over-distribution of)
net investment income at
the end of period $ 4,234,416 $ 4,145,773 $ 1,959,577 $ 1,819,993 $ 2,172,611 $ 1,609,827
====================================================================================================================================
See accompanying notes to financial statements.
55
Statement of
CHANGES IN NET ASSETS (Unaudited) (continued)
INSURED CALIFORNIA INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL) TAX-FREE ADVANTAGE (NKX)
---------------------------------- ----------------------------------
FOR THE
PERIOD 11/21/02
(COMMENCEMENT
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED OF OPERATIONS)
2/29/04 8/31/03 2/29/04 THROUGH 8/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 7,834,934 $ 15,106,899 $ 2,820,125 $ 3,748,945
Net realized gain (loss) from investments 596,820 2,233,096 120,526 (319,256)
Change in net unrealized appreciation
(depreciation) of investments 20,110,372 (9,779,462) 7,718,657 (1,545,173)
Distributions to Preferred Shareholders:
From net investment income (396,322) (1,085,060) (163,077) (233,784)
From accumulated net realized
gains from investments (143,985) (87,519) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 28,001,819 6,387,954 10,496,231 1,650,732
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (6,958,450) (13,916,900) (2,664,694) (3,552,809)
From accumulated net realized gains
from investments (1,910,520) (784,735) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (8,868,970) (14,701,635) (2,664,694) (3,552,809)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares (1,575) 9,614 -- 83,983,125
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- -- 1,504 4,206
Preferred shares offering costs (1,401) (7,636) -- (1,044,953)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
to Common shares from capital
share transactions (2,976) 1,978 1,504 82,942,378
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 19,129,873 (8,311,703) 7,833,041 81,040,301
Net assets applicable to Common shares
at the beginning of period 222,750,508 231,062,211 81,140,576 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $241,880,381 $222,750,508 $88,973,617 $81,140,576
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of period $ 716,356 $ 236,194 $ (45,294) $ (37,648)
====================================================================================================================================
See accompanying notes to financial statements.
56
Notes to
FINANCIAL STATEMENTS (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California Funds (the "Funds") covered in this report and their
corresponding Common share stock exchange symbols are Nuveen Insured California
Premium Income Municipal Fund, Inc. (NPC), Nuveen Insured California Premium
Income Municipal Fund 2, Inc. (NCL), Nuveen California Premium Income Municipal
Fund (NCU), Nuveen California Dividend Advantage Municipal Fund (NAC), Nuveen
California Dividend Advantage Municipal Fund 2 (NVX), Nuveen California Dividend
Advantage Municipal Fund 3 (NZH), Nuveen Insured California Dividend Advantage
Municipal Fund (NKL) and Nuveen Insured California Tax-Free Advantage Municipal
Fund (NKX). Common shares of Insured California Premium Income (NPC), Insured
California Premium Income 2 (NCL) and California Dividend Advantage (NAC) are
traded on the New York Stock Exchange while Common shares of California Premium
Income (NCU), California Dividend Advantage 2 (NVX), California Dividend
Advantage 3 (NZH), Insured California Dividend Advantage (NKL) and Insured
California Tax-Free Advantage (NKX) are traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940, as amended,
as closed-end management investment companies.
Prior to the commencement of operations of Insured California Tax-Free Advantage
(NKX), the Fund had no operations other than those related to organizational
matters, the initial capital contribution of $100,275 by Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc., and the
recording of the organization expenses ($11,500) and their reimbursement by
Nuveen Investments, LLC, also a wholly owned subsidiary of Nuveen Investments,
Inc.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes, and in the case of Insured California Tax-Free
Advantage (NKX) the alternative minimum tax applicable to individuals, by
investing primarily in a diversified portfolio of municipal obligations issued
by state and local government authorities within the state of California.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities 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 Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Directors/Trustees of the Funds, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities 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 and delayed delivery purchase commitments. At February 29, 2004,
Insured California Premium Income 2 (NCL), California Dividend Advantage (NAC),
California Dividend Advantage 2 (NVX) and California Dividend Advantage 3 (NZH)
had outstanding when-issued purchase commitments of $5,329,487, $1,326,011,
$834,896, and $1,350,566, respectively. There were no such outstanding purchase
commitments in any of the other 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.
57
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. 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
California state income taxes, and in the case of Insured California Tax-Free
Advantage (NKX) the alternative minimum tax applicable to individuals, to retain
such tax-exempt status when distributed to shareholders of the Funds.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
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 accounting
principles generally accepted in the United States.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
on each Series may change every seven days, as set pursuant to a dutch auction
process by the auction agent, and is payable at or near the end of each rate
period. The number of Preferred shares outstanding, by Series and in total, for
each Fund is as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,720 --
Series T 1,800 1,900 -- --
Series TH -- 1,900 -- 3,500
Series F -- -- -- 3,500
--------------------------------------------------------------------------------
Total 1,800 3,800 1,720 7,000
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Number of shares:
Series M 2,200 3,740 -- --
Series T -- -- 2,360 --
Series TH -- 3,740 -- 1,800
Series F 2,200 -- 2,360 --
--------------------------------------------------------------------------------
Total 4,400 7,480 4,720 1,800
================================================================================
Effective January 17, 2003, Insured California Tax-Free Advantage (NKX) issued
1,800 Series TH, $25,000 stated value Preferred shares.
58
Insurance
Insured California Premium Income (NPC) and Insured California Premium Income 2
(NCL) invest in municipal securities which are either covered by insurance or
are backed by an escrow or trust account containing sufficient U.S. Government
or U.S. Government agency securities, both of which ensure the timely payment of
principal and interest.
Insured California Dividend Advantage (NKL) and Insured California Tax-Free
Advantage (NKX) invest at least 80% of their net assets (including net assets
applicable to Preferred shares) in municipal securities that are covered by
insurance. Each Fund may also invest up to 20% of its net assets (including net
assets applicable to Preferred shares) in municipal securities which are either
(i) backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities, or (ii) municipal bonds that are rated, at the
time of investment, within the four highest grades (Baa or BBB or better by
Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the
Adviser.
Each insured municipal security is covered by Original Issue Insurance,
Secondary Market Insurance or Portfolio Insurance. Such insurance does not
guarantee the market value of the municipal securities or the value of the
Funds' Common shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the Funds
ultimately dispose of such municipal securities. Consequently, the market value
of the municipal securities covered by Original Issue Insurance or Secondary
Market Insurance may reflect value attributable to the insurance. Portfolio
Insurance is effective only while the municipal securities are held by the
Funds. Accordingly, neither the prices used in determining the market value of
the underlying municipal securities nor the Common share net asset value of the
Funds include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Funds the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
Derivative Financial Instruments
The Funds may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the six months ended February 29, 2004.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Nuveen Investments, LLC has agreed to pay all Common share offering costs (other
than the sales load) that exceed $.03 per Common share for Insured California
Tax-Free Advantage (NKX). Insured California Tax-Free Advantage's (NKX) share of
Common share offering costs ($176,250) was recorded as a reduction of the
proceeds from the sale of Common shares.
Costs incurred by Insured California Tax-Free Advantage (NKX) in connection with
its offering of Preferred shares ($1,044,953) were recorded as a reduction to
paid-in surplus.
Indemnifications
Under the Funds' organizational documents, its Officers and Directors/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.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
------------------------- -------------------------- -------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 2/29/04 8/31/03 ENDED 2/29/04 8/31/03 ENDED 2/29/04 8/31/03
-----------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions -- 2,919 14,795 27,169 -- --
-----------------------------------------------------------------------------------------------------------
-- 2,919 14,795 27,169 -- --
===========================================================================================================
Preferred shares sold -- -- -- -- -- --
===========================================================================================================
59
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE (NAC) ADVANTAGE 2 (NVX) ADVANTAGE 3 (NZH)
------------------------- -------------------------- --------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 2/29/04 8/31/03 ENDED 2/29/04 8/31/03 ENDED 2/29/04 8/31/03
------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------
-- -- -- -- -- --
============================================================================================================
Preferred shares sold -- -- -- -- -- --
============================================================================================================
INSURED INSURED
CALIFORNIA DIVIDEND CALIFORNIA TAX-FREE
ADVANTAGE (NKL) ADVANTAGE (NKX)
-------------------------- ------------------------------
FOR THE
PERIOD 11/21/02
(COMMENCEMENT
OF OPERATIONS)
SIX MONTHS YEAR ENDED SIX MONTHS THROUGH
ENDED 2/29/04 8/31/03 ENDED 2/29/04 8/31/03
------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 5,875,000
Shares issued to shareholders
due to reinvestment
of distributions -- -- 103 285
------------------------------------------------------------------------------------------------------------
-- -- 103 5,875,285
============================================================================================================
Preferred shares sold -- -- -- 1,800
============================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the six months ended February 29, 2004, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Purchases $13,151,548 $67,349,433 $15,615,333 $22,325,835
Sales and maturities 20,839,808 69,987,291 15,068,623 36,237,417
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Purchases $21,928,077 $29,584,624 $31,092,244 $22,515,610
Sales and maturities 16,112,626 30,526,185 26,103,310 21,020,770
================================================================================
60
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At February 29, 2004, the cost of investments were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Cost of investments $135,337,247 $270,776,469 $121,061,589 $497,356,359
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Cost of investments $316,962,976 $522,257,807 $334,035,834 $126,694,893
================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at February 29, 2004, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
-------------------------------------------------------------------------------
Gross unrealized:
Appreciation $15,892,610 $23,690,599 $ 8,587,976 $39,085,278
Depreciation -- -- (1,016,288) (1,018,647)
-------------------------------------------------------------------------------
Net unrealized
appreciation
of investments $15,892,610 $23,690,599 $ 7,571,688 $38,066,631
===============================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Gross unrealized:
Appreciation $18,870,594 $24,047,797 $24,054,351 $6,202,089
Depreciation (1,110,535) (1,434,982) (151,380) (25,746)
--------------------------------------------------------------------------------
Net unrealized
appreciation
of investments $17,760,059 $22,612,815 $23,902,971 $6,176,343
================================================================================
The tax components of undistributed net investment income and net realized gains
at August 31, 2003, the Funds' last fiscal year end, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
----------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $1,636,577 $2,950,611 $1,313,927 $5,854,730
Undistributed net ordinary income * 59,311 -- -- 2,875
Undistributed net long-term capital gains 326,823 -- -- --
==========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
----------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $2,921,637 $3,350,890 $1,362,657 $408,586
Undistributed net ordinary income * 131 1,734 1,783,045 --
Undistributed net long-term capital gains -- -- 227,868 --
==========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
61
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
The tax character of distributions paid during the fiscal year ended August 31,
2003, the Funds' last fiscal year end, was designated for purposes of the
dividends paid deduction as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
----------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $6,123,025 $12,130,717 $5,376,229 $23,425,975
Distributions from net ordinary income * 459,740 -- 40,993 --
Distributions from net long-term capital gains 533,358 -- -- --
==========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
----------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $14,174,057 $22,678,767 $15,008,754 $3,339,890
Distributions from net ordinary income * 540 -- 872,254 --
Distributions from net long-term capital gains 479,390 -- -- --
==========================================================================================================
62
At August 31, 2003, the Funds' last fiscal year end, the following Funds had
unused capital loss carryforwards available for federal income tax purposes to
be applied against future capital gains, if any. If not applied, the
carryforwards will expire as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM DIVIDEND DIVIDEND TAX-FREE
INCOME 2 INCOME ADVANTAGE ADVANTAGE 3 ADVANTAGE
(NCL) (NCU) (NAC) (NZH) (NKX)
---------------------------------------------------------------------------------------------------------
Expiration year:
2004 $4,345,091 $2,089,738 $ -- $ -- $ --
2005 1,283,948 1,049,994 -- -- --
2006 -- -- -- -- --
2007 -- -- -- -- --
2008 -- -- -- -- --
2009 2,185,870 -- 1,959,092 -- --
2010 440,510 -- -- -- --
2011 -- -- -- 4,394,597 321,095
---------------------------------------------------------------------------------------------------------
Total $8,255,419 $3,139,732 $1,959,092 $4,394,597 $321,095
=========================================================================================================
The following Funds elected to defer net realized losses from investments
incurred from November 1, 2002 through August 31, 2003 ("post-October losses")
in accordance with Federal income tax regulations. The following post-October
losses were treated as having arisen on the first day of the current fiscal
year:
INSURED
CALIFORNIA CALIFORNIA
PREMIUM DIVIDEND
INCOME 2 ADVANTAGE 2
(NCL) (NVX)
--------------------------------------------------------------------------------
$377,822 $2,214,203
================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Insured California Premium Income's (NPC), Insured California Premium
Income 2's (NCL) and California Premium Income's (NCU) investment management
agreements with the Adviser, each Fund pays an annual management fee, payable
monthly, at the rates set forth below, which are based upon the average daily
net assets (including net assets attributable to Preferred shares) of each Fund
as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
63
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
Under California Dividend Advantage's (NAC), California Dividend Advantage 2's
(NVX), California Dividend Advantage 3's (NZH), Insured California Dividend
Advantage's (NKL) and Insured California Tax-Free Advantage (NKX) investment
management agreements with the Adviser, each Fund pays an annual management fee,
payable monthly, at the rates set forth below, which are based upon the average
daily net assets (including net assets attributable to Preferred shares) of each
Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
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 Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates.
For the first ten years of California Dividend Advantage's (NAC) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage (NAC) for
any portion of its fees and expenses beyond July 31, 2009.
For the first ten years of California Dividend Advantage 2's (NVX) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 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 California Dividend Advantage 2 (NVX)
for any portion of its fees and expenses beyond March 31, 2011.
64
For the first ten years of California Dividend Advantage 3's (NZH) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage 3 (NZH)
for any portion of its fees and expenses beyond September 30, 2011.
For the first ten years of Insured California Dividend Advantage's (NKL)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured California Dividend Advantage
(NKL) for any portion of its fees and expenses beyond March 31, 2012.
For the first eight years of Insured California Tax-Free Advantage's (NKX)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
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 Insured California Tax-Free Advantage
(NKX) for any portion of its fees and expenses beyond November 30, 2010.
65
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on April 1, 2004, to shareholders of record on
March 15, 2004, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Dividend per share $.0770 $.0760 $.0730 $.0820
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Dividend per share $.0760 $.0720 $.0760 $.0755
================================================================================
66
Financial
HIGHLIGHTS (Unaudited)
67
Financial
HIGHLIGHTS (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) $15.59 $ .50 $ 1.13 $(.02) $-- $1.61 $(.47) $(.05) $ (.52)
2003 16.17 .99 (.45) (.06) (.01) .47 (.97) (.08) (1.05)
2002 16.04 1.05 .03 (.09) -- .99 (.86) -- (.86)
2001 15.08 1.04 .99 (.21) -- 1.82 (.86) -- (.86)
2000 14.81 1.09 .30 (.24) -- 1.15 (.88) -- (.88)
1999 16.31 1.09 (1.56) (.20) -- (.67) (.83) -- (.83)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) 14.60 .49 1.05 (.03) -- 1.51 (.46) -- (.46)
2003 15.08 .99 (.51) (.07) -- .41 (.89) -- (.89)
2002 15.01 1.02 (.02) (.10) -- .90 (.83) -- (.83)
2001 14.09 1.01 .91 (.22) -- 1.70 (.78) -- (.78)
2000 13.70 1.02 .41 (.24) -- 1.19 (.80) -- (.80)
1999 14.82 1.01 (1.14) (.21) -- (.34) (.78) -- (.78)
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) 13.66 .48 1.19 (.03) -- 1.64 (.44) -- (.44)
2003 14.42 .96 (.78) (.07) -- .11 (.87) -- (.87)
2002 14.22 .99 .13 (.10) -- 1.02 (.82) -- (.82)
2001 13.34 1.00 .90 (.23) -- 1.67 (.79) -- (.79)
2000 13.19 1.03 .14 (.23) -- .94 (.79) -- (.79)
1999 14.30 1.00 (1.13) (.21) -- (.34) (.77) -- (.77)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
===========================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
-------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) $-- $16.68 $16.2200 11.21% 10.46%
2003 -- 15.59 15.0700 1.55 2.82
2002 -- 16.17 15.8500 6.73 6.47
2001 -- 16.04 15.6900 14.12 12.43
2000 -- 15.08 14.5625 .84 8.34
1999 -- 14.81 15.3750 1.62 (4.35)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
-------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) -- 15.65 15.5500 11.87 10.44
2003 -- 14.60 14.3200 2.69 2.71
2002 -- 15.08 14.8000 5.57 6.29
2001 -- 15.01 14.8300 11.99 12.45
2000 -- 14.09 14.0000 3.58 9.21
1999 -- 13.70 14.3750 2.27 (2.50)
CALIFORNIA PREMIUM
INCOME (NCU)
-------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) -- 14.86 13.8700 10.00 12.14
2003 -- 13.66 13.0200 (.91) .69
2002 -- 14.42 14.0000 4.84 7.48
2001 -- 14.22 14.1700 12.84 12.92
2000 -- 13.34 13.3125 5.93 7.63
1999 -- 13.19 13.3750 .81 (2.57)
===========================================================================================
Ratios/Supplemental Data
------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
---------------------------- -----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
====================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) $107,420 1.15%* 6.23%* 1.14%* 6.24%* 9%
2003 100,427 1.17 6.13 1.16 6.14 26
2002 104,137 1.21 6.65 1.19 6.66 30
2001 103,068 1.22 6.77 1.21 6.79 21
2000 96,903 1.25 7.65 1.24 7.66 27
1999 95,091 1.22 6.81 1.22 6.82 50
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) 198,683 1.18* 6.48* 1.18* 6.48* 24
2003 185,181 1.20 6.53 1.19 6.54 22
2002 190,870 1.23 6.83 1.22 6.84 6
2001 189,633 1.24 7.01 1.24 7.02 18
2000 177,977 1.28 7.65 1.26 7.66 26
1999 172,833 1.24 6.86 1.24 6.86 35
CALIFORNIA PREMIUM
INCOME (NCU)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(a) 85,810 1.22* 6.68* 1.21* 6.69* 12
2003 78,859 1.24 6.72 1.24 6.72 24
2002 83,249 1.27 7.07 1.26 7.08 10
2001 82,067 1.32 7.36 1.30 7.38 18
2000 76,878 1.38 8.09 1.36 8.10 19
1999 75,877 1.30 7.08 1.30 7.08 36
====================================================================================================================
Preferred Shares at End of Period
-----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
===================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
-------------------------------------------------------------------
Year Ended 8/31:
2004(a) $45,000 $25,000 $84,678
2003 45,000 25,000 80,793
2002 45,000 25,000 82,854
2001 45,000 25,000 82,260
2000 45,000 25,000 78,835
1999 45,000 25,000 77,828
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
-------------------------------------------------------------------
Year Ended 8/31:
2004(a) 95,000 25,000 77,285
2003 95,000 25,000 73,732
2002 95,000 25,000 75,229
2001 95,000 25,000 74,903
2000 95,000 25,000 71,836
1999 95,000 25,000 70,482
CALIFORNIA PREMIUM
INCOME (NCU)
-------------------------------------------------------------------
Year Ended 8/31:
2004(a) 43,000 25,000 74,889
2003 43,000 25,000 70,848
2002 43,000 25,000 73,400
2001 43,000 25,000 72,714
2000 43,000 25,000 69,696
1999 43,000 25,000 69,115
===================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common Share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the six months ended February 29, 2004.
See accompanying notes to financial statements.
68-69 SPREAD
Financial HIGHLIGHTS (Unaudited) (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) $14.82 $ .52 $1.20 $(.03) $-- $1.69 $(.49) $-- $(.49)
2003 15.24 1.06 (.47) (.07) -- .52 (.94) -- (.94)
2002 15.13 1.07 -- (.10) -- .97 (.86) -- (.86)
2001 13.82 1.07 1.28 (.23) -- 2.12 (.81) -- (.81)
2000 13.33 1.07 .52 (.26) -- 1.33 (.84) -- (.84)
1999(a) 14.33 .20 (.92) (.03) -- (.75) (.14) -- (.14)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 14.18 .49 1.22 (.03) -- 1.68 (.46) -- (.46)
2003 14.79 1.00 (.62) (.07) -- .31 (.89) (.03) (.92)
2002 15.11 1.06 (.40) (.11) -- .55 (.87) -- (.87)
2001(b) 14.33 .34 .90 (.05) -- 1.19 (.29) -- (.29)
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 13.72 .49 1.30 (.03) -- 1.76 (.43) -- (.43)
2003 14.33 .98 (.66) (.08) -- .24 (.86) -- (.86)
2002(c) 14.33 .83 .09 (.08) -- .84 (.72) -- (.72)
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 14.60 .51 1.37 (.03) (.01) 1.84 (.46) (.13) (.59)
2003 15.14 .99 (.49) (.07) (.01) .42 (.91) (.05) (.96)
2002(d) 14.33 .34 .92 (.03) -- 1.23 (.30) -- (.30)
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 13.79 .48 1.34 (.03) -- 1.79 (.45) -- (.45)
2003(e) 14.33 .64 (.33) (.04) -- .27 (.60) -- (.60)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
==========================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) $-- $16.02 $15.2500 10.15% 11.54%
2003 -- 14.82 14.3000 4.79 3.37
2002 -- 15.24 14.5500 3.67 6.75
2001 -- 15.13 14.8900 15.06 15.85
2000 -- 13.82 13.7500 (2.18) 10.80
1999(a) (.11) 13.33 15.0000 .96 (5.99)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) -- 15.40 14.3200 11.70 11.81
2003 -- 14.18 13.2400 (.95) 2.16
2002 -- 14.79 14.2800 (.27) 3.90
2001(b) (.12) 15.11 15.2100 3.40 7.55
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) -- 15.05 13.7000 11.29 12.99
2003 .01 13.72 12.7100 (3.20) 1.68
2002(c) (.12) 14.33 14.0000 (1.68) 5.32
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) -- 15.85 15.1600 12.61 12.73
2003 -- 14.60 14.0000 (.35) 2.70
2002(d) (.12) 15.14 15.0000 2.05 7.84
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) -- 15.13 15.0400 14.42 13.17
2003(e) (.21) 13.79 13.5600 (5.79) .34
==========================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
---------------------------- -----------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
======================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) $375,070 1.13%* 6.35%* .68%* 6.80%* 4%
2003 346,918 1.15 6.44 .70 6.88 11
2002 356,821 1.18 6.76 .72 7.22 33
2001 354,197 1.19 7.03 .72 7.50 17
2000 323,326 1.24 7.93 .75 8.43 25
1999(a) 311,367 .93* 5.06* .55* 5.45* 8
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 227,745 1.18* 6.21* .71* 6.67* 5
2003 209,722 1.18 6.30 .73 6.75 40
2002 218,814 1.19 6.82 .73 7.28 32
2001(b) 223,440 1.05* 5.23* .62* 5.65* 40
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 362,820 1.18* 6.32* .72* 6.79* 6
2003 330,829 1.20 6.33 .73 6.79 48
2002(c) 345,470 1.15* 6.01* .69* 6.47* 49
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 241,880 1.17* 6.29* .71* 6.75* 8
2003 222,751 1.18 6.00 .72 6.46 71
2002(d) 231,062 1.10* 4.98* .60* 5.47* 12
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2004(f) 88,974 1.23* 6.14* .72* 6.65* 16
2003(e) 81,141 1.14* 5.25* .67* 5.72* 45
======================================================================================================================
Preferred Shares at End of Period
-----------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------
Year Ended 8/31:
2004(f) $175,000 $25,000 $78,581
2003 175,000 25,000 74,560
2002 175,000 25,000 75,974
2001 175,000 25,000 75,600
2000 175,000 25,000 71,189
1999(a) 175,000 25,000 69,481
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------
Year Ended 8/31:
2004(f) 110,000 25,000 76,760
2003 110,000 25,000 72,664
2002 110,000 25,000 74,731
2001(b) 110,000 25,000 75,782
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------
Year Ended 8/31:
2004(f) 187,000 25,000 73,505
2003 187,000 25,000 69,229
2002(c) 187,000 25,000 71,186
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------
Year Ended 8/31:
2004(f) 118,000 25,000 76,246
2003 118,000 25,000 72,193
2002(d) 118,000 25,000 73,954
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------
Year Ended 8/31:
2004(f) 45,000 25,000 74,430
2003(e) 45,000 25,000 70,078
==================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common Share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period May 26, 1999 (commencement of operations) through August 31,
1999.
(b) For the period March 27, 2001 (commencement of operations) through August
31, 2001.
(c) For the period September 25, 2001 (commencement of operations) through
August 31, 2002.
(d) For the period March 25, 2002 (commencement of operations) through August
31, 2002.
(e) For the period November 21, 2002 (commencement of operations) through
August 31, 2003.
(f) For the six months ended February 29, 2004.
See accompanying notes to financial statements.
70-71 SPREAD
Build Your Wealth
AUTOMATICALLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
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.
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.
72
Fund
INFORMATION
BOARD OF DIRECTORS/TRUSTEES
William E. Bennett
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter*
Anne E. Impellizzeri
William L. Kissick
Thomas E. Leafstrand
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Sheila W. Wellington
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
POLICY CHANGE
On February 25, 2004, the Board approved policies that would allow each Fund, at
the discretion of the Adviser, to engage in certain types of derivative
transactions for the purpose of hedging interest rate risk. There is no
guarantee that the Adviser will cause a Fund to enter into such transactions. If
a Fund were to engage in hedging, there is no guarantee that such hedging will
be successful or that it will not reduce the Fund's total return.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available (i) without
charge, upon request, by calling Nuveen Investments at (800) 257-8787; and (ii)
on the Commission's website at http://www.sec.gov.
GLOSSARY OF TERMS USED IN THIS REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. Generally, the longer a bond 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 generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund.
Market Yield (also known as Dividend Yield or Current Yield): An investment's
current annualized dividend divided by its current market price.
Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
---------
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period ended February 29, 2004. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
* Director for certain of the Funds.
73
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.
Managing $90 billion in assets, Nuveen Investments offers access to
a number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in tax-free investments; NWQ, a leader in value-style
equities; Rittenhouse, a leader in growth-style equities; and Symphony, a
leading institutional manager of market-neutral alternative investment
portfolios.
To learn more about the products and services Nuveen Investments offers and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
Distributed by
NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606
| www.nuveen.com
ESA-B-0204D
ITEM 2. CODE OF ETHICS.
Not applicable to this filing.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to this filing.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to this filing.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to this filing.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable at this time.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable to this filing.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable at this time.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Trustees implemented after the
registrant last provided disclosure in response to the requirements of Item
7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101) or this Item.
ITEM 10. 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 registrant's last
fiscal half-year (the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
File the exhibits listed below as part of this Form.
(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 to
this filing.
(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
at this time.
(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 Insured California Tax-Free Advantage Municipal Fund
------------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: May 6, 2004
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(Principal Executive Officer)
Date: May 6, 2004
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: May 6, 2004
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.