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
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(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: August 31
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Date of reporting period: February 29, 2008
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL REPORT
February 29, 2008
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
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
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
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Chairman's
LETTER TO SHAREHOLDERS
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Every year I sign a shareholder letter that carries a date viewed by many with
concern or dread. But you, and thousands like you, have learned that the
tax-free income provided by your Nuveen Fund can help make April 15th a little
less onerous. So, once again, I am pleased to report that over the six-month
period covered by this report your Fund continued to provide you with attractive
monthly tax-free income. For more details about the management strategy and
performance of your Fund, please read the Portfolio Manager's Comments, the
Common Share Dividend and Share Price Information, and the Performance Overview
sections of this report.
I also wanted to update you on some important news about Nuveen Investments. In
late 2007, the firm was acquired by a group led by Madison Dearborn Partners,
LLC. While this affected the corporate structure of Nuveen Investments, it had
no impact on the investment objectives, portfolio management strategies or
dividend policy of your Fund.
With the recent volatility in the stock market, many have begun to wonder which
way the market is headed, and whether they need to adjust their holdings of
investments. No one knows what the future will bring, which is why we think a
well-balanced portfolio that is structured and carefully monitored with the help
of an investment professional is an important component in achieving your long
term financial goals. A well-diversified portfolio may actually help to reduce
your overall investment risk, and we believe that investments like your Nuveen
Investments Fund can be important building blocks in a portfolio crafted to
perform well through a variety of market conditions.
We also are pleased to be able to offer you a choice concerning how you receive
your shareholder reports and other Fund information. As an alternative to mailed
copies, you can sign up to receive future Fund reports and other Fund
information by e-mail and the internet. The inside front cover of this report
contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
April 15, 2008
Portfolio Manager's COMMENTS
Nuveen Investments Municipal Closed-End Funds
NPC, NCL, NCU, NAC,
NVX, NZH, NKL, NKX
Portfolio manager Scott Romans examines key investment strategies and the
six-month performance of the Nuveen California Municipal Funds. Scott, who
joined Nuveen in 2000, has managed NCU, NAC, NVX, NZH, NKL and NKX since 2003.
He assumed portfolio management responsibility for NPC and NCL in 2005.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE CALIFORNIA FUNDS DURING THE
SIX-MONTH REPORTING PERIOD ENDED FEBRUARY 29, 2008?
During this period, the municipal market experienced a great deal of volatility,
as factors related to the sub-prime mortgage crisis had an indirect, but
important, influence on the municipal market's performance. As the market moved
from rally to slump and back again, we sought to take advantage of this
environment by tailoring our investment strategies appropriately. Overall, we
believed the Funds were well structured going into this period. When interest
rates were low, we continued to invest conservatively by purchasing defensive,
high credit quality bonds that we believed would hold their value well when
interest rates eventually rose. When disruptions in the financial markets
triggered a backup in interest rates and the market discounted lower-quality and
higher-yielding bonds, we took a more opportunistic approach to investing. That
entailed selling some of the Funds' higher-rated defensive positions and buying
lower-rated bonds at attractive levels relative to their credit quality (in the
Funds that can hold such bonds) or taking positions in higher-yielding bonds in
order to capture the yield advantage of the increase in rates.
The Funds also found ample opportunities to sell some holdings that were
purchased when yields were lower and replace them with similar, newer credits
that yielded comparatively more. This process enabled us to maintain the Funds'
current portfolio characteristics while strengthening their future income
streams.
Over the course of the entire reporting period, we saw the municipal yield curve
steepen, as municipal bond interest rates at the short end of the curve declined
while longer-term rates rose. In this environment, we continued to emphasize a
disciplined approach to duration1 management. As part of this strategy, we used
inverse floating rate securities,2 a type of derivative financial instrument, in
all eight of these Funds. Inverse floaters typically provide the dual benefit of
lengthening the Funds' durations to
1 Duration is a measure of a bond's price sensitivity as interest rates
change, with longer duration bonds displaying more sensitivity to these
changes than bonds with shorter durations.
2 An inverse floating rate security is a financial instrument designed to pay
long-term tax-exempt interest at a rate that varies inversely with a
short-term tax-exempt interest rate index. For the Nuveen Funds, the index
typically used is the Securities Industry and Financial Markets (SIFM)
Municipal Swap Index (previously referred to as the Bond Market Association
Index or BMA). Inverse floaters, including those inverse floating rate
securities in which the Funds invested during the reporting period, are
further defined within the Notes to Financial Statements and Glossary of
Terms Used in This Report sections of this shareholder report.
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio manager as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Funds disclaim any obligation to advise shareholders of
such changes.
4
be closer to our strategic target and enhancing their income-generation
capabilities, albeit while adding risk to the portfolio.
The Funds also employed two other types of derivative financial instruments:
forward interest rate swaps, which were used in all eight Funds, and futures
contracts, which were used in NZH. The goal of these strategies was to help us
manage the net asset value (NAV) volatility of these Funds without having a
negative impact on their income streams or common share dividends over the short
term. During this period, we believed that our use of these derivatives had
largely accomplished this goal, and we removed the interest rate swaps from NPC,
NCL, NCU, NAC, NVX, NKL, and NKX and the futures contracts from NZH. As of
February 29, 2008, NZH continued to hold forward interest rate swap positions.
HOW DID THE FUNDS PERFORM?
Individual results for these Nuveen Funds, as well as relevant index and peer
group information, are presented in the accompanying table.
Total Returns on Common Share Net Asset Value*
For periods ended 2/29/08
Uninsured Funds Six-Month 1-Year 5-Year 10-Year
NCU -4.47% -6.89% 3.69% 5.08%
NAC -4.62% -6.47% 3.95% NA
NVX -2.93% -5.36% 4.35% NA
NZH -6.12% -9.48% 3.64% NA
Lehman Brothers CA
Tax-Exempt Bond Index(3) -1.34% -2.24% 3.46% 4.68%
Lipper CA Municipal
Debt Funds Average(4) -5.86% -8.84% 3.63% 4.50%
Insured Funds
NPC -2.27% -3.57% 3.45% 4.73%
NCL -5.11% -6.90% 2.90% 4.72%
NKL -4.58% -6.67% 3.82% NA
NKX -3.50% -5.48% 4.32% NA
Lehman Brothers
Insured CA Tax-Exempt
Bond Index3 -2.03% -2.99% 3.18% 4.64%
Lipper Insured CA
Municipal Debt
Funds Average(5) -6.64% -9.21% 2.71% 4.42%
* Six-month returns are cumulative; returns for one-year, five-year, and
ten-year are annualized.
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
3 The Lehman Brothers California Tax-Exempt Bond Index is an unleveraged,
unmanaged index comprising a broad range of investment-grade California
municipal bonds, while the Lehman Brothers Insured California Tax-Exempt
Bond Index is an unleveraged, unmanaged index containing a broad range of
insured California municipal bonds. Results for the Lehman indexes do not
reflect any expenses.
4 The Lipper California Municipal Debt Funds Average is calculated using the
returns of all closed-end funds in this category for each period as
follows: 6 months, 24; 1 year, 24; 5 years, 24; and 10 years, 12. Fund and
Lipper returns assume reinvestment of dividends.
5 The Lipper Insured California Municipal Debt Funds Average is calculated
using the returns of all closed-end funds in its category for each period
as follows: 6 months, 13; 1 year, 13; 5 years, 13; and 10 years, 7. Fund
and Lipper returns assume reinvestment of dividends.
5
For the six months ended February 29, 2008, the cumulative returns on NAV for
NCU, NAC, NVX, and NZH underperformed the return on the Lehman Brothers
California Tax-Exempt Bond Index, and the six-month returns for NPC, NCL, NKL,
and NKX lagged the return on the Lehman Brothers Insured California Tax-Exempt
Bond Index. All of the Funds in this report except NZH exceeded the average
return for their respective Lipper California Municipal Debt Funds Average.
The two most significant factors in the Funds' performance were
leverage-adjusted duration and the use of derivatives. Sector and credit
allocations and holdings of bonds backed by certain municipal bond insurers also
influenced the Funds' returns on common share NAV.
During this six-month period, bonds in the Lehman Brothers Municipal Bond Index
with maturities of less than six years, especially those maturing in
approximately three years, benefited the most from changes in the interest rate
environment. As a result, these shorter-maturity bonds generally outperformed
credits with longer maturities. Bonds having the longest maturities (22 years
and longer) posted the worst returns. In this market environment, NVX and NPC
benefited from the fact that their durations were shorter than those of the
other six Funds in this report, while NCL and NZH had the longest durations
among these Funds.
As mentioned earlier, all eight of these Funds used forward interest rate swaps,
and NAC and NZH also used futures contracts. In seven of the Funds (all except
NZH), these derivative instruments were used to synthetically extend the Funds'
durations and move them closer to our strategic duration target. Despite the
fact that longer-duration instruments performed relatively poorly, the common
share return performances of these seven Funds were actually positively impacted
by the use of derivatives. This was due to the fact that the derivatives
provided exposure to taxable markets during a period when, in contrast to
historical trends, the Treasury market and the municipal market moved in the
opposite directions. As municipal market performance lagged the significant
gains made by Treasuries, these forward interest rate swaps and futures
contracts performed very well, benefiting the seven Funds in direct proportion
to the amount of derivatives used. For example, since NVX and NPC had the
shortest durations among these Funds, they made the greatest use of forward
interest rate swap transactions and benefited the most from their use.
6
However, in NZH, which had a duration that exceeded our target, the derivatives
were used to synthetically shorten duration. These positions, which reduced
duration in the outperforming taxable markets, hurt the Fund's performance. In
addition, the inverse floaters used by all eight of these Funds had a negative
impact on performance. This resulted from the fact that the inverse floaters
effectively increased the Funds' exposure to longer maturity bonds during a
period when shorter maturities were in favor in the market. However, the inverse
floaters also benefited the Funds by helping to support their income streams.
Sectors of the market that generally contributed to the Funds' performances
included resource recovery, special tax, water and sewer, and electric
utilities. Pre-refunded6 bonds performed exceptionally well, due primarily to
their shorter effective maturities and higher credit quality. Among these eight
Funds, NPC and NVX had the heaviest allocations of pre-refunded bonds.
On the other hand, bonds that carried any credit risk, regardless of sector,
tended to perform poorly. Revenue bonds as a whole, and specifically the
industrial development and health care sectors that had ranked among the top
performers in the Lehman Brothers Municipal Bond Index over the past few years,
underperformed the general municipal market. Lower credit quality bonds (bonds
rated BBB or below) and non-rated bonds also posted poor returns. Credits backed
by the 1998 master tobacco settlement agreement generally underperformed as
well, due to the overall lower credit quality of the tobacco sector as well as
the ample supply of these bonds. The performance of the California Funds was
also hurt by their holdings of zero coupon bonds as well as their small
positions in gas prepayment contracts for certain municipalities.
Another factor that had an impact on the performance of the California Funds was
their position in bonds backed by certain municipal insurers. All of these Funds
had exposure to bonds insured by XL Capital Assurance (XLCA) and Financial
Guaranty Insurance Company (FGIC). NKL also had a very small position in bonds
insured by ACA Financial Guaranty Corporation (ACA), which was downgraded to CCC
from A in December 2007. As concern increased about the balance sheets of
municipal bond insurers, prices on bonds insured by these companies declined,
detracting from the performance of the Funds. At the same time, all of these
Funds had holdings of bonds backed by Financial Security Assurance (FSA), which
held their value well. The
6 Advance refundings, also known as pre-refundings or refinancings, occur
when an issuer sells new bonds and uses the proceeds to fund principal and
interest payments of older existing bonds. This process often results in
lower borrowing costs for bond issuers.
7
California Funds that had heavier exposures to FSA-backed bonds relative to the
general market benefited from this good performance. As a whole, the holdings of
our Funds continued to be well diversified between insured and uninsured bonds
and within the insured bond category.
RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES AND FUND POLICY CHANGES
The Portfolios of Investments reflect the ratings on certain bonds insured by
Ambac, FGIC, MBIA and XLCA as of February 29, 2008. Subsequent to February 29,
2008, at least one rating agency reduced the rating for Ambac-insured bonds to
AA and at least one rating agency further reduced the ratings for FGIC-insured
and XLCA-insured bonds. As of February 29, 2008, one or more rating agencies
have placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future. If one
or more insurers' ratings are reduced by these rating agencies, it would likely
reduce the effective rating of many of the bonds insured by that insurer or
insurers. It is important to note that municipal bonds historically have had a
very low rate of default.
During March 2008, the Nuveen funds' Board of Directors/Trustees approved
changes to the investment policies of all the Nuveen insured municipal
closed-end fund. The new policies require that (1) at least 80% of the fund's
net assets be invested in insured municipal bonds guaranteed by insurers rated
"A" or better by at least one rating agency at the time of purchase; (2) at
least 80% of the fund's net assets must be invested in municipal bonds rated
"AA" or better by at least one rating agency (with or without insurance), deemed
to be of comparable quality by the Adviser, or backed by an escrow or trust
containing sufficient U.S. Government or Government agency securities at the
time of purchase; and (3) up to 20% of the fund's net assets may be invested in
uninsured municipal bonds rated "A" to "BBB" by at least one rating agency or
deemed to be of comparable quality by the Adviser at the time of purchase. These
policy changes are designed to increase portfolio manager flexibility and retain
the insured nature of the funds' investment portfolios for current and future
environments. Some funds may require shareholder approval prior to implementing
these policy changes.
8
RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED MARKETS
Beginning in February 2008, more shares were submitted for sale in the regularly
scheduled auctions for the auction preferred shares issued by these Funds than
there were offers to buy. This meant that these auctions "failed to clear" and
that many or all auction preferred shareholders who wanted to sell their shares
in these auctions were unable to do so. This decline in liquidity in auction
preferred shares did not lower the credit quality of these shares, and auctioned
preferred shareholders unable to sell their shares received distributions at the
"maximum rate" calculated in accordance with the pre-established terms of the
auctioned preferred shares. At the time this report was prepared, the Funds'
managers could not predict when future auctions might succeed in attracting
sufficient buyers for the shares offered, if ever. The Funds' managers are
working diligently to develop mechanisms designed to improve the liquidity of
the auctioned preferred shares, or to restructure them, but at present there is
no assurance that these efforts will succeed. These developments generally do
not affect the management or investment policies of these Funds. However, one
implication of these auction failures for common shareholders is that the Funds'
cost of leverage will be higher than it otherwise would have been had the
auctions continued to be successful. As a result, the Funds' future common share
earnings may be lower than they otherwise would have been.
For current, up-to-date information, please visit the Nuveen CEF Auction Rate
Preferred Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
9
Common Share
Dividend and Share Price
INFORMATION
All of the Funds in this report use financial leverage. While leverage can add
volatility to a Fund's common share NAV and common share price, this strategy
can also provide opportunities for additional income and total return for common
shareholders. The Funds' use of this strategy continued to provide incremental
income, although the extent of this benefit was reduced to a degree in some of
the Funds by short-term interest rates that remained relatively high during the
earlier part of this period. This, in turn, kept the Funds' borrowing costs
high. The Funds' income streams were also impacted as the proceeds from older,
higher-yielding bonds that matured or were called were reinvested into bonds
then available in the market, which offered lower yields at times during this
period. The combination of these factors resulted in one monthly common share
dividend reduction in NCL, NVX, and NKL over the six-month period ended February
29, 2008. The common share dividends of NPC, NCU, NAC, NZH, and NKX remained
stable throughout this reporting period.
Due to capital gains generated by normal portfolio activity, common shareholders
of the following Funds received capital gains and net ordinary income
distributions at the end of December 2007 as follows:
Short-Term Capital Gains
Long-Term Capital Gains and/or Ordinary Income
(per share) (per share)
NPC $0.0056 $0.0078
NAC $0.0357 --
NKL $0.0223 --
All of the Funds in this report seek to pay stable dividends at rates that
reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as
10
undistributed net investment income (UNII) as part of the Fund's common share
NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its
earnings, the excess constitutes negative UNII that is likewise reflected in the
Fund's common share NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of February 29, 2008, all of
the Funds in this report had positive UNII balances, based upon our best
estimate, for tax purposes. NPC and NCL had positive UNII balances and NCU, NAC,
NVX, NZH, NKL and NKX had negative UNII balances for financial statement
purposes.
As of February 29, 2008, the Funds' common share prices were trading at
discounts to their common share NAVs as shown in the accompanying chart:
2/29/08 Six-Month Average
Discount Discount
NPC -6.00% -8.07%
NCL -5.94% -9.15%
NCU -6.02% -8.79%
NAC -4.55% -7.73%
NVX -7.69% -8.65%
NZH -4.91% -7.52%
NKL -4.76% -7.78%
NKX -0.29% -6.84%
11
NPC
Performance
OVERVIEW
Nuveen Insured California Premium Income Municipal Fund, Inc.
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
Insured 68%
U.S. Guaranteed 32%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Mar 0.0605
Apr 0.0605
May 0.0605
Jun 0.0605
Jul 0.0605
Aug 0.0605
Sep 0.0605
Oct 0.0605
Nov 0.0605
Dec 0.0605
Jan 0.0605
Feb 0.0605
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 15.15
15.15
15.153
15.19
15.15
15.24
15.51
15.4799
15.5
15.72
15.47
15.55
15.55
15.55
15.76
15.55
15.25
14.75
14.78
14.91
14.5
14.4
14.4
14.43
14.45
13.95
14.17
14.96
14.81
14.5
14.12
14.43
14.3901
14.33
14.2
14.31
14.3456
13.8
13.5
13.7
13.788
13.99
13.8
13.87
13.9
14.57
14.68
14.69
14.6599
14.84
15.25
14.11
13.89
2/29/08 13.48
FUND SNAPSHOT
------------------------------------
Common Share Price $13.48
------------------------------------
Common Share
Net Asset Value $14.34
------------------------------------
Premium/(Discount) to NAV -6.00%
------------------------------------
Market Yield 5.39%
------------------------------------
Taxable-Equivalent Yield(2) 8.25%
------------------------------------
Net Assets Applicable
to Common Shares ($000) $92,622
------------------------------------
Average Effective Maturity
on Securities (Years) 14.95
------------------------------------
Leverage-Adjusted Duration 12.54
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/19/92)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -7.50% -2.27%
------------------------------------
1-Year -6.26% -3.57%
------------------------------------
5-Year 2.90% 3.45%
------------------------------------
10-Year 4.46% 4.73%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 32.3%
------------------------------------
Tax Obligation/General 21.5%
------------------------------------
Tax Obligation/Limited 20.5%
------------------------------------
Water and Sewer 16.6%
------------------------------------
Other 9.1%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders capital gains and net ordinary income
distributions in December 2007 of $0.0134 per share.
12
NCL
Performance
OVERVIEW
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
Insured 78%
U.S. Guaranteed 22%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Mar 0.056
Apr 0.056
May 0.056
Jun 0.056
Jul 0.056
Aug 0.056
Sep 0.056
Oct 0.053
Nov 0.053
Dec 0.053
Jan 0.053
Feb 0.053
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 14.31
14.28
14.45
14.36
14.36
14.55
14.6899
14.46
14.38
14.65
14.59
14.55
14.55
14.61
14.56
14.38
14.22
14.35
14.24
14.03
13.89
14.16
13.59
13.81
13.57
13.13
13.5
13.71
14.09
14.06
13.71
13.84
13.6025
13.64
13.33
13.29
13.3
13.09
12.7899
13.13
13.14
13.16
12.83
12.81
12.95
13.41
13.66
13.459
13.67
13.62
13.74
12.9999
12.944
12.66
14.45
14.36
14.36
14.55
14.6899
14.46
14.38
14.65
14.59
14.55
14.55
14.61
14.56
14.38
14.22
14.35
14.24
14.03
13.89
14.16
13.59
13.81
13.57
13.13
13.5
13.71
14.09
14.06
13.71
13.84
13.6025
13.64
13.33
13.29
13.3
13.09
12.7899
13.13
13.14
13.16
12.83
12.81
12.95
13.41
13.66
13.459
13.67
13.62
13.74
12.9999
12.944
2/29/08 12.66
FUND SNAPSHOT
------------------------------------
Common Share Price $12.66
------------------------------------
Common Share
Net Asset Value $13.46
------------------------------------
Premium/(Discount) to NAV -5.94%
------------------------------------
Market Yield 5.02%
------------------------------------
Taxable-Equivalent Yield(2) 7.69%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $171,124
------------------------------------
Average Effective Maturity
on Securities (Years) 15.98
------------------------------------
Leverage-Adjusted Duration 15.80
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -5.41% -5.11%
------------------------------------
1-Year -7.49% -6.90%
------------------------------------
5-Year 2.09% 2.90%
------------------------------------
10-Year 4.19% 4.72%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 36.0%
------------------------------------
U.S. Guaranteed 21.6%
------------------------------------
Tax Obligation/General 13.9%
------------------------------------
Water and Sewer 13.1%
------------------------------------
Utilities 5.0%
------------------------------------
Other 10.4%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
13
NCU
Performance
OVERVIEW
Nuveen California Premium Income Municipal Fund
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 55%
AA 14%
A 14%
BBB 11%
BB or Lower 4%
N/R 2%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Mar 0.0565
Apr 0.0565
May 0.0565
Jun 0.0535
Jul 0.0535
Aug 0.0535
Sep 0.0535
Oct 0.0535
Nov 0.0535
Dec 0.0535
Jan 0.0535
Feb 0.0535
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 14.2
14.07
14.1
13.944
14.05
14.14
14.28
14.26
14.2
14.44
14.5345
14.35
14.3
14.46
14.5
14.35
13.8768
13.55
13.77
13.63
13.36
13.15
12.82
13.2
13.18
12.63
12.86
13.03
13.3
13.288
12.96
13.02
12.97
13.0699
12.91
13
13.334
13.1619
13.16
13.07
12.8201
12.65
12.39
12.38
12.42
13.06
13.17
13.08
13.29
13.25
13.22
12.57
12.7
2/29/08 12.34
FUND SNAPSHOT
------------------------------------
Common Share Price $12.34
------------------------------------
Common Share
Net Asset Value $13.13
------------------------------------
Premium/(Discount) to NAV -6.02%
------------------------------------
Market Yield 5.20%
------------------------------------
Taxable-Equivalent Yield(2) 7.96%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $75,817
------------------------------------
Average Effective Maturity
on Securities (Years) 16.70
------------------------------------
Leverage-Adjusted Duration 13.89
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -2.93% -4.47%
------------------------------------
1-Year -8.64% -6.89%
------------------------------------
5-Year 4.30% 3.69%
------------------------------------
10-Year 4.60% 5.08%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 30.1%
------------------------------------
Tax Obligation/General 17.1%
------------------------------------
Health Care 15.2%
------------------------------------
U.S. Guaranteed 14.5%
------------------------------------
Water and Sewer 7.2%
------------------------------------
Utilities 5.2%
------------------------------------
Other 10.7%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
14
NAC
Performance
OVERVIEW
Nuveen California Dividend Advantage Municipal Fund
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 55%
AA 6%
A 24%
BBB 8%
BB or Lower 1%
N/R 6%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Mar 0.065
Apr 0.065
May 0.065
Jun 0.065
Jul 0.065
Aug 0.065
Sep 0.0615
Oct 0.0615
Nov 0.0615
Dec 0.0615
Jan 0.0615
Feb 0.0615
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 15.85
15.87
15.78
15.64
15.75
15.91
15.77
15.47
15.54
15.74
15.96
15.95
15.95
15.8301
16
15.66
15.54
15.4
15.09
14.84
14.54
14.38
14.2
14.32
14.258
14.09
14.3
14.3399
14.39
14.43
14.06
14.22
14.23
13.99
13.93
13.8
13.914
13.65
13.42
13.44
13.3401
13.58
13.42
13.32
13.33
14.04
14.06
13.88
14.15
14.4
14.49
13.68
13.48
2/29/08 13.23
FUND SNAPSHOT
------------------------------------
Common Share Price $13.23
------------------------------------
Common Share
Net Asset Value $13.86
------------------------------------
Premium/(Discount) to NAV -4.55%
------------------------------------
Market Yield 5.58%
------------------------------------
Taxable-Equivalent Yield(2) 8.55%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $325,514
------------------------------------
Average Effective Maturity
on Securities (Years) 17.96
------------------------------------
Leverage-Adjusted Duration 13.75
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 5/26/99)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -4.99% -4.62%
------------------------------------
1-Year -12.20% -6.47%
------------------------------------
5-Year 5.02% 3.95%
------------------------------------
Since
Inception 4.78% 5.76%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 22.7%
------------------------------------
U.S. Guaranteed 20.0%
------------------------------------
Transportation 12.1%
------------------------------------
Health Care 11.4%
------------------------------------
Tax Obligation/General 8.7%
------------------------------------
Utilities 5.5%
------------------------------------
Water and Sewer 5.4%
------------------------------------
Other 14.2%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders a capital gains distribution in December 2007 of
$0.0357 per share.
15
NVX
Performance
OVERVIEW
Nuveen California Dividend Advantage Municipal Fund 2
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
AAA/U.S. Guaranteed 60%
AA 10%
A 14%
BBB 9%
BB or Lower 1%
N/R 6%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Mar 0.063
Apr 0.063
May 0.063
Jun 0.06
Jul 0.06
Aug 0.06
Sep 0.06
Oct 0.0575
Nov 0.0575
Dec 0.0575
Jan 0.0575
Feb 0.0575
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 15.26
15.14
15.16
15.15
15.25
15.43
15.5899
15.32
15.41
15.45
15.5
15.44
15.3
15.16
15.32
15.0101
14.37
14.19
14.3
14.07
13.96
13.72
13.77
13.73
13.73
13.25
13.56
13.73
14.0999
13.85
13.7
13.82
13.7
13.63
13.43
13.47
13.5
13.2
12.75
12.84
13.05
13.1
12.91
12.9
13.15
13.84
13.75
13.69
13.89
13.84
13.97
13.24
13.29
2/29/08 12.85
FUND SNAPSHOT
------------------------------------
Common Share Price $12.85
------------------------------------
Common Share
Net Asset Value $13.92
------------------------------------
Premium/(Discount) to NAV -7.69%
------------------------------------
Market Yield 5.37%
------------------------------------
Taxable-Equivalent Yield(2) 8.22%
------------------------------------
Net Assets Applicable
to Common Shares ($000) $206,042
------------------------------------
Average Effective Maturity
on Securities (Years) 14.98
------------------------------------
Leverage-Adjusted Duration 11.99
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -3.96% -2.93%
------------------------------------
1-Year 11.28% -5.36%
------------------------------------
5-Year 4.90% 4.35%
------------------------------------
Since
Inception 3.74% 5.36%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 29.9%
------------------------------------
Tax Obligation/Limited 14.7%
------------------------------------
Health Care 12.1%
------------------------------------
Education and Civic
Organizations 8.2%
------------------------------------
Transportation 6.8%
------------------------------------
Water and Sewer 6.0%
------------------------------------
Consumer Staples 5.3%
------------------------------------
Utilities 4.6%
------------------------------------
Other 12.4%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
16
NZH
Performance
OVERVIEW
Nuveen California Dividend Advantage Municipal Fund 3
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1), (2)
AAA/U.S. Guaranteed 55%
AA 7%
A 20%
BBB 11%
BB or Lower 1%
N/R 6%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Mar 0.063
Apr 0.063
May 0.063
Jun 0.059
Jul 0.059
Aug 0.059
Sep 0.059
Oct 0.059
Nov 0.059
Dec 0.059
Jan 0.059
Feb 0.059
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 15.15
15.18
15.23
15.15
15.19
15.26
15.3
15.15
15.23
15.19
15.34
15.36
15.22
15.15
15.21
14.559
14.22
14.03
13.96
13.92
13.7
13.62
13.6
13.65
13.57
13.19
13.4
13.52
13.68
13.69
13.38
13.55
13.55
13.34
13.42
13.3
13.39
13.18
12.87
12.91
12.95
13.09
12.71
12.51
12.64
13.48
13.64
13.62
13.78
13.78
13.71
12.91
12.82
2/29/08 12.4
FUND SNAPSHOT
------------------------------------
Common Share Price $12.40
------------------------------------
Common Share
Net Asset Value $13.04
------------------------------------
Premium/(Discount) to NAV -4.91%
------------------------------------
Market Yield 5.71%
------------------------------------
Taxable-Equivalent Yield(3) 8.74%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $314,714
------------------------------------
Average Effective Maturity
on Securities (Years) 18.02
------------------------------------
Leverage-Adjusted Duration 15.27
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -5.79% -6.12%
------------------------------------
1-Year -13.60% -9.48%
------------------------------------
5-Year 4.87% 3.64%
------------------------------------
Since
Inception 2.99% 4.23%
------------------------------------
INDUSTRIES
(as a % of total investments)2
------------------------------------
Tax Obligation/Limited 25.1%
------------------------------------
Health Care 16.7%
------------------------------------
U.S. Guaranteed 16.5%
------------------------------------
Tax Obligation/General 10.9%
------------------------------------
Water and Sewer 7.7%
------------------------------------
Consumer Staples 5.2%
------------------------------------
Transportation 4.4%
------------------------------------
Other 13.5%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Excluding derivative transactions.
(3) 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 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
17
NKL
Performance
OVERVIEW
Nuveen Insured California Dividend Advantage Municipal Fund
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
Insured 76%
U.S. Guaranteed 13%
GNMA/FNMA Guaranteed 1%
A (Uninsured) 3%
BBB (Uninsured) 7%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share(3)
Mar 0.065
Apr 0.065
May 0.065
Jun 0.062
Jul 0.062
Aug 0.062
Sep 0.062
Oct 0.0595
Nov 0.0595
Dec 0.0595
Jan 0.0595
Feb 0.0595
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 15.45
15.45
15.72
15.65
15.87
15.9
15.94
15.76
15.84
16
16.1
15.95
15.8499
15.79
15.76
15.2299
15.1
15.1
14.98
14.95
14.72
14.25
14
14.3799
14.23
13.73
14.24
14.24
14.71
14.72
14.16
14.35
14.4425
14.07
13.98
13.86
13.981
13.732
13.21
13.28
13.44
13.81
13.11
13.06
13.55
14.21
14.16
14.16
14.12
14.38
14.42
13.57
13.6506
2/29/08 13.212
FUND SNAPSHOT
------------------------------------
Common Share Price $13.21
------------------------------------
Common Share
Net Asset Value $13.87
------------------------------------
Premium/(Discount) to NAV -4.76%
------------------------------------
Market Yield 5.40%
------------------------------------
Taxable-Equivalent Yield(2) 8.27%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $212,072
------------------------------------
Average Effective Maturity
on Securities (Years) 17.93
------------------------------------
Leverage-Adjusted Duration 15.24
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -4.67% -4.58%
------------------------------------
1-Year -9.91% -6.67%
------------------------------------
5-Year 3.97% 3.82%
------------------------------------
Since
Inception 3.91% 5.37%
------------------------------------
INDUSTRIES
(as a % of total investments)2
------------------------------------
Tax Obligation/Limited 33.3%
------------------------------------
Tax Obligation/General 16.6%
------------------------------------
U.S. Guaranteed 12.5%
------------------------------------
Utilities 12.0%
------------------------------------
Water and Sewer 9.8%
------------------------------------
Health Care 3.8%
------------------------------------
Other 12.0%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
(3) The Fund paid shareholders a capital gains distribution in December 2007 of
$0.0223 per share.
18
NKX
Performance
OVERVIEW
Nuveen Insured California Tax-Free Advantage Municipal Fund
as of February 29, 2008
Pie Chart:
Credit Quality (as a % of total investments)(1)
Insured 69%
U.S. Guaranteed 19%
A (Uninsured) 5%
BBB (Uninsured) 7%
Bar Chart:
2007-2008 Monthly Tax-Free Dividends Per Common Share
Mar 0.059
Apr 0.059
May 0.059
Jun 0.059
Jul 0.059
Aug 0.059
Sep 0.059
Oct 0.059
Nov 0.059
Dec 0.059
Jan 0.059
Feb 0.059
Line Chart:
Common Share Price Performance -- Weekly Closing Price
3/01/07 14.73
15.0099
15.11
15.22
14.78
14.93
15.09
15.4
15.57
15.48
15.2
15.34
14.97
14.86
15.31
15
14.646
14.6
14.55
14.25
14.76
14.5
14.05
14.3
14.42
13.904
14.1
14.47
14.75
14.82
14.41
14.63
14.425
14.21
14.39
14.24
14.27
13.6999
13.47
13.5901
13.67
14.07
14.3
13.59
14.2
14.79
14.96
14.95
15.05
14.72
14.76
14.04
14.14
2/29/08 13.59
FUND SNAPSHOT
------------------------------------
Common Share Price $13.59
------------------------------------
Common Share
Net Asset Value $13.63
------------------------------------
Premium/(Discount) to NAV -0.29%
------------------------------------
Market Yield 5.21%
------------------------------------
Taxable-Equivalent Yield(2) 7.98%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $80,250
------------------------------------
Average Effective Maturity
on Securities (Years) 17.67
------------------------------------
Leverage-Adjusted Duration 15.12
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/21/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
6-Month
(Cumulative) -3.73% -3.50%
------------------------------------
1-Year -3.16% -5.48%
------------------------------------
5-Year 4.21% 4.32%
------------------------------------
Since
Inception 3.66% 4.52%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 32.6%
------------------------------------
U.S. Guaranteed 18.7%
------------------------------------
Tax Obligation/General 13.6%
------------------------------------
Water and Sewer 10.0%
------------------------------------
Transportation 7.1%
------------------------------------
Health Care 6.6%
------------------------------------
Other 11.4%
------------------------------------
(1) The percentages shown in the foregoing chart reflect the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February 29, 2008. As
explained earlier in the Portfolio Manager's Comments section of this
report, at least one rating agency reduced the rating for AMBAC-insured
bonds to AA and at least one rating agency further reduced the ratings for
FGIC-insured and XLCA-insured bonds. One or more rating agencies have
placed each of these insurers on "negative credit watch", which may presage
one or more rating reductions for such insurer or insurers in the future.
If one or more insurers' ratings are reduced by these rating agencies, it
would likely reduce the effective rating of many of the bonds insured by
that insurer or insurers, and thereby reduce the percentage of the ratings
shown in the foregoing chart.
(2) Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 34.7%. When comparing this Fund to investments that generate
qualified dividend income, the Taxable-Equivalent Yield is lower.
19
NPC
NCL
NCU
Shareholder MEETING REPORT
The annual meeting of shareholders was held in the offices of Nuveen Investments
on December 18, 2007; at this meeting shareholders were asked to vote on the
election of Board Members. Additionally, a special meeting of shareholders was
held in the offices of Nuveen Investments on October 12, 2007; at this meeting
shareholders were asked to vote on a new Investment Management Agreement and to
ratify the selection of Ernst & Young LLP as the Funds' independent registered
public accounting firm; the meetings for 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) were
subsequently adjourned to October 22, 2007, and additionally adjourned to
November 8, 2007, for NVX, NZH and NKL.
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME PREMIUM INCOME 2 PREMIUM INCOME
(NPC) (NCL) (NCU)
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
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
====================================================================================================================================
For 3,249,962 -- 6,266,550 -- 3,046,374 --
Against 130,315 -- 228,551 -- 114,139 --
Abstain 119,589 -- 239,066 -- 179,731 --
Broker Non-Votes 1,015,442 -- 2,126,948 -- 1,015,621 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,515,308 -- 8,861,115 -- 4,355,865 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For 5,732,659 -- 11,553,188 -- -- --
Withhold 69,815 -- 143,579 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- -- --
====================================================================================================================================
Jack B. Evans
For 5,732,959 -- 11,546,697 -- -- --
Withhold 69,515 -- 150,070 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- -- --
====================================================================================================================================
William C. Hunter
For 5,733,059 -- 11,552,097 -- -- --
Withhold 69,415 -- 144,670 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- -- --
====================================================================================================================================
David J. Kundert
For 5,731,959 -- 11,552,317 -- -- --
Withhold 70,515 -- 144,450 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- -- --
====================================================================================================================================
William J. Schneider
For -- 1,377 -- 3,049 -- 1,451
Withhold -- 4 -- 7 -- 45
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,381 -- 3,056 -- 1,496
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,377 -- 3,049 -- 1,451
Withhold -- 4 -- 7 -- 45
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,381 -- 3,056 -- 1,496
====================================================================================================================================
Judith M. Stockdale
For 5,732,859 -- 11,552,588 -- 5,252,295 --
Withhold 69,615 -- 144,179 -- 57,829 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- 5,310,124 --
====================================================================================================================================
Carole E. Stone
For 5,732,859 -- 11,547,897 -- 5,253,642 --
Withhold 69,615 -- 148,870 -- 56,482 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,802,474 -- 11,696,767 -- 5,310,124 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 4,351,724 -- 8,592,302 -- 4,211,485 --
Against 78,171 -- 68,171 -- 29,312 --
Abstain 85,413 -- 200,642 -- 115,068 --
------------------------------------------------------------------------------------------------------------------------------------
Total 4,515,308 -- 8,861,115 -- 4,355,865 --
====================================================================================================================================
20
NAC
NVX
NZH
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NAC) (NVX) (NZH)
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
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
====================================================================================================================================
For 11,519,066 -- 7,524,024 -- 12,547,385 --
Against 452,805 -- 362,274 -- 582,255 --
Abstain 457,250 -- 339,547 -- 552,227 --
Broker Non-Votes 4,540,346 -- 2,655,816 -- 4,737,111 --
------------------------------------------------------------------------------------------------------------------------------------
Total 16,969,467 -- 10,881,661 -- 18,418,978 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
Jack B. Evans
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
William C. Hunter
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
David J. Kundert
For -- -- -- -- -- --
Withhold -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- -- -- --
====================================================================================================================================
William J. Schneider
For -- 5,829 -- 3,704 -- 6,284
Withhold -- 33 -- 13 -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 5,862 -- 3,717 -- 6,284
====================================================================================================================================
Timothy R. Schwertfeger
For -- 5,829 -- 3,704 -- 6,284
Withhold -- 33 -- 13 -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 5,862 -- 3,717 -- 6,284
====================================================================================================================================
Judith M. Stockdale
For 21,961,662 -- 13,813,497 -- 22,336,209 --
Withhold 265,174 -- 183,594 -- 309,742 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,226,836 -- 13,997,091 -- 22,645,951 --
====================================================================================================================================
Carole E. Stone
For 21,963,592 -- 13,813,821 -- 22,319,413
--
Withhold 263,244 -- 183,270 -- 326,538 --
------------------------------------------------------------------------------------------------------------------------------------
Total 22,226,836 -- 13,997,091 -- 22,645,951 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 16,517,077 -- 10,517,764 -- 17,813,369 --
Against 106,577 -- 94,528 -- 224,947 --
Abstain 345,813 -- 269,369 -- 380,662 --
------------------------------------------------------------------------------------------------------------------------------------
Total 16,969,467 -- 10,881,661 -- 18,418,978 --
====================================================================================================================================
21
NKL
NKX
Shareholder MEETING REPORT (continued)
INSURED CALIFORNIA INSURED CALIFORNIA
DIVIDEND ADVANTAGE TAX-FREE ADVANTAGE
(NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
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
====================================================================================================================================
For 7,881,610 -- 3,000,408 --
Against 318,941 -- 87,357 --
Abstain 356,200 -- 170,447 --
Broker Non-Votes 2,790,520 -- 1,043,224 --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,347,271 -- 4,301,436 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For -- -- -- --
Withhold -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
====================================================================================================================================
Jack B. Evans
For -- -- -- --
Withhold -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
====================================================================================================================================
William C. Hunter
For -- -- -- --
Withhold -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
====================================================================================================================================
David J. Kundert
For -- -- -- --
Withhold -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total -- -- -- --
====================================================================================================================================
William J. Schneider
For -- 3,793 -- 1,632
Withhold -- 16 -- 35
------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,809 -- 1,667
====================================================================================================================================
Timothy R. Schwertfeger
For -- 3,793 -- 1,642
Withhold -- 16 -- 25
------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,809 -- 1,667
====================================================================================================================================
Judith M. Stockdale
For 14,050,217 -- 5,298,031 --
Withhold 283,925 -- 133,851 --
------------------------------------------------------------------------------------------------------------------------------------
Total 14,334,142 -- 5,431,882 --
====================================================================================================================================
Carole E. Stone
For 14,058,484 -- 5,298,781 --
Withhold 275,658 -- 133,101 --
------------------------------------------------------------------------------------------------------------------------------------
Total 14,334,142 -- 5,431,882 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 10,907,472 -- 4,170,719 --
Against 218,503 -- 17,387 --
Abstain 221,296 -- 113,330 --
------------------------------------------------------------------------------------------------------------------------------------
Total 11,347,271 -- 4,301,436 --
====================================================================================================================================
22
NPC
Nuveen Insured California Premium Income Municipal Fund, Inc.
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.3% (3.6% OF TOTAL INVESTMENTS)
$ 2,125 California Educational Facilities Authority, Student Loan Revenue 3/08 at 102.00 Aaa $ 2,143,764
Bonds, Cal Loan Program, Series 2001A, 5.400%, 3/01/21 -
MBIA Insured (Alternative Minimum Tax)
1,500 California State University, Systemwide Revenue Bonds, 5/15 at 100.00 AAA 1,444,005
Series 2005A, 5.000%, 11/01/25 - AMBAC Insured
1,500 University of California, General Revenue Bonds, Series 2006J, 5/15 at 101.00 AAA 1,306,620
4.500%, 5/15/35 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,125 Total Education and Civic Organizations 4,894,389
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 4.9% (3.4% OF TOTAL INVESTMENTS)
3,000 California Health Facilities Financing Authority, Insured Revenue 8/08 at 101.00 AAA 3,001,620
Bonds, Sutter Health, Series 1998A, 5.375%, 8/15/30 -
MBIA Insured
1,500 California Statewide Community Development Authority, 8/09 at 101.00 AAA 1,557,150
Certificates of Participation, Sutter Health Obligated Group,
Series 1999, 5.500%, 8/15/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,500 Total Health Care 4,558,770
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.3% (0.2% OF TOTAL INVESTMENTS)
210 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 217,785
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
100 California Housing Finance Agency, Single Family Mortgage 8/08 at 101.00 AAA 100,531
Bonds II, Series 1997A-1, 6.000%, 8/01/20 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
310 Total Housing/Single Family 318,316
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 31.3% (21.5% OF TOTAL INVESTMENTS)
Bonita Unified School District, San Diego County, California,
General Obligation Bonds, Series 2004A:
1,890 5.250%, 8/01/23 - MBIA Insured 8/14 at 100.00 AAA 1,897,069
1,250 5.250%, 8/01/25 - MBIA Insured 8/14 at 100.00 AAA 1,241,488
2,000 California, General Obligation Veterans Welfare Bonds, 6/08 at 100.00 AAA 1,990,000
Series 2001BZ, 5.375%, 12/01/24 - MBIA Insured
(Alternative Minimum Tax)
El Segundo Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2004:
2,580 5.250%, 9/01/21 - FGIC Insured 9/14 at 100.00 A+ 2,618,287
1,775 5.250%, 9/01/22 - FGIC Insured 9/14 at 100.00 A+ 1,791,525
1,225 Fresno Unified School District, Fresno County, California, 2/13 at 103.00 AAA 1,377,549
General Obligation Refunding Bonds, Series 1998A,
6.550%, 8/01/20 - MBIA Insured
1,180 Jurupa Unified School District, Riverside County, California, 8/13 at 100.00 A 1,183,009
General Obligation Bonds, Series 2004, 5.000%, 8/01/21 -
FGIC Insured
3,000 Pomona Unified School District, Los Angeles County, California, 8/11 at 103.00 AAA 3,325,860
General Obligation Refunding Bonds, Series 1997A,
6.500%, 8/01/19 - MBIA Insured
160 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 156,301
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
3,000 Sacramento City Unified School District, Sacramento County, 7/15 at 100.00 Aaa 2,945,100
California, General Obligation Bonds, Series 2005,
5.000%, 7/01/27 - MBIA Insured
23
NPC
Nuveen Insured California Premium Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
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 $ 1,432,722
3,500 5.000%, 7/01/22 - FSA Insured 7/11 at 102.00 AAA 3,756,200
4,895 5.000%, 7/01/23 - FSA Insured 7/11 at 102.00 AAA 5,253,314
------------------------------------------------------------------------------------------------------------------------------------
27,790 Total Tax Obligation/General 28,968,424
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 29.9% (20.5% OF TOTAL INVESTMENTS)
1,000 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 994,650
California, Certificates of Participation Refunding, Series 2002A,
5.125%, 8/01/26 - FSA Insured
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
1,215 5.000%, 12/01/19 - AMBAC Insured 12/13 at 100.00 AAA 1,244,865
1,615 5.000%, 12/01/21 - AMBAC Insured 12/13 at 100.00 AAA 1,632,571
195 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 182,105
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
595 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 547,953
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
1,900 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 1,900,000
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 Participation, 1/11 at 100.00 AAA 4,768,650
Department of Public Services Facility Phase II, Series 2001,
5.250%, 1/01/34 - AMBAC Insured
2,050 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 1,900,904
Enhanced Tobacco Settlement Revenue Bonds, Drivers
Trust 2091, 8.252%, 6/01/45 - AGC Insured (IF)
1,000 Hesperia Public Financing Authority, California, Redevelopment 9/17 at 100.00 A3 904,530
and Housing Projects Tax Allocation Bonds, Series 2007A,
5.000%, 9/01/37 - XLCA Insured
435 Indian Wells Redevelopment Agency, California, Tax Allocation 9/13 at 100.00 AAA 437,597
Bonds, Consolidated Whitewater Project Area, Series 2003A,
5.000%, 9/01/20 - AMBAC Insured
345 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 313,436
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
895 Los Angeles Community Redevelopment Agency, California, 12/14 at 100.00 AAA 909,857
Tax Allocation Bonds, Bunker Hill Project, Series 2004A,
5.000%, 12/01/20 - FSA Insured
1,500 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AA- 1,336,710
Lease Revenue Bonds, Police Headquarters, Series 2006A,
4.750%, 1/01/31 - FGIC Insured
1,050 Moreno Valley Community Redevelopment Agency, California, 8/17 at 100.00 AAA 844,904
Tax Allocation Bonds, Trust 1028, 6.644%, 8/01/38 -
AMBAC Insured (IF)
2,500 Rancho Cucamonga Redevelopment Agency, California, Tax 9/17 at 100.00 AAA 1,899,600
Allocation Bonds, Trust 1029, 7.623%, 9/01/34 -
MBIA Insured (IF)
165 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 152,932
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
205 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 197,464
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
1,500 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/15 at 100.00 AAA 1,420,215
Merged Project Area, Series 2005A, 5.000%, 8/01/28 -
MBIA Insured
3,565 Sweetwater Union High School District Public Financing Authority, 9/15 at 100.00 AAA 3,491,704
California, Special Tax Revenue Bonds, Series 2005A,
5.000%, 9/01/25 - FSA Insured
2,805 Yucaipa-Calimesa Joint Unified School District, San Bernardino 10/11 at 100.00 AAA 2,596,364
County, California, General Obligation Refunding Bonds,
Series 2001A, 5.000%, 10/01/31 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
29,535 Total Tax Obligation/Limited 27,677,011
------------------------------------------------------------------------------------------------------------------------------------
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.5% (1.7% OF TOTAL INVESTMENTS)
$ 2,400 San Diego Unified Port District, California, Revenue Bonds, 9/14 at 100.00 AAA $ 2,269,992
Series 2004B, 5.000%, 9/01/29 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 47.0% (32.3% OF TOTAL INVESTMENTS) (4)
California, Various Purpose General Obligation Bonds, Series 2000:
7,995 5.750%, 3/01/22 (Pre-refunded 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 8,545,616
2,000 5.750%, 3/01/27 (Pre-refunded 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 2,137,740
2,500 Fresno Unified School District, Fresno County, California, General 8/09 at 102.00 AAA 2,506,500
Obligation Bonds, Series 2001A, 5.125%, 8/01/26 -
FSA Insured (ETM)
6,000 Huntington Park Redevelopment Agency, California, Single No Opt. Call AAA 7,962,120
Family Residential Mortgage Revenue Refunding Bonds,
Series 1986A, 8.000%, 12/01/19 (ETM)
5,135 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,535,058
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax) (ETM)
6,220 Riverside County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 8,632,112
Program Single Family Mortgage Revenue Bonds, Series 1987A,
9.000%, 5/01/21 (Alternative Minimum Tax) (ETM)
1,485 San Jose, California, Single Family Mortgage Revenue Bonds, No Opt. Call Aaa 1,930,144
Series 1985A, 9.500%, 10/01/13 (ETM)
3,000 Santa Clara County Financing Authority, California, Lease 3/08 at 102.00 AAA 3,063,750
Revenue Bonds, VMC Facility Replacement Project, Series 1997A,
5.000%, 11/15/22 (Pre-refunded 3/17/08) - AMBAC Insured
2,150 Santa Clara Valley Water District, California, Water Utility System 6/10 at 100.00 AA (4) 2,256,554
Revenue Bonds, Series 2000A, 5.125%, 6/01/31
(Pre-refunded 6/01/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
36,485 Total U.S. Guaranteed 43,569,594
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 0.4% (0.2% OF TOTAL INVESTMENTS)
345 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 322,020
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 24.1% (16.6% OF TOTAL INVESTMENTS)
5,255 El Dorado Irrigation District, California, Water and Sewer 3/13 at 100.00 A 5,263,513
Certificates of Participation, Series 2003A, 5.000%, 3/01/20 -
FGIC Insured
1,230 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 A 1,210,037
Certificates of Participation, Series 2004A, 5.000%, 3/01/21 -
FGIC Insured
235 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 222,127
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
5,000 Indio Water Authority, California, Water Revenue Bonds, 4/16 at 100.00 AAA 4,794,900
Series 2006, 5.000%, 4/01/31 - AMBAC Insured
220 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 203,742
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
1,500 Placerville Public Financing Authority, California, Wastewater 9/16 at 100.00 A- 1,372,590
System Refinancing and Improvement Project Revenue Bonds,
Series 2006, 5.000%, 9/01/34 - XLCA Insured
3,400 San Diego Public Facilities Financing Authority, California, 5/08 at 100.50 A 3,411,968
Sewerage Revenue Bonds, Series 1997A, 5.250%, 5/15/22 -
FGIC Insured
1,310 Santa Fe Springs Public Financing Authority, California, Water 5/13 at 100.00 AAA 1,308,048
Revenue Bonds, Series 2003A, 5.000%, 5/01/33 - MBIA Insured
1,345 West Basin Municipal Water District, California, Revenue 8/13 at 100.00 AAA 1,338,544
Certificates of Participation, Series 2003A, 5.000%, 8/01/20 -
MBIA Insured
2,000 Westlands Water District, California, Revenue Certificates of 3/15 at 100.00 AAA 1,894,020
Participation, Series 2005A, 5.000%, 9/01/30 - MBIA Insured
25
NPC
Nuveen Insured California Premium Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 1,310 Wheeler Ridge-Maricopa Water District, Kern County, California, 5/08 at 101.00 AAA $ 1,325,825
Water Revenue Refunding Bonds, Series 1996,
5.700%, 11/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
22,805 Total Water and Sewer 22,345,314
------------------------------------------------------------------------------------------------------------------------------------
$ 129,295 Total Investments (cost $132,991,181) - 145.7% 134,923,830
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.9% 2,697,835
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.6)% (5) (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 92,621,665
====================================================================================================================
As of February 29, 2008, all of the bonds in the Portfolio
of Investments, 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 unless
otherwise noted.
(2) 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.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.4)%.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
26
NCL
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.9% (3.6% OF TOTAL INVESTMENTS)
$ 620 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa $ 652,761
University of the Pacific, Series 2000, 5.875%, 11/01/20 -
MBIA Insured
2,125 California Educational Facilities Authority, Student Loan Revenue 3/08 at 102.00 Aaa 2,143,764
Bonds, Cal Loan Program, Series 2001A, 5.400%, 3/01/21 -
MBIA Insured (Alternative Minimum Tax)
1,500 California State University, Systemwide Revenue Bonds, 5/15 at 100.00 AAA 1,444,005
Series 2005A, 5.000%, 11/01/25 - AMBAC Insured
6,000 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 5,798,280
Series 2003A, 5.000%, 5/15/27 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,245 Total Education and Civic Organizations 10,038,810
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 1.4% (0.9% OF TOTAL INVESTMENTS)
2,000 The Regents of the University of California, Medical Center 5/15 at 101.00 AAA 1,721,100
Pooled Revenue Bonds, Series 2007A, 4.500%, 5/15/37 -
MBIA Insured
650 University of California, Hospital Revenue Bonds, UCLA Medical 5/12 at 101.00 AAA 690,229
Center, Series 2004A, 5.500%, 5/15/18 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
2,650 Total Health Care 2,411,329
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.3% (1.4% OF TOTAL INVESTMENTS)
400 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 414,828
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
2,410 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AAA 2,479,986
Bonds, Series 2006K, 5.500%, 2/01/42 - AMBAC Insured
(Alternative Minimum Tax)
1,100 California Housing Finance Agency, Single Family Mortgage 8/08 at 100.75 AAA 1,105,291
Bonds, Series 1997C-2-II, 5.625%, 8/01/20 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,910 Total Housing/Single Family 4,000,105
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 22.5% (13.9% OF TOTAL INVESTMENTS)
1,460 ABC Unified School District, Los Angeles County, California, 8/10 at 101.00 A+ 1,551,834
General Obligation Bonds, Series 2000B, 5.750%, 8/01/16 -
FGIC Insured
1,425 Bassett Unified School District, Los Angeles County, California, 8/16 at 100.00 A 1,421,210
General Obligation Bonds, Series 2006B, 5.250%, 8/01/30 -
FGIC Insured
3,000 California State, General Obligation Bonds, Series 2006, 9/16 at 100.00 AAA 2,574,540
4.500%, 9/01/36 - FSA Insured
4,400 California, General Obligation Bonds, Series 2003, 2/13 at 100.00 AAA 4,158,924
5.000%, 2/01/31 - MBIA Insured
3,000 California, General Obligation Veterans Welfare Bonds, 6/08 at 100.00 AAA 2,985,000
Series 2001BZ, 5.375%, 12/01/24 - MBIA Insured
(Alternative Minimum Tax)
1,910 Fresno Unified School District, Fresno County, California, No Opt. Call AAA 2,020,761
General Obligation Bonds, Series 2002A, 6.000%, 8/01/26 -
MBIA Insured (4)
1,255 Los Angeles Community College District, Los Angeles County, 8/15 at 100.00 AAA 1,256,493
California, General Obligation Bonds, Series 2005A,
5.000%, 8/01/24 - FSA Insured
4,000 Los Angeles Unified School District, Los Angeles County, 7/17 at 100.00 AAA 3,714,880
California, General Obligation Bonds, Series 2007A,
4.500%, 7/01/24 - FSA Insured
27
NCL
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
Los Rios Community College District, Sacramento, El Dorado and
Yolo Counties, California, General Obligation Bonds, Series 2006C:
$ 2,110 5.000%, 8/01/21 - FSA Insured 8/14 at 102.00 AAA $ 2,149,119
3,250 5.000%, 8/01/22 - FSA Insured 8/14 at 102.00 AAA 3,287,733
3,395 5.000%, 8/01/23 - FSA Insured 8/14 at 102.00 AAA 3,411,092
1,270 Merced City School District, Merced County, California, 8/13 at 100.00 A 1,259,650
General Obligation Bonds, Series 2004, 5.000%, 8/01/22 -
FGIC Insured
305 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 297,948
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
2,500 Sacramento City Unified School District, Sacramento County, 7/15 at 100.00 Aaa 2,454,250
California, General Obligation Bonds, Series 2005,
5.000%, 7/01/27 - MBIA Insured
1,125 San Diego Unified School District, California, General Obligation No Opt. Call AA 527,456
Bonds, Election of 1998, Series 1999A, 0.000%, 7/01/21 -
FGIC Insured
2,000 San Francisco Community College District, California, General 6/10 at 102.00 Aa3 1,950,700
Obligation Bonds, Series 2002A, 5.000%, 6/15/26 - FGIC Insured
1,000 San Ramon Valley Unified School District, Contra Costa County, 8/14 at 100.00 AAA 1,000,500
California, General Obligation Bonds, Series 2004,
5.000%, 8/01/24 - FSA Insured
2,445 Washington Unified School District, Yolo County, California, 8/13 at 100.00 A 2,451,235
General Obligation Bonds, Series 2004A, 5.000%, 8/01/21 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
39,850 Total Tax Obligation/General 38,473,325
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 58.2% (36.0% OF TOTAL INVESTMENTS)
Anaheim Public Finance Authority, California, Subordinate Lease
Revenue Bonds, Public Improvement Project, Series 1997C:
5,130 0.000%, 9/01/18 - FSA Insured No Opt. Call AAA 3,031,676
8,000 0.000%, 9/01/21 - FSA Insured No Opt. Call AAA 3,875,040
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
1,535 5.000%, 12/01/20 - AMBAC Insured 12/13 at 100.00 AAA 1,561,832
1,780 5.000%, 12/01/23 - AMBAC Insured 12/13 at 100.00 AAA 1,776,013
3,725 California State Public Works Board, Lease Revenue Bonds, 1/16 at 100.00 AAA 3,932,259
Department of Corrections & Rehabilitation, Series 2005J,
5.000%, 1/01/17 - AMBAC Insured
380 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 354,871
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
6,000 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 5,988,360
Department of Public Services Facility Phase II, Series 2001,
5.000%, 1/01/21 - AMBAC Insured
8,280 Fontana Public Financing Authority, California, Tax Allocation 10/15 at 100.00 AAA 7,778,149
Revenue Bonds, North Fontana Redevelopment Project,
Series 2005A, 5.000%, 10/01/32 - AMBAC Insured
3,000 Galt Schools Joint Powers Authority, Sacramento County, 5/08 at 102.00 AAA 3,068,550
California, Revenue Refunding Bonds, High School and
Elementary School Facilities, Series 1997A, 5.875%, 11/01/24 -
MBIA Insured
4,025 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 3,732,262
Enhanced Tobacco Settlement Revenue Bonds, Drivers
Trust 2091, 8.252%, 6/01/45 - AGC Insured (IF)
4,500 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 3,276,405
Enhanced Tobacco Settlement Revenue Bonds, Residual
Series 2040, 3.530%, 6/01/45 - FGIC Insured (IF)
Golden State Tobacco Securitization Corporation, California,
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A:
20,110 5.000%, 6/01/35 - FGIC Insured (UB) 6/15 at 100.00 A 18,643,378
2,345 5.000%, 6/01/38 - FGIC Insured (UB) 6/15 at 100.00 A 2,159,980
1,255 Hesperia Public Financing Authority, California, Redevelopment 9/17 at 100.00 A3 1,135,185
and Housing Projects Tax Allocation Bonds, Series 2007A,
5.000%, 9/01/37 - XLCA Insured
1,700 Hesperia Unified School District, San Bernardino County, 2/17 at 100.00 AAA 1,556,843
California, Certificates of Participation, Capital Improvement,
Series 2007, 5.000%, 2/01/41 - AMBAC Insured
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,810 Kern County Board of Education, California, Certificates of 5/08 at 102.00 AAA $ 1,759,211
Participation Refunding, Series 1998A, 5.200%, 5/01/28 -
MBIA Insured
5,000 La Quinta Redevelopment Agency, California, Tax Allocation 3/08 at 102.00 AAA 4,858,800
Refunding Bonds, Redevelopment Project Area 1, Series 1998,
5.200%, 9/01/28 - AMBAC Insured
2,185 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 1,985,094
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
1,000 Los Angeles Community Redevelopment Agency, California, 12/14 at 100.00 AAA 1,016,600
Tax Allocation Bonds, Bunker Hill Project, Series 2004A,
5.000%, 12/01/20 - FSA Insured
1,250 Los Angeles County Metropolitan Transportation Authority, 7/13 at 100.00 AAA 1,272,463
California, Proposition A First Tier Senior Sales Tax Revenue
Bonds, Series 2003B, 5.000%, 7/01/19 - MBIA Insured
4,000 Los Angeles, California, Certificates of Participation, Municipal 6/13 at 100.00 AAA 3,682,360
Improvement Corporation, Series 2003AW, 5.000%, 6/01/33 -
AMBAC Insured
3,000 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AA- 2,673,420
Lease Revenue Bonds, Police Headquarters, Series 2006A,
4.750%, 1/01/31 - FGIC Insured
2,045 Moreno Valley Community Redevelopment Agency, California, 8/17 at 100.00 AAA 1,645,550
Tax Allocation Bonds, Trust 1028, 6.644%, 8/01/38 -
AMBAC Insured (IF)
4,140 Plumas County, California, Certificates of Participation, Capital 6/13 at 101.00 AAA 3,871,438
Improvement Program, Series 2003A, 5.000%, 6/01/28 -
AMBAC Insured
390 Poway Redevelopment Agency, California, Tax Allocation Refunding 12/10 at 102.00 AAA 397,972
Bonds, Paguay Redevelopment Project, Series 2000,
5.750%, 6/15/33 - MBIA Insured
325 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 301,230
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
1,000 Rocklin Unified School District, Placer County, California, 9/13 at 100.00 AAA 966,050
Special Tax Bonds, Community Facilities District 1, Series 2004,
5.000%, 9/01/25 - MBIA Insured
405 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 390,112
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
5,000 San Bernardino Joint Powers Financing Authority, California, 9/09 at 102.00 AAA 5,189,750
Certificates of Participation Refunding, Police Station Financing
Project, Series 1999, 5.500%, 9/01/20 - MBIA Insured
1,500 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/15 at 100.00 AAA 1,420,215
Merged Project Area, Series 2005A, 5.000%, 8/01/28 -
MBIA Insured
5,510 Sweetwater Union High School District Public Financing 9/15 at 100.00 AAA 5,311,475
Authority, California, Special Tax Revenue Bonds, Series 2005A,
5.000%, 9/01/28 - FSA Insured
1,020 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 954,649
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
111,345 Total Tax Obligation/Limited 99,567,192
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.3% (4.5% OF TOTAL INVESTMENTS)
6,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 65.32 AAA 3,823,820
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/18 - MBIA Insured
4,000 Orange County Transportation Authority, California, Toll Road 8/13 at 100.00 AAA 4,089,000
Revenue Bonds, 91 Express Lanes Project, Series 2003A,
5.000%, 8/15/18 - AMBAC Insured
5,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 4,633,500
Refunding Bonds, San Francisco International Airport,
Second Series 2001, Issue 27A, 5.250%, 5/01/31 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
15,500 Total Transportation 12,546,320
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 34.9% (21.6% OF TOTAL INVESTMENTS) (5)
1,380 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 1,485,211
University of the Pacific, Series 2000, 5.875%, 11/01/20
(Pre-refunded 11/01/10) - MBIA Insured
29
NCL
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (5) (continued)
California Infrastructure Economic Development Bank, Revenue
Bonds, Asian Art Museum of San Francisco, Series 2000:
$ 1,295 5.500%, 6/01/19 (Pre-refunded 6/01/10) - MBIA Insured 6/10 at 101.00 AAA $ 1,380,690
1,000 5.500%, 6/01/20 (Pre-refunded 6/01/10) - MBIA Insured 6/10 at 101.00 AAA 1,066,170
3,450 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 3,640,647
Department of Health Services, Series 1999A,
5.750%, 11/01/24 (Pre-refunded 11/01/09) - MBIA Insured
2,250 California State, General Obligation Bonds, Series 2004, 4/14 at 100.00 AAA 2,420,145
5.000%, 4/01/31 (Pre-refunded 4/01/14) - AMBAC Insured
2,500 California, Various Purpose General Obligation Bonds, 9/09 at 101.00 AAA 2,624,900
Series 1999, 5.500%, 9/01/24 (Pre-refunded 9/01/09) -
FSA Insured
California, Various Purpose General Obligation Bonds, Series 2000:
7,995 5.750%, 3/01/22 (Pre-refunded 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 8,545,616
1,900 5.750%, 3/01/27 (Pre-refunded 3/01/10) - MBIA Insured 3/10 at 101.00 AAA 2,030,853
2,260 Central Unified School District, Fresno County, California, 3/08 at 100.00 AAA 2,285,493
General Obligation Bonds, Series 1993, 5.625%, 3/01/18 -
AMBAC Insured (ETM)
3,000 Escondido Union High School District, San Diego County, California, 5/08 at 101.00 AAA 3,043,980
General Obligation Bonds, Series 1996, 5.700%, 11/01/10 -
MBIA Insured (ETM)
Fresno Unified School District, Fresno County, California, General
Obligation Bonds, Series 2001F:
1,065 5.125%, 8/01/21 - FSA Insured (ETM) 8/09 at 102.00 AAA 1,089,346
1,160 5.125%, 8/01/22 - FSA Insured (ETM) 8/09 at 102.00 AAA 1,175,811
1,220 5.125%, 8/01/23 - FSA Insured (ETM) 8/09 at 102.00 AAA 1,230,797
1,500 Hacienda La Puente Unified School District, Los Angeles County, 8/10 at 101.00 AAA 1,596,855
California, General Obligation Bonds, Series 2000A,
5.250%, 8/01/25 (Pre-refunded 8/01/10) - MBIA Insured
2,000 Kern County Board of Education, California, Certificates of 5/08 at 102.00 AAA 2,049,280
Participation Refunding, Series 1998A, 5.200%, 5/01/28
(Pre-refunded 5/01/08) - MBIA Insured
3,865 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101.00 AA (5) 4,108,109
California, Proposition C Second Senior Lien Sales Tax Revenue
Bonds, Series 2000A, 5.250%, 7/01/30 (Pre-refunded 7/01/10) -
FGIC Insured
Manteca Unified School District, San Joaquin County, California,
General Obligation Bonds, Series 2004:
1,000 5.250%, 8/01/21 (Pre-refunded 8/01/14) - FSA Insured 8/14 at 100.00 AAA 1,092,630
1,000 5.250%, 8/01/22 (Pre-refunded 8/01/14) - FSA Insured 8/14 at 100.00 AAA 1,092,630
2,500 Oakland, California, Insured Revenue Bonds, 1800 Harrison 1/10 at 100.00 AAA 2,648,075
Foundation - Kaiser Permanente, Series 1999A,
6.000%, 1/01/29 (Pre-refunded 1/01/10) - AMBAC Insured
1,610 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 Aaa 1,762,274
Refunding Bonds, Paguay Redevelopment Project, Series 2000,
5.750%, 6/15/33 (Pre-refunded 12/15/10) - MBIA Insured
3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 3,779,825
Series 2002II, 5.125%, 7/01/26 (Pre-refunded 7/01/12) -
FSA Insured
4,320 Riverside County, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 5,636,995
Program Single Family Mortgage Revenue Bonds, Series 1987B,
8.625%, 5/01/16 (Alternative Minimum Tax) (ETM)
1,690 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 1,809,432
Improvement Revenue Bonds, Solid Waste and Redevelopment
Projects, Series 1999, 5.800%, 12/01/19 (Pre-refunded
12/01/09) - AMBAC Insured
1,000 Sacramento County Sanitation District Financing Authority, 12/10 at 101.00 AAA 1,077,790
California, Revenue Bonds, Series 2000A, 5.500%, 12/01/20
(Pre-refunded 12/01/10) - AMBAC Insured
905 University of California, Hospital Revenue Bonds, UCLA Medical 5/12 at 101.00 AAA 992,206
Center, Series 2004A, 5.500%, 5/15/18 (Pre-refunded 5/15/12) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
55,365 Total U.S. Guaranteed 59,665,760
------------------------------------------------------------------------------------------------------------------------------------
30
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.1% (5.0% OF TOTAL INVESTMENTS)
$ 3,740 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA $ 3,748,265
Refunding Bonds, Southern California Edison Company,
Series 1999B, 5.450%, 9/01/29 - MBIA Insured
670 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 625,371
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
100 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 105,694
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, Revenue Bonds, 8/12 at 100.00 AAA 1,874,184
Series 2002, 5.250%, 8/01/27 - AMBAC Insured (Alternative
Minimum Tax)
Santa Clara, California, Subordinate Electric Revenue Bonds,
Series 2003A:
2,800 5.000%, 7/01/24 - MBIA Insured 7/13 at 100.00 AAA 2,726,640
5,000 5.000%, 7/01/28 - MBIA Insured 7/13 at 100.00 AAA 4,757,550
------------------------------------------------------------------------------------------------------------------------------------
14,260 Total Utilities 13,837,704
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 21.2% (13.1% OF TOTAL INVESTMENTS)
2,975 Chino Basin Regional Finance Authority, California, Sewerage 8/08 at 100.00 AAA 2,982,259
System Revenue Bonds, Inland Empire Utilities Agency,
Series 1994, 6.000%, 8/01/16 - AMBAC Insured
2,000 El Dorado Irrigation District, California, Water and Sewer 3/14 at 100.00 A 1,967,540
Certificates of Participation, Series 2004A, 5.000%, 3/01/21 -
FGIC Insured
750 Fortuna Public Finance Authority, California, Water Revenue 10/16 at 100.00 AAA 718,088
Bonds, Series 2006, 5.000%, 10/01/36 - FSA Insured
460 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 434,801
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
2,700 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 2,735,991
California, Senior Revenue Bonds, Capital Projects,
Series 2003A, 5.000%, 10/01/21 - FSA Insured
2,000 Los Angeles, California, Wastewater System Revenue Bonds, 6/15 at 100.00 AAA 1,787,880
Series 2005A, 4.500%, 6/01/29 - MBIA Insured
430 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 398,223
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
12,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AA 11,053,439
of Participation, Series 2003, 5.000%, 2/01/33 - FGIC Insured
1,520 San Buenaventura, California, Water Revenue Certificates 10/14 at 100.00 AAA 1,463,638
of Participation, Series 2004, 5.000%, 10/01/25 - AMBAC Insured
3,675 San Dieguito Water District, California, Water Revenue Bonds, 10/14 at 100.00 AA- 3,674,816
Series 2004, 5.000%, 10/01/23 - 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 AA+ 1,418,480
445 5.000%, 2/01/20 - FGIC Insured 2/14 at 100.00 AA+ 447,679
465 5.000%, 2/01/21 - FGIC Insured 2/14 at 100.00 AA+ 464,544
2,500 West Basin Municipal Water District, California, Revenue 8/13 at 100.00 AAA 2,408,525
Certificates of Participation, Series 2003A, 5.000%, 8/01/30 -
MBIA Insured
31
NCL
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
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 $ 1,932,454
2,530 5.000%, 10/01/33 - FGIC Insured 10/13 at 100.00 AAA 2,410,609
37,860 Total Water and Sewer 36,298,966
------------------------------------------------------------------------------------------------------------------------------------
$ 290,985 Total Investments (cost $282,997,557) - 161.8% 276,839,511
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (9.8%) (16,845,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.5% 6,129,059
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.5)% (6) (95,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $171,123,570
====================================================================================================================
As of February 29, 2008, all of the bonds in the Portfolio
of Investments, 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 unless
otherwise noted.
(2) 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.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax-exempt income
until such time it is formally determined that the interest
on the bonds should be treated as taxable.
(5) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(6) Preferred Shares, at Liquidation Value as a percentage of
total investments is (34.3)%.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
32
NCU
Nuveen California Premium Income Municipal Fund
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 7.4% (4.8% OF TOTAL INVESTMENTS)
$ 1,500 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 $ 1,405,920
Settlement Asset-Backed Bonds, Alameda County Tobacco
Asset Securitization Corporation, Series 2002, 5.750%, 6/01/29
290 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB 266,336
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
3,320 California Statewide Financing Authority, Tobacco Settlement 5/12 at 100.00 Baa3 3,129,830
Asset-Backed Bonds, Pooled Tobacco Securitization Program,
Series 2002A, 5.625%, 5/01/29
1,350 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 806,288
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
6,460 Total Consumer Staples 5,608,374
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 2.3% (1.5% OF TOTAL INVESTMENTS)
70 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 63,766
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
45 5.000%, 11/01/21 11/15 at 100.00 A2 43,322
60 5.000%, 11/01/25 11/15 at 100.00 A2 55,545
1,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 1,573,680
Series 2003A, 5.125%, 5/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
1,675 Total Education and Civic Organizations 1,736,313
------------------------------------------------------------------------------------------------------------------------------------
ENERGY - 0.5% (0.4% OF TOTAL INVESTMENTS)
500 Virgin Islands Public Finance Authority, Revenue Bonds, Refinery 1/15 at 100.00 BBB 412,790
Project Hovensa LLC, Series 2007, 4.700%, 7/01/22
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 23.5% (15.2% OF TOTAL INVESTMENTS)
4,705 California Health Facilities Financing Authority, Hospital Revenue 5/08 at 100.00 BB 4,507,765
Bonds, Downey Community Hospital, Series 1993,
5.750%, 5/15/15
620 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 571,931
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
155 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 137,170
Kaiser Permanante System, Series 2006, 5.000%, 4/01/37
3,525 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 3,240,180
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
1,500 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 1,471,980
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
685 California Municipal Financing Authority, Certificates of 2/17 at 100.00 Baa2 559,193
Participation, Community Hospitals of Central California,
Series 2007, 5.250%, 2/01/46
1,000 California Statewide Community Development Authority, Insured 10/17 at 100.00 A+ 889,350
Health Facility Revenue Bonds, Henry Mayo Newhall Memorial
Hospital, Series 2007A, 5.000%, 10/01/37
2,180 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 1,933,573
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
33
NCU
Nuveen California Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 730 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ $ 681,981
Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
1,000 California Statewide Community Development Authority, Revenue 4/17 at 100.00 A+ 852,090
Bonds, Kaiser Permanente System, Series 2007A,
4.750%, 4/01/33
2,100 California Statewide Community Development Authority, Revenue No Opt. Call AAA 2,126,019
Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
1,000 The Regents of the University of California, Medical Center 5/15 at 101.00 AAA 860,550
Pooled Revenue Bonds, Series 2007A, 4.500%, 5/15/37 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
19,200 Total Health Care 17,831,782
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.1% (1.4% OF TOTAL INVESTMENTS)
1,600 California Statewide Community Development Authority, Revenue 7/08 at 101.00 N/R 1,590,160
Refunding Bonds, Irvine Apartment Communities Development,
Series 1998A, 5.250%, 5/15/25 (Mandatory put 5/15/13)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.5% (0.2% OF TOTAL INVESTMENTS)
185 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 191,858
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
175 California Housing Finance Agency, Single Family Mortgage 8/08 at 101.00 AAA 175,929
Bonds II, Series 1997A-1, 6.000%, 8/01/20 - MBIA Insured
(Alternative Minimum Tax)
30 California Rural Home Mortgage Finance Authority, No Opt. Call AAA 30,606
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Bonds, Series 1996C, 7.500%, 8/01/27
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
390 Total Housing/Single Family 398,393
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.6% (0.4% OF TOTAL INVESTMENTS)
500 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 447,540
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 26.4% (17.1% OF TOTAL INVESTMENTS)
California, General Obligation Bonds, Series 2003:
1,000 5.250%, 11/01/19 - RAAI Insured 11/13 at 100.00 AA 1,017,720
1,500 5.000%, 2/01/31 - MBIA Insured 2/13 at 100.00 AAA 1,417,815
California, General Obligation Bonds, Series 2004:
1,750 5.000%, 4/01/22 4/14 at 100.00 A+ 1,701,648
1,400 5.200%, 4/01/26 4/14 at 100.00 A+ 1,364,706
4,000 California, General Obligation Veterans Welfare Bonds, 6/08 at 100.00 AA- 3,822,680
Series 1999BR, 5.300%, 12/01/29 (Alternative Minimum Tax)
6,000 Hartnell Community College District, California, General Obligation 6/16 at 100.00 AAA 5,868,899
Bonds, Series 2006B, 5.000%, 6/01/29 - FSA Insured
3,000 Pomona Unified School District, Los Angeles County, California, 8/11 at 103.00 AAA 3,332,790
General Obligation Refunding Bonds, Series 1997A,
6.150%, 8/01/15 - MBIA Insured
15 Riverside Community College District, California, General 8/14 at 100.00 AAA 15,319
Obligation Bonds, Series 2004A, 5.250%, 8/01/22 -
MBIA Insured
135 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 131,879
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
1,355 San Jose-Evergreen Community College District, 9/15 at 100.00 AAA 1,336,342
Santa Clara County, California, General Obligation Bonds,
Series 2005A, 5.000%, 9/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
20,155 Total Tax Obligation/General 20,009,798
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 46.6% (30.1% OF TOTAL INVESTMENTS)
1,000 Bell Community Redevelopment Agency, California, Tax Allocation 10/13 at 100.00 AA 978,060
Bonds, Bell Project Area, Series 2003, 5.625%, 10/01/33 -
RAAI Insured
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
California Infrastructure Economic Development Bank, Revenue
Bonds, North County Center for Self-Sufficiency Corporation,
Series 2004:
$ 1,695 5.000%, 12/01/22 - AMBAC Insured 12/13 at 100.00 AAA $ 1,700,746
1,865 5.000%, 12/01/24 - AMBAC Insured 12/13 at 100.00 AAA 1,844,019
5,920 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 6,155,201
Department of Veterans Affairs, Southern California Veterans
Home - Chula Vista Facility, Series 1999A, 5.600%, 11/01/19 -
AMBAC Insured
905 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 953,110
5.000%, 7/01/15
165 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 154,089
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
500 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 460,465
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
1,450 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 1,055,731
Enhanced Asset Backed Settlement Revenue Bonds, Trust
Series 1500, 7.910%, 6/01/45 - AMBAC Insured (IF)
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
80 5.000%, 9/01/26 9/16 at 100.00 N/R 70,198
185 5.125%, 9/01/36 9/16 at 100.00 N/R 157,352
2,500 Kern County Board of Education, California, Certificates of 6/16 at 100.00 AAA 2,352,475
Participation, Series 2006A, 5.000%, 6/01/31 - MBIA Insured
3,500 Livermore Redevelopment Agency, California, Tax Allocation 8/11 at 100.00 AAA 3,250,520
Revenue Bonds, Livermore Redevelopment Project Area,
Series 2001A, 5.000%, 8/01/26 - MBIA Insured
310 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 281,638
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
2,000 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AA- 1,782,280
Lease Revenue Bonds, Police Headquarters, Series 2006A,
4.750%, 1/01/31 - FGIC Insured
3,230 Murrieta Redevelopment Agency, California, Tax Allocation Bonds, 8/15 at 100.00 AAA 3,032,938
Series 2005, 5.000%, 8/01/35 - MBIA Insured
1,000 Poway, California, Community Facilities District 88-1, Special 8/08 at 102.00 N/R 1,032,570
Tax Refunding Bonds, Parkway Business Centre, Series 1998,
6.500%, 8/15/09
155 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 143,663
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
190 Roseville, California, Certificates of Participation, 8/13 at 100.00 AAA 183,016
Public Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
1,500 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 1,607,160
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 - MBIA Insured
3,000 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AA- 3,206,580
Refunding Bonds, Series 1993B, 5.400%, 11/01/20
San Marcos Public Facilities Authority, California, Revenue
Refunding Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101.00 Baa3 1,514,400
1,000 5.800%, 9/01/27 9/08 at 101.00 Baa3 978,870
325 San Mateo Union High School District, San Mateo County, 12/17 at 100.00 AAA 299,647
California, Certificates of Participation, Phase 1, Series 2007A,
5.000%, 12/15/30 - AMBAC Insured
2,050 Santa Barbara County, California, Certificates of Participation, 12/11 at 102.00 AAA 2,114,985
Series 2001, 5.250%, 12/01/19 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
36,025 Total Tax Obligation/Limited 35,309,713
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.2% (2.0% OF TOTAL INVESTMENTS)
780 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 752,021
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
35
NCU
Nuveen California Premium Income Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ 2,000 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- $ 1,645,420
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
------------------------------------------------------------------------------------------------------------------------------------
2,780 Total Transportation 2,397,441
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 22.3% (14.5% OF TOTAL INVESTMENTS) (4)
2,250 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 2,437,335
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
1,200 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) 1,279,356
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
3,000 California Infrastructure Economic Development Bank, First Lien No Opt. Call AAA 3,081,870
Revenue Bonds, San Francisco Bay Area Toll Bridge, Series 2003A,
5.000%, 7/01/22 - FSA Insured (ETM)
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B:
1,000 5.625%, 6/01/33 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 1,084,650
1,000 5.500%, 6/01/33 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 1,078,750
3,495 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AA (4) 3,809,550
of Participation, Series 2003, 5.250%, 2/01/21
(Pre-refunded 8/01/13) - FGIC Insured
2,000 Puerto Rico, General Obligation and Public Improvement Bonds, 7/10 at 100.00 AAA 2,092,540
Series 2000, 5.750%, 7/01/21 (Pre-refunded 7/01/10) -
MBIA Insured
2,000 Vista, California, Mobile Home Park Revenue Bonds, Vista 3/24 at 100.00 N/R (4) 2,076,100
Manor Mobile Home Park Project, Series 1999A, 5.750%, 3/15/29
(Pre-refunded 3/15/24)
------------------------------------------------------------------------------------------------------------------------------------
15,945 Total U.S. Guaranteed 16,940,151
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.0% (5.2% OF TOTAL INVESTMENTS)
890 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 799,167
Purchase Revenue Bonds, Series 2007A, 5.500%, 11/15/37
275 Los Angeles Department of Water and Power, California, Power 7/13 at 100.00 AAA 276,966
System Revenue Bonds, Series 2003A-2, 5.000%, 7/01/21 -
MBIA Insured
295 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 275,350
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
4,580 Sacramento Municipal Utility District, California, Electric Revenue 8/12 at 100.00 AAA 4,724,086
Refunding Bonds, Series 2002Q, 5.250%, 8/15/20 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,040 Total Utilities 6,075,569
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.1% (7.2% OF TOTAL INVESTMENTS)
1,125 Burbank, California, Wastewater System Revenue Bonds, 6/14 at 100.00 AAA 1,124,910
Series 2004A, 5.000%, 6/01/23 - AMBAC Insured
5,000 Culver City, California, Wastewater Facilities Revenue Refunding 9/09 at 102.00 A+ 5,040,949
Bonds, Series 1999A, 5.700%, 9/01/29 - FGIC Insured
205 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 193,770
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
370 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 350,549
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 1,795 Woodbridge Irrigation District, California, Certificates of 7/13 at 100.00 BBB+ $ 1,683,137
Participation, Water Systems Project, Series 2003,
5.500%, 7/01/33
------------------------------------------------------------------------------------------------------------------------------------
8,495 Total Water and Sewer 8,393,315
------------------------------------------------------------------------------------------------------------------------------------
$ 119,765 Total Investments (cost $119,762,657) - 154.5% 117,151,339
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.1%) (2,352,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 5.3% 4,017,311
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.7)% (5) (43,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 75,816,650
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (36.7)%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
37
NAC
Nuveen California Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 6.9% (4.3% OF TOTAL INVESTMENTS)
$ 1,250 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 1,148,000
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
7,500 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 6,704,025
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1, 5.750%, 6/01/47
24,265 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 14,492,271
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
33,015 Total Consumer Staples 22,344,296
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.2% (3.2% OF TOTAL INVESTMENTS)
290 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 264,173
University of Redlands, Series 2005A, 5.000%, 10/01/35
10,000 California Educational Facilities Authority, Revenue Bonds, 10/17 at 100.00 AA+ 8,788,100
University of Southern California, Series 2007A, 4.500%, 10/01/33
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
200 5.000%, 11/01/21 11/15 at 100.00 A2 192,544
265 5.000%, 11/01/25 11/15 at 100.00 A2 245,324
615 California Statewide Community Development Authority, 10/13 at 100.00 N/R 609,317
Revenue Bonds, Notre Dame de Namur University, Series 2003,
6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 100.00 AAA 3,179,130
Refunding Bonds, Long Beach Aquarium of the South Pacific,
Series 2001, 5.500%, 11/01/17 - AMBAC Insured
3,500 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 3,671,920
Series 2003A, 5.125%, 5/15/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
17,870 Total Education and Civic Organizations 16,950,508
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 18.6% (11.4% OF TOTAL INVESTMENTS)
2,160 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 2,191,493
Revenue Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/15
California Health Facilities Financing Authority, Revenue Bonds,
Kaiser Permanante System, Series 2006:
660 5.000%, 4/01/37 4/16 at 100.00 A+ 584,080
10,140 5.250%, 3/01/45 3/16 at 100.00 A+ 9,280,027
14,895 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 13,691,484
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
10,000 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AAA 9,185,000
Sutter Health, Series 2007A, 5.000%, 11/15/42 - MBIA Insured
1,535 California Statewide Communities Development Authority, 7/17 at 100.00 N/R 1,259,928
Revenue Bonds, ValleyCare Health System, Series 2007A,
5.125%, 7/15/31
9,280 California Statewide Community Development Authority, 3/16 at 100.00 A+ 8,230,989
Revenue Bonds, Kaiser Permanante System, Series 2006,
5.000%, 3/01/41
3,095 California Statewide Community Development Authority, 8/16 at 100.00 A+ 2,891,411
Revenue Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 10,500 Duarte, California, Certificates of Participation, City of Hope 4/09 at 101.00 A- $ 9,839,340
National Medical Center, Series 1999A, 5.250%, 4/01/31
3,690 Rancho Mirage Joint Powers Financing Authority, California, 7/17 at 100.00 A3 3,263,399
Revenue Bonds, Eisenhower Medical Center, Series 2007A,
5.000%, 7/01/38
------------------------------------------------------------------------------------------------------------------------------------
65,955 Total Health Care 60,417,151
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.3% (3.9% OF TOTAL INVESTMENTS)
7,475 California Housing Finance Agency, Multifamily Housing Revenue No Opt. Call AAA 6,977,474
Bonds III, Series 2003A Select Auction Rate Securities,
6.000%, 2/01/38 - MBIA Insured (Alternative Minimum Tax) (4)
5,095 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 5,404,063
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
5,000 Contra Costa County, California, Multifamily Housing Revenue 6/09 at 102.00 N/R 5,015,900
Bonds, Delta View Apartments Project, Series 1999C,
6.750%, 12/01/30 (Alternative Minimum Tax)
320 Independent Cities Lease Finance Authority, California, 5/16 at 100.00 N/R 271,267
Mobile Home Park Revenue Bonds, San Juan Mobile Estates,
Series 2006B, 5.850%, 5/15/41
1,725 Rohnert Park Finance Authority, California, Senior Lien Revenue 9/13 at 100.00 A+ 1,620,258
Bonds, Rancho Feliz Mobile Home Park, Series 2003A,
5.750%, 9/15/38
1,120 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R 1,091,350
Revenue Bonds, Rancho Feliz Mobile Home Park, Series 2003B,
6.625%, 9/15/38
------------------------------------------------------------------------------------------------------------------------------------
20,735 Total Housing/Multifamily 20,380,312
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS)
775 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 803,729
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.8% (1.1% OF TOTAL INVESTMENTS)
2,000 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,790,160
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
5,120 California Statewide Communities Development Authority, No Opt. Call BB 4,200,909
Revenue Bonds, EnerTech Regional Biosolids Project,
Series 2007A, 5.500%, 12/01/33 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,120 Total Industrials 5,991,069
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.5% (1.5% OF TOTAL INVESTMENTS)
8,500 Riverside County Public Financing Authority, California, 5/09 at 101.00 BBB- 8,087,410
Certificates of Participation, Air Force Village West,
Series 1999, 5.800%, 5/15/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 14.1% (8.7% OF TOTAL INVESTMENTS)
2,000 California, General Obligation Bonds, Series 2003, 11/13 at 100.00 AA 2,035,440
5.250%, 11/01/19 - RAAI Insured
California, General Obligation Bonds, Series 2004:
5,000 5.125%, 4/01/23 4/14 at 100.00 A+ 4,869,150
4,150 5.125%, 4/01/25 4/14 at 100.00 A+ 4,014,503
4,435 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 4,930,922
6.000%, 4/01/16 - AMBAC Insured
5,000 Coast Community College District, Orange County, California, 8/16 at 100.00 AAA 5,006,600
General Obligation Bonds, Series 2006B, 5.000%, 8/01/24 -
FSA Insured
5,000 Fresno Unified School District, Fresno County, California, No Opt. Call AAA 5,289,950
General Obligation Bonds, Series 2002A, 6.000%, 8/01/26 -
MBIA Insured (5)
5,150 Hacienda La Puente Unified School District Facilities Financing No Opt. Call AAA 5,058,588
Authority, California, General Obligation Revenue Bonds,
Series 2007, 5.000%, 8/01/26 - FSA Insured
5,210 Oak Valley Hospital District, Stanislaus County, California, General 7/14 at 101.00 A3 4,892,398
Obligation Bonds, Series 2005, 5.000%, 7/01/35 - FGIC Insured
575 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 561,706
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
39
NAC
Nuveen California Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 5,000 San Diego Unified School District, San Diego County, California, 7/13 at 101.00 AAA $ 5,451,300
General Obligation Bonds, Series 2003E, 5.250%, 7/01/20 -
FSA Insured
3,605 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 AAA 3,644,006
California, General Obligation Bonds, Series 2003B,
5.000%, 8/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
45,125 Total Tax Obligation/General 45,754,563
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 36.7% (22.7% OF TOTAL INVESTMENTS)
Beaumont Financing Authority, California, Local Agency Revenue
Bonds, Series 2004D:
1,000 5.500%, 9/01/24 9/14 at 102.00 N/R 898,270
615 5.800%, 9/01/35 9/14 at 102.00 N/R 544,121
1,990 Borrego Water District, California, Community Facilities 8/17 at 102.00 N/R 1,786,861
District 2007-1 Montesoro, Special Tax Bonds, Series 2007,
5.750%, 8/01/25
1,990 Brentwood Infrastructure Financing Authority, California, 9/12 at 100.00 AAA 1,998,318
Infrastructure Revenue Refunding Bonds, Series 2002A,
5.125%, 9/02/24 - FSA Insured
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 1,173,037
1,165 5.375%, 11/01/19 - FSA Insured 11/11 at 100.00 AAA 1,230,624
2,000 Capistrano Unified School District, Orange County, California, 9/13 at 100.00 N/R 1,910,920
Special Tax Bonds, Community Facilities District 90-2 -
Talega, Series 2003, 6.000%, 9/01/33
710 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 663,048
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,225 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 1,128,139
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
3,490 Fontana, California, Senior Special Tax Refunding Bonds, 9/08 at 102.00 AAA 3,593,374
Heritage Village Community Facilities District 2, Series 1998A,
5.250%, 9/01/17 - MBIA Insured
1,125 Fontana, California, Special Tax Bonds, Sierra Community Facilities 9/14 at 100.00 N/R 1,013,231
District 22, Series 2004, 6.000%, 9/01/34
3,980 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 4,073,848
Financing Project, Series 2002A, 5.500%, 3/01/22 -
AMBAC Insured
Golden State Tobacco Securitization Corporation, California,
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A:
37,695 5.000%, 6/01/35 - FGIC Insured (UB) 6/15 at 100.00 A 34,945,904
4,395 5.000%, 6/01/38 - FGIC Insured (UB) 6/15 at 100.00 A 4,048,235
2,850 Hesperia Community Redevelopment Agency, California, 9/15 at 100.00 A3 2,604,045
Tax Allocation Bonds, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
4,500 Inglewood Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 4,575,600
Refunding Bonds, Merged Area Redevelopment Project,
Series 1998A, 5.250%, 5/01/23 - AMBAC Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
345 5.000%, 9/01/26 9/16 at 100.00 N/R 302,727
795 5.125%, 9/01/36 9/16 at 100.00 N/R 676,187
675 Lammersville School District, San Joaquin County, California, 9/16 at 100.00 N/R 549,794
Community Facilities District 2002, Mountain House Special
Tax Bonds, Series 2006, 5.125%, 9/01/35
2,000 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 2,026,600
Tax Bonds, Community Facilities District 1 of Sycamore
Creek, Series 2003, 6.500%, 9/01/24
1,000 Lindsay Redevelopment Agency, California, Project 1 Tax 8/17 at 100.00 AA 854,020
Allocation Bonds, Series 2007, 5.000%, 8/01/37 - RAAI Insured
1,290 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 1,171,978
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
5,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 4,967,900
California, Proposition C Second Senior Lien Sales Tax
Revenue Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
1,530 Moreno Valley Unified School District, Riverside County, 3/14 at 100.00 AAA 1,516,689
California, Certificates of Participation, Series 2005,
5.000%, 3/01/24 - FSA Insured
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 3,500 Murrieta Redevelopment Agency, California, Tax Allocation 8/17 at 100.00 AAA $ 3,275,125
Bonds, Series 2007A, 5.000%, 8/01/37 - MBIA Insured
9,200 Norco Redevelopment Agency, California, Tax Allocation 3/11 at 102.00 AAA 9,315,644
Refunding Bonds, Project Area 1, Series 2001,
5.000%, 3/01/19 - MBIA Insured
North Natomas Community Facilities District 4, Sacramento,
California, Special Tax Bonds, Series 2006D:
545 5.000%, 9/01/26 9/14 at 102.00 N/R 459,544
250 5.000%, 9/01/33 9/14 at 102.00 N/R 201,615
3,290 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 A 3,497,303
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/16 - FGIC Insured
5,600 Palm Springs Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 5,599,608
Refunding Bonds, Convention Center Project, Series 2001A,
5.000%, 11/01/22 - MBIA Insured
1,000 Palmdale Community Redevelopment Agency, California, Tax 12/14 at 100.00 AAA 948,990
Allocation Bonds, Merged Redevelopment Project Areas,
Series 2004, 5.000%, 12/01/24 - AMBAC Insured
1,570 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 1,602,091
Refunding Bonds, Paguay Redevelopment Project, Series 2000,
5.750%, 6/15/33 - MBIA Insured
620 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 574,653
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
1,860 Riverside Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 1,850,254
Refunding Bonds, Merged Project Areas, Series 2003,
5.250%, 8/01/22 - MBIA Insured
770 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 741,695
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
2,500 Sacramento City Financing Authority, California, Lease Revenue No Opt. Call AAA 2,607,425
Refunding Bonds, Series 1993A, 5.400%, 11/01/20 -
AMBAC Insured
1,150 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R 1,084,968
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
2,695 San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,773,559
Refunding Bonds, Civic Center Project, Series 2002B,
5.250%, 6/01/19 - AMBAC Insured
1,000 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 935,930
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
2,810 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 2,954,434
Bonds, Community Facilities District 01-1, Series 2003B,
7.000%, 9/01/38
2,000 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 1,796,860
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
1,350 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 1,238,801
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
124,185 Total Tax Obligation/Limited 119,711,969
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 19.6% (12.1% OF TOTAL INVESTMENTS)
1,430 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 1,378,706
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
8,150 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 101.00 BBB- 7,691,807
Toll Road Revenue Refunding Bonds, Series 1999,
5.750%, 1/15/40
8,515 Los Angeles Harbors Department, California, Revenue Refunding 8/11 at 100.00 AAA 8,617,180
Bonds, Series 2001B, 5.500%, 8/01/18 - AMBAC Insured
(Alternative Minimum Tax)
120 Palm Springs Financing Authority, California, Palm Springs 7/14 at 102.00 N/R 111,184
International Airport Revenue Bonds, Series 2006,
5.450%, 7/01/20 (Alternative Minimum Tax)
23,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 A+ 22,634,070
5.750%, 11/01/29 - FGIC Insured (Alternative Minimum Tax)
23,275 San Francisco Airports Commission, California, Revenue 5/10 at 101.00 AAA 23,366,934
Bonds, San Francisco International Airport, Second Series 2000,
Issue 24A, 5.750%, 5/01/30 - FSA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
64,490 Total Transportation 63,799,881
------------------------------------------------------------------------------------------------------------------------------------
41
NAC
Nuveen California Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 32.4% (20.0% OF TOTAL INVESTMENTS) (6)
$ 9,750 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa $10,561,785
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
10,500 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (6) 11,194,365
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
8,400 California Health Facilities Financing Authority, Revenue Bonds, 10/08 at 101.00 AAA 8,597,820
Kaiser Permanente System, Series 1998B,
5.250%, 10/01/14 (ETM)
740 California Statewide Community Development Authority, Revenue 10/15 at 100.00 BBB- (6) 763,451
Bonds, Thomas Jefferson School of Law, Series 2005A,
4.875%, 10/01/31 (Pre-refunded 10/01/15)
8,000 Central California Joint Powers Health Finance Authority, 2/10 at 101.00 AAA 8,558,960
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000, 6.000%, 2/01/30
(Pre-refunded 2/01/10)
5,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,695,820
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33 (Pre-refunded 6/01/13)
1,940 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (6) 2,249,740
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25 (Pre-refunded 9/01/13)
1,335 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (6) 1,515,092
Community Facilities District 03-1, Series 2004,
6.000%, 9/01/34 (Pre-refunded 9/01/13)
10,845 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,622,695
Obligation Bonds, Series 2002E, 5.000%, 7/01/19
(Pre-refunded 7/01/12) - MBIA Insured
Northern California Tobacco Securitization Authority, Tobacco
Settlement Asset-Backed Bonds, Series 2001A:
2,500 5.250%, 6/01/31 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 2,661,275
4,500 5.375%, 6/01/41 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 4,807,575
5,840 Orange County Water District, California, Revenue Certificates 8/09 at 101.00 AA+ (6) 5,975,138
of Participation, Series 1999A, 5.375%, 8/15/29 (ETM)
6,530 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 Aaa 7,147,607
Refunding Bonds, Paguay Redevelopment Project, Series 2000,
5.750%, 6/15/33 (Pre-refunded 12/15/10) - MBIA Insured
4,000 Puerto Rico, General Obligation and Public Improvement Bonds, 7/10 at 100.00 AAA 4,185,080
Series 2000, 5.750%, 7/01/16 (Pre-refunded 7/01/10) -
MBIA Insured
1,590 San Marcos Public Facilities Authority, California, Special Tax 9/09 at 102.00 N/R (6) 1,692,189
Bonds, Community Facilities District 99-1, Series 2003B,
6.000%, 9/01/24 (Pre-refunded 9/01/09)
2,860 Tobacco Securitization Authority of Southern California, Tobacco 6/12 at 100.00 AAA 3,080,992
Settlement Asset-Backed Bonds, San Diego County Tobacco
Asset Securitization Corporation, Senior Series 2001A, 5.250%,
6/01/27 (Pre-refunded 6/01/12)
700 University of California, Certificates of Participation, San Diego 1/10 at 101.00 Aa1 (6) 738,773
and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/22 (Pre-refunded 1/01/10)
11,305 University of California, Revenue Bonds, Multi-Purpose Projects, 9/10 at 101.00 AA (6) 11,986,126
Series 2002O, 5.000%, 9/01/21 (Pre-refunded 9/01/10) -
FGIC Insured
2,500 Whittier, California, Health Facility Revenue Bonds, Presbyterian 6/12 at 101.00 A+ (6) 2,755,700
Intercommunity Hospital, Series 2002, 5.600%, 6/01/22
(Pre-refunded 6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
99,035 Total U.S. Guaranteed 105,790,183
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 9.0% (5.5% OF TOTAL INVESTMENTS)
3,630 Imperial Irrigation District, California, Certificates of 11/13 at 100.00 AAA 3,661,581
Participation, Electric System Revenue Bonds, Series 2003,
5.250%, 11/01/23 - FSA Insured
3,775 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 3,161,147
Purchase Revenue Bonds, Series 2007A, 5.000%, 11/15/35
7,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 7,181,790
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
8,370 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 8,703,879
Power System Revenue Bonds, Series 2001A-2,
5.375%, 7/01/19 - MBIA Insured
5,500 Los Angeles Department of Water and Power, California, 7/15 at 100.00 AAA 5,330,215
Power System Revenue Bonds, Series 2005A-1,
5.000%, 7/01/31 - FSA Insured
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,270 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- $ 1,185,405
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
29,545 Total Utilities 29,224,017
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.8% (5.4% OF TOTAL INVESTMENTS)
9,165 California Department of Water Resources, Water System 12/11 at 100.00 AAA 9,324,654
Revenue Bonds, Central Valley Project, Series 2001W,
5.250%, 12/01/22 - FSA Insured
875 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 827,068
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
2,500 Indio Water Authority, California, Water Revenue Bonds, 4/16 at 100.00 AAA 2,397,450
Series 2006, 5.000%, 4/01/31 - AMBAC Insured
835 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 773,294
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
8,250 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 7,855,733
Series 2001A, 6.250%, 12/01/32
2,250 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 2,159,213
California, Revenue Bonds, Series 2006, 5.000%, 12/01/31 -
FGIC Insured
5,115 San Francisco City and County Public Utilities Commission, 11/12 at 100.00 AAA 5,213,822
California, Water Revenue Bonds, Series 2002A,
5.000%, 11/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
28,990 Total Water and Sewer 28,551,234
------------------------------------------------------------------------------------------------------------------------------------
$ 545,340 Total Investments (cost $541,177,540) - 162.1% 527,806,322
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (12.7%) (41,488,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.4% 14,196,000
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.8)% (7) (175,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $325,514,322
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Investment valued at fair value using methods determined in
good faith by, or at the discretion of, the Board of
Directors/Trustees.
(5) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax-exempt income
until such time it is formally determined that the interest
on the bonds should be treated as taxable.
(6) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(7) Preferred Shares, at Liquidation Value as a percentage of
total investments is (33.2)%.
N/R Not rated.
(ETM) Escrowed to maturity.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
43
NVX
Nuveen California Dividend Advantage Municipal Fund 2
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 8.0% (5.3% OF TOTAL INVESTMENTS)
$ 775 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 711,760
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
4,625 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 4,226,695
Settlement Asset-Backed Bonds, Stanislaus County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
4,000 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 3,575,480
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1, 5.750%, 6/01/47
13,480 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 8,050,930
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
22,880 Total Consumer Staples 16,564,865
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.7% (8.2% OF TOTAL INVESTMENTS)
2,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 1,999,980
Stanford University, Series 2001Q, 5.250%, 12/01/32
180 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 163,969
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
125 5.000%, 11/01/21 11/15 at 100.00 A2 120,340
165 5.000%, 11/01/25 11/15 at 100.00 A2 152,749
6,375 California Educational Facilities Authority, Student Loan Revenue 3/08 at 102.00 Aaa 6,431,291
Bonds, Cal Loan Program, Series 2001A, 5.400%, 3/01/21 -
MBIA Insured (Alternative Minimum Tax)
10,570 California State Public Works Board, Lease Revenue Bonds, 10/12 at 100.00 AAA 11,179,782
University of California, UCLA Replacement Hospital Project,
Series 2002A, 5.375%, 10/01/18 - FSA Insured
620 California Statewide Community Development Authority, Revenue 10/13 at 100.00 N/R 614,271
Bonds, Notre Dame de Namur University, Series 2003,
6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 2,858,460
Refunding Bonds, Long Beach Aquarium of the South Pacific,
Series 2001, 5.250%, 11/01/30 - AMBAC Insured
3,000 University of California, General Revenue Bonds, Series 2006J, 5/15 at 101.00 AAA 2,613,240
4.500%, 5/15/35 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
26,035 Total Education and Civic Organizations 26,134,082
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 18.8% (12.1% OF TOTAL INVESTMENTS)
2,000 California Health Facilities Financing Authority, Revenue Bonds, 4/12 at 100.00 BBB+ 2,014,260
Casa Colina Inc., Series 2001, 6.000%, 4/01/22
1,640 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 1,512,851
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
415 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 367,263
Kaiser Permanante System, Series 2006, 5.000%, 4/01/37
9,260 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 8,511,792
Sutter Health, Series 2007A, 5.250%, 11/15/46 (UB)
500 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 490,660
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 960 California Statewide Communities Development Authority, 7/17 at 100.00 N/R $ 787,968
Revenue Bonds, ValleyCare Health System, Series 2007A,
5.125%, 7/15/31
2,185 California Statewide Community Development Authority, Health No Opt. Call A+ 2,339,851
Facility Revenue Refunding Bonds, Memorial Health Services,
Series 2003A, 6.000%, 10/01/11
2,500 California Statewide Community Development Authority, Hospital 6/13 at 100.00 AAA 2,600,125
Revenue Bonds, Monterey Peninsula Hospital, Series 2003B,
5.250%, 6/01/18 - FSA Insured
7,775 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 6,896,114
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
1,925 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 1,798,374
Bonds, Kaiser Permanente System, Series 2001C, 5.250%, 8/01/31
8,305 Rancho Mirage Joint Powers Financing Authority, California, 7/17 at 100.00 A3 7,344,859
Revenue Bonds, Eisenhower Medical Center, Series 2007A,
5.000%, 7/01/38
4,000 Santa Clara County Financing Authority, California, Auction Rate No Opt. Call AAA 4,000,000
Revenue Bonds, El Camino Hospital, Series 2007B,
6.000%, 2/01/41 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
41,465 Total Health Care 38,664,117
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.1% (4.6% OF TOTAL INVESTMENTS)
3,395 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 3,600,941
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
5,962 California Statewide Community Development Authority, 6/11 at 102.00 AAA 6,187,542
Multifamily Housing Revenue Refunding Bonds, Claremont
Village Apartments, Series 2001D, 5.500%, 6/01/31
(Mandatory put 6/01/16) (Alternative Minimum Tax)
205 Independent Cities Lease Finance Authority, California, Mobile 5/16 at 100.00 N/R 173,781
Home Park Revenue Bonds, San Juan Mobile Estates,
Series 2006B, 5.850%, 5/15/41
1,055 Rohnert Park Finance Authority, California, Senior Lien Revenue 9/13 at 100.00 A+ 990,940
Bonds, Rancho Feliz Mobile Home Park, Series 2003A,
5.750%, 9/15/38
700 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R 682,094
Revenue Bonds, Rancho Feliz Mobile Home Park, Series 2003B,
6.625%, 9/15/38
3,045 Yucaipa Redevelopment Agency, California, Mobile Home Park 5/11 at 102.00 N/R 3,082,484
Revenue Bonds, Rancho del Sol and Grandview, Series 2001A,
6.750%, 5/15/36
------------------------------------------------------------------------------------------------------------------------------------
14,362 Total Housing/Multifamily 14,717,782
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.1% (0.7% OF TOTAL INVESTMENTS)
480 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 497,794
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
1,925 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AA- 1,090,378
Bonds, Trust 1021, 7.216%, 8/01/31 (Alternative Minimum Tax) (IF)
520 California Rural Home Mortgage Finance Authority, 6/11 at 102.00 AAA 530,426
Mortgage-Backed Securities Program Single Family Mortgage
Revenue Bonds, Series 2001A, 5.650%, 12/01/31
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,925 Total Housing/Single Family 2,118,598
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.9% (1.2% OF TOTAL INVESTMENTS)
1,250 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,118,850
Disposal Revenue Bonds, Waste Management Inc., Series 2002A,
5.000%, 1/01/22 (Alternative Minimum Tax)
3,175 California Statewide Communities Development Authority, No Opt. Call BB 2,605,056
Revenue Bonds, EnerTech Regional Biosolids Project, Series 2007A,
5.500%, 12/01/33 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
4,425 Total Industrials 3,723,906
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,550 California Health Facilities Financing Authority, Cal-Mortgage 1/13 at 100.00 A+ 1,496,990
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
45
NVX
Nuveen California Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
$ 3,750 California Statewide Communities Development Authority, 12/17 at 100.00 Baa1 $ 3,283,688
Revenue Bonds, Inland Regional Center Project, Series 2007,
5.375%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
5,300 Total Long-Term Care 4,780,678
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 6.8% (4.4% OF TOTAL INVESTMENTS)
3,335 California State, General Obligation Bonds, RITES 1502, 12/15 at 100.00 AA- 1,584,692
6.862%, 12/01/32 (Alternative Minimum Tax) (IF)
3,615 Colton Joint Unified School District, San Bernardino County, 8/12 at 102.00 A 3,697,169
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 AA 3,037,514
3,300 5.000%, 8/01/22 - FGIC Insured 8/12 at 100.00 AA 3,315,444
2,000 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call AAA 2,056,740
Series 2001A, 5.500%, 7/01/20 - MBIA Insured
355 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 346,792
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
15,610 Total Tax Obligation/General 14,038,351
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.8% (14.7% OF TOTAL INVESTMENTS)
Beaumont Financing Authority, California, Local Agency Revenue
Bonds, Series 2004D:
650 5.500%, 9/01/24 9/14 at 102.00 N/R 583,876
385 5.800%, 9/01/35 9/14 at 102.00 N/R 340,629
1,240 Borrego Water District, California, Community Facilities 8/17 at 102.00 N/R 1,113,421
District 2007-1 Montesoro, Special Tax Bonds, Series 2007,
5.750%, 8/01/25
4,900 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A 5,239,129
Department of Corrections, Series 2003C, 5.500%, 6/01/16
2,105 California, Economic Recovery Revenue Bonds, Series 2004A, 7/14 at 100.00 AA+ 2,216,902
5.000%, 7/01/15
1,200 Capistrano Unified School District, Orange County, California, 9/13 at 100.00 N/R 1,146,552
Special Tax Bonds, Community Facilities District 90-2 - Talega,
Series 2003, 6.000%, 9/01/33
435 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 406,233
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
4,845 Encinitas Public Financing Authority, California, Lease Revenue 4/08 at 102.00 AAA 4,780,949
Bonds, Acquisition Project, Series 2001A, 5.250%, 4/01/31 -
MBIA Insured
750 Fontana, California, Special Tax Bonds, Sierra Community Facilities 9/14 at 100.00 N/R 675,488
District 22, Series 2004, 6.000%, 9/01/34
1,785 Hawthorne Community Redevelopment Agency, California, Project 9/16 at 100.00 A- 1,698,981
Area 2 Tax Allocation Bonds, Series 2006, 5.250%, 9/01/36 -
XLCA Insured
1,800 Hesperia Unified School District, San Bernardino County, 2/17 at 100.00 AAA 1,648,422
California, Certificates of Participation, Capital Improvement,
Series 2007, 5.000%, 2/01/41 - AMBAC Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
215 5.000%, 9/01/26 9/16 at 100.00 N/R 188,656
495 5.125%, 9/01/36 9/16 at 100.00 N/R 421,022
2,000 Lake Elsinore Public Finance Authority, California, Local Agency 10/13 at 102.00 N/R 1,978,140
Revenue Refunding Bonds, Series 2003H, 6.000%, 10/01/20
415 Lammersville School District, San Joaquin County, California, 9/16 at 100.00 N/R 338,022
Community Facilities District 2002, Mountain House Special
Tax Bonds, Series 2006, 5.125%, 9/01/35
1,265 Lee Lake Water District, Riverside County, California, Special Tax 9/13 at 102.00 N/R 1,281,825
Bonds, Community Facilities District 1 of Sycamore Creek,
Series 2003, 6.500%, 9/01/24
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 800 Los Angeles Community Redevelopment Agency, California, Lease 9/15 at 100.00 Aaa $ 726,808
Revenue Bonds, Manchester Social Services Project, Series 2005,
5.000%, 9/01/37 - AMBAC Insured
8,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 7,948,640
California, Proposition C Second Senior Lien Sales Tax Revenue
Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
4,000 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AA- 3,845,600
Lease Revenue Bonds, Police Headquarters, Series 2006A,
5.000%, 1/01/25 - FGIC Insured
495 North Natomas Community Facilities District 4, Sacramento, 9/14 at 102.00 N/R 399,198
California, Special Tax Bonds, Series 2006D, 5.000%, 9/01/33
2,000 Orange County, California, Special Tax Bonds, Community Facilities 8/11 at 101.00 N/R 1,841,500
District 02-1 of Ladera Ranch, Series 2003A, 5.550%, 8/15/33
385 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 356,841
Merged Project Area, Series 2005A, 5.000%, 9/01/35 - XLCA Insured
475 Roseville, California, Certificates of Participation, 8/13 at 100.00 AAA 457,539
Public Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
700 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R 660,415
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
1,530 San Marcos Public Facilities Authority, California, Tax Allocation 8/15 at 100.00 AAA 1,436,655
Bonds, Project Areas 2 and 3, Series 2005C, 5.000%, 8/01/35 -
AMBAC Insured
825 San Mateo Union High School District, San Mateo County, 12/17 at 100.00 AAA 760,642
California, Certificates of Participation, Phase 1, Series 2007A,
5.000%, 12/15/30 - AMBAC Insured
1,330 Washington Unified School District, Yolo County, California, 8/17 at 100.00 AAA 1,244,787
Certificates of Participation, Series 2007, 5.125%, 8/01/37 -
AMBAC Insured
1,930 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 1,996,431
Bonds, Community Facilities District 01-1, Series 2003B,
6.750%, 9/01/30
500 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 449,215
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
850 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 779,986
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
48,305 Total Tax Obligation/Limited 46,962,504
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.6% (6.8% OF TOTAL INVESTMENTS)
1,930 Bay Area Toll Authority, California, Revenue Bonds, San Francisco 4/16 at 100.00 AA 1,860,771
Bay Area Toll Bridge, Series 2006, 5.000%, 4/01/31
7,000 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,243,300
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/27
5,585 Port of Oakland, California, Revenue Bonds, Series 2002N, 11/12 at 100.00 AAA 5,687,708
5.000%, 11/01/16 - MBIA Insured (Alternative Minimum Tax)
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue 29A:
2,430 5.250%, 5/01/18 - FGIC Insured (Alternative Minimum Tax) 5/13 at 100.00 A1 2,445,431
2,555 5.250%, 5/01/19 - FGIC Insured (Alternative Minimum Tax) 5/13 at 100.00 A1 2,553,314
1,000 San Francisco Airports Commission, California, Revenue Bonds, 5/13 at 100.00 A1 1,024,130
San Francisco International Airport, Second Series 2003,
Issue 29B, 5.125%, 5/01/17 - FGIC Insured
2,000 San Francisco Airports Commission, California, Revenue 5/12 at 100.00 AAA 2,026,960
Refunding Bonds, San Francisco International Airport, Second
Series 2002, Issue 28A, 5.250%, 5/01/17 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
22,500 Total Transportation 21,841,614
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 46.3% (29.9% OF TOTAL INVESTMENTS) (4)
9,000 Anitoch Area Public Facilities Financing Agency, California, 8/11 at 100.00 AAA 9,622,889
Special Tax Bonds, Community Facilities District 1989-1,
Series 2001, 5.250%, 8/01/25 (Pre-refunded 8/01/11) -
MBIA Insured
47
NVX
Nuveen California Dividend Advantage Municipal Fund 2 (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 6,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa $ 6,499,560
Bonds, Series 2002A, 5.125%, 5/01/18 (Pre-refunded 5/01/12)
465 California Statewide Community Development Authority, Revenue 10/15 at 100.00 BBB- (4) 479,736
Bonds, Thomas Jefferson School of Law, Series 2005A,
4.875%, 10/01/31 (Pre-refunded 10/01/15)
3,000 Central California Joint Powers Health Finance Authority, 2/10 at 101.00 AAA 3,209,610
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000, 6.000%, 2/01/30
(Pre-refunded 2/01/10)
4,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- (4) 4,551,160
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.850%, 12/15/32
(Pre-refunded 12/15/13)
4,900 East Bay Municipal Utility District, Alameda and Contra Costa 6/11 at 100.00 AAA 5,187,826
Counties, California, Water System Subordinated Revenue
Bonds, Series 2001, 5.000%, 6/01/26 (Pre-refunded 6/01/11) -
MBIA Insured
3,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 3,505,120
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33 (Pre-refunded 6/01/13)
1,170 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (4) 1,356,802
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25 (Pre-refunded 9/01/13)
885 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (4) 1,004,387
Community Facilities District 03-1, Series 2004, 6.000%, 9/01/34
(Pre-refunded 9/01/13)
7,530 Los Angeles Unified School District, California, General Obligation 7/10 at 100.00 AA- (4) 7,954,316
Bonds, Series 2000D, 5.375%, 7/01/25 (Pre-refunded 7/01/10) -
FGIC Insured
10,840 Los Angeles Unified School District, California, General Obligation 7/12 at 100.00 AAA 11,617,335
Bonds, Series 2002E, 5.000%, 7/01/19 (Pre-refunded 7/01/12) -
MBIA Insured
3,000 Northern California Tobacco Securitization Authority, Tobacco 6/11 at 100.00 AAA 3,205,050
Settlement Asset-Backed Bonds, Series 2001A, 5.375%, 6/01/41
(Pre-refunded 6/01/11)
2,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB- (4) 2,196,860
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
6,000 Riverside County Redevelopment Agency, California, Tax Allocation 10/11 at 102.00 AAA 6,539,040
Bonds, Jurupa Valley Project Area, Series 2001,
5.250%, 10/01/35 (Pre-refunded 10/01/11) - AMBAC Insured
12,090 Santa Clara Valley Transportation Authority, California, 6/11 at 100.00 AAA 12,800,164
Sales Tax Revenue Bonds, Series 2001A, 5.000%, 6/01/25
(Pre-refunded 6/01/11) - MBIA Insured
4,050 Santa Rosa High School District, Sonoma County, California, 5/11 at 101.00 A+ (4) 4,356,059
General Obligation Bonds, Series 2001, 5.300%, 5/01/26
(Pre-refunded 5/01/11) - FGIC Insured
6,200 Southwestern Community College District, San Diego County, 8/11 at 101.00 AAA 6,709,888
California, General Obligation Bonds, Series 2001,
5.375%, 8/01/25 (Pre-refunded 8/01/11) - AMBAC Insured
2,800 Tobacco Securitization Authority of Southern California, 6/12 at 100.00 AAA 3,043,936
Tobacco Settlement Asset-Backed Bonds, San Diego County
Tobacco Asset Securitization Corporation, Senior Series 2001A,
5.500%, 6/01/36 (Pre-refunded 6/01/12)
1,500 Whittier, California, Health Facility Revenue Bonds, Presbyterian 6/12 at 101.00 A+ (4) 1,653,420
Intercommunity Hospital, Series 2002, 5.600%, 6/01/22
(Pre-refunded 6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
88,630 Total U.S. Guaranteed 95,493,158
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.2% (4.6% OF TOTAL INVESTMENTS)
5,000 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 5,087,450
Electric Distribution Revenue Bonds, Series 2004,
5.250%, 10/01/21 - MBIA Insured
2,355 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 1,972,053
Purchase Revenue Bonds, Series 2007A, 5.000%, 11/15/35
1,000 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 993,580
Power System Revenue Bonds, Series 2003A-2, 5.000%, 7/01/23 -
MBIA Insured
500 Los Angeles Department of Water and Power, California, 7/15 at 100.00 AAA 484,565
Power System Revenue Bonds, Series 2005A-1,
5.000%, 7/01/31 - FSA Insured
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 790 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- $ 737,378
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
2,000 Santa Clara, California, Subordinate Electric Revenue Bonds, 7/13 at 100.00 AAA 2,034,740
Series 2003A, 5.250%, 7/01/20 - MBIA Insured
4,000 Southern California Public Power Authority, Natural Gas Project 1 No Opt. Call AA- 3,521,840
Revenue Bonds, Series 2007A, 5.000%, 11/01/33
------------------------------------------------------------------------------------------------------------------------------------
15,645 Total Utilities 14,831,606
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.3% (6.0% OF TOTAL INVESTMENTS)
1,400 Castaic Lake Water Agency, California, Certificates of Participation, 8/16 at 100.00 AAA 1,311,338
Series 2006C, 5.000%, 8/01/36 - MBIA Insured
545 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 515,145
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
750 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 719,738
California, Revenue Bonds, Series 2006, 5.000%, 12/01/31 -
FGIC Insured
1,700 San Buenaventura, California, Wastewater Revenue Certificates 3/14 at 100.00 AAA 1,662,821
of Participation, Series 2004, 5.000%, 3/01/24 - MBIA Insured
4,785 San Diego Public Facilities Financing Authority, California, 8/12 at 100.00 AAA 4,821,605
Subordinate Lien Water Revenue Bonds, Series 2002,
5.000%, 8/01/21 - MBIA Insured
10,000 San Francisco City and County Public Utilities Commission, 4/13 at 100.00 AAA 10,166,799
California, Clean Water Revenue Refunding Bonds, Series 2003A,
5.250%, 10/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
19,180 Total Water and Sewer 19,197,446
------------------------------------------------------------------------------------------------------------------------------------
$ 327,262 Total Investments (cost $323,838,894) - 154.9% 319,068,707
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.0%) (6,171,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 3,144,319
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.4)% (5) (110,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $206,042,026
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (34.5)%.
N/R Not rated.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
49
NZH
Nuveen California Dividend Advantage Municipal Fund 3
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 8.1% (5.2% OF TOTAL INVESTMENTS)
$ 1,260 California County Tobacco Securitization Agency, Tobacco 6/15 at 100.00 BBB $ 1,157,184
Settlement Asset-Backed Bonds, Sonoma County Tobacco
Securitization Corporation, Series 2005, 4.250%, 6/01/21
7,500 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 6,704,025
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1, 5.750%, 6/01/47
29,660 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB 17,714,434
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
38,420 Total Consumer Staples 25,575,643
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.1% (2.6% OF TOTAL INVESTMENTS)
290 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 A3 264,173
University of Redlands, Series 2005A, 5.000%, 10/01/35
California Educational Facilities Authority, Revenue Bonds,
University of the Pacific, Series 2006:
200 5.000%, 11/01/21 11/15 at 100.00 A2 192,544
270 5.000%, 11/01/25 11/15 at 100.00 A2 249,953
3,825 California Educational Facilities Authority, Student Loan Revenue 3/08 at 102.00 Aaa 3,858,775
Bonds, Cal Loan Program, Series 2001A, 5.400%, 3/01/21 -
MBIA Insured (Alternative Minimum Tax)
3,600 California State Public Works Board, Lease Revenue Bonds, 10/12 at 100.00 AAA 3,859,596
University of California, UCLA Replacement Hospital Project,
Series 2002A, 5.375%, 10/01/17 - FSA Insured
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 614,271
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
4,000 University of California, Revenue Bonds, Multi-Purpose Projects, 5/13 at 100.00 AAA 3,974,440
Series 2003A, 5.000%, 5/15/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
12,805 Total Education and Civic Organizations 13,013,752
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 26.1% (16.7% OF TOTAL INVESTMENTS)
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+ 4,028,520
2,000 6.125%, 4/01/32 4/12 at 100.00 BBB+ 1,996,120
2,660 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,453,770
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/34
670 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 592,930
Kaiser Permanante System, Series 2006, 5.000%, 4/01/37
12,435 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 9,420,507
Sutter Health Residual Trust 2061, 9.162%, 11/15/46 (IF)
2,000 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AAA 1,837,000
Sutter Health, Series 2007A, 5.000%, 11/15/42 - MBIA Insured
9,000 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 8,831,880
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
1,575 California Statewide Communities Development Authority, 7/17 at 100.00 N/R 1,292,760
Revenue Bonds, ValleyCare Health System, Series 2007A,
5.125%, 7/15/31
6,525 California Statewide Community Development Authority, No Opt. Call A+ 7,074,014
Health Facility Revenue Refunding Bonds, Memorial Health
Services, Series 2003A, 6.000%, 10/01/12
50
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE (continued)
$ 6,450 California Statewide Community Development Authority, Hospital 6/13 at 100.00 AAA $ 6,708,323
Revenue Bonds, Monterey Peninsula Hospital, Series 2003B,
5.250%, 6/01/18 - FSA Insured
7,665 California Statewide Community Development Authority, Insured 11/09 at 102.00 A+ 7,673,738
Mortgage Hospital Revenue Bonds, Mission Community Hospital,
Series 2001, 5.375%, 11/01/21
12,425 California Statewide Community Development Authority, Revenue 3/16 at 100.00 A+ 11,020,478
Bonds, Kaiser Permanante System, Series 2006, 5.000%, 3/01/41
3,145 California Statewide Community Development Authority, Revenue 8/16 at 100.00 A+ 2,938,122
Bonds, Kaiser Permanente System, Series 2001C, 5.250%, 8/01/31
Rancho Mirage Joint Powers Financing Authority, California,
Revenue Bonds, Eisenhower Medical Center, Series 2007A:
8,310 5.000%, 7/01/38 7/17 at 100.00 A3 7,349,281
5,540 5.000%, 7/01/47 7/17 at 100.00 A3 4,773,541
4,000 Santa Clara County Financing Authority, California, Auction No Opt. Call AAA 4,000,000
Rate Revenue Bonds, El Camino Hospital, Series 2007B,
6.000%, 2/01/41 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
88,400 Total Health Care 81,990,984
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.4% (4.1% OF TOTAL INVESTMENTS)
4,000 ABAG Finance Authority for Non-Profit Corporations, California, No Opt. Call BBB 4,051,920
Multifamily Housing Revenue Refunding Bonds, United
Dominion/2000 Post Apartments, Series 2000B, 6.250%, 8/15/30
(Mandatory put 8/15/08)
5,090 California Statewide Community Development Authority, GNMA 8/12 at 105.00 Aaa 5,398,759
Collateralized Housing Revenue Refunding Bonds, Crowne
Pointe Project, Series 2002F, 6.750%, 8/20/37
325 Independent Cities Lease Finance Authority, California, Mobile 5/16 at 100.00 N/R 275,506
Home Park Revenue Bonds, San Juan Mobile Estates,
Series 2006B, 5.850%, 5/15/41
1,735 Rohnert Park Finance Authority, California, Senior Lien Revenue 9/13 at 100.00 A+ 1,629,651
Bonds, Rancho Feliz Mobile Home Park, Series 2003A,
5.750%, 9/15/38
1,125 Rohnert Park Finance Authority, California, Subordinate Lien 9/13 at 100.00 N/R 1,096,223
Revenue Bonds, Rancho Feliz Mobile Home Park, Series 2003B,
6.625%, 9/15/38
3,610 San Bernardino County Housing Authority, California, 11/11 at 105.00 Aaa 3,683,969
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 1,220,663
2,880 5.450%, 2/20/43 (Alternative Minimum Tax) 8/11 at 102.00 AAA 2,669,069
------------------------------------------------------------------------------------------------------------------------------------
20,015 Total Housing/Multifamily 20,025,760
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.8% (1.1% OF TOTAL INVESTMENTS)
790 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 819,285
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
8,485 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 AA- 4,806,159
Bonds, Trust 1021, 7.216%, 8/01/31 (Alternative Minimum Tax) (IF)
------------------------------------------------------------------------------------------------------------------------------------
9,275 Total Housing/Single Family 5,625,444
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.9% (1.2% OF TOTAL INVESTMENTS)
2,000 California Pollution Control Financing Authority, Solid Waste 1/16 at 102.00 BBB 1,790,160
Disposal Revenue Bonds, Waste Management Inc.,
Series 2002A, 5.000%, 1/01/22 (Alternative Minimum Tax)
5,205 California Statewide Communities Development Authority, No Opt. Call BB 4,270,650
Revenue Bonds, EnerTech Regional Biosolids Project,
Series 2007A, 5.500%, 12/01/33 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,205 Total Industrials 6,060,810
------------------------------------------------------------------------------------------------------------------------------------
51
NZH
Nuveen California Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.6% (1.1% OF TOTAL INVESTMENTS)
$ 2,450 California Health Facilities Financing Authority, Cal-Mortgage 1/13 at 100.00 A+ $ 2,366,210
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
California Health Facilities Financing Authority, Insured Senior
Living Revenue Bonds, Aldersly Project, Series 2002A:
1,500 5.125%, 3/01/22 3/12 at 101.00 A+ 1,448,400
1,315 5.250%, 3/01/32 3/12 at 101.00 A+ 1,228,355
------------------------------------------------------------------------------------------------------------------------------------
5,265 Total Long-Term Care 5,042,965
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 17.0% (10.9% OF TOTAL INVESTMENTS)
9,335 California, General Obligation Bonds, Series 2002, No Opt. Call AAA 10,609,228
6.000%, 2/01/16 - FSA Insured
10 California, General Obligation Veterans Welfare Bonds, 6/08 at 101.00 AA- 10,119
Series 1997BJ, 5.500%, 12/01/18 (Alternative Minimum Tax)
14,300 California, General Obligation Veterans Welfare Bonds, 6/08 at 100.00 AAA 14,299,284
Series 2001BZ, 5.350%, 12/01/21 - MBIA Insured
(Alternative Minimum Tax)
3,000 Contra Costa County Community College District, California, 8/12 at 100.00 AA 3,004,590
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 2,504,575
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/23 - FSA Insured
2,260 Jurupa Unified School District, Riverside County, California, 8/11 at 101.00 A 2,263,887
General Obligation Bonds, Series 2002, 5.125%, 8/01/22 -
FGIC Insured
870 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 856,585
Series 2001, 5.000%, 7/01/24 - FSA Insured
575 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 561,706
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
10,810 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 10,796,379
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, California, 7/12 at 101.00 AA 4,322,120
General Obligation Bonds, Election of 1998, Series 2002D,
5.250%, 7/01/21 - FGIC Insured
2,715 San Jose-Evergreen Community College District, Santa Clara 9/15 at 100.00 AAA 2,677,614
County, California, General Obligation Bonds, Series 2005A,
5.000%, 9/01/25 - MBIA Insured
1,630 West Contra Costa Unified School District, Contra Costa County, 8/11 at 101.00 A 1,616,716
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
52,005 Total Tax Obligation/General 53,522,803
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 39.3% (25.1% OF TOTAL INVESTMENTS)
2,040 Borrego Water District, California, Community Facilities 8/17 at 102.00 N/R 1,831,757
District 2007-1 Montesoro, Special Tax Bonds, Series 2007,
5.750%, 8/01/25
7,135 Brentwood Infrastructure Financing Authority, Contra Costa 11/11 at 100.00 AAA 7,068,430
County, California, Capital Improvement Revenue Bonds,
Series 2001, 5.000%, 11/01/25 - FSA Insured
8,210 California State Public Works Board, Lease Revenue Bonds, 12/13 at 100.00 A 8,778,214
Department of Corrections, Series 2003C, 5.500%, 6/01/16
4,000 California State Public Works Board, Lease Revenue Bonds, 3/12 at 100.00 AAA 3,703,800
Department of General Services, Series 2002B,
5.000%, 3/01/27 - AMBAC Insured
4,510 California State Public Works Board, Lease Revenue Bonds, 12/11 at 102.00 AAA 4,293,926
Department of Mental Health, Hospital Addition, Series 2001A,
5.000%, 12/01/26 - 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 1,715,158
550 6.000%, 9/01/33 9/13 at 100.00 N/R 525,503
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 715 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A $ 667,717
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
2,160 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 1,989,209
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
1,125 Fontana, California, Special Tax Bonds, Sierra Community 9/14 at 100.00 N/R 1,013,231
Facilities District 22, Series 2004, 6.000%, 9/01/34
1,000 Fullerton Community Facilities District 1, California, Special 9/12 at 100.00 N/R 1,005,260
Tax Bonds, Amerige Heights, Series 2002, 6.100%, 9/01/22
5,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 4,546,750
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/45 - AMBAC Insured
Irvine, California, Unified School District, Community Facilities
District Special Tax Bonds, Series 2006A:
350 5.000%, 9/01/26 9/16 at 100.00 N/R 307,115
805 5.125%, 9/01/36 9/16 at 100.00 N/R 684,693
3,000 Lake Elsinore Public Finance Authority, California, Local 10/13 at 102.00 N/R 2,967,210
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
685 Lammersville School District, San Joaquin County, California, 9/16 at 100.00 N/R 557,939
Community Facilities District 2002, Mountain House Special
Tax Bonds, Series 2006, 5.125%, 9/01/35
5,250 Lammersville School District, San Joaquin County, California, 9/12 at 101.00 N/R 5,228,160
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, Special 9/13 at 102.00 N/R 2,026,600
Tax Bonds, Community Facilities District 1 of Sycamore Creek,
Series 2003, 6.500%, 9/01/24
1,000 Lindsay Redevelopment Agency, California, Project 1 Tax 8/17 at 100.00 AA 854,020
Allocation Bonds, Series 2007, 5.000%, 8/01/37 - RAAI Insured
5,425 Lodi, California, Certificates of Participation, Public Improvement 10/12 at 100.00 AAA 5,202,846
Financing Project, Series 2002, 5.000%, 10/01/26 - MBIA Insured
1,310 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 1,190,148
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
1,675 Moreno Valley Unified School District, Riverside County, 3/14 at 100.00 AAA 1,643,812
California, Certificates of Participation, Series 2005,
5.000%, 3/01/26 - FSA Insured
North Natomas Community Facilities District 4, Sacramento,
California, Special Tax Bonds, Series 2006D:
545 5.000%, 9/01/26 9/14 at 102.00 N/R 459,544
250 5.000%, 9/01/33 9/14 at 102.00 N/R 201,615
3,000 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 A 3,089,370
Tax Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/19 - FGIC Insured
4,520 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 4,420,786
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 1,841,500
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 10,395,062
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.100%, 4/01/30 - MBIA Insured
3,250 Pomona Public Financing Authority, California, Revenue 2/11 at 100.00 AAA 3,119,285
Refunding Bonds, Merged Redevelopment Projects,
Series 2001AD, 5.000%, 2/01/27 - MBIA Insured
6,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A 5,607,240
Revenue Bonds, Series 2007N, 5.250%, 7/01/39 - FGIC Insured
625 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 579,288
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
780 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 751,327
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
53
NZH
Nuveen California Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,145 Sacramento, California, Special Tax Bonds, North Natomas 9/14 at 100.00 N/R $ 1,080,250
Community Facilities District 4, Series 2003C, 6.000%, 9/01/33
14,505 San Diego Redevelopment Agency, California, Subordinate Lien 9/11 at 101.00 AAA 14,281,332
Tax Allocation Bonds, Centre City Project, Series 2001A,
5.000%, 9/01/26 - FSA Insured
2,300 San Francisco Bay Area Rapid Transit District, California, Sales 7/11 at 100.00 AAA 2,237,923
Tax Revenue Bonds, Series 2001, 5.000%, 7/01/26 -
AMBAC Insured
1,345 San Mateo Union High School District, San Mateo County, 12/17 at 100.00 AAA 1,240,077
California, Certificates of Participation, Phase 1, Series 2007A,
5.000%, 12/15/30 - AMBAC Insured
8,710 South Orange County Public Financing Authority, California, 8/15 at 100.00 AAA 8,072,864
Special Tax Revenue Bonds, Ladera Ranch, Series 2005A,
5.000%, 8/15/32 - AMBAC Insured
2,810 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 2,954,434
Bonds, Community Facilities District 01-1, Series 2003B,
7.000%, 9/01/38
2,000 West Patterson Financing Authority, California, Special Tax 9/13 at 102.00 N/R 1,796,860
Bonds, Community Facilities District 01-1, Series 2004B,
6.000%, 9/01/39
1,375 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 1,261,741
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
2,500 Yucaipa-Calimesa Joint Unified School District, San Bernardino 10/11 at 100.00 AAA 2,414,750
County, California, General Obligation Refunding Bonds,
Series 2001A, 5.000%, 10/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
128,520 Total Tax Obligation/Limited 123,606,746
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.8% (4.4% OF TOTAL INVESTMENTS)
1,690 Bay Area Toll Authority, California, Revenue Bonds, 4/16 at 100.00 AA 1,629,380
San Francisco Bay Area Toll Bridge, Series 2006,
5.000%, 4/01/31
11,750 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 10,417,550
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/28
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue 29B:
4,110 5.125%, 5/01/17 - FGIC Insured 5/13 at 100.00 A1 4,209,174
5,140 5.125%, 5/01/19 - FGIC Insured 5/13 at 100.00 A1 5,235,398
------------------------------------------------------------------------------------------------------------------------------------
22,690 Total Transportation 21,491,502
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 25.7% (16.5% OF TOTAL INVESTMENTS) (4)
4,000 Beaumont Financing Authority, California, Local Agency 9/12 at 102.00 N/R (4) 4,622,480
Revenue Bonds, Series 2002A, 6.750%, 9/01/25
(Pre-refunded 9/01/12)
11,240 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa3 (4) 12,082,774
Settlement Asset-Backed Bonds, Merced County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
(Pre-refunded 6/01/12)
California Department of Water Resources, Power Supply Revenue
Bonds, Series 2002A:
3,500 5.375%, 5/01/17 (Pre-refunded 5/01/12) - XLCA Insured 5/12 at 101.00 Aaa 3,825,325
9,000 5.125%, 5/01/18 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 9,749,340
745 California Statewide Community Development Authority, 10/15 at 100.00 BBB- (4) 768,609
Revenue Bonds, Thomas Jefferson School of Law,
Series 2005A, 4.875%, 10/01/31 (Pre-refunded 10/01/15)
Central California Joint Powers Health Finance Authority,
Certificates of Participation, Community Hospitals of Central
California Obligated Group, Series 2000:
1,770 6.000%, 2/01/20 (Pre-refunded 2/01/10) 2/10 at 101.00 AAA 1,893,670
1,740 6.000%, 2/01/30 (Pre-refunded 2/01/10) 2/10 at 101.00 AAA 1,861,574
2,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- (4) 2,270,380
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.800%, 12/15/25
(Pre-refunded 12/15/13)
6,100 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 6,681,635
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33 (Pre-refunded 6/01/13)
1,940 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (4) 2,249,740
Community Facilities District 03-1, Series 2003A,
6.500%, 9/01/25 (Pre-refunded 9/01/13)
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 1,335 Lincoln, California, Special Tax Bonds, Lincoln Crossing 9/13 at 102.00 N/R (4) $ 1,515,092
Community Facilities District 03-1, Series 2004,
6.000%, 9/01/34 (Pre-refunded 9/01/13)
1,525 Lucia Mar Unified School District, San Luis Obispo County, 8/14 at 100.00 A1 (4) 1,666,261
California, General Obligation Bonds, Series 2004A,
5.250%, 8/01/22 (Pre-refunded 8/01/14) - FGIC Insured
5,500 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 5,935,655
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
(Pre-refunded 7/01/12)
1,700 Roseville, California, Special Tax Bonds, Community Facilities 9/09 at 103.00 N/R (4) 1,829,217
District 1 - Crocker, Series 2003, 6.000%, 9/01/27
(Pre-refunded 9/01/09)
6,425 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 6,810,179
Sales Tax Revenue Bonds, Series 2001, 5.000%, 7/01/26
(Pre-refunded 7/01/11) - AMBAC Insured
7,595 San Francisco State University Foundation Inc., California, 9/11 at 101.00 AAA 8,131,739
Auxiliary Organization Student Housing Revenue Bonds,
Series 2001, 5.000%, 9/01/26 (Pre-refunded 9/01/11) -
MBIA Insured
1,590 San Marcos Public Facilities Authority, California, Special Tax 9/09 at 102.00 N/R (4) 1,692,189
Bonds, Community Facilities District 99-1, Series 2003B,
6.000%, 9/01/24 (Pre-refunded 9/01/09)
4,200 Tobacco Securitization Authority of Southern California, 6/12 at 100.00 AAA 4,565,904
Tobacco Settlement Asset-Backed Bonds, San Diego County
Tobacco Asset Securitization Corporation, Senior Series 2001A,
5.500%, 6/01/36 (Pre-refunded 6/01/12)
2,500 Whittier, California, Health Facility Revenue Bonds, Presbyterian 6/12 at 101.00 A+ (4) 2,755,700
Intercommunity Hospital, Series 2002, 5.600%, 6/01/22
(Pre-refunded 6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
74,405 Total U.S. Guaranteed 80,907,463
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.3% (3.4% OF TOTAL INVESTMENTS)
3,815 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 3,194,643
Purchase Revenue Bonds, Series 2007A, 5.000%, 11/15/35
1,285 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 1,199,406
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
5,000 Merced Irrigation District, California, Revenue Certificates of 9/13 at 102.00 Baa3 4,696,000
Participation, Electric System Project, Series 2003,
5.700%, 9/01/36
2,250 Salinas Valley Solid Waste Authority, California, Revenue Bonds, 8/12 at 100.00 AAA 2,196,810
Series 2002, 5.125%, 8/01/22 - AMBAC Insured
(Alternative Minimum Tax)
6,000 Southern California Public Power Authority, Natural Gas No Opt. Call AA- 5,282,760
Project 1 Revenue Bonds, Series 2007A, 5.000%, 11/01/33
------------------------------------------------------------------------------------------------------------------------------------
18,350 Total Utilities 16,569,619
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.1% (7.7% OF TOTAL INVESTMENTS)
1,070 Burbank, California, Wastewater System Revenue Bonds, 6/14 at 100.00 AAA 1,075,050
Series 2004A, 5.000%, 6/01/22 - AMBAC Insured
7,000 Carmichael Water District, Sacramento County, California, 9/09 at 102.00 AAA 6,667,080
Water Revenue Certificates of Participation, Series 1999,
5.125%, 9/01/29 - MBIA Insured
1,125 Fortuna Public Finance Authority, California, Water Revenue 10/16 at 100.00 AAA 1,077,131
Bonds, Series 2006, 5.000%, 10/01/36 - FSA Insured
890 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 841,246
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
850 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 787,185
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
1,000 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 952,210
Series 2001A, 6.250%, 12/01/32
1,380 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 1,307,453
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
1,000 San Buenaventura, California, Wastewater Revenue Certificates 3/14 at 100.00 AAA 978,130
of Participation, Series 2004, 5.000%, 3/01/24 - MBIA Insured
55
NZH
Nuveen California Dividend Advantage Municipal Fund 3 (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
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 $ 2,494,575
6,260 5.000%, 8/01/24 - MBIA Insured 8/12 at 100.00 AAA 6,190,702
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 3,430,163
12,000 5.250%, 10/01/19 - MBIA Insured (5) 4/13 at 100.00 AAA 12,286,919
------------------------------------------------------------------------------------------------------------------------------------
38,390 Total Water and Sewer 38,087,844
------------------------------------------------------------------------------------------------------------------------------------
$ 515,745 Total Investments (cost $510,361,532) - 156.2% 491,521,335
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.2% 10,193,146
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (59.4)% (6) (187,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $314,714,481
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT FEBRUARY 29, 2008:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (7) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
UBS $29,000,000 Receive 3-Month USD-LIBOR 5.471% Semi-Annually 6/04/08 6/04/13 $(2,677,814)
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate).
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares unless
otherwise noted.
(2) Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Portion of investment, with an aggregate market value of
$1,935,190, has been pledged to collateralize the net
payment obligations under forward swap contracts.
(6) Preferred Shares, at Liquidation Value as a percentage of
total investments is (38.0)%.
(7) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
56
NKL
Nuveen Insured California Dividend Advantage Municipal Fund
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.0% (2.6% OF TOTAL INVESTMENTS)
$ 14,155 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB $ 8,454,074
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.9% (3.1% OF TOTAL INVESTMENTS)
1,675 California Educational Facilities Authority, Revenue Bonds, 10/12 at 100.00 A2 1,606,509
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 8,691,930
Series 2002A, 5.125%, 11/01/26 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,675 Total Education and Civic Organizations 10,298,439
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 5.8% (3.8% OF TOTAL INVESTMENTS)
5,000 ABAG Finance Authority for Non-Profit Corporations, California, 4/12 at 100.00 A+ 4,968,250
Cal-Mortgage Insured Revenue Bonds, Sansum-Santa Barbara
Medical Foundation Clinic, Series 2002A, 5.600%, 4/01/26
5,000 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 4,575,950
Kaiser Permanante System, Series 2006, 5.250%, 3/01/45
2,815 California Health Facilities Financing Authority, Revenue 8/13 at 100.00 AAA 2,828,822
Bonds, Lucile Salter Packard Children's Hospital, Series 2003C,
5.000%, 8/15/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
12,815 Total Health Care 12,373,022
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 California Statewide Community Development Authority, Student 8/12 at 100.00 N/R 894,750
Housing Revenue Bonds, EAH - Irvine East Campus
Apartments, LLC Project, Series 2002A, 5.500%, 8/01/22 -
ACA Insured
1,905 Los Angeles, California, GNMA Mortgage-Backed Securities 7/11 at 102.00 AAA 1,910,810
Program Multifamily Housing Revenue Bonds, Park Plaza West
Senior Apartments, Series 2001B, 5.300%, 1/20/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,905 Total Housing/Multifamily 2,805,560
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS)
505 California Housing Finance Agency, Home Mortgage Revenue 2/16 at 100.00 Aa2 523,720
Bonds, Series 2006H, 5.750%, 8/01/30 - FGIC Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.4% (0.9% OF TOTAL INVESTMENTS)
3,000 California Pollution Control Financing Authority, Solid Waste No Opt. Call BBB+ 2,885,670
Disposal Revenue Bonds, Republic Services Inc., Series 2002C,
5.250%, 6/01/23 (Mandatory put 12/01/17)
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.4% (0.9% OF TOTAL INVESTMENTS)
3,000 ABAG Finance Authority for Non-Profit Corporations, California, 11/12 at 100.00 A+ 2,915,670
Insured Senior Living Revenue Bonds, Odd Fellows Home of
California, Series 2003A, 5.200%, 11/15/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 25.5% (16.6% OF TOTAL INVESTMENTS)
5,920 Cajon Valley Union School District, San Diego County, 8/10 at 102.00 AAA 5,700,309
California, General Obligation Bonds, Series 2002B,
5.125%, 8/01/32 - MBIA Insured
2,900 California, General Obligation Bonds, Series 2003, 5.000%, 2/01/21 8/13 at 100.00 A+ 2,905,191
8,250 California, General Obligation Refunding Bonds, Series 2002, 2/12 at 100.00 AAA 8,023,950
5.000%, 2/01/22 - MBIA Insured
230 El Monte Union High School District, Los Angeles County, 6/13 at 100.00 AAA 223,422
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/28 - FSA Insured
57
NKL
Nuveen Insured California Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 10,000 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 Aa3 $ 9,661,100
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FGIC Insured
1,000 Los Rios Community College District, Sacramento, El Dorado 8/14 at 102.00 AAA 993,070
and Yolo Counties, California, General Obligation Bonds,
Series 2006C, 5.000%, 8/01/25 - FSA Insured
1,500 Madera Unified School District, Madera County, California, 8/12 at 100.00 AAA 1,456,950
General Obligation Bonds, Series 2002, 5.000%, 8/01/28 -
FSA Insured
2,000 Murrieta Valley Unified School District, Riverside County, 9/17 at 100.00 AAA 1,783,880
California, General Obligation Bonds, Series 2007,
4.500%, 9/01/30 - FSA Insured
2,500 Oakland Unified School District, Alameda County, California, 8/12 at 100.00 A 2,463,950
General Obligation Bonds, Series 2002, 5.250%, 8/01/21 -
FGIC Insured
375 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 366,330
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
3,250 San Diego Unified School District, San Diego County, California, 7/11 at 102.00 AAA 3,487,900
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 Aa1 3,413,375
General Obligation Bonds, Series 2002A, 5.000%, 9/01/26 -
FGIC Insured
10,000 Vista Unified School District, San Diego County, California, 8/12 at 100.00 AAA 10,023,200
General Obligation Bonds, Series 2002A, 5.000%, 8/01/23 -
FSA Insured
3,905 West Kern Community College District, California, General 11/17 at 100.00 A 3,683,430
Obligation Bonds, Election 2004, Series 2007C,
5.000%, 10/01/32 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
55,330 Total Tax Obligation/General 54,186,057
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 51.3% (33.3% OF TOTAL INVESTMENTS)
1,450 Baldwin Park Public Financing Authority, California, Sales Tax 8/13 at 102.00 BBB 1,439,459
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 6,858,112
California, Certificates of Participation Refunding, Series 2002A,
5.125%, 8/01/26 - FSA Insured
2,200 California Infrastructure Economic Development Bank, 9/13 at 101.00 AAA 2,134,110
Los Angeles County, Revenue Bonds, Department of Public
Social Services, Series 2003, 5.000%, 9/01/28 - AMBAC Insured
3,100 California State Public Works Board, Lease Revenue Bonds, 11/15 at 100.00 A 2,900,298
Department of Health Services, Richmond Lab, Series 2005B,
5.000%, 11/01/30 - XLCA Insured
465 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 434,250
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
1,400 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 1,289,302
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
7,035 Corona-Norco Unified School District, Riverside County, 9/13 at 100.00 AAA 6,824,302
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, Tax Allocation 5/11 at 101.00 AAA 3,110,562
Revenue Bonds, Redevelopment Project, Series 2002A,
5.125%, 11/01/25 - MBIA Insured
8,720 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 8,703,083
Department of Public Services Facility Phase II, Series 2001,
5.000%, 1/01/21 - AMBAC Insured
4,000 Folsom Public Financing Authority, California, Special Tax 9/12 at 102.00 AAA 3,965,120
Revenue Bonds, Series 2004A, 5.000%, 9/01/21 - AMBAC Insured
4,985 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 4,622,441
Enhanced Tobacco Settlement Revenue Bonds, Drivers
Trust 2091, 8.252%, 6/01/45 - AGC Insured (IF)
8,780 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 7,984,093
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2005A, 5.000%, 6/01/45 - AMBAC Insured
1,300 Hesperia Public Financing Authority, California, Redevelopment 9/17 at 100.00 A3 1,175,889
and Housing Projects Tax Allocation Bonds, Series 2007A,
5.000%, 9/01/37 - XLCA Insured
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,115 Inglewood Redevelopment Agency, California, Tax Allocation No Opt. Call AAA $ 2,150,532
Refunding Bonds, Merged Area Redevelopment Project,
Series 1998A, 5.250%, 5/01/23 - AMBAC Insured
3,500 La Quinta Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA 3,345,860
Bonds, Redevelopment Project Area 1, Series 2001,
5.100%, 9/01/31 - AMBAC Insured
3,400 La Quinta Redevelopment Agency, California, Tax Allocation 9/12 at 102.00 AAA 3,386,128
Bonds, Redevelopment Project Area 1, Series 2002,
5.000%, 9/01/22 - AMBAC Insured
845 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 767,691
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
4,690 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 4,659,890
California, Proposition C Second Senior Lien Sales Tax Revenue
Refunding Bonds, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
1,460 Los Angeles, California, Certificates of Participation, Municipal 6/13 at 100.00 AAA 1,344,061
Improvement Corporation, Series 2003AW, 5.000%, 6/01/33 -
AMBAC Insured
7,000 Los Angeles, California, Certificates of Participation, Series 2002, 4/12 at 100.00 AAA 6,916,210
5.200%, 4/01/27 - AMBAC Insured
8,470 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 8,214,291
Revenue Bonds, Capital Projects, Series 2001, 5.200%, 8/01/29 -
AMBAC Insured
5,000 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA 4,876,400
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.000%, 4/01/25 - MBIA Insured
3,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A 2,803,620
Revenue Bonds, Series 2007N, 5.250%, 7/01/39 - FGIC Insured
405 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 375,378
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
4,475 Riverside County, California, Asset Leasing Corporate Leasehold 6/12 at 101.00 AAA 4,533,623
Revenue Bonds, Riverside County Hospital Project,
Series 1997B, 5.000%, 6/01/19 - MBIA Insured
505 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 486,436
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
3,175 San Buenaventura, California, Certificates of Participation, 2/11 at 101.00 AAA 3,044,222
Series 2001C, 5.250%, 2/01/31 - AMBAC Insured
3,730 San Diego Redevelopment Agency, California, Subordinate Lien 9/09 at 101.00 Baa2 3,593,221
Tax Increment and Parking Revenue Bonds, Centre City Project,
Series 2003B, 5.250%, 9/01/26
4,000 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 4,049,320
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/19 - MBIA Insured
1,000 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/15 at 100.00 AAA 946,810
Merged Project Area, Series 2005A, 5.000%, 8/01/28 -
MBIA Insured
2,160 Temecula Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 AAA 2,088,979
Revenue Bonds, Redevelopment Project 1, Series 2002,
5.125%, 8/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
112,405 Total Tax Obligation/Limited 109,023,693
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.2% (3.4% OF TOTAL INVESTMENTS)
7,500 Foothill/Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 6,525,975
Toll Road Revenue Refunding Bonds, Series 1999,
0.000%, 1/15/29
San Francisco Airports Commission, California, Revenue Bonds,
San Francisco International Airport, Second Series 2003, Issue
29A:
2,185 5.250%, 5/01/16 - FGIC Insured (Alternative Minimum Tax) 5/13 at 100.00 A1 2,234,731
2,300 5.250%, 5/01/17 - FGIC Insured (Alternative Minimum Tax) 5/13 at 100.00 A1 2,333,396
------------------------------------------------------------------------------------------------------------------------------------
11,985 Total Transportation 11,094,102
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 19.4% (12.5% OF TOTAL INVESTMENTS) (4)
6,000 California Department of Water Resources, Power Supply 5/12 at 101.00 Aaa 6,499,560
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
(Pre-refunded 5/01/12)
59
NKL
Nuveen Insured California Dividend Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (4) (continued)
$ 2,500 California Health Facilities Financing Authority, Revenue Bonds, 12/09 at 101.00 N/R (4) $ 2,665,325
Cedars-Sinai Medical Center, Series 1999A, 6.125%, 12/01/30
(Pre-refunded 12/01/09)
2,250 California Infrastructure Economic Development Bank, First Lien 1/28 at 100.00 AAA 2,256,885
Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A, 5.000%, 7/01/36 (Pre-refunded 1/01/28) -
AMBAC Insured
2,185 El Monte Union High School District, Los Angeles County, 6/13 at 100.00 AAA 2,350,754
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/28 (Pre-refunded 6/01/13) - FSA Insured
Fresno Unified School District, Fresno County, California, General
Obligation Bonds, Series 2002B:
1,135 5.125%, 8/01/23 - FGIC Insured (ETM) 8/10 at 102.00 A+ (4) 1,147,689
1,190 5.125%, 8/01/24 - FGIC Insured (ETM) 8/10 at 102.00 A+ (4) 1,199,544
1,245 5.125%, 8/01/25 - FGIC Insured (ETM) 8/10 at 102.00 A+ (4) 1,253,018
1,255 5.125%, 8/01/26 - FGIC Insured (ETM) 8/10 at 102.00 A+ (4) 1,222,119
2,070 Fresno Unified School District, Fresno County, California, General 8/10 at 102.00 AAA 2,076,810
Obligation Bonds, Series 2002G, 5.125%, 8/01/26 -
FSA Insured (ETM)
4,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,350,770
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42 (Pre-refunded 6/01/13)
5,000 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 5,383,650
Obligation Bonds, Series 2002E, 5.125%, 1/01/27
(Pre-refunded 7/01/12) - MBIA Insured
3,380 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 (4) 3,796,889
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.875%, 7/01/26 (Pre-refunded 7/01/14)
2,980 Santa Clarita Community College District, Los Angeles County, 8/11 at 101.00 AA- (4) 3,201,056
California, General Obligation Bonds, Series 2002,
5.125%, 8/01/26 (Pre-refunded 8/01/11) - FGIC Insured
2,460 Vacaville Unified School District, Solano County, California, 8/11 at 101.00 AAA 2,632,569
General Obligation Bonds, Series 2002, 5.000%, 8/01/26
(Pre-refunded 8/01/11) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
38,150 Total U.S. Guaranteed 41,036,638
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 18.6% (12.0% OF TOTAL INVESTMENTS)
9,000 Anaheim Public Finance Authority, California, Revenue Bonds, 10/12 at 100.00 AAA 8,801,640
Electric System Distribution Facilities, Series 2002A,
5.000%, 10/01/27 - FSA Insured
10,000 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 10,287,500
Revenue Bonds, Pacific Gas and Electric Company, Series 1996A,
5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax)
2,490 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 2,085,101
Purchase Revenue Bonds, Series 2007A, 5.000%, 11/15/35
3,000 Los Angeles Department of Water and Power, California, Power 7/11 at 100.00 AAA 3,077,910
System Revenue Bonds, Series 2001A-1, 5.250%, 7/01/21 -
FSA Insured
830 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 774,714
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
6,000 Northern California Power Agency, Revenue Refunding Bonds, 7/08 at 101.00 AAA 5,783,040
Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 -
MBIA Insured
3,000 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 2,854,530
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 5,683,485
Revenue Refunding Bonds, Transmission Project, Series 2002A,
4.750%, 7/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
39,950 Total Utilities 39,347,920
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.2% (9.8% OF TOTAL INVESTMENTS)
3,000 California Department of Water Resources, Water System Revenue 12/12 at 100.00 AA 3,016,080
Bonds, Central Valley Project, Series 2002X, 5.150%, 12/01/23 -
FGIC Insured
9,000 Eastern Municipal Water District, California, Water and Sewerage 7/11 at 100.00 AA- 8,380,890
System Revenue Certificates of Participation, Series 2001B,
5.000%, 7/01/30 - FGIC Insured
60
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 750 Fortuna Public Finance Authority, California, Water Revenue 10/16 at 100.00 AAA $ 718,088
Bonds, Series 2006, 5.000%, 10/01/36 - FSA Insured
570 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 538,775
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
4,500 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 4,512,825
California, Senior Revenue Bonds, Capital Projects, Series 2003A,
5.000%, 10/01/23 - FSA Insured
2,425 Manteca Financing Authority, California, Sewerage Revenue 12/13 at 100.00 Aaa 2,443,260
Bonds, Series 2003B, 5.000%, 12/01/33 - MBIA Insured
500 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 463,050
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
9,185 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AA 8,460,487
of Participation, Series 2003, 5.000%, 2/01/33 - FGIC Insured
870 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 824,264
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC Insured
Semitropic Water Storage District, Kern County, California,
Water Banking Revenue Bonds, Series 2004A:
1,315 5.500%, 12/01/20 - XLCA Insured 12/14 at 100.00 A 1,350,071
1,415 5.500%, 12/01/21 - XLCA Insured 12/14 at 100.00 A 1,442,182
------------------------------------------------------------------------------------------------------------------------------------
33,530 Total Water and Sewer 32,149,972
------------------------------------------------------------------------------------------------------------------------------------
$ 338,405 Total Investments (cost $331,770,845) - 154.2% 327,094,537
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.4% 2,977,480
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.6)% (5) (118,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $212,072,017
====================================================================================================================
As of February 29, 2008, at least 80% of the Fund's net
assets (including net assets attributable 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 attributable 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) rated, at the time of investment, within the four
highest grades (Baa or BBB or better by Moody's, Standard &
Poor's 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 unless
otherwise noted.
(2) 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.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (36.1)%.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
61
NKX
Nuveen Insured California Tax-Free Advantage Municipal Fund
Portfolio of INVESTMENTS
February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.5% (3.2% OF TOTAL INVESTMENTS)
$ 6,070 Golden State Tobacco Securitization Corporation, California, 6/22 at 100.00 BBB $ 3,625,308
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-2, 0.000%, 6/01/37
------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 9.4% (6.6% OF TOTAL INVESTMENTS)
1,815 California Health Facilities Financing Authority, Revenue Bonds, 3/16 at 100.00 A+ 1,661,070
Kaiser Permanante System, Series 2006, 5.250%, 3/01/45
1,800 California Infrastructure Economic Development Bank, Revenue 8/11 at 102.00 A+ 1,766,376
Bonds, Kaiser Hospital Assistance LLC, Series 2001A,
5.550%, 8/01/31
4,060 California Statewide Community Development Authority, No Opt. Call AAA 4,110,303
Revenue Bonds, Sherman Oaks Health System, Series 1998A,
5.000%, 8/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
7,675 Total Health Care 7,537,749
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.4% (0.9% OF TOTAL INVESTMENTS)
1,165 Poway, California, Housing Revenue Bonds, Revenue Bonds, 5/13 at 102.00 A+ 1,076,693
Poinsettia Mobile Home Park, Series 2003, 5.000%, 5/01/23
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.6% (2.5% OF TOTAL INVESTMENTS)
1,000 ABAG Finance Authority for Non-Profit Corporations, 11/12 at 100.00 A+ 971,890
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, Cal-Mortgage 1/13 at 100.00 A+ 1,891,320
Insured Revenue Bonds, Northern California Retired Officers
Community Corporation - Paradise Valley Estates, Series 2002,
5.250%, 1/01/26
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Long-Term Care 2,863,210
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 19.5% (13.6% OF TOTAL INVESTMENTS)
2,000 Butte-Glenn Community College District, Butte and Glenn 8/12 at 101.00 Aaa 1,950,560
Counties, California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/26 - MBIA Insured
California State, General Obligation Bonds, Series 2002:
2,460 5.000%, 4/01/27 - AMBAC Insured 4/12 at 100.00 AAA 2,346,373
55 5.250%, 4/01/30 - XLCA Insured 4/12 at 100.00 AAA 53,251
450 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 Aa3 434,750
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FGIC Insured
2,000 Los Angeles, California, General Obligation Bonds, Series 2002A, 9/12 at 100.00 AAA 2,011,200
5.000%, 9/01/22 - MBIA Insured
1,000 Murrieta Valley Unified School District, Riverside County, 9/13 at 100.00 A1 959,200
California, General Obligation Bonds, Series 2003A,
5.000%, 9/01/26 - FGIC Insured
1,000 Murrieta Valley Unified School District, Riverside County, 9/17 at 100.00 AAA 891,940
California, General Obligation Bonds, Series 2007,
4.500%, 9/01/30 - FSA Insured
140 Roseville Joint Union High School District, Placer County, 8/15 at 100.00 AA- 136,763
California, General Obligation Bonds, Series 2006B,
5.000%, 8/01/27 - FGIC Insured
3,000 San Diego Unified School District, California, General 7/10 at 100.00 AAA 3,138,690
Obligation Bonds, Election of 1998, Series 2000B,
5.125%, 7/01/22 - MBIA Insured
3,855 San Rafael City High School District, Marin County, California, 8/12 at 100.00 AAA 3,744,362
General Obligation Bonds, Series 2003A, 5.000%, 8/01/28 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
15,960 Total Tax Obligation/General 15,667,089
------------------------------------------------------------------------------------------------------------------------------------
62
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 46.7% (32.6% OF TOTAL INVESTMENTS)
$ 550 Baldwin Park Public Financing Authority, California, Sales Tax 8/13 at 102.00 BBB $ 546,002
and Tax Allocation Bonds, Puente Merced Redevelopment
Project, Series 2003, 5.250%, 8/01/21
1,165 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 1,179,318
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/22 - AMBAC Insured
4,000 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 3,811,440
Department of General Services, Capital East End Project,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
170 Capistrano Unified School District, Orange County, California, 9/15 at 100.00 A 158,758
Special Tax Bonds, Community Facilities District, Series 2005,
5.000%, 9/01/24 - FGIC Insured
525 Chino Redevelopment Agency, California, Merged Chino 9/16 at 101.00 AAA 483,488
Redevelopment Project Area Tax Allocation Bonds, Series 2006,
5.000%, 9/01/38 - AMBAC Insured
1,610 Folsom Public Financing Authority, California, Special Tax 9/12 at 102.00 AAA 1,595,961
Revenue Bonds, Series 2004A, 5.000%, 9/01/21 - AMBAC Insured
1,875 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 1,738,631
Enhanced Tobacco Settlement Revenue Bonds, Drivers
Trust 2091, 8.252%, 6/01/45 - AGC Insured (IF)
3,285 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 2,987,215
Tobacco Settlement Asset-Backed Revenue Bonds, Series 2005A,
5.000%, 6/01/45 - AMBAC Insured
1,000 Hesperia Public Financing Authority, California, Redevelopment 9/17 at 100.00 A3 904,530
and Housing Projects Tax Allocation Bonds, Series 2007A,
5.000%, 9/01/37 - XLCA Insured
5,540 Irvine Public Facilities and Infrastructure Authority, California, 9/13 at 100.00 AAA 5,563,764
Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/21 -
AMBAC Insured
315 Los Angeles Community Redevelopment Agency, California, 9/15 at 100.00 Aaa 286,181
Lease Revenue Bonds, Manchester Social Services Project,
Series 2005, 5.000%, 9/01/37 - AMBAC Insured
1,770 Los Angeles Unified School District, California, Certificates 10/12 at 100.00 AAA 1,682,916
of Participation, Administration Building Project II, Series 2002C,
5.000%, 10/01/27 - AMBAC Insured
2,000 Los Angeles, California, Certificates of Participation, Municipal 6/13 at 100.00 AAA 1,841,180
Improvement Corporation, Series 2003AW, 5.000%, 6/01/33 -
AMBAC Insured
1,500 Los Angeles, California, Municipal Improvement Corporation, 1/17 at 100.00 AA- 1,336,710
Lease Revenue Bonds, Police Headquarters, Series 2006A,
4.750%, 1/01/31 - FGIC Insured
1,500 Los Osos, California, Improvement Bonds, Community Services 9/10 at 103.00 AAA 1,367,205
Wastewater Assessment District 1, Series 2002,
5.000%, 9/02/33 - MBIA Insured
1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call A 934,540
Revenue Bonds, Series 2007N, 5.250%, 7/01/39 - FGIC Insured
150 Rialto Redevelopment Agency, California, Tax Allocation Bonds, 9/15 at 100.00 A- 139,029
Merged Project Area, Series 2005A, 5.000%, 9/01/35 -
XLCA Insured
190 Roseville, California, Certificates of Participation, Public 8/13 at 100.00 AAA 183,016
Facilities, Series 2003A, 5.000%, 8/01/25 - AMBAC Insured
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 2,855,310
3,300 5.000%, 2/01/32 - AMBAC Insured 2/12 at 100.00 AAA 3,102,660
1,200 San Diego Redevelopment Agency, California, Subordinate 9/09 at 101.00 Baa2 1,155,996
Lien Tax Increment and Parking Revenue Bonds, Centre
City Project, Series 2003B, 5.250%, 9/01/26
2,770 San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,654,159
Refunding Bonds, Civic Center Project, Series 2002B,
5.000%, 6/01/32 - AMBAC Insured
1,000 San Jose Redevelopment Agency, California, Tax Allocation 8/15 at 100.00 AAA 946,810
Bonds, Merged Project Area, Series 2005A, 5.000%, 8/01/28 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
39,415 Total Tax Obligation/Limited 37,454,819
------------------------------------------------------------------------------------------------------------------------------------
63
NKX
Nuveen Insured California Tax-Free Advantage Municipal Fund (continued)
Portfolio of INVESTMENTS February 29, 2008 (Unaudited)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.2% (7.1% OF TOTAL INVESTMENTS)
$ 5,480 Bay Area Governments Association, California, BART SFO 8/12 at 100.00 AAA $ 5,294,173
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- 1,645,420
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
1,300 San Francisco Airports Commission, California, Revenue Bonds, 5/10 at 101.00 A1 1,256,294
San Francisco International Airport, Second Series 2000,
Issue 26B, 5.000%, 5/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
8,780 Total Transportation 8,195,887
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 26.7% (18.7% OF TOTAL INVESTMENTS) (4)
1,000 Berryessa Union School District, Santa Clara County, California, 8/12 at 100.00 AAA 1,072,070
General Obligation Bonds, Series 2003C, 5.000%, 8/01/21
(Pre-refunded 8/01/12) - FSA Insured
1,000 California Health Facilities Financing Authority, Revenue Bonds, 11/08 at 101.00 AAA 1,027,410
UCSF - Stanford Healthcare, Series 1998A, 5.000%, 11/15/31
(Pre-refunded 11/15/08) - FSA Insured
California State, General Obligation Bonds, Series 2002:
1,290 5.000%, 4/01/27 (Pre-refunded 4/01/12) - AMBAC Insured 4/12 at 100.00 AAA 1,378,559
2,945 5.250%, 4/01/30 (Pre-refunded 4/01/12) - XLCA Insured 4/12 at 100.00 A1 (4) 3,175,181
500 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 A+ (4) 544,590
5.250%, 4/01/34 (Pre-refunded 4/01/14)
1,625 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 1,932,223
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42 (Pre-refunded 6/01/13)
Hacienda La Puente Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003B:
4,500 5.000%, 8/01/26 (Pre-refunded 8/01/13) - FSA Insured 8/13 at 100.00 AAA 4,849,740
2,030 5.000%, 8/01/27 (Pre-refunded 8/01/13) - FSA Insured 8/13 at 100.00 AAA 2,187,772
1,260 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 (4) 1,415,408
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.875%, 7/01/26 (Pre-refunded 7/01/14)
1,220 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 1,291,687
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/32 (Pre-refunded 8/01/10) - MBIA Insured
2,390 Solano County, California, Certificates of Participation, 11/12 at 100.00 AAA 2,589,947
Series 2002, 5.250%, 11/01/24 (Pre-refunded 11/01/12) -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
19,760 Total U.S. Guaranteed 21,464,587
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.9% (4.8% OF TOTAL INVESTMENTS)
1,000 Anaheim Public Finance Authority, California, Second Lien 10/14 at 100.00 AAA 1,017,490
Electric Distribution Revenue Bonds, Series 2004,
5.250%, 10/01/21 - MBIA Insured
945 Long Beach Bond Finance Authority, California, Natural Gas No Opt. Call A1 848,553
Purchase Revenue Bonds, Series 2007A, 5.500%, 11/15/37
3,055 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,106,904
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 276,966
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/21 - MBIA Insured
310 Merced Irrigation District, California, Electric System Revenue 9/15 at 100.00 A- 289,351
Bonds, Series 2005, 5.125%, 9/01/31 - XLCA Insured
------------------------------------------------------------------------------------------------------------------------------------
5,585 Total Utilities 5,539,264
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 14.3% (10.0% OF TOTAL INVESTMENTS)
1,000 Castaic Lake Water Agency, California, Certificates of 8/16 at 100.00 AAA 936,670
Participation, Series 2006C, 5.000%, 8/01/36 - MBIA Insured
750 Fortuna Public Finance Authority, California, Water Revenue 10/16 at 100.00 AAA 718,088
Bonds, Series 2006, 5.000%, 10/01/36 - FSA Insured
215 Healdsburg Public Financing Authority, California, Wastewater 4/16 at 100.00 AAA 203,222
Revenue Bonds, Series 2006, 5.000%, 4/01/36 - MBIA Insured
64
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 895 Manteca Financing Authority, California, Sewerage Revenue 12/13 at 100.00 Aaa $ 901,739
Bonds, Series 2003B, 5.000%, 12/01/33 - MBIA Insured
170 Marina Coast Water District, California, Enterprise Certificate 6/16 at 100.00 AAA 157,437
of Participation, Series 2006, 5.000%, 6/01/31 - MBIA Insured
370 Sacramento County Sanitation District Financing Authority, 6/16 at 100.00 AA 350,549
California, Revenue Bonds, Series 2006, 5.000%, 12/01/36 -
FGIC 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 3,006,960
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,494,575
1,180 South Feather Water and Power Agency, California, 4/13 at 100.00 BBB 1,155,692
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 1,556,512
Wastewater Revenue Bonds, Series 2001, 5.000%, 10/01/26 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,680 Total Water and Sewer 11,481,444
------------------------------------------------------------------------------------------------------------------------------------
$ 119,090 Total Investments (cost $117,922,767) - 143.2% 114,906,050
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 12.9% 10,344,122
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.1)% (5) (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 80,250,172
====================================================================================================================
As of February 29, 2008, at least 80% of the Fund's net
assets (including net assets attributable 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 attributable 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) rated, at the time of investment, within the four
highest grades (Baa or BBB or better by Moody's, Standard &
Poor's 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 unless
otherwise noted.
(2) 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.
Certain mortgage-backed securities may be subject to
periodic principal paydowns.
(3) Ratings: Using the higher of Standard & Poor's Group
("Standard & Poor's") or Moody's Investor Service, Inc.
("Moody's") rating. Ratings below BBB by Standard & Poor's
or Baa by Moody's are considered to be below investment
grade.
The Portfolio of Investments reflects the ratings on certain
bonds insured by AMBAC, FGIC, MBIA and XLCA as of February
29, 2008. Subsequent to February 29, 2008, at least one
rating agency reduced the rating for AMBAC-insured bonds to
AA and at least one rating agency further reduced the
ratings for FGIC-insured and XLCA-insured bonds. As of
February 29, 2008, one or more rating agencies have placed
each of these insurers on "negative credit watch", which may
presage one or more rating reductions for such insurer or
insurers in the future. If one or more insurers' ratings are
reduced by these rating agencies, it would likely reduce the
effective rating of many of the bonds insured by that
insurer or insurers.
(4) Backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities which ensure
the timely payment of principal and interest. Such
investments are normally considered to be equivalent to AAA
rated securities.
(5) Preferred Shares, at Liquidation Value as a percentage of
total investments is (39.2)%.
(IF) Inverse floating rate investment.
See accompanying notes to financial statements.
65
Statement of
ASSETS & LIABILITIES
February 29, 2008 (Unaudited)
INSURED
INSURED CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PREMIUM PREMIUM DIVIDEND
PREMIUM INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $132,991,181, $282,997,557,
$119,762,657 and $541,177,540, respectively) $134,923,830 $276,839,511 $117,151,339 $527,806,322
Cash 774,867 1,171,979 311,608 --
Receivables:
Interest 2,375,186 3,771,044 1,634,365 8,267,497
Investments sold -- 1,986,719 2,458,440 11,471,191
Other assets 682 28,359 6,496 44,542
------------------------------------------------------------------------------------------------------------------------------------
Total assets 138,074,565 283,797,612 121,562,248 547,589,552
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- -- 3,750,392
Floating rate obligations -- 16,845,000 2,352,000 41,488,000
Unrealized depreciation on forward swaps -- -- -- --
Accrued expenses:
Management fees 72,285 139,356 62,769 216,074
Other 24,487 53,879 24,797 87,052
Common share dividends payable 340,021 612,939 286,218 1,372,011
Preferred share dividends payable 16,107 22,868 19,814 161,701
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 452,900 17,674,042 2,745,598 47,075,230
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 45,000,000 95,000,000 43,000,000 175,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $ 92,621,665 $171,123,570 $ 75,816,650 $325,514,322
====================================================================================================================================
Common shares outstanding 6,459,832 12,716,370 5,775,188 23,480,254
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 14.34 $ 13.46 $ 13.13 $ 13.86
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 64,598 $ 127,164 $ 57,752 $ 234,803
Paid-in surplus 89,426,693 176,228,128 78,312,045 333,587,814
Undistributed (Over-distribution of) net investment income 74,294 20,209 (441) (780,177)
Accumulated net realized gain (loss) from investments
and derivative transactions 1,123,431 906,115 58,612 5,843,100
Net unrealized appreciation (depreciation ) of investments
and derivative transactions 1,932,649 (6,158,046) (2,611,318) (13,371,218)
====================================================================================================================================
Net assets applicable to Common shares $ 92,621,665 $171,123,570 $ 75,816,650 $325,514,322
====================================================================================================================================
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.
66
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $323,838,894, $510,361,532,
$331,770,845 and $117,922,767, respectively) $319,068,707 $491,521,335 $327,094,537 $114,906,050
Cash -- -- 35,259 32,102
Receivables:
Interest 4,353,689 7,598,916 4,070,905 1,428,455
Investments sold 5,150 7,877,258 -- 9,287,440
Other assets 24,237 46,590 23,604 639
------------------------------------------------------------------------------------------------------------------------------------
Total assets 323,451,783 507,044,099 331,224,305 125,654,686
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 189,568 978,218 -- --
Floating rate obligations 6,171,000 -- -- --
Unrealized depreciation on forward swaps -- 2,677,814 -- --
Accrued expenses:
Management fees 111,230 175,615 102,786 41,149
Other 59,631 83,554 64,000 24,552
Common share dividends payable 821,429 1,359,786 871,629 333,256
Preferred share dividends payable 56,899 54,631 113,873 5,557
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 7,409,757 5,329,618 1,152,288 404,514
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 110,000,000 187,000,000 118,000,000 45,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $206,042,026 $314,714,481 $212,072,017 $ 80,250,172
====================================================================================================================================
Common shares outstanding 14,797,422 24,132,334 15,286,005 5,886,022
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 13.92 $ 13.04 $ 13.87 $ 13.63
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 147,974 $ 241,323 $ 152,860 $ 58,860
Paid-in surplus 210,153,559 342,811,267 217,031,715 83,041,770
Undistributed (Over-distribution of) net investment income (382,833) (405,676) (334,367) (41,041)
Accumulated net realized gain (loss) from investments
and derivative transactions 893,513 (6,414,422) (101,883) 207,300
Net unrealized appreciation (depreciation) of investments
and derivative transactions (4,770,187) (21,518,011) (4,676,308) (3,016,717)
====================================================================================================================================
Net assets applicable to Common shares $206,042,026 $314,714,481 $212,072,017 $ 80,250,172
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
67
Statement of
OPERATIONS
Six Months Ended February 29, 2008 (Unaudited)
INSURED
INSURED CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA PREMIUM PREMIUM DIVIDEND
PREMIUM INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $3,584,184 $ 7,001,803 $3,171,644 $13,819,183
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 453,828 879,042 395,281 1,623,491
Preferred shares - auction fees 56,096 118,424 53,603 218,151
Preferred shares - dividend disbursing agent fees 4,959 9,936 4,975 9,936
Shareholders' servicing agent fees and expenses 3,956 6,909 2,933 2,134
Interest expense on floating rate obligations -- 23,204 39,249 209,149
Custodian's fees and expenses 25,407 34,118 12,584 75,773
Directors'/Trustees' fees and expenses 1,702 3,115 1,392 5,191
Professional fees 7,169 9,653 4,617 8,732
Shareholders' reports - printing and mailing expenses 9,187 21,853 6,953 28,220
Stock exchange listing fees 4,811 4,799 244 4,867
Investor relations expense 5,357 10,294 4,803 17,977
Other expenses 7,368 10,489 7,810 13,502
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 579,840 1,131,836 534,444 2,217,123
Custodian fee credit (6,439) (5,099) (4,040) (21,017)
Expense reimbursement -- -- -- (262,928)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 573,401 1,126,737 530,404 1,933,178
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,010,783 5,875,066 2,641,240 11,886,005
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 336,770 688,647 148,069 2,479,066
Forward swaps 863,429 856,758 239,634 4,168,843
Futures -- -- -- --
Change in net unrealized appreciation (depreciation) of:
Investments (5,193,844) (14,309,221) (5,832,004) (28,481,675)
Forward swaps (364,728) (656,230) 1,018 (2,275,676)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (4,358,373) (13,420,046) (5,443,283) (24,109,442)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (750,163) (1,592,995) (727,162) (3,022,277)
From accumulated net realized gains (25,344) -- -- (260,925)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (775,507) (1,592,995) (727,162) (3,283,202)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares
from operations $(2,123,097) $ (9,137,975) $(3,529,205) $(15,506,639)
====================================================================================================================================
See accompanying notes to financial statements.
68
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 8,427,602 $13,730,317 $ 8,702,981 $3,194,640
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,026,137 1,639,606 1,082,409 415,978
Preferred shares - auction fees 137,122 233,109 147,096 56,096
Preferred shares - dividend disbursing agent fees 9,927 9,954 9,926 4,982
Shareholders' servicing agent fees and expenses 916 1,556 995 430
Interest expense on floating rate obligations 102,979 5,181 -- --
Custodian's fees and expenses 53,276 64,043 65,813 29,790
Directors'/Trustees' fees and expenses 3,054 5,948 4,115 1,412
Professional fees 8,048 11,808 9,332 4,525
Shareholders' reports - printing and mailing expenses 16,216 24,142 17,281 8,139
Stock exchange listing fees 626 1,021 647 249
Investor relations expense 11,598 18,028 12,162 4,812
Other expenses 11,280 14,944 10,466 5,464
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,381,179 2,029,340 1,360,242 531,877
Custodian fee credit (13,373) (24,181) (14,510) (10,165)
Expense reimbursement (329,183) (553,203) (434,570) (183,774)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,038,623 1,451,956 911,162 337,938
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 7,388,979 12,278,361 7,791,819 2,856,702
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 26,877 (1,357,951) 812,849 897,999
Forward swaps 1,314,381 -- 731,015 128,891
Futures -- (291,364) -- --
Change in net unrealized appreciation (depreciation) of:
Investments (12,507,608) (25,890,522) (17,099,516) (5,984,653)
Forward swaps (396,451) (2,024,955) (24,419) (12,888)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (11,562,801) (29,564,792) (15,580,071) (4,970,651)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,973,796) (3,262,301) (2,110,558) (704,723)
From accumulated net realized gains -- -- (116,419) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,973,796) (3,262,301) (2,226,977) (704,723)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common shares
from operations $ (6,147,618) $(20,548,732) $(10,015,229) $(2,818,672)
====================================================================================================================================
See accompanying notes to financial statements.
69
Statement of
CHANGES in NET ASSETS (Unaudited)
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
----------------------------- ---------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
2/29/08 8/31/07 2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,010,783 $ 5,834,849 $ 5,875,066 $ 11,372,772 $ 2,641,240 $ 5,169,371
Net realized gain (loss) from:
Investments 336,770 132,902 688,647 (30,877) 148,069 (251,856)
Forward swaps 863,429 159,600 856,758 419,200 239,634 (57,143)
Futures -- -- -- -- -- --
Change in net
unrealized appreciation
(depreciation) of:
Investments (5,193,844) (2,928,553) (14,309,221) (6,140,606) (5,832,004) (2,648,488)
Forward swaps (364,728) 35,238 (656,230) (181,996) 1,018 (1,018)
Futures -- -- -- -- -- --
Distributions to
Preferred shareholders:
From net investment income (750,163) (1,373,537) (1,592,995) (3,120,823) (727,162) (1,400,856)
From accumulated net
realized gains (25,344) (118,110) -- -- -- (50,482)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (2,123,097) 1,742,389 (9,137,975) 2,317,670 (3,529,205) 759,528
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (2,345,056) (4,725,196) (4,081,954) (8,545,402) (1,853,834) (3,863,107)
From accumulated net realized gains (86,562) (486,696) -- -- -- (177,846)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to Common shares
from distributions to
Common shareholders (2,431,618) (5,211,892) (4,081,954) (8,545,402) (1,853,834) (4,040,953
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions -- 65,214 -- -- -- 14,098
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 65,214 -- -- -- 14,098
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares (4,554,715) (3,404,289) (13,219,929) (6,227,732) (5,383,039) (3,267,327)
Net assets applicable to Common
shares at the beginning
of period 97,176,380 100,580,669 184,343,499 190,571,231 81,199,689 84,467,016
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $92,621,665 $ 97,176,380 $171,123,570 $184,343,499 $75,816,650 $81,199,689
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of period $ 74,294 $ 158,730 $ 20,209 $ (179,908) $ (441) $ (60,685)
====================================================================================================================================
See accompanying notes to financial statements.
70
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND ADVANTAGE (NAC) DIVIDEND ADVANTAGE 2 (NVX) DIVIDEND ADVANTAGE 3 (NZH)
----------------------------- ---------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
2/29/08 8/31/07 2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 11,886,005 $ 23,391,916 $ 7,388,979 $ 14,244,418 $ 12,278,361 $ 23,582,231
Net realized gain (loss) from:
Investments 2,479,066 1,330,465 26,877 (394,576) (1,357,951) (1,177,206)
Forward swaps 4,168,843 (824,000) 1,314,381 352,500 -- (401,000)
Futures -- 29,877 -- -- (291,364) --
Change in net
unrealized appreciation
(depreciation) of:
Investments (28,481,675) (14,848,472) (12,507,608) (8,830,002) (25,890,522) (15,582,514)
Forward swaps (2,275,676) 1,437,247 (396,451) (351,758) (2,024,955) (652,859)
Futures -- (27,339) -- -- -- --
Distributions to
Preferred shareholders:
From net investment income (3,022,277) (5,740,999) (1,973,796) (3,680,820) (3,262,301) (6,425,421)
From accumulated
net realized gains (260,925) (310,662) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (15,506,639) 4,438,033 (6,147,618) 1,339,762 (20,548,732) (656,769)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (8,664,213) (18,656,213) (5,142,104) (11,272,438) (8,542,844) (18,308,241)
From accumulated net
realized gains (838,245) (1,250,132) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from
distributions to
Common shareholders (9,502,458) (19,906,345) (5,142,104) (11,272,438) (8,542,844) (18,308,241)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions -- 475,567 -- 104,551 -- 298,310
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 475,567 -- 104,551 -- 298,310
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable
to Common shares (25,009,097) (14,992,745) (11,289,722) (9,828,125) (29,091,576) (18,666,700)
Net assets applicable to Common
shares at the beginning
of period 350,523,419 365,516,164 217,331,748 227,159,873 343,806,057 362,472,757
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $325,514,322 $350,523,419 $206,042,026 $217,331,748 $314,714,481 $343,806,057
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of period $ (780,177) $ (979,692) $ (382,835) $ (655,912) $ (405,676) $ (878,892)
====================================================================================================================================
See accompanying notes to financial statements.
71
Statement of
CHANGES in NET ASSETS (continued) (Unaudited)
INSURED CALIFORNIA INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL) TAX-FREE ADVANTAGE (NKX)
---------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 7,791,819 $ 15,395,108 $ 2,856,702 $ 5,654,749
Net realized gain (loss) from:
Investments 812,849 653,722 897,999 91,706
Forward swaps 731,015 (200,000) 128,891 (57,143)
Futures -- -- -- --
Change in net unrealized appreciation (depreciation) of:
Investments (17,099,516) (8,944,129) (5,984,653) (2,767,618)
Forward swaps (24,419) 24,419 (12,888) 12,888
Futures -- -- -- --
Distributions to Preferred shareholders:
From net investment income (2,110,558) (4,037,528) (704,723) (1,431,890)
From accumulated net realized gains (116,419) (10,666) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations (10,015,229) 2,880,926 (2,818,672) 1,502,692
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (5,495,318) (11,778,209) (2,083,514) (4,166,045)
From accumulated net realized gains (340,878) (39,709) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (5,836,196) (11,817,918) (2,083,514) (4,166,045)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions -- 335,845 8,695 32,211
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions -- 335,845 8,695 32,211
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (15,851,425) (8,601,147) (4,893,491) (2,631,142)
Net assets applicable to Common
shares at the beginning of period 227,923,442 236,524,589 85,143,663 87,774,805
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $212,072,017 $227,923,442 $80,250,172 $85,143,663
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of period $ (334,367) $ (520,310) $ (41,041) $ (109,506)
====================================================================================================================================
See accompanying notes to financial statements.
72
Notes to
FINANCIAL STATEMENTS (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
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) (collectively,
the "Funds"). 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.
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 or
certain U.S. territories.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service may establish fair value based on
yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of forward swap contracts are also provided by an independent
pricing service approved by each Fund's Board of Directors/Trustees. Futures
contracts are valued using the closing settlement price, or in the absence or
such a price, at the mean of the bid and asked prices. If the pricing service is
unable to supply a price for a municipal bond, forward swap or futures contract,
each Fund may use market quotes provided by major broker/dealers in such
investments. If it is determined that the market price for an investment or
derivative instrument is unavailable or inappropriate, the Board of
Directors/Trustees of the Funds, or its designee, may establish fair value in
accordance with procedures established in good faith by the Board of
Directors/Trustees. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from transactions are determined on the specific identification method.
Investments purchased on a when-issued/delayed delivery basis may have extended
settlement periods. Any investments so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued/delayed delivery purchase commitments. At February 29, 2008, there
were no such outstanding purchase commitments in any of the Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all of its net investment income and net
capital gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
73
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. Net realized capital gains and ordinary income distributions paid
by the Funds are subject to federal taxation.
Effective February 29, 2008, the Funds adopted Financial Accounting Standards
Board (FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
(FIN 48). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the affirmative evaluation of tax positions taken or expected to be
taken in the course of preparing the Funds' tax returns to determine whether it
is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold may result in a tax benefit or expense in the
current year.
Implementation of FIN 48 required management of the Funds to analyze all open
tax years, as defined by the statute of limitations, for all major
jurisdictions, which includes federal and certain states. Open tax years are
those that are open for examination by taxing authorities (i.e., generally the
last four tax year ends and the interim tax period since then). The Funds have
no examinations in progress.
For all open tax years and all major taxing jurisdictions through the end of the
reporting period, management of the Funds has reviewed all tax positions taken
or expected to be taken in the preparation of the Funds' tax returns and
concluded the adoption of FIN 48 resulted in no impact to the Funds' net assets
or results of operations as of and during the six months ended February 29,
2008.
The Funds are also not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders 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 U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one or more Series. The dividend rate paid by the Funds on each
Series is determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and is payable at the end of each rate period.
The number of Preferred shares outstanding, by Series and in total, for each
Fund is as follows:
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
================================================================================
74
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
================================================================================
Insurance
During the six months ended February 29, 2008, Insured California Premium Income
(NPC) and Insured California Premium Income 2 (NCL) invested only in municipal
securities which were 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.
During the six months ended February 29, 2008, Insured California Dividend
Advantage (NKL) and Insured California Tax-Free Advantage (NKX) invested at
least 80% of their net assets (including net assets attributable to Preferred
shares) in municipal securities that were covered by insurance. Each Fund may
have also invested up to 20% of its net assets (including net assets
attributable to Preferred shares) in municipal securities which were either (i)
backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities, or (ii) 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 Nuveen Asset Management (the
"Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. ("Nuveen").
Effective March 20, 2008, pursuant to action taken by the Funds' Board of
Directors/Trustees, under normal circumstances, Insured California Dividend
Advantage (NKL) and Insured California Tax-Free Advantage (NKX) must invest at
least 80% of their net assets (including net assets attributable to Preferred
shares) in municipal securities which are either covered by insurance or 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. For purposes of this 80% test, insurers must have a
claims paying ability rated at least A at the time of purchase. In addition,
each Fund must invest at least 80% of their net assets (including net assets
attributable to Preferred shares) in municipal securities that are rated at
least AA at the time of purchase. Each Fund may also invest up to 20% of their
net assets (including net assets attributable to Preferred shares) in municipal
securities rated below AA (based on the higher rating of the insurer, if any, or
the underlying bond) or are unrated but judged to be of comparable quality by
the Adviser.
The foregoing policy changes will be implemented in Insured California Premium
Income (NPC) and Insured California Premium Income 2 (NCL) pending shareholder
approval.
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, in contrast, 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.
Inverse Floating Rate Securities
Each Fund may invest in inverse floating rate securities. An inverse floating
rate security is created by depositing a municipal bond, typically with a fixed
interest rate, into a special purpose trust created by a broker-dealer. In turn,
this trust (a) issues floating rate certificates, in face amounts equal to some
fraction of the deposited bond's par amount or market value, that typically pay
short-term tax-exempt interest rates to third parties, and (b) issues to a
long-term investor (such as one of the Funds) an inverse floating rate
certificate (sometimes referred to as an "inverse floater") that represents all
remaining or residual interest in the trust. The income received by the inverse
floater holder varies inversely with the short-term rate paid to the floating
rate certificates' holders, and in most circumstances the inverse floater holder
bears substantially all of the underlying bond's downside investment risk and
also benefits disproportionately from any potential appreciation of the
underlying bond's value. The price of an inverse floating rate security will be
more volatile than that of the underlying bond because the interest rate is
dependent on not only the fixed coupon rate of the underlying bond but also on
the short-term interest paid on the floating rate certificates, and because the
inverse floating rate security essentially bears the risk of loss of the greater
face value of the underlying bond.
A Fund may purchase an inverse floating rate security in a secondary market
transaction without first owning the underlying bond (referred to as an
"externally-deposited inverse floater"), or instead by first selling a
fixed-rate bond to a broker-dealer for deposit into the special purpose trust
and receiving in turn the residual interest in the trust (referred to as a
"self-deposited inverse floater"). A Fund may also enter into shortfall and
forbearance agreements (sometimes referred to as a "recourse trust" or "credit
recovery
75
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
swap") with a broker-dealer by which a Fund agrees to reimburse the
broker-dealer, in certain circumstances, for the difference between the
liquidation value of the fixed-rate bond held by the trust and the liquidation
value of the floating rate certificates, as well as any shortfalls in interest
cash flows. The inverse floater held by a Fund gives the Fund the right (a) to
cause the holders of the floating rate certificates to tender their notes at
par, and (b) to have the broker transfer the fixed-rate bond held by the trust
to the Fund, thereby collapsing the trust. An investment in an
externally-deposited inverse floater is identified in the Portfolio of
Investments as an "Inverse floating rate investment". An investment in a
self-deposited inverse floater, recourse trust or credit recovery swap is
accounted for as a financing transaction in accordance with Statement of
Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". In such
instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as an "Underlying bond of an inverse
floating rate trust", with the Fund accounting for the short-term floating rate
certificates issued by the trust as "Floating rate obligations" on the Statement
of Assets and Liabilities. In addition, the Fund reflects in Investment Income
the entire earnings of the underlying bond and accounts for the related interest
paid to the holders of the short-term floating rate certificates as "Interest
expense on floating rate obligations" in the Statement of Operations.
During the six months ended February 29, 2008, each Fund invested in externally
deposited inverse floaters and/or self-deposited inverse floaters.
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the six months
ended February 29, 2008, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations -- $1,480,879 $2,352,000 $12,702,505
Average annual interest rate and fees -- 3.15% 3.36% 3.31%
==================================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $6,171,000 $261,429 -- --
Average annual interest rate and fees 3.36% 3.99% -- --
==================================================================================================================
Forward Swap Transactions
Each Fund is authorized to invest in forward interest rate swap transactions.
Each Fund's use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination
76
date increases or decreases. The Funds may terminate a swap contract prior to
the effective date, at which point a realized gain or loss is recognized. When a
forward swap is terminated, it ordinarily does not involve the delivery of
securities or other underlying assets or principal, but rather is settled in
cash on a net basis. Each Fund intends, but is not obligated, to terminate its
forward swaps before the effective date. Accordingly, the risk of loss with
respect to the swap counterparty on such transactions is limited to the credit
risk associated with a counterparty failing to honor its commitment to pay any
realized gain to the Fund upon termination. To reduce such credit risk, all
counterparties are required to pledge collateral daily (based on the daily
valuation of each swap) on behalf of each Fund with a value approximately equal
to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to pledge assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above a pre-determined threshold. Collateral pledges are monitored and
subsequently adjusted if and when the swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount. California Dividend
Advantage 3 (NZH) was the only Fund to invest in forward interest rate swap
transactions during the six months ended February 29, 2008.
Futures Contracts
Each Fund is authorized to invest in futures contracts. Upon entering into a
futures contract, a Fund is required to deposit with the broker an amount of
cash or liquid securities equal to a specified percentage of the contract
amount. This is known as the "initial margin." Subsequent payments ("variation
margin") are made or received by a Fund each day, depending on the daily
fluctuation of the value of the contract.
During the period the futures contract is open, changes in the value of the
contract are recognized as an unrealized gain or loss by "marking-to-market" on
a daily basis to reflect the changes in market value of the contract. When the
contract is closed or expired, a Fund records a realized gain or loss equal to
the difference between the value of the contract on the closing date and value
of the contract when originally entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts, if any, is recognized in
the Statement of Assets and Liabilities. Additionally, the Statement of Assets
and Liabilities reflects a receivable or payable for the variation margin when
applicable. California Dividend Advantage 3 (NZH) was the only Fund to invest in
futures contracts during the six months ended February 29, 2008.
Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon
security does not pay a regular interest coupon to its holders during the life
of the security. Tax-exempt income to the holder of the security comes from
accretion of the difference between the original purchase price of the security
at issuance and the par value of the security at maturity and is effectively
paid at maturity. Such securities are included in the Portfolios of Investments
with a 0.000% coupon rate in their description. The market prices of zero coupon
securities generally are more volatile than the market prices of securities that
pay interest periodically.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on each Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments. Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.
Indemnifications
Under the Funds' organizational documents, their Officers and 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. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
77
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
2. FUND SHARES
Transactions in Common shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
------------------------ ----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/29/08 8/31/07 2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- 4,166 -- -- -- 972
==================================================================================================================
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE (NAC) ADVANTAGE 2 (NVX) ADVANTAGE 3 (NZH)
------------------------ ----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/29/08 8/31/07 2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- 29,993 -- 6,762 -- 19,501
==================================================================================================================
INSURED INSURED
CALIFORNIA DIVIDEND CALIFORNIA TAX-FREE
ADVANTAGE (NKL) ADVANTAGE (NKX)
----------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
2/29/08 8/31/07 2/29/08 8/31/07
------------------------------------------------------------------------------------------------------------------
Common shares issued to shareholders
due to reinvestment of distributions -- 21,450 581 2,139
==================================================================================================================
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the six months ended February 29, 2008, were
as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------
Purchases $5,074,263 $20,695,318 $2,861,137 $62,722,422
Sales and maturities 8,120,311 21,575,086 5,404,343 69,857,789
==================================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------
Purchases $31,943,287 $62,036,632 $16,231,628 $ 6,157,807
Sales and maturities 32,123,668 79,197,160 23,513,113 18,540,077
==================================================================================================================
78
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, timing differences
in recognizing taxable market discount, timing differences in recognizing
certain gains and losses on investment transactions and the treatment of
investments in inverse floating rate transactions subject to SFAS No.140. To the
extent that differences arise that are permanent in nature, such amounts are
reclassified within the capital accounts on the Statement of Assets and
Liabilities presented in the annual report, based on their federal tax basis
treatment; temporary differences do not require reclassification. Temporary and
permanent differences do not impact the net asset values of the Funds.
At February 29, 2008, the cost of investments was as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------
Cost of investments $133,136,676 $266,024,756 $117,339,770 $499,526,736
==================================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------
Cost of investments $317,999,611 $510,373,461 $333,149,615 $118,301,952
==================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at February 29, 2008, 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 $ 5,757,937 $ 5,317,086 $ 2,257,259 $ 10,466,723
Depreciation (3,970,783) (11,345,972) (4,797,229) (23,677,616)
------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $ 1,787,154 $ (6,028,886) $ (2,539,970) $(13,210,893)
==================================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 9,135,887 $ 8,746,883 $ 4,991,670 $ 1,814,455
Depreciation (14,238,418) (27,599,009) (11,046,748) (5,210,357)
-------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $ (5,102,531) $(18,852,126) $ (6,055,078) $ (3,395,902)
==================================================================================================================
79
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at August 31, 2007, the Funds' last tax 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 * $520,376 $377,220 $194,292 $444,969
Undistributed net ordinary income ** 212,281 4,534 -- --
Undistributed net long-term capital gains 16,768 -- 886 294,361
====================================================================================================================
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 * $268,220 $585,805 $239,745 $226,861
Undistributed net ordinary income ** -- -- -- --
Undistributed net long-term capital gains -- -- 456,991 --
====================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on August 1, 2007, paid on September 4, 2007.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the Funds' last tax year ended
August 31, 2007, 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 $6,064,156 $11,716,879 $5,291,072 $24,556,552
Distributions from net ordinary income ** 46,600 -- -- 395
Distributions from net long-term capital gains 604,806 -- 228,328 1,560,803
====================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
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 $15,011,893 $24,913,042 $15,884,429 $5,618,698
Distributions from net ordinary income ** -- -- -- --
Distributions from net long-term capital gains -- -- 50,375 --
====================================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
80
At August 31, 2007, the Funds' last tax 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
PREMIUM DIVIDEND DIVIDEND TAX-FREE
INCOME 2 ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE
(NCL) (NVX) (NZH) (NKX)
------------------------------------------------------------------------------------------------------------------
Expiration year:
2009 $199,461 $ -- $ -- $ --
2010 440,509 -- -- --
2011 -- -- 2,816,212 218,696
2012 -- 90,840 323,840 --
2013 -- -- -- 59,857
2014 -- -- -- 85,788
------------------------------------------------------------------------------------------------------------------
Total $639,970 $90,840 $3,140,052 $364,341
==================================================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2006 through August 31, 2007, the Funds' last tax
year-end, ("post-October losses") in accordance with federal income tax
regulations. Post-October losses are treated as having arisen on the first day
of the current fiscal year:
INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM DIVIDEND TAX-FREE
INCOME ADVANTAGE 3 ADVANTAGE
(NCU) (NZH) (NKX)
--------------------------------------------------------------------------------
$324,473 $1,599,933 $63,065
================================================================================
81
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within each individual Fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
INSURED CALIFORNIA PREMIUM INCOME (NPC)
AVERAGE DAILY NET ASSETS INSURED CALIFORNIA PREMIUM INCOME 2 (NCL)
(INCLUDING NET ASSETS CALIFORNIA PREMIUM INCOME (NCU)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
CALIFORNIA DIVIDEND ADVANTAGE (NAC)
CALIFORNIA DIVIDEND ADVANTAGE 2 (NVX)
CALIFORNIA DIVIDEND ADVANTAGE 3 (NZH)
AVERAGE DAILY NET ASSETS INSURED CALIFORNIA DIVIDEND ADVANTAGE (NKL)
(INCLUDING NET ASSETS INSURED CALIFORNIA TAX-FREE ADVANTAGE (NKX)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the table below. As
of February 29, 2008, the complex-level fee rate was .1869%.
82
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion .2000%
$56 billion .1996
$57 billion .1989
$60 billion .1961
$63 billion .1931
$66 billion .1900
$71 billion .1851
$76 billion .1806
$80 billion .1773
$91 billion .1691
$125 billion .1599
$200 billion .1505
$250 billion .1469
$300 billion .1445
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to its Officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
funds.
For the first ten years of 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.
83
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
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.
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.
84
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.
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy
City would acquire Nuveen Investments. Madison Dearborn is a private equity
investment firm based in Chicago, Illinois. The merger was consummated on
November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between each Fund and the Adviser, and resulted in the automatic
termination of each Fund's agreement. The Board of Directors/Trustees of each
Fund considered and approved a new investment management agreement with the
Adviser on the same terms as the previous agreements. Each new ongoing
agreement, was approved by the shareholders of each Fund and took effect on
November 13, 2007.
The investors led by Madison Dearborn includes an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of each Fund. Certain conflicts
of interest may arise as a result of such indirect affiliation. For example, the
Funds are generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation will
significantly impact the ability of the Funds to pursue their investment
objectives and policies.
85
Notes to
FINANCIAL STATEMENTS (continued) (Unaudited)
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of February 29, 2008, management does not believe the adoption
of SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 161
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." This standard is intended to enhance
financial statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a fund uses
derivative instruments, b) how derivative instruments and related hedge items
are accounted for, and c) how derivative instruments and related hedge items
affect a fund's financial position, results of operations and cash flows. SFAS
No. 161 is effective for financial statements issued for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal years. As of
February 29, 2008, management does not believe the adoption of SFAS No. 161 will
impact the financial statement amounts; however, additional footnote disclosures
may be required about the use of derivative instruments and hedging items.
7. SUBSEQUENT EVENTS
Auction Rate Preferred Markets
Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled auctions for the Preferred shares issued by the Funds than there were
offers to buy. This meant that these auctions "failed to clear,'' and that many
Preferred shareholders who wanted to sell their shares in these auctions were
unable to do so. Preferred shareholders unable to sell their shares received
distributions at the "maximum rate'' calculated in accordance with the
pre-established terms of the Preferred shares.
These developments generally do not affect the management or investment policies
of the Funds. However, one implication of these auction failures for Common
shareholders is that the Funds' cost of leverage will be higher than it
otherwise would have been had the auctions continued to be successful. As a
result, the Funds' future Common share earnings may be lower than they otherwise
would have been.
86
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on April 1, 2008, to shareholders of record on
March 15, 2008, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
--------------------------------------------------------------------------------
Dividend per share $.0605 $.0530 $.0535 $.0615
================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
--------------------------------------------------------------------------------
Dividend per share $.0575 $.0590 $.0595 $.0590
================================================================================
87
Financial
HIGHLIGHTS (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- ---------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
=============================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
-----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $15.04 $.47 $ (.68) $(.12) $--**** $(.33) $(.36) $(.01) $ (.37)
2007 15.58 .90 (.40) (.21) (.02) .27 (.73) (.08) (.81)
2006 16.21 .92 (.38) (.18) (.02) .34 (.83) (.14) (.97)
2005 16.23 .95 .22 (.10) (.01) 1.06 (.92) (.16) (1.08)
2004 15.59 .99 .68 (.05) -- 1.62 (.93) (.05) (.98)
2003 16.17 .99 (.45) (.06) (.01) .47 (.97) (.08) (1.05)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
-----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 14.50 .46 (1.05) (.13) -- (.72) (.32) -- (.32)
2007 14.99 .89 (.46) (.25) -- .18 (.67) -- (.67)
2006 15.33 .90 (.28) (.20) -- .42 (.76) -- (.76)
2005 15.12 .91 .29 (.11) -- 1.09 (.88) -- (.88)
2004 14.60 .96 .53 (.06) -- 1.43 (.91) -- (.91)
2003 15.08 .99 (.51) (.07) -- .41 (.89) -- (.89)
=============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
======================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
--------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ -- $14.34 $13.48 (7.50)% (2.27)%
2007 -- 15.04 14.96 4.61 1.70
2006 -- 15.58 15.08 1.00 2.23
2005 -- 16.21 15.90 7.58 6.74
2004 -- 16.23 15.81 11.80 10.64
2003 -- 15.59 15.07 1.55 2.82
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
--------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) -- 13.46 12.66 (5.41) (5.11)
2007 -- 14.50 13.71 1.26 1.18
2006 -- 14.99 14.19 (.63) 2.91
2005 -- 15.33 15.05 5.10 7.42
2004 -- 15.12 15.18 12.71 10.02
2003 -- 14.60 14.32 2.69 2.71
======================================================================================
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------- ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ 92,622 1.17%*** 1.17%*** 6.09%*** 1.16%*** 1.16%*** 6.10%*** 4%
2007 97,176 1.22 1.16 5.84 1.20 1.14 5.87 9
2006 100,581 1.16 1.16 5.89 1.15 1.15 5.90 9
2005 104,510 1.14 1.14 5.85 1.13 1.13 5.86 9
2004 104,618 1.17 1.17 6.17 1.16 1.16 6.17 25
2003 100,427 1.17 1.17 6.13 1.16 1.16 6.14 26
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 171,124 1.21*** 1.19*** 6.30*** 1.21*** 1.18*** 6.30*** 7
2007 184,343 1.24 1.18 6.00 1.22 1.17 6.01 19
2006 190,571 1.20 1.20 6.05 1.19 1.19 6.05 14
2005 194,895 1.17 1.17 6.03 1.17 1.17 6.03 7
2004 192,035 1.19 1.19 6.38 1.19 1.19 6.38 35
2003 185,181 1.20 1.20 6.53 1.19 1.19 6.54 22
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- --------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
INSURED CALIFORNIA PREMIUM INCOME (NPC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $45,000 $25,000 $76,456 $ -- $ --
2007 45,000 25,000 78,987 -- --
2006 45,000 25,000 80,878 -- --
2005 45,000 25,000 83,061 -- --
2004 45,000 25,000 83,121 -- --
2003 45,000 25,000 80,793 -- --
INSURED CALIFORNIA PREMIUM INCOME 2 (NCL)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 95,000 25,000 70,033 16,845 16,798
2007 95,000 25,000 73,511 -- --
2006 95,000 25,000 75,150 -- --
2005 95,000 25,000 76,288 -- --
2004 95,000 25,000 75,535 -- --
2003 95,000 25,000 73,732 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** Annualized.
**** Distributions from Capital Gains to Preferred Shareholders rounds to less
than $.01 per share.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended February 29, 2008.
See accompanying notes to financial statements.
88-89 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
============================================================================================================================
CALIFORNIA PREMIUM
INCOME (NCU)
----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $14.06 $ .46 $ (.94) $(.13) $ -- $(.61) $(.32) $ -- $ (.32)
2007 14.63 .90 (.52) (.24) (.01) .13 (.67) (.03) (.70)
2006 15.03 .89 (.30) (.21) -- .38 (.77) (.01) (.78)
2005 14.51 .90 .60 (.12) -- 1.38 (.86) -- (.86)
2004 13.66 .94 .85 (.06) -- 1.73 (.88) -- (.88)
2003 14.42 .96 (.78) (.07) -- .11 (.87) -- (.87)
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 14.93 .51 (1.03) (.13) (.01) (.66) (.37) (.04) (.41)
2007 15.59 1.00 (.56) (.24) (.01) .19 (.80) (.05) (.85)
2006 15.98 1.01 (.25) (.21) -- .55 (.91) (.03) (.94)
2005 15.59 1.04 .50 (.12) -- 1.42 (.98) (.05) (1.03)
2004 14.82 1.05 .76 (.06) -- 1.75 (.98) -- (.98)
2003 15.24 1.06 (.47) (.07) -- .52 (.94) -- (.94)
============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
================================================================================
CALIFORNIA PREMIUM
INCOME (NCU)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ -- $13.13 $12.34 (2.93)% (4.47)%
2007 -- 14.06 13.03 (2.21) .82
2006 -- 14.63 14.01 3.14 2.72
2005 -- 15.03 14.37 11.76 9.75
2004 -- 14.51 13.67 12.04 12.94
2003 -- 13.66 13.02 (.91) .69
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) -- 13.86 13.23 (4.99) (4.62)
2007 -- 14.93 14.34 (5.19) 1.16
2006 -- 15.59 15.97 5.47 3.63
2005 -- 15.98 16.07 14.62 9.41
2004 -- 15.59 15.00 12.07 12.11
2003 -- 14.82 14.30 4.79 3.37
================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------------------ ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ 75,817 1.31%*** 1.21%*** 6.44%*** 1.30%*** 1.20%*** 6.45%*** 2%
2007 81,200 1.29 1.21 6.14 1.27 1.19 6.16 11
2006 84,467 1.23 1.23 6.09 1.21 1.21 6.10 20
2005 86,785 1.21 1.21 6.08 1.20 1.20 6.09 13
2004 83,772 1.23 1.23 6.62 1.22 1.22 6.63 19
2003 78,859 1.24 1.24 6.72 1.24 1.24 6.72 24
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 325,514 1.26*** 1.14*** 6.60*** 1.10*** .98*** 6.76*** 12
2007 350,523 1.17 1.12 6.24 .94 .89 6.47 20
2006 365,516 1.13 1.13 6.22 .83 .83 6.51 13
2005 374,265 1.12 1.12 6.22 .75 .75 6.59 4
2004 365,066 1.14 1.14 6.38 .70 .70 6.83 12
2003 346,918 1.15 1.15 6.44 .70 .70 6.88 11
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- --------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CALIFORNIA PREMIUM INCOME (NCU)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ 43,000 $25,000 $69,079 $ 2,352 $51,517
2007 43,000 25,000 72,209 2,352 53,806
2006 43,000 25,000 74,109 -- --
2005 43,000 25,000 75,456 -- --
2004 43,000 25,000 73,704 -- --
2003 43,000 25,000 70,848 -- --
CALIFORNIA DIVIDEND ADVANTAGE (NAC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 175,000 25,000 71,502 41,488 13,064
2007 175,000 25,000 75,075 9,928 53,933
2006 175,000 25,000 77,217 -- --
2005 175,000 25,000 78,466 -- --
2004 175,000 25,000 77,152 -- --
2003 175,000 25,000 74,560 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized. Total Return on
Common Share Net Asset Value is the combination of changes in Common share
net asset value, reinvested dividend income at net asset value and
reinvested capital gains distributions at net asset value, if any. The last
dividend declared in the period, which is typically paid on the first
business day of the following month, is assumed to be reinvested at the
ending net asset value. The actual reinvest price for the last dividend
declared in the period may often be based on the Fund's market price (and
not its net asset value), and therefore may be different from the price
used in the calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended February 29, 2008.
See accompanying notes to financial statements.
90-91 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- -------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===========================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $14.69 $ .50 $ (.79) $(.13) $ -- $(.42) $(.35) $ -- $(.35)
2007 15.36 .96 (.62) (.25) -- .09 (.76) -- (.76)
2006 15.63 .97 (.19) (.21) -- .57 (.84) -- (.84)
2005 14.97 .98 .71 (.12) -- 1.57 (.91) -- (.91)
2004 14.18 .99 .77 (.06) -- 1.70 (.91) -- (.91)
2003 14.79 1.00 (.62) (.07) -- .31 (.89) (.03) (.92)
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 14.25 .51 (1.23) (.14) -- (.86) (.35) -- (.35)
2007 15.03 .98 (.73) (.27) -- (.02) (.76) -- (.76)
2006 15.31 .97 (.20) (.22) -- .55 (.83) -- (.83)
2005 14.65 .97 .68 (.13) -- 1.52 (.86) -- (.86)
2004 13.72 .98 .88 (.07) -- 1.79 (.86) -- (.86)
2003 14.33 .98 (.66) (.08) -- .24 (.86) -- (.86)
===========================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
====================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $ -- $13.92 $12.85 (3.96)% (2.93)%
2007 -- 14.69 13.73 (3.39) .46
2006 -- 15.36 14.95 4.19 3.82
2005 -- 15.63 15.19 14.98 10.80
2004 -- 14.97 14.08 13.60 12.11
2003 -- 14.18 13.24 (.95) 2.16
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) -- 13.04 12.40 (5.79) (6.12)
2007 -- 14.25 13.52 (4.12) (.32)
2006 -- 15.03 14.84 8.50 3.81
2005 -- 15.31 14.49 15.75 10.69
2004 -- 14.65 13.33 11.97 13.36
2003 .01 13.72 12.71 (3.20) 1.68
====================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement**
-------------------------------------------- ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $206,042 1.26%*** 1.16%*** 6.41%*** .95%*** .85%*** 6.72%*** 10%
2007 217,332 1.25 1.17 5.97 .89 .81 6.33 21
2006 227,160 1.16 1.16 5.94 .73 .73 6.36 9
2005 231,140 1.16 1.16 5.94 .70 .70 6.40 3
2004 221,395 1.18 1.18 6.24 .72 .72 6.70 13
2003 209,722 1.18 1.18 6.30 .73 .73 6.75 40
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 314,714 1.18*** 1.17*** 6.78*** .84*** .84*** 7.11*** 12
2007 343,806 1.22 1.16 6.16 .81 .76 6.56 23
2006 362,473 1.16 1.16 6.08 .70 .70 6.54 10
2005 369,262 1.17 1.17 6.05 .70 .70 6.51 5
2004 353,360 1.20 1.20 6.32 .73 .73 6.78 13
2003 330,829 1.20 1.20 6.33 .73 .73 6.79 48
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- --------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
CALIFORNIA DIVIDEND ADVANTAGE 2 (NVX)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) $110,000 $25,000 $71,828 $6,171 $52,214
2007 110,000 25,000 74,394 6,171 54,044
2006 110,000 25,000 76,627 -- --
2005 110,000 25,000 77,532 -- --
2004 110,000 25,000 75,317 -- --
2003 110,000 25,000 72,664 -- --
CALIFORNIA DIVIDEND ADVANTAGE 3 (NZH)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(b) 187,000 25,000 67,074 -- --
2007 187,000 25,000 70,963 7,930 67,936
2006 187,000 25,000 73,459 -- --
2005 187,000 25,000 74,367 -- --
2004 187,000 25,000 72,241 -- --
2003 187,000 25,000 69,229 -- --
================================================================================
* Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
*** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the six months ended February 29, 2008.
See accompanying notes to financial statements.
92-93 spread
Financial
HIGHLIGHTS (continued) (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
=============================================================================================================================
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
-----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) $14.91 $ .51 $(1.02) $(.14) $(.01) $(.66) $(.36) $(.02) $ (.38)
2007 15.50 1.01 (.57) (.26) --* .18 (.77) --* (.77)
2006 15.81 1.01 (.25) (.22) -- .54 (.85) -- (.85)
2005 15.35 1.01 .52 (.12) -- 1.41 (.90) (.05) (.95)
2004 14.60 1.02 .84 (.06) (.01) 1.79 (.91) (.13) (1.04)
2003 15.14 .99 (.49) (.07) (.01) .42 (.91) (.05) (.96)
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
-----------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) 14.47 .49 (.86) (.12) -- (.49) (.35) -- (.35)
2007 14.92 .96 (.46) (.24) -- .26 (.71) -- (.71)
2006 15.17 .95 (.25) (.21) -- .49 (.74) -- (.74)
2005 14.62 .96 .57 (.13) -- 1.40 (.85) -- (.85)
2004 13.79 .96 .84 (.06) -- 1.74 (.91) -- (.91)
2003(b) 14.33 .64 (.33) (.04) -- .27 (.60) -- (.60)
=============================================================================================================================
Total Returns
--------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Asset Market Market Asset
Discounts Value Value Value** Value**
==================================================================================
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
----------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) $ -- $13.87 $13.21 (4.67)% (4.58)%
2007 -- 14.91 14.24 (4.64) 1.13
2006 -- 15.50 15.70 10.72 3.62
2005 -- 15.81 15.00 9.00 9.46
2004 -- 15.35 14.67 12.54 12.53
2003 -- 14.60 14.00 (.35) 2.70
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
----------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) -- 13.63 13.59 (3.73) (3.50)
2007 -- 14.47 14.47 6.35 1.69
2006 -- 14.92 14.27 4.56 3.43
2005 -- 15.17 14.38 7.46 9.84
2004 -- 14.62 14.19 11.54 12.86
2003(b) (.21) 13.79 13.56 (5.79) .34
==================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement After Credit/Reimbursement***
------------------------------------------- ------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate
====================================================================================================================================
INSURED CALIFORNIA
DIVIDEND ADVANTAGE
(NKL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) $212,072 1.18%**** 1.18%**** 6.38%**** .79%**** .79%**** 6.77%**** 5%
2007 227,923 1.21 1.16 6.12 .78 .73 6.55 12
2006 236,525 1.17 1.17 6.12 .71 .71 6.58 3
2005 241,254 1.16 1.16 6.06 .71 .71 6.51 4
2004 234,186 1.18 1.18 6.28 .72 .72 6.74 14
2003 222,751 1.18 1.18 6.00 .72 .72 6.46 71
INSURED CALIFORNIA
TAX-FREE ADVANTAGE
(NKX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) 80,250 1.23**** 1.23**** 6.15**** .78**** .78**** 6.60**** 5
2007 85,144 1.27 1.21 5.95 .77 .71 6.45 15
2006 87,775 1.22 1.22 5.97 .73 .73 6.46 4
2005 89,272 1.21 1.21 5.95 .73 .73 6.43 3
2004 86,008 1.23 1.23 6.17 .73 .73 6.67 20
2003(b) 81,141 1.14**** 1.14**** 5.25**** .67**** .67**** 5.72**** 45
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- --------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
================================================================================
INSURED CALIFORNIA DIVIDEND ADVANTAGE (NKL)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) $118,000 $25,000 $69,931 $ -- $ --
2007 118,000 25,000 73,289 -- --
2006 118,000 25,000 75,111 -- --
2005 118,000 25,000 76,113 -- --
2004 118,000 25,000 74,616 -- --
2003 118,000 25,000 72,193 -- --
INSURED CALIFORNIA TAX-FREE ADVANTAGE (NKX)
--------------------------------------------------------------------------------
Year Ended 8/31:
2008(c) 45,000 25,000 69,583 -- --
2007 45,000 25,000 72,302 -- --
2006 45,000 25,000 73,764 -- --
2005 45,000 25,000 74,595 -- --
2004 45,000 25,000 72,782 -- --
2003(b) 45,000 25,000 70,078 -- --
================================================================================
* Distributions from Capital Gains to Preferred Shareholders and Capital
Gains to Common Shareholders round to less than $.01 per share.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period may take place
over several days, and in some instances may not be based on the market
price, so the actual reinvestment price may be different from the price
used in the calculation. Total returns are not annualized.
Total Return on Common Share Net Asset Value is the combination of changes
in Common share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset value, if
any. The last dividend declared in the period, which is typically paid on
the first business day of the following month, is assumed to be reinvested
at the ending net asset value. The actual reinvest price for the last
dividend declared in the period may often be based on the Fund's market
price (and not its net asset value), and therefore may be different from
the price used in the calculation. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
**** Annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the period November 21, 2002 (commencement of operations) through
August 31, 2003. (c) For the six months ended February 29, 2008. See
accompanying notes to financial statements.
94-95 spread
Reinvest Automatically
EASILY and CONVENIENTLY
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
greater of the net asset value or 95% of the then-current market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading below net asset value, but the Fund's
shares subsequently trade at or above their net asset value before the Plan
Agent is able to complete its purchases, the Plan Agent may cease open-market
purchases and may invest the uninvested portion of the distribution in
newly-issued Fund shares at a price equal to the greater of the shares' net
asset value or 95% of the shares' market value on the last business day
immediately prior to the purchase date. Dividends and distributions received to
purchase shares in the open market will normally be invested shortly after the
dividend payment date. No interest will be paid on dividends and distributions
awaiting reinvestment. Because the market price of the shares may increase
before purchases are completed, the average purchase price per share may exceed
the market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or distribution had been paid in shares issued by
the Fund. A pro rata portion of any applicable brokerage commissions on open
market purchases will be paid by Plan participants. These commissions usually
will be lower than those charged on individual transactions.
96
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
97
Glossary of
TERMS USED in this REPORT
o AUCTION RATE BOND: An auction rate bond is a security whose interest
payments are adjusted periodically through an auction process, which
process typically also serves as a means for buying and selling the bond.
Auctions that fail to attract enough buyers for all the shares offered for
sale are deemed to have "failed", with current holders receiving a
formula-based interest rate until the next scheduled auction.
o AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment's actual cumulative performance (including change in NAV or
market price and reinvested dividends and capital gains distributions, if
any) over the time period being considered.
o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity
of the bonds in a Fund's portfolio, computed by weighting each bond's time
to maturity (the date the security comes due) by the market value of the
security. This figure does not account for the likelihood of prepayments or
the exercise of call provisions unless an escrow account has been
established to redeem the bond before maturity. The market value weighting
for an investment in an inverse floating rate security is the value of the
portfolio's residual interest in the inverse floating rate trust, and does
not include the value of the floating rate securities issued by the trust.
o INVERSE FLOATERS: Inverse floating rate securities are created by
depositing a municipal bond, typically with a fixed interest rate, into a
special purpose trust created by a broker-dealer. This trust, in turn, (a)
issues floating rate certificates typically paying short-term tax-exempt
interest rates to third parties in amounts equal to some fraction of the
deposited bond's par amount or market value, and (b) issues an inverse
floating rate certificate (sometimes referred to as an "inverse floater")
to an investor (such as a Fund) interested in gaining investment exposure
to a long-term municipal bond. The income received by the holder of the
inverse floater varies inversely with the short-term rate paid to the
floating rate certificates' holders, and in most circumstances the holder
of the inverse floater bears substantially all of the underlying bond's
downside investment risk. The holder of the inverse floater typically also
benefits disproportionately from any potential appreciation of the
underlying bond's value. Hence, an inverse floater essentially represents
an investment in the underlying bond on a leveraged basis.
o LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period
over which a bond's principal and interest will be paid, and consequently
is a measure of the sensitivity of a bond's or bond Fund's value to changes
when market interest rates change. Generally, the longer a bond's or Fund's
duration, the more the price of the bond or Fund will change as interest
rates change. Leverage-adjusted duration takes into account the leveraging
process for a Fund and therefore is longer than the duration of the Fund's
portfolio of bonds.
o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An
investment's current annualized dividend divided by its current market
price.
o NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any Preferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
o TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
o ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
to its holders during the life of the bond. Tax-exempt income to the holder
of the bond comes from accretion of the difference between the original
purchase price of the bond at issuance and the par value of the bond at
maturity and is effectively paid at maturity. The market prices of zero
coupon bonds generally are more volatile than the market prices of bonds
that pay interest periodically.
98
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
You may obtain (i) each Fund's quarterly portfolio of investments, (ii)
information regarding how the Funds voted proxies relating to portfolio
securities held during the twelve-month period ended June 30, 2007, and (iii) a
description of the policies and procedures that the Funds used to determine how
to vote proxies relating to portfolio securities without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 100 F Street NE, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carole E. Stone
FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
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 common
or preferred shares were repurchased during the period covered by this report.
Any future repurchases will be reported to shareholders in the next annual or
semi-annual report.
99
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Managing $164 billion in assets, as of December 31, 2007, Nuveen Investments
offers access to a number of different asset classes and investing solutions
through a variety of products. Nuveen Investments markets its capabilities under
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
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Investor education
Interactive planning tools
ESA-B-0208D
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.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form.
(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: See
Ex-99.CERT attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons: Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference: See Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Insured California Tax-Free Advantage Municipal Fund
------------------------------------------------------------
By (Signature and Title) /s/ Kevin J. McCarthy
-----------------------------------------------
Kevin J. McCarthy
(Vice President and Secretary)
Date: May 8, 2008
--------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Gifford R. Zimmerman
-----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: May 8, 2008
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By (Signature and Title) /s/ Stephen D. Foy
-----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: May 8, 2008
--------------------------------------------------------------------