As filed with the Securities and Exchange Commission on November 16, 2012
1933 Act Registration No. 333-14725
1940 Act Registration No. 811-07873
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
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REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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Post-Effective Amendment No.
33
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x
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and/or
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REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
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Amendment No. 36
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Nuveen Municipal Trust
(Exact
Name of Registrant as Specified in Declaration of Trust)
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333 West Wacker Drive, Chicago, Illinois
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60606
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants Telephone Number, Including Area Code: (312) 917-7700
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Kevin J. McCarthy
Vice President and Secretary
333 West Wacker Drive
Chicago, Illinois 60606
(Name and
Address of Agent for Service)
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Copies to:
Eric F. Fess
Chapman and Cutler LLP
111 West Monroe Street
Chicago,
Illinois 60603
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Approximate Date of Proposed Public Offering: As soon as practicable after effectiveness.
It is proposed that this filing will become effective (check appropriate box):
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¨
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immediately upon filing pursuant to paragraph (b)
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¨
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on (date) pursuant to paragraph (a)(1)
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¨
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on (date) pursuant to paragraph (b)
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x
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75 days after filing pursuant to paragraph (a)(2)
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60 days after filing pursuant to paragraph (a)(1)
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¨
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on (date) pursuant to paragraph (a)(2) of Rule 485.
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If appropriate, check the following box:
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This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
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CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 33
This Post-Effective Amendment to the Registration Statement comprises the following papers and contents:
The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted.
Preliminary Prospectus dated November 16, 2012
Subject to Completion
Mutual Funds
Prospectus
, 2012
Nuveen Municipal Bond Funds
Dependable, tax-free income because its not what you earn, its what you keep.
®
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Class / Ticker Symbol
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Fund Name
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Class A
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Class C
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Class I
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Nuveen Short Duration High Yield Municipal Bond Fund
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The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
Table of Contents
NOT FDIC OR GOVERNMENT
INSURED MAY LOSE VALUE NO BANK GUARANTEE
Section 1
Fund Summary
Nuveen Short Duration High Yield Municipal Bond Fund
Investment Objective
The
investment objective of the Fund is to provide high current income exempt from regular federal income taxes. Capital appreciation is a secondary objective when consistent with the Funds primary objective.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at
least $50,000 in the Fund or in other Nuveen Mutual Funds. More information about these and other discounts, as well as eligibility requirements for each share class, is available from your financial advisor and in What Share Classes We
Offer on page 18 of the Funds prospectus, How to Reduce Your Sales Charge on page 19 of the prospectus and Purchase and Redemption of Fund Shares on page S-47 of the Funds statement of additional
information.
Shareholder Fees
(fees paid
directly from your investment)
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Class A
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Class C
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Class I
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Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
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4.20%
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None
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None
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Maximum Deferred Sales Charge (Load)
(as a percentage of the lesser of purchase price or redemption proceeds)
1
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None
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1.00%
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None
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Maximum Sales Charge (Load) Imposed on Reinvested Dividends
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None
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None
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None
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Exchange Fee
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None
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None
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None
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Annual Low Balance Account Fee (for accounts under $1,000)
2
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$15
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$15
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$15
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment)
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Class A
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Class C
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Class I
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Management Fees
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%
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%
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%
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Distribution and/or Service (12b-1) Fees
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0.20%
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0.75%
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0.00%
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Other Expenses
3
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%
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%
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%
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Total Annual Fund Operating Expenses
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%
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%
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%
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Fee Waivers and/or Expense Reimbursements
4
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%
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%
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%
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Total Annual Fund Operating Expenses After Fee Waivers and/or Expense Reimbursements
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%
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%
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%
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1
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The contingent deferred sales charge on Class C shares applies only to redemptions within 12 months of purchase.
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2
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Fee applies to the following types of accounts under $1,000 held directly with the Fund: accounts established pursuant to the Uniform Transfers to Minors Act (UTMA) or Uniform
Gifts to Minors Act (UGMA).
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3
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Other Expenses are estimated assuming that the Funds average net assets for its first fiscal year are $50 million.
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4
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The Funds investment adviser has agreed to waive fees and/or reimburse expenses through
so that Total Annual Fund Operating Expenses (excluding 12b-1 distribution and/or service fees, interest expenses, taxes,
acquired fund fees and expenses, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) do not exceed % of the average daily net assets of any class of Fund shares. The expense limitation
expiring may be terminated or modified prior to that date only with the approval of the Board of Trustees of the Fund.
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Example
The following example is
intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and then either redeem or do not redeem your
shares at the end of a period. The example also assumes that your investment
2
Section 1
Fund Summary
has a 5% return each year, that the Funds operating expenses remain the same, and the contractual fee waivers currently in place are not renewed beyond
. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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Redemption
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No Redemption
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A
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C
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I
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A
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C
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I
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1 Year
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$
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$
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$
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$
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$
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$
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3 Years
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$
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$
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$
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$
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$
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$
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5 Years
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$
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$
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$
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$
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$
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$
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10 Years
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$
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$
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$
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$
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$
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$
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Portfolio Turnover
The Fund
pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held
in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance
Principal Investment Strategies
Under normal market conditions, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in municipal bonds that pay interest that is exempt from regular federal
personal income tax. The Fund may invest without limit in securities that generate income subject to the alternative minimum tax. Under normal market conditions, the Fund will maintain an investment portfolio with a weighted average effective
duration of less than 4.5 years.
The Fund invests significantly in lower-quality municipal bonds and may employ effective leverage through investments
in inverse floaters. These investment strategies should be considered high risk relative to strategies employed by investment grade municipal bond funds.
The Fund generally invests at least 65% of its net assets in low-to-medium-quality bonds rated BBB/Baa or lower by at least one independent rating agency, or, if
unrated, judged by the Funds sub-adviser to be of comparable quality, although it may invest less than this amount during abnormal market conditions or periods of large cash inflows or outflows. Below investment grade municipal bonds (those
rated BB/Ba or lower) are commonly referred to as high yield or junk bonds. The Fund may invest up to 10% of its net assets in defaulted municipal bonds (i.e., bonds on which the issuer has not paid principal or interest on
time).
The Fund may invest in all types of municipal bonds, including general obligation bonds, revenue bonds and participation interests in municipal
leases. The Fund may invest in zero coupon bonds, which are issued at substantial discounts from their value at maturity and pay no cash income to their holders until they mature.
The Fund may invest up to 15% of its net assets in municipal securities whose interest payments vary inversely with changes in short-term tax-exempt interest rates (
inverse floaters
). Inverse
floaters are derivative securities that provide leveraged exposure to underlying municipal bonds. The Funds investments in inverse floaters are designed to increase the Funds income and returns through this leveraged exposure. These
investments are speculative, however, and also create the possibility that income and returns will be diminished. The Fund may invest in inverse floaters that create effective leverage of up to 15% of the Funds total investment exposure.
The Fund may utilize the following derivatives: futures contracts; options on futures contracts; swap agreements, including interest rate swaps, total
return swaps and credit default swaps, and options on swap agreements. The Fund may use these derivatives in an attempt to manage market risk, credit risk and yield curve risk, to manage the effective maturity or duration of securities in the
Funds portfolio or for speculative purposes in an effort to increase the Funds yield or to enhance returns. The use of a derivative is speculative if the Fund is primarily seeking to enhance returns, rather than offset the risk of other
positions.
Section
1
Fund Summary
3
The Funds sub-adviser uses a research-intensive investment process to identify high-yielding municipal bonds
that offer attractive value in terms of their current yields, prices, credit quality, liquidity and future prospects. The sub-adviser may choose to sell municipal bonds with deteriorating credit or limited upside potential compared to other
available bonds.
Principal Risks
The price and
yield of this Fund will change daily, which means you could lose money. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The principal
risks of investing in the Fund include:
Alternative Minimum Tax Risk
The Fund has no limit as to the amount that can be invested in
alternative minimum tax bonds. Therefore, all or a portion of the Funds otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Call Risk
If an issuer calls higher-yielding debt instruments held by the Fund, performance could be adversely impacted.
Credit Risk
Credit risk is the risk that an issuer of a debt security may be unable or unwilling to make interest and principal payments when due and
the related risk that the value of a debt security may decline because of concerns about the issuers ability or willingness to make such payments. In addition, parties to other financial contracts with the Fund could default on their
obligations. Because the Fund invests at least 65% of its assets in low-to-medium-quality bonds, including high yield securities, the Funds credit risks are greater than those of funds that buy only investment grade securities. Also, the
Funds investments in inverse floaters will increase the Funds credit risk.
Defaulted Bond Risk
Defaulted bonds are speculative
and involve substantial risks in addition to the risks of investing in high yield securities that have not defaulted. The Fund generally will not receive interest payments on the defaulted bonds and there is a substantial risk that principal will
not be repaid. In any reorganization or liquidation proceeding relating to a defaulted bond, the Fund may lose its entire investment.
Derivatives
Risk
The use of derivatives involves additional risks and transaction costs which could leave the Fund in a worse position than if it had not used these instruments. Derivatives may entail investment exposures that are greater than their
cost would suggest. As a result, a small investment in derivatives could have a large impact on performance. Recent legislation requires the development of a new regulatory framework for the derivatives market. The impact of the new regulations is
still unknown, but has the potential to increase the costs of using derivatives, may limit the availability of some forms of derivatives or the Funds ability to use derivatives, and may adversely affect the performance of some derivative
instruments used by the Fund as well as the Funds ability to pursue its investment objective through the use of such instruments.
High Yield
Securities Risk
High yield securities are high risk investments that may cause income and principal losses for the Fund. They generally have greater credit risk, are less liquid, and have more volatile prices than investment grade
securities.
Income Risk
The Funds income could decline during periods of falling interest rates. Also, if the Fund invests in inverse
floaters, the Funds income may decrease if short-term interest rates rise.
Interest Rate Risk
Interest rate risk is the risk that the
value of the Funds portfolio will decline because of rising interest rates. When interest rates change, the values of longer-duration debt securities usually change more than the values of shorter-duration debt securities.
Inverse Floaters Risk
The use of inverse floaters by the Fund creates effective leverage. Due to the leveraged nature of these investments, they will
typically be more volatile and involve greater risk than the fixed rate municipal bonds underlying the inverse floaters. An investment in certain inverse floaters will involve the risk that the Fund could lose more than its original principal
investment. Distributions on inverse floaters bear an inverse relationship to short-term municipal bond interest rates. Thus, distributions paid to the Fund on its inverse floaters will be reduced or even eliminated as short-term municipal interest
rates rise and will increase when short-term municipal interest rates fall. Inverse floaters generally will underperform the market for fixed rate municipal bonds in a rising interest rate environment.
4
Section 1
Fund Summary
Liquidity Risk
The secondary market for municipal bonds, and particularly for high-yield municipal bonds,
tends to be less well developed and less liquid than many other securities markets. As a result, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash, or give up an investment opportunity, any of which
could have a negative effect on performance. If the Fund needed to sell large blocks of bonds to meet shareholder redemption requests or to raise cash, those sales could further reduce the bonds prices. The Fund may invest a significant
portion of its assets in unrated bonds. The market for these bonds may be less liquid than the market for rated bonds of comparable quality.
Market
Risk
The market values of the Funds investments may decline, at times sharply and unpredictably.
Municipal Lease Obligations
Risk
Participation interests in municipal leases pose special risks because many leases and contracts contain non-appropriation clauses that provide that the governmental issuer has no obligation to make future payments under
the lease or contract unless money is appropriated for this purpose by the appropriate legislative body.
Political and Economic Risks
The
values of municipal securities held by the Fund may be adversely affected by local political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on
the financial condition of local issuers.
Tax Risk
Income from municipal bonds held by the Fund could be declared taxable because of, among
other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of a bond issuer. In addition, a portion of the Funds otherwise exempt-interest dividends
may be taxable to those shareholders subject to the federal alternative minimum tax.
Zero Coupon Bonds Risk
Zero coupon bonds do not pay
interest on a current basis and may be highly volatile as interest rates rise or fall. In addition, while such bonds generate income for purposes of generally accepted accounting standards, they do not generate cash flow and thus could cause the
Fund to be forced to liquidate securities at an inopportune time in order to distribute cash, as required by tax laws.
Fund Performance
Fund performance is not included in this prospectus because the Fund has not been in existence for a full calendar year.
Management
Investment Adviser
Nuveen Fund Advisors, Inc.
Sub-Adviser
Nuveen Asset Management, LLC
Portfolio Managers
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Name
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Title
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Portfolio Manager of Fund Since
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John V. Miller, CFA
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Managing Director and Co-Head of Fixed Income
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2013
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Timothy Ryan
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Senior Vice President, Portfolio Manager
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2013
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Steven Hlavin
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Vice President, Portfolio Manager
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2013
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Section
1
Fund Summary
5
Purchase and Sale of Fund Shares
You may purchase, redeem or exchange shares of the Fund on any business day, which is any day the New York Stock Exchange is open for business. You may purchase, redeem or exchange shares of the Fund either through
a financial advisor or other financial intermediary or directly from the Fund. The Funds initial and subsequent investment minimums generally are as follows, although the Fund may reduce or waive the minimums in some cases:
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Class A and Class C
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Class I
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Eligibility and Minimum Initial Investment
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$3,000
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Available only through fee-based programs and to other limited categories of investors as described in the
prospectus.
$100,000 for all accounts except:
$250 for clients of financial
intermediaries and family offices that have accounts holding Class I shares with an aggregate value of at least $100,000 (or that are expected to reach this level).
No minimum for certain other categories of eligible investors as described in the
prospectus.
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Minimum Additional Investment
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$100
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No minimum.
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Tax Information
The Fund
intends to make interest income distributions that are exempt from regular federal income tax. All or a portion of these distributions, however, may be subject to the federal alternative minimum tax and state and local taxes.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank or financial advisor), the Fund, its distributor or its
investment adviser may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other financial intermediary and your salesperson to recommend the
Fund over another investment. Ask your financial advisor or visit your financial intermediarys website for more information.
6
Section 1
Fund Summary
Section 2
How We Manage Your Money
To help you better understand the Fund, this section includes a detailed discussion of the Funds investment and risk
management strategies. For a more complete discussion of these matters, please see the statement of additional information, which is available by calling (800) 257-8787 or by visiting Nuveens website at www.nuveen.com.
Nuveen Fund Advisors, Inc. (
Nuveen Fund Advisors
), the Funds investment adviser, offers
advisory and investment management services to a broad range of mutual fund clients. Nuveen Fund Advisors has overall responsibility for management of the Fund, oversees the management of the Funds portfolio, manages the Funds business
affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is a subsidiary of Nuveen Investments, Inc.
(
Nuveen Investments
). On November 13, 2007, Nuveen Investments was acquired by investors led by Madison Dearborn Partners, LLC, which is a private equity investment firm based in Chicago, Illinois. The Nuveen family of advisers
has been providing advice to investment companies since 1976.
Nuveen Fund Advisors has selected its affiliate, Nuveen Asset Management,
LLC (
Nuveen Asset Management
), located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as sub-adviser to the Fund. Nuveen Asset Management manages the investment of the Funds assets on a discretionary basis,
subject to the supervision of Nuveen Fund Advisors.
The portfolio managers for the Fund are John V. Miller, Timothy Ryan and Steven
Hlavin.
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John V. Miller, CFA, joined Nuveen as a credit analyst in 1996, with three prior years of experience in the municipal market with a private account management
firm. Mr. Miller has been Co-Head of Fixed Income since 2011. He manages nine Nuveen-sponsored investment companies, with a total of approximately $10.9 billion under management.
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Timothy Ryan began his municipal career in 1983 in public finance, later switching to asset management in 1991. He joined Nuveen in 2010. He manages investments
for Nuveen-sponsored municipal bond funds with a total of approximately $ million under management.
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Steven M. Hlavin joined Nuveen in 2003 as a performance analyst, was promoted to senior analyst responsible for the firms risk management and performance
reporting process, and then assumed certain portfolio management duties in 2006. He manages investments for four Nuveen-sponsored municipal bond funds with a total of approximately $722.3 million under management.
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Additional information about the portfolio managers compensation, other accounts managed by the portfolio managers and the portfolio
managers ownership of securities in the Fund is provided in the statement of additional information.
Section 2
How We Manage Your Money
7
Management Fees
The management fee schedule for the Fund consists of two components: a Fund-level fee, based only on the amount of assets within the Fund, and a complex-level fee, based on the aggregate amount of all eligible fund
assets managed by Nuveen Fund Advisors.
The annual Fund-level fee, payable monthly, is based upon the average daily net assets of the
Fund as follows:
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Average Daily Net Assets
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Fund-Level
Fee
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For the first $125 million
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%
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For the next $125 million
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%
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For the next $250 million
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%
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For the next $500 million
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%
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For the next $1 billion
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%
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For net assets over $2 billion
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%
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The complex-level fee begins at a maximum rate of 0.2000% of the Funds average daily net assets, based upon
complex-level assets of $55 billion, with breakpoints for eligible assets above that level. Therefore, the maximum management fee rate for the Fund is the Fund-level fee plus 0.2000%. As of December 31, 2012, the effective complex-level fee for the
Fund was % of the Funds average daily net assets.
Nuveen Fund Advisors has agreed
to waive fees and/or reimburse expenses through so that total annual fund operating expenses (excluding 12b-1 distribution and/or service fees, interest expenses, taxes, acquired fund fees and
expenses, fees incurred in acquiring and disposing of portfolio securities and extraordinary expenses) do not exceed % of the average daily net assets of any class of Fund shares. This expense limitation may be terminated or
modified prior to that date only with the approval of the Board of Trustees of the Fund.
Information regarding the Board of
Trustees approval of the investment management agreements will be available in the Funds annual report for the fiscal year ended April 30, 2013.
The Funds investment objectives, which are described in the Fund Summary section, may not be
changed without shareholder approval. Its investment policies may be changed by the Board of Trustees without shareholder approval unless otherwise noted in this prospectus or the statement of additional information.
The Funds principal investment strategies are discussed in the Fund Summary section. These are the strategies that the
Funds investment adviser and sub-adviser believe are most likely to be important in trying to achieve the Funds investment objectives. This section provides more information about these strategies, as well as information about some
additional strategies that the Funds sub-adviser uses, or may use, to achieve the Funds objectives. You should be aware that the Fund may also use strategies and invest in securities that are not described in this prospectus, but that
are described in the statement of additional information. For a copy
8
Section 2
How We Manage Your Money
of the statement of additional information, call Nuveen Investor Services at (800) 257-8787 or visit Nuveens website at www. nuveen.com.
Municipal Obligations
States, local governments and municipalities and other issuing authorities issue municipal bonds to raise money for various public purposes such as
building public facilities, refinancing outstanding obligations and financing general operating expenses. These bonds include general obligation bonds, which are backed by the full faith and credit of the issuer and may be repaid from any revenue
source, and revenue bonds, which may be repaid only from the revenue of a specific facility or source.
The Fund may purchase municipal
bonds that represent lease obligations. These carry special risks because the issuer of the bonds may not be obligated to appropriate money annually to make payments under the lease. In order to reduce this risk, the Fund will, in making purchase
decisions, take into consideration the issuers incentive to continue making appropriations until maturity.
In evaluating
municipal bonds of different credit qualities or maturities, Nuveen Asset Management takes into account the size of yield spreads. Yield spread is the additional return the Fund may earn by taking on additional credit risk or interest rate risk. For
example, yields on low quality bonds are higher than yields on high quality bonds because investors must be compensated for incurring the higher credit risk associated with low quality bonds. If yield spreads do not provide adequate compensation for
the additional risk associated with low quality bonds, the Fund may buy bonds of relatively higher quality. Similarly, in evaluating bonds of different maturities, Nuveen Asset Management evaluates the comparative yield available on these bonds. If
yield spreads on long-term bonds do not compensate the Fund adequately for the additional interest rate risk the Fund must assume, the Fund may buy bonds of relatively shorter maturity. In addition, municipal bonds in a particular industry may
provide higher yields relative to their risk compared to bonds in other industries. If that occurs, the Fund may buy more bonds from issuers in that industry.
Credit Quality
The Funds investment strategies require it to generally invest at least
65% of its net assets in low-to-medium-quality bonds rated BBB/Baa or lower by a rating service such as Moodys or Standard & Poors or in unrated bonds of comparable quality. Any reference in this prospectus to a specific rating
encompasses all gradations of that rating. For example, if the prospectus says that the Fund may invest in securities rated as low as B, the Fund may invest in securities rated B-. Municipal bonds that are rated below investment grade (BB/Ba or
lower) are commonly referred to as high yield or junk bonds. High yield bonds typically offer higher yields than investment grade bonds with similar maturities but involve greater risks, including the possibility of default
or bankruptcy, and increased market price volatility.
While the Fund generally invests at least 65% of its net assets in
low-to-medium-quality bonds, it may invest in higher quality municipal bonds (those rated AAA/Aaa to A or, if unrated, judged by Nuveen Asset Management to be of comparable quality) or in any type of short-term, high-quality investments (including
non-municipal investments) as a temporary defensive measure, in response to unusual market conditions, when there is a lack of acceptable lower rated bonds or at times when yield spreads do not justify
Section 2
How We Manage
Your Money
9
the increased risks of investing in lower rated bonds, or during periods of large cash inflows or outflows. If the Fund invests in higher quality municipal bonds, it may not be able to achieve
its investment objectives.
Effective Duration
Effective duration measures a bonds expected life on a present value basis, taking into account the bonds yield, interest payments, final maturity and, in the case of a bond with an embedded option
(e.g., the right of the issuer to call the bond prior to maturity, or a sinking fund schedule), the probability that the option will be exercised. Effective duration is a reasonably accurate measure of a bonds price sensitivity to changes in
interest rates. The longer the effective duration of a bond, the greater the bonds price sensitivity is to changes in interest rates. For example, if a bond has an effective duration of five years, its value will decrease by approximately 5%
if interest rates rise by 1%. Under normal market conditions, the Fund will maintain an investment portfolio with a weighted average effective duration of less than 4.5 years. The Funds measurement of weighted average effective duration will
reflect the impact of portfolio leverage through any investments in inverse floaters.
Inverse Floaters
The Fund may invest up to 15% of its net assets in inverse floaters issued in tender option bond (
TOB
) transactions. In a TOB
transaction, one or more highly-rated municipal bonds are deposited into a special purpose trust that issues floating rate securities (
floaters
) to outside parties and inverse floaters to long-term investors like the Fund. The
floaters pay interest at a rate that is reset periodically (generally weekly) to reflect current short-term tax-exempt interest rates. Holders of the floaters have the right to tender such securities back to the TOB trust for par plus accrued
interest (the
put option
), typically on seven days notice. Holders of the floaters are paid from the proceeds of a successful remarketing of the floaters or by a liquidity provider in the event of a failed remarketing. The
inverse floaters pay interest at a rate equal to (a) the interest accrued on the underlying bonds, minus (b) the sum of the interest payable on the floaters and fees payable in connection with the TOB. Thus, the interest payments on the inverse
floaters will vary inversely with the short-term rates paid on the floaters. Holders of the inverse floaters typically have the right to simultaneously (a) cause the holders of the floaters to tender those floaters to the TOB trust at par plus
accrued interest and (b) purchase the municipal bonds from the TOB trust.
Because holders of the floaters have the right to tender
their securities to the TOB trust at par plus accrued interest, holders of the inverse floaters are exposed to all of the gains or losses on the underlying municipal bonds, despite the fact that their net cash investment is significantly less than
the value of those bonds. This multiplies the positive or negative impact of the underlying bonds price movements on the value of the inverse floaters, thereby creating effective leverage. The effective leverage created by any TOB transaction
depends on the value of the securities deposited in the TOB trust relative to the value of the floaters it issues. The higher the percentage of the TOB trusts total value represented by the floaters, the greater the effective leverage. For
example, if municipal bonds worth $100 are deposited in a TOB trust and the TOB trust issues floaters worth $75 and inverse floaters worth $25, the TOB trust will have a leverage ratio of 3:1 and the inverse floaters will exhibit price movements at
a rate that is four times that of the underlying bonds deposited into the trust. If that same TOB trust were to issue only $50 of floaters, the leverage ratio would be 1:1 and the inverse floaters would exhibit price movements at a rate that is only
two times that of the underlying bonds.
10
Section 2
How We Manage Your Money
The Fund may invest in inverse floaters that create effective leverage of up to 15% of the
Funds total investment exposure. For purposes of this calculation, the Funds total investment exposure includes not only the inverse floaters owned by the Fund but also the assets attributable to the floaters issued by the related TOB
trust. As an illustration, assume that a hypothetical fund with $180 of assets invests in the inverse floaters issued by a TOB trust with $30 of underlying municipal bonds and a 2:1 leverage ratio (i.e., the trust has issued $20 of floaters and $10
of inverse floaters). The Funds effective leverage amount (the $20 of floaters outstanding) would be equal to 10% of its total $200 investment exposure ($180 of original assets plus the $20 in floaters to which the Fund is now exposed).
Taxable Investments
Under normal market conditions, the Fund may invest up to 20% of its net assets in short-term, high quality taxable securities or shares of taxable money market funds if suitable tax-exempt investments are not
available at reasonable prices and yields. In addition, for temporary or defensive purposes, the Fund may invest without limit such securities. When the Fund engages in such strategies, it may not achieve its investment objective.
When-Issued, Delayed-Delivery and Forward Commitment Transactions
The Fund may enter into contracts to purchase securities for a specified price at a future date later than the normal settlement date.
Municipal forwards pay higher interest rates after settlement than standard bonds to compensate the buyer for bearing market risk but deferring income during the settlement period, and can often be
bought at attractive prices and yields. For instance, if the Fund knows that a portfolio bond will, or is likely to, be called or mature on a specific future date, the Fund may buy a forward settling on or about that date to replace the called or
maturing bond and lock in a currently attractive interest rate. The Fund may invest up to 15% of its assets in forwards that do not serve to replace a specific bond.
Portfolio Holdings
A
description of the Funds policies and procedures with respect to the disclosure of the Funds portfolio holdings is available in the Funds statement of additional information. Certain portfolio holdings information for the Fund is
available on the Funds websitewww.nuveen.comby clicking the Individual Investors link and then clicking the Products & PerformanceMutual Funds link and following the applicable link for the Fund.
By following these links, you can obtain a list of the Funds top ten holdings as of the end of the most recent month. A complete list of portfolio holdings information is generally made available on the Funds website approximately five
business days following the end of each most recent month. This information will remain available on the website until the Fund files with the Securities and Exchange Commission its annual, semi-annual or quarterly holdings report for the fiscal
period that includes the date(s) as of which the website information is current.
Investment Philosophy
Nuveen Asset Management believes that the tax treatment of municipal securities and the structural characteristics in the municipal securities market
Section 2
How We Manage Your Money
11
create opportunities to enhance the after-tax total return and diversification of the investment portfolios of taxable investors. Nuveen Asset Management follows a disciplined, research-driven
investment approach to find securities that combine exceptional relative value with above-average return potential.
Investment
Process
Nuveen Asset Management believes that a value-oriented investment strategy that seeks to identify underrated and
undervalued securities and sectors is positioned to capture the opportunities inherent in the municipal securities market and potentially outperform the general municipal securities market over time. The primary elements of Nuveen Asset
Managements investment process are:
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Credit analysis and surveillance
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Limited industry concentration
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Yield curve and structural analysis
|
Risk is inherent in all investing. Investing in a mutual fund involves risk, including the risk that you may
receive little or no return on your investment or even that you may lose part or all of your investment. Therefore, before investing you should consider carefully the principal risks and certain other risks that you assume when you invest in the
Fund. These risks are listed alphabetically below. Because of these risks, you should consider an investment in the Fund to be a long-term investment.
Principal Risks
Alternative minimum tax risk:
The Fund has no limit as to the amount
that can be invested in alternative minimum tax bonds. Therefore, all or a portion of the Funds otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Call risk:
Many bonds may be redeemed at the option of the issuer, or called, before their stated maturity date. In general, an
issuer will call its bonds if they can be refinanced by issuing new bonds which bear a lower interest rate. The Fund is subject to the possibility that during periods of falling interest rates, a bond issuer will call its high yielding bonds. The
Fund would then be forced to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the Funds income.
Credit risk:
The Fund is subject to the risk that the issuers of debt securities held by the Fund will not make payments on the securities.
There is also the risk that an issuer could suffer adverse changes in financial condition that could lower the credit quality of a security. This could lead to greater volatility in the price of the security and in shares of the Fund. Also, a change
in the credit quality rating of a bond could affect the bonds liquidity and make it more difficult for the Fund to sell. When the Fund purchases unrated securities, it will depend on the sub-advisers analysis of credit risk without the
assessment of an independent rating organization, such as Moodys or Standard & Poors. Credit risk may be increased by the Funds investments in inverse floaters because of the leveraged nature of these investments.
12
Section 2
How We Manage Your Money
Defaulted
b
ond
r
isk:
Defaulted bonds are speculative and involve
substantial risks in addition to the risks of investing in high yield securities that have not defaulted. The Fund generally will not receive interest payments on the defaulted bonds and there is a substantial risk that principal will not be repaid.
The Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal of or interest on its portfolio holdings. In any reorganization or liquidation proceeding relating to a defaulted bond,
the Fund may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Defaulted bonds and any securities received in exchange for defaulted bonds may be subject to restrictions on
resale.
Derivatives risk:
The use of derivatives presents risks different from, and possibly greater than, the risks associated
with investing directly in traditional securities. Among the risks presented are market risk, credit risk, management risk and liquidity risk. Derivatives can be highly volatile, illiquid and difficult to value, and there is the risk that changes in
the value of a derivative held by the Fund will not correlate with the underlying instruments or the Funds other investments.
The
use of derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives. Derivative instruments also involve the risk that a loss
may be sustained as a result of the failure of the counterparty to the derivative instruments to make required payments or otherwise comply with the derivative instruments terms. These risks are heightened when the management team uses
derivatives to enhance the Funds return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the Fund.
In addition, when the Fund invests in certain derivative securities, including, but not limited to, futures contracts, it is effectively leveraging
its investments, which could result in exaggerated changes in the net asset value of the Funds shares and can result in losses that exceed the amount originally invested. The success of the Funds derivatives strategies will depend on the
sub-advisers ability to assess and predict the impact of market or economic developments on the underlying asset, index or rate and the derivative itself, without the benefit of observing the performance of the derivative under all possible
market conditions. The Fund may also enter into over-the-counter (OTC) transactions in derivatives. Transactions in the OTC markets generally are conducted on a principal-to-principal basis. The terms and conditions of these instruments generally
are not standardized and tend to be more specialized or complex, and the instruments may be harder to value. In general, there is less governmental regulation and supervision of transactions in the OTC markets than of transactions entered into on
organized exchanges. In addition, certain derivative instruments and markets may not be liquid, which means the Fund may not be able to close out a derivatives transaction in a cost-efficient manner.
Short positions in derivatives may involve greater risks than long positions, as the risk of loss on short positions is theoretically unlimited
(unlike a long position, in which the risk of loss may be limited to the amount invested).
Recent legislation requires the development
of a new regulatory framework for the derivatives market. The impact of the new regulations is still unknown, but has the potential to increase the costs of using derivatives, may limit the availability of some forms of derivatives or the
Funds ability to use derivatives, and may adversely affect the performance of some derivative
Section 2
How We Manage Your Money
13
instruments used by the Fund as well as the Funds ability to pursue its investment objectives through the use of such instruments.
High yield securities risk:
The Fund invests in high yield securities, which involve more risk than investment grade securities. High yield
securities may be more susceptible to real or perceived adverse economic conditions than investment grade securities, and they generally have more volatile prices and carry more risk to principal. In addition, liquidity risk is greater for high
yield securities than for investment grade securities.
Income risk:
The Funds income could decline due to falling market
interest rates. This is because, in a falling interest rate environment, the Fund generally will have to invest the proceeds from sales of Fund shares, as well as the proceeds from maturing portfolio securities (or portfolio securities that have
been called, see Call risk above), in lower-yielding securities. Also, if the Fund invests in inverse floaters, whose income payments vary inversely with changes in short-term market rates, the Funds income may decrease if
short-term interest rates rise.
Interest rate risk:
Debt securities in the Fund will fluctuate in value with changes in interest
rates. In general, debt securities will increase in value when interest rates fall and decrease in value when interest rates rise. Longer-term debt securities are generally more sensitive to interest rate changes.
Inverse floaters risk:
The use of inverse floaters by the Fund creates effective leverage. Due to the leveraged nature of these investments,
the value of an inverse floater will increase and decrease to a significantly greater extent than the values of the TOB trusts underlying municipal bonds in responses to changes in market interest rates or credit quality. An investment in
inverse floaters typically will involve greater risk than an investment in a fixed rate municipal bond, including, in the case of recourse inverse floaters (discussed below), the risk that the Fund may lose more than its original principal
investment.
Distributions on inverse floaters bear an inverse relationship to short-term municipal bond interest rates. Thus,
distributions paid to the Fund on its inverse floaters will be reduced or even eliminated as short-term municipal interest rates rise and will increase when short-term municipal interest rates fall. The greater the amount of floaters sold by a TOB
trust relative to the inverse floaters (i.e., the greater the effective leverage of the inverse floaters), the more volatile the distributions on the inverse floaters will be. Inverse floaters generally will underperform the market for fixed rate
municipal bonds in a rising interest rate environment.
The Fund may invest in recourse inverse floaters. With such an investment, the
Fund will be required to reimburse the liquidity provider of a TOB trust for any shortfall between the outstanding amount of any floaters and the value of the municipal bonds in the TOB trust in the event the floaters cannot be successfully
remarketed, which could cause the Fund to lose money in excess of its investment.
A TOB trust may be terminated without the Funds
consent upon the occurrence of certain events, such as the bankruptcy or default of the issuer of the securities in the trust. If that happens, the floaters will be redeemed at par (plus accrued interest) out of the proceeds from the sale of
securities in the TOB trust, and the Fund will be entitled to the remaining proceeds, if any. Thus, if there is a decrease in the value of the securities held in the TOB trust, the Fund may lose some or all of the principal amount of its investment
14
Section 2
How We Manage Your Money
in the inverse floaters. As noted above, in the case of recourse inverse floaters, the Fund could lose money in excess of its investment.
Liquidity risk:
The secondary market for municipal bonds, and particularly for high-yield municipal bonds, tends to be less well developed
and less liquid than many other securities markets. Liquidity can be reduced unpredictably in response to overall economic conditions or credit tightening. As a result of reduced liquidity, the Fund may have to accept a lower price to sell a
security, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative effect on performance. If the Fund needed to sell large blocks of bonds to meet shareholder redemption requests or to raise cash,
those sales could further reduce the bonds prices. The Fund may invest a significant portion of its assets in unrated bonds. The market for these bonds may be less liquid than the market for rated bonds of comparable quality.
Market risk:
The market values of the Funds investments may decline, at times sharply and unpredictably. Market values of debt
securities are affected by a number of different factors, including changes in interest rates, the credit quality of bond issuers, and general economic and market conditions.
Municipal lease obligations risk:
The Fund may purchase participation interests in municipal leases. These are undivided interests in a lease, installment purchase contract, or conditional sale contract
entered into by a state or local government unit to acquire equipment or facilities. Participation interests in municipal leases pose special risks because many leases and contracts contain non-appropriation clauses that provide that the
governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body. Although these kinds of obligations are secured by the leased equipment or
facilities, it might be difficult and time consuming to dispose of the equipment or facilities in the event of non-appropriation, and the Fund might not recover the full principal amount of the obligation.
Political and economic risks
: The values of municipal securities may be adversely affected by local political and economic conditions and
developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on the financial condition of local issuers. Other factors that could affect municipal securities include a change in the
local, state, or national economy, demographic factors, ecological or environmental concerns, statutory limitations on the issuers ability to increase taxes, and other developments generally affecting the revenue of issuers (for example,
legislation or court decisions reducing state aid to local governments or mandating additional services). This risk would be heightened to the extent that the Fund invests a substantial portion of the below-investment grade quality portion of its
portfolio in the bonds of similar projects (such as those relating to the education, health care, housing, transportation, or utilities industries), in industrial development bonds, or in particular types of municipal securities (such as general
obligation bonds, private activity bonds or moral obligation bonds) that are particularly exposed to specific types of adverse economic, business or political events.
Tax risk:
Income from municipal bonds held by the Fund could be declared taxable because of unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities,
or noncompliant
Section
2
How We Manage Your Money
15
conduct of a bond issuer. On September 12, 2011, President Obama submitted to Congress the American Jobs Act of 2011 (the
Jobs Act
). If enacted in its proposed
form, the Jobs Act generally would limit the exclusion from gross income of tax-exempt interest (which includes exempt-interest dividends received from the Fund) for individuals whose adjusted gross income for federal income tax purposes exceeds
certain thresholds. Such proposal could affect the value of the municipal bonds owned by the Fund. The likelihood of the Jobs Act being enacted in the form introduced or in some other form cannot be predicted. Shareholders should consult their own
tax advisors regarding the potential consequences of the Jobs Act and other proposed or potential legislation on their investment in the Fund.
Zero coupon bonds risk:
As interest on zero coupon bonds is not paid on a current basis, the values of the bonds are subject to greater fluctuations than are the value of bonds that distribute income
regularly and may be more speculative than such bonds. Accordingly, the values of zero coupon bonds may be highly volatile as interest rates rise or fall. In addition, while zero coupon bonds generate income for purposes of generally accepted
accounting standards, they do not generate cash flow and thus could cause the Fund to be forced to liquidate securities at an inopportune time in order to distribute cash, as required by tax laws.
Other Risks
Borrowing
risk:
The Fund may borrow for temporary or emergency purposes, including to meet redemption requests, pay dividends, repurchase its shares, or clear portfolio transactions. Borrowing may exaggerate changes in the net asset value of the
Funds shares and may affect the Funds net income. When the Fund borrows money, it must pay interest and other fees, which will reduce the Funds returns if such costs exceed the returns on the portfolio securities purchased or
retained with such borrowings. Any such borrowings are intended to be temporary. However, under certain market conditions, including periods of low demand or decreased liquidity in the municipal bond market, such borrowings might be outstanding for
longer periods of time.
Inflation risk:
The value of assets or income from investments may be less in the future as inflation
decreases the value of money. As inflation increases, the value of the Funds assets can decline, as can the value of the Funds distributions.
Small fund risk:
The Fund currently has less assets than similar funds, and like other relatively small funds, large inflows and outflows may impact the Funds market exposure for limited periods of
time, causing the Funds performance to vary from that of the Funds model portfolio. This impact may be positive or negative, depending on the direction of market movement during the period affected. The Fund has policies in place which
seek to reduce the impact of these flows where Nuveen Fund Advisors has prior knowledge of them. If any individual shareholder (or several shareholders whose investment in the Fund is controlled by a single decision-maker such as an advisor) owns a
large percentage of the Funds shares, and if such shareholder chooses to redeem his or her shares at one time, the Fund may have difficulty selling its assets in a timely manner to raise the cash necessary to meet the redemption request, in
which case the Fund may have to borrow money to do so. In such an instance, the Funds remaining shareholders would bear the costs of such borrowings, and the Fund would be subject to leverage risk (to the extent such leverage exceeded the
amount of portfolio sales awaiting settlement) as long as such borrowings were outstanding. Rapid portfolio sales in response to such a
16
Section 2
How We Manage Your Money
large redemption might also cause the Fund to experience above-normal transaction costs, and might disrupt the overall composition of the Funds portfolio and thereby impede the
advisers ability to optimally pursue its investment strategy.
When-issued, delayed-delivery and forward commitment
transactions:
These transactions involve an additional element of risk because, although the Fund will not have made any cash outlay prior to the settlement date, the value of the security to be purchased may decline before that settlement date.
Section 2
How
We Manage Your Money
17
Section 3
How You Can Buy and Sell
Shares
The Fund offers multiple classes of shares, each with a different combination of sales charges, fees, eligibility
requirements and other features. Your financial advisor can help you determine which class is best for you. For further details, please see the statement of additional information.
Class A Shares
You can purchase Class A shares at the offering price, which is the net asset value per share plus an up-front sales charge. You may qualify for a reduced sales charge, or the sales charge may be waived, as
described in How to Reduce Your Sales Charge. Class A shares are also subject to an annual service fee of 0.20% of the Funds average daily net assets, which compensates your financial advisor or other financial intermediary for
providing ongoing service to you. Nuveen Securities, LLC (the
Distributor
), a subsidiary of Nuveen Investments and the distributor of the Fund, retains the up-front sales charge and the service fee on accounts with no financial
intermediary of record. The up-front Class A sales charges for the Fund are as follows:
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Amount of Purchase
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Sales Charge as
% of Public
Offering Price
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Sales Charge as %
of Net Amount
Invested
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Maximum
Financial Intermediary
Commission as % of
Public Offering Price
|
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Less than $50,000
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4.20
|
%
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4.38
|
%
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3.70
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%
|
$50,000 but less than $100,000
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4.00
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4.18
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3.50
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$100,000 but less than $250,000
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3.50
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3.63
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3.00
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$250,000 but less than $500,000
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2.50
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2.56
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2.00
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$500,000 but less than $1,000,000
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2.00
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2.04
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1.50
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$1,000,000 and over*
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1.00
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*
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You can purchase $1 million or more of Class A shares at net asset value without an up-front sales charge. The Distributor pays financial intermediaries of record a commission
equal to 1% of the first $2.5 million, plus 0.75% of the next $2.5 million, plus 0.50% of the amount over $5 million. Unless you are eligible for a waiver, you may be assessed a contingent deferred sales charge (
CDSC
) of 1% if you
redeem any of your shares within 6 months of purchase, 0.75% if you redeem any of your shares within 12 months of purchase and 0.50% if you redeem any of your shares within 18 months of purchase. See How to Sell SharesContingent Deferred
Sales Charge below for more information.
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Class C Shares
You can purchase Class C shares at the offering price, which is the net asset value per share without any up-front sales charge. Class C shares are
subject to annual distribution and service fees of 0.75% of the Funds average daily net assets. The annual 0.20% service fee compensates your financial advisor or other financial intermediary for providing ongoing service to you. The annual
0.55% distribution fee compensates the Distributor for paying your financial advisor or other financial intermediary an ongoing sales commission. The Distributor compensates your financial advisor or other financial intermediary at the time of sale
at a rate of 1% of the amount of Class C shares purchased, which includes an advance of the first years service and distribution fees. The Distributor retains the service and distribution fees on accounts with no financial intermediary of
record. If you redeem your shares within 12 months of purchase, you will normally pay a 1% CDSC, which is calculated on the lower of your purchase price or redemption proceeds. You do not pay a CDSC on any Class C shares you purchase by reinvesting
dividends.
18
Section 3
How You Can Buy and Sell Shares
The Fund has established a limit to the amount of Class C shares that may be purchased by an
individual investor. See the statement of additional information for more information.
Class I Shares
You can purchase Class I shares at the offering price, which is the net asset value per share without any up-front sales charge. As Class I
shares are not subject to sales charges or ongoing service or distribution fees, they have lower ongoing expenses than the other classes.
Class I shares are available for purchase by clients of financial intermediaries who charge such clients an ongoing fee for advisory, investment,
consulting or related services. Such clients may include individuals, corporations, endowments and foundations. The minimum initial investment for such clients is $100,000, but this minimum will be lowered to $250 for clients of financial
intermediaries that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of financial intermediaries anticipated to reach this Class I share holdings
level.
Class I shares are also available for purchase by family offices and their clients. A family office is a company that provides
certain financial and other services to a high net worth family or families. The minimum initial investment for family offices and their clients is $100,000, but this minimum will be lowered to $250 for clients of family offices that have accounts
holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of family offices anticipated to reach this Class I share holdings level.
Class I shares are also available for purchase, with no minimum initial investment, by the following categories of investors:
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Certain bank or broker-affiliated trust departments.
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Advisory accounts of Nuveen Fund Advisors and its affiliates.
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Current and former trustees/directors of any Nuveen Fund, and their immediate family members (as defined in the statement of additional information).
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Officers, directors and former directors of Nuveen Investments and its affiliates, and their immediate family members.
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Full-time and retired employees of Nuveen Investments and its affiliates, and their immediate family members.
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Certain financial intermediary personnel, and their immediate family members.
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Certain other institutional investors described in the statement of additional information.
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Please refer to the statement of additional information for more information about Class A, Class C and Class I shares, including more detailed
program descriptions and eligibility requirements. Additional information is also available from your financial advisor, who can also help you prepare any necessary application forms.
The Fund offers a number of ways to reduce or eliminate the up-front sales charge on Class A shares. See
What Share Classes We Offer (above) for a discussion of eligibility requirements for purchasing Class I shares.
Section 3
How You Can Buy and Sell Shares
19
Class A Sales Charge Reductions
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Rights of Accumulation.
In calculating the appropriate sales charge on a purchase of Class A shares of the Fund, you may be able to add the amount of your
purchase to the value, based on the current net asset value per share, of all of your prior purchases of any Nuveen Mutual Fund.
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Letter of Intent.
Subject to certain requirements, you may purchase Class A shares of the Fund at the sales charge rate applicable to the total amount of
the purchases you intend to make over a 13-month period.
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For purposes of calculating the appropriate sales charge as
described under
Rights of Accumulation
and
Letter of Intent
above, you may include purchases by (i) you, (ii) your spouse or domestic partner and children under the age of 21 years, and (iii) a corporation, partnership or sole
proprietorship that is 100% owned by any of the persons in (i) or (ii). In addition, a trustee or other fiduciary can count all shares purchased for a single trust, estate or other single fiduciary account that has multiple accounts (including one
or more employee benefit plans of the same employer).
Class A Sales Charge Waivers
Class A shares of the Fund may be purchased at net asset value without a sales charge as follows:
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Purchases of $1,000,000 or more.
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Monies representing reinvestment of Nuveen Mutual Fund distributions.
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Employees of Nuveen Investments and its affiliates.
Purchases by full-time and retired employees of Nuveen Investments and its affiliates and such
employees immediate family members (as defined in the statement of additional information).
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Current and former trustees/directors of the Nuveen Funds.
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Financial intermediary personnel.
Purchases by any person who, for at least the last 90 days, has been an officer, director, or employee of any financial
intermediary or any such persons immediate family member.
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Certain trust departments.
Purchases by bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, advisory, custodial or similar capacity.
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Additional categories of investors.
Purchases made (i) by investors purchasing on a periodic fee, asset-based fee or no transaction fee basis through a
broker-dealer sponsored mutual fund purchase program; (ii) by clients of investment advisers, financial planners or other financial intermediaries that charge periodic or asset-based fees for their services; and (iii) through a financial
intermediary that has entered into an agreement with the Distributor to offer the Funds shares to self-directed investment brokerage accounts and that may or may not charge a transaction fee to its customers.
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In order to obtain a sales charge reduction or waiver, it may be necessary at the time of purchase for you to inform the Fund or your financial
advisor of the existence of other accounts in which there are holdings eligible to be aggregated for such purposes. You may need to provide the Fund or your financial advisor information or records, such as account statements, in order to verify
your eligibility for a sales charge reduction or waiver. This may include account statements of family members and information regarding
20
Section 3
How You Can Buy and Sell Shares
Nuveen Mutual Fund shares held in accounts with other financial advisors. You or your financial advisor must notify the Distributor at the time of each purchase if you are eligible for any of
these programs. The Fund may modify or discontinue these programs at any time.
Fund shares may be purchased on any business day, which is any day the New York Stock Exchange (the
NYSE
) is open for business. Generally, the NYSE is closed on weekends and national holidays. The share price you pay depends on when the Distributor receives your order and on the share class you are purchasing. Orders received
before the close of trading on a business day (normally, 4:00 p.m. New York time) will receive that days closing share price; otherwise, you will receive the next business days price.
You may purchase Fund shares (1) through a financial advisor or (2) directly from the Fund.
Through a Financial Advisor
You may buy shares through your financial advisor, who can handle all the details for you, including opening a new account. Financial advisors can
also help you review your financial needs and formulate long-term investment goals and objectives. In addition, financial advisors generally can help you develop a customized financial plan, select investments and monitor and review your portfolio
on an ongoing basis to help assure your investments continue to meet your needs as circumstances change. Financial advisors (including brokers or agents) are paid for providing ongoing investment advice and services, either from Fund sales charges
and fees or by charging you a separate fee in lieu of a sales charge.
Financial advisors or other dealer firms may charge their
customers a processing or service fee in connection with the purchase or redemption of Fund shares. The amount and applicability of such a fee is determined and disclosed to customers by each individual dealer. Processing or service fees
typically are fixed, nominal dollar amounts and are in addition to the sales and other charges described in this prospectus and the statement of additional information. Your dealer will provide you with specific information about any processing
or service fees you will be charged. Shares you purchase through your financial advisor or other intermediary will normally be held with that firm. For more information, please contact your financial advisor.
Directly from the Fund
Eligible investors may purchase shares directly from the Fund.
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By wire.
You can purchase shares by making a wire transfer from your bank. Before making an initial investment by wire, you must submit a new account form
to the Fund. After receiving your form, a service representative will contact you with your account number and wiring instructions. Your order will be priced at the next closing share price based on the share class of the Fund, calculated after the
Funds custodian receives your payment by wire. Wired funds must be received prior to 4:00 p.m. New York time to be eligible for same day pricing. Neither your Fund nor the transfer agent is responsible for the consequences of delays resulting
from the banking or Federal Reserve wire system, or from incomplete wiring instructions. Before making any
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Section 3
How You Can Buy and Sell Shares
21
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additional purchases by wire, you should call Nuveen Investor Services at (800) 257-8787. You cannot purchase shares by wire on days when federally chartered banks are closed.
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By mail.
You may open an account directly with the Fund and buy shares by completing an application and mailing it along with your check to: Nuveen
Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530. Applications may be obtained at www.nuveen.com or by calling (800) 257-8787. No third party checks will be accepted.
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The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with
such services, or receipt at the post office box above, of purchase orders or redemption requests does not constitute receipt by the transfer agent of the Fund.
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On-line
. Existing shareholders with direct accounts may process certain account transactions on-line. You may purchase additional shares or exchange
shares between existing, identically registered direct accounts. You can also look up your account balance, history and dividend information, as well as order duplicate account statements and tax forms from the Funds website. To access your
account, click the Individual Investors link on www.nuveen.com and then choose Account Access under the Resources tab. The system will walk you through the log-in process. To purchase shares on-line, you must have
established Fund Direct privileges on your account prior to the requested transaction. See Special ServicesFund Direct below.
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By telephone
. Existing shareholders with direct accounts may also process account transactions via the Funds automated information line. Simply call
(800) 257-8787, press 1 for mutual funds and the voice menu will walk you through the process. To purchase shares by telephone, you must have established Fund Direct privileges on your account prior to the requested transaction. See
Special ServicesFund Direct below.
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To help make your investing with us easy and efficient, we offer you the following services at no extra cost.
Your financial advisor can help you complete the forms for these services, or you can call Nuveen Investor Services at (800) 257-8787 for copies of the necessary forms.
Systematic Investing
Once you have opened an account satisfying the applicable investment
minimum, systematic investing allows you to make regular additional investments through automatic deductions from your bank account, directly from your paycheck or from exchanging shares from another mutual fund account. The minimum automatic
deduction is $100 per month. There is no charge to participate in the Funds systematic investment plan. You can stop the deductions at any time by notifying the Fund in writing.
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From your bank account.
You can make systematic investments of $100 or more per month by authorizing the Fund to draw pre-authorized checks on your bank
account.
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From your paycheck.
With your employers consent, you can make systematic investments each pay period (collectively meeting the monthly minimum of
$100) by authorizing your employer to deduct monies from your paycheck.
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22
Section 3
How You Can Buy and Sell Shares
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Systematic exchanging.
You can make systematic investments by authorizing the Distributor to exchange shares from one Nuveen Mutual Fund account into
another identically registered Nuveen Mutual Fund account of the same share class.
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Systematic Withdrawal
If the value of your Fund account is at least $10,000, you may request to have $50 or more withdrawn automatically from your
account. You may elect to receive payments monthly, quarterly, semi-annually or annually, and may choose to receive a check, have the monies transferred directly into your bank account (see Fund Direct below), paid to a third party or
sent payable to you at an address other than your address of record. You must complete the appropriate section of the account application or Account Update Form to participate in the Funds systematic withdrawal plan.
You should not establish systematic withdrawals if you intend to make concurrent purchases of Class A or Class C shares because you may
unnecessarily pay a sales charge or CDSC on these purchases.
Exchanging Shares
You may exchange Fund shares into an identically registered account for the same class of another Nuveen Mutual Fund available in your state. Your
exchange must meet the minimum purchase requirements of the fund into which you are exchanging. You may also, under certain limited circumstances, exchange between certain classes of shares of the same fund, subject to the payment of any applicable
CDSC. Please consult the statement of additional information for details.
The Fund reserves the right to revise or suspend the exchange
privilege, limit the amount or number of exchanges, or reject any exchange. Shareholders will be provided with at least 60 days notice of any material revision to or termination of the exchange privilege.
Because an exchange between funds is treated for tax purposes as a purchase and sale, any gain may be subject to tax. An exchange between classes
of shares of the same fund may not be considered a taxable event. You should consult your tax advisor about the tax consequences of exchanging your shares.
Fund Direct
SM
The Fund Direct
Program allows you to link your Fund account to your bank account, transfer money electronically between these accounts and perform a variety of account transactions, including purchasing shares by telephone and investing through a systematic
investment plan. You may also have dividends, distributions, redemption payments or systematic withdrawal plan payments sent directly to your bank account.
Reinstatement Privilege
If you redeem Fund shares, you may reinvest all or part of your
redemption proceeds up to one year later without incurring any additional charges. You may only reinvest into the same share class you redeemed. If you paid a CDSC, the Fund will refund your CDSC and reinstate your holding period for purposes of
calculating the CDSC. You may use this reinstatement privilege only once for any redemption.
Section 3
How You Can Buy and Sell Shares
23
You may sell (redeem) your shares on any business day. You will receive the share price next determined after
the Fund has received your properly completed redemption request. Your redemption request must be received before the close of trading on the NYSE (normally, 4:00 p.m. New York time) for you to receive that days price. The Fund will normally
mail your check the next business day after a redemption request is received, but in no event more than seven days after your request is received. If you are selling shares purchased recently with a check, your redemption proceeds will not be mailed
until your check has cleared, which may take up to ten business days from your purchase date.
You may sell your shares (1) through
a financial advisor or (2) directly to the Fund.
Through a Financial Advisor
You may sell your shares through your financial advisor, who can prepare the necessary documentation. Your financial advisor may charge for this
service.
Directly to the Fund
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By mail.
You can sell your shares at any time by sending a written request to the Fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts
02266-8530. Your request must include the following information:
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Your name and account number;
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The dollar or share amount you wish to redeem;
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The signature of each owner exactly as it appears on the account;
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The name of the person to whom you want your redemption proceeds paid (if other than to the shareholder of record);
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The address where you want your redemption proceeds sent (if other than the address of record);
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Any certificates you have for the shares; and
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Any required signature guarantees.
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After you have established your account, signatures on a written request must be guaranteed if:
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You would like redemption proceeds payable or sent to any person, address or bank account other than that on record;
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You have changed the address on the Funds records within the last 30 days;
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Your redemption request is in excess of $50,000; or
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You are requesting a change in ownership on your account.
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Non-financial transactions, including establishing or modifying certain services such as changing bank information on an account, will require a signature guarantee or signature verification from a Medallion
Signature Guarantee Program member or other acceptable form of authentication from a financial institution source. In addition to the situations described above, the Fund reserves the right to require a signature guarantee, or another acceptable
form of signature verification, in other instances based on the circumstances of a particular situation.
24
Section 3
How You Can Buy and Sell Shares
A signature guarantee assures that a signature is genuine and protects shareholders from unauthorized
account transfers. Banks, savings and loan associations, trust companies, credit unions, broker-dealers and member firms of a national securities exchange may guarantee signatures. Call your financial intermediary to determine if it has this
capability. A notary public is not an acceptable signature guarantor. Proceeds from a written redemption request will be sent to you by check unless another form of payment is requested.
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On-line.
You may redeem shares or exchange shares between existing, identically registered accounts on-line. To access your account, click the
Individual Investors link on www.nuveen.com and then choose Account Access under the Resources tab. The system will walk you through the log-in process. On-line redemptions are not available for shares owned in
certificate form and, with respect to redemptions where the proceeds are payable by check, may not exceed $50,000. Checks will only be issued to you as the shareholder of record and mailed to your address of record. If you have established Fund
Direct privileges, you may have redemption proceeds transferred electronically to your bank account.
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By telephone.
If your account is held with the Fund and not in your brokerage account, and you have authorized telephone redemption privileges, call (800)
257-8787 to redeem your shares, press 1 for mutual funds and the voice menu will walk you through the process. Telephone redemptions are not available for shares owned in certificate form and, with respect to redemptions where the proceeds are
payable by check, may not exceed $50,000. Checks will only be issued to you as the shareholder of record and mailed to your address of record, normally the next business day after the redemption request is received. If you have established Fund
Direct privileges, you may have redemption proceeds transferred electronically to your bank account. In this case, the redemption proceeds will be transferred to your bank on the next business day after the redemption request is received. You should
contact your bank for further information concerning the timing of the credit of the redemption proceeds in your bank account.
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Contingent Deferred Sales Charge
If you redeem Class A or Class C shares that are
subject to a CDSC, you may be assessed a CDSC upon redemption. When you redeem Class A or Class C shares subject to a CDSC, the Fund will first redeem any shares that are not subject to a CDSC, and then redeem the shares you have owned for
the longest period of time, unless you ask the Fund to redeem your shares in a different order. No CDSC is imposed on shares you buy through the reinvestment of dividends and capital gains. The CDSC holding period is calculated on a monthly basis
and begins on the first day of the month in which the purchase was made. When you redeem shares subject to a CDSC, the CDSC is calculated on the lower of your purchase price or redemption proceeds, deducted from your redemption proceeds, and paid to
the Distributor. The CDSC may be waived under certain special circumstances as described in the statement of additional information.
Accounts with Low Balances
The Fund reserves the right to liquidate or assess a low balance fee on any account held directly with the Fund that has a balance that has fallen
below the account balance minimum of $1,000 for any reason, including market fluctuations.
An Important Note About Telephone Transactions
Although Nuveen Investor
Services has certain safeguards and procedures to confirm the identity of callers, it will not be liable for losses resulting from following telephone instructions it reasonably believes to be genuine. Also, you should verify your trade
confirmations immediately upon receipt.
Section 3
How You Can Buy and Sell Shares
25
If the Fund elects to exercise the right to assess a low balance fee, then annually the Fund will
assess a $15 low balance account fee on certain accounts with balances under the account balance minimum that are accounts established pursuant to the UTMA or UGMA. At the same time, other accounts with balances under the account balance minimum
will be liquidated, with proceeds being mailed to the address of record. Prior to the assessment of any low balance fee or liquidation of low balance accounts, affected shareholders will receive a communication notifying them of the pending action,
thereby providing time to ensure that balances are at or above the account balance minimum prior to any fee assessment or account liquidation. You will not be assessed a CDSC if your account is liquidated.
Redemptions In-Kind
The
Fund generally pays redemption proceeds in cash. However, if the Fund determines that it would be detrimental to its remaining shareholders to make payment of a redemption order wholly in cash, the Fund may pay a portion of your redemption proceeds
in securities or other Fund assets. Although it is unlikely that your shares would be redeemed in-kind, you would probably have to pay brokerage costs to sell the securities or other assets distributed to you, as well as taxes on any capital gains
from that sale.
26
Section 3
How You Can Buy and Sell Shares
Section 4
General Information
To help you understand the tax implications of investing in the Fund, this section includes important details about how the
Fund makes distributions to shareholders. We discuss some other Fund policies as well. Please consult the statement of additional information and your tax advisor for more information about taxes.
The Fund declares dividends daily and pays such dividends monthly, usually on the first business day of the
month. Your account will begin to accrue dividends on the business day after the day when the monies used to purchase your shares are collected by the transfer agent. The Fund seeks to pay monthly tax-exempt dividends at a level rate that reflects
the past and projected net income of the Fund. To help maintain more stable monthly distributions, the distribution paid by the Fund for any particular monthly period may be more or less than the amount of net income actually earned by the Fund
during such period, and any such under- (or over-) distribution of income is reflected in the Funds net asset value. This policy is designed to result in the distribution of substantially all of the Funds net income over time. The Fund
declares and pays any taxable capital gains or other taxable distributions once a year at year end.
Payment and Reinvestment Options
The Fund automatically reinvests your dividends in additional Fund shares unless you request otherwise. You may request to have
your dividends paid to you by check, sent via electronic funds transfer through Automated Clearing House network or reinvested in shares of another Nuveen Mutual Fund. For further information, contact your financial advisor or call Nuveen Investor
Services at (800) 257-8787. If you request that your distributions be paid by check but those distributions cannot be delivered because of an incorrect mailing address, or if a distribution check remains uncashed for six months, the undelivered or
uncashed distributions and all future distributions will be reinvested in Fund shares at the current net asset value.
Taxes and Tax
Reporting
Because the Fund invests primarily in municipal bonds, the regular monthly dividends you receive will generally be exempt
from regular federal income tax. All or a portion of these dividends, however, may be subject to state and local taxes or to the federal alternative minimum tax.
Generally the Fund does not seek to realize taxable income or capital gains. However, the Fund may realize and distribute taxable income or capital gains from time to time as a result of the Funds normal
investment activities. The Funds distributions of these amounts are taxed as ordinary income or capital gains and are taxable whether received in cash or reinvested in additional shares. Dividends from the Funds long-term capital gains
are taxable as capital gains, while dividends from short-term capital gains and net investment income are generally taxable as ordinary income. The Funds taxable dividends are not expected to qualify for a dividends received deduction if you
are a corporate shareholder or for the lower tax rates on qualified dividend income.
Section 4
General Information
27
Early in each year, you will receive a statement detailing the amount and nature of all dividends and
capital gains that you were paid during the prior year. If you hold your investment at the firm where you purchased your Fund shares, you will receive the statement from that firm. If you hold your shares directly with the Fund, the Distributor will
send you the statement. The tax status of your dividends is the same whether you reinvest your dividends or elect to receive them in cash.
If you receive social security or railroad retirement benefits, you should consult your tax advisor about how an investment in the Fund may affect the taxation of your benefits.
Each sale or exchange of Fund shares may be a taxable event. When you exchange shares of one Nuveen Mutual Fund for shares of a different Nuveen
Mutual Fund, the exchange is treated the same as a sale for tax purposes. A sale may result in capital gain or loss to you. The gain or loss generally will be treated as short-term if you held the shares for 12 months or less and long-term if you
held the shares for more than 12 months at the time of disposition.
Please note that if you do not furnish the Fund with your correct
Social Security number or employer identification number, you fail to provide certain certifications to the Fund, you fail to certify whether you are a U.S. citizen or a U.S. resident alien, or the Internal Revenue Service notifies the Fund to
withhold, federal law requires the Fund to withhold federal income tax from your distributions and redemption proceeds at the applicable withholding rate.
Buying or Selling Shares Close to a Record Date
Buying Fund shares shortly before the record
date for a taxable income or capital gain distribution is commonly known as buying the dividend. The entire distribution may be taxable to you even though a portion of the distribution effectively represents a return of your purchase
price.
Cost Basis Method
You may elect a cost basis method to apply to all existing and future accounts you may establish. The cost basis method you select will determine the order in which shares are redeemed and how your cost basis
information is calculated and subsequently reported to you and to the Internal Revenue Service. Please consult your tax advisor to determine which cost basis method best suits your specific situation. If you hold your account directly with the Fund,
please contact Nuveen Investor Services at (800) 257-8787 for instructions on how to make your election. If you hold your account with a financial intermediary, please contact that financial intermediary for instructions on how to make your
election. If you hold your account directly with the Fund and do not elect a cost basis method, your account will default to the average cost basis method. For a definition of average cost basis method, please see the glossary. Financial
intermediaries choose their own default method.
28
Section 4
General Information
Taxable Equivalent Yields
The taxable equivalent yield is the current yield you would need to earn on a taxable investment in order to equal a stated federal tax-free yield
on a municipal investment. To assist you in comparing municipal investments like the Fund with fully taxable alternative investments, the table below presents the taxable equivalent yields for a range of hypothetical federal tax-free yields and tax
rates:
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Taxable Equivalents of Tax-Free Yields
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To Equal a Tax-Free Yield of:
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2.00
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%
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3.00
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%
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4.00
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%
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5.00
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%
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Tax Bracket:
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A Taxable Investment Would Need to Yield:
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25%
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2.67
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%
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4.00
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%
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5.33
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%
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6.67
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%
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28%
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2.78
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%
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4.17
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%
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5.56
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%
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6.94
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%
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33%
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2.99
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%
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4.48
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%
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5.97
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%
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7.46
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%
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35%
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3.08
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%
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4.62
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%
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|
6.15
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%
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7.69
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%
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The yields and tax rates shown above are hypothetical and do not predict your actual returns or effective tax rate.
For more detailed information, see the statement of additional information or consult your tax advisor.
The Distributor serves as the selling agent and distributor of the Funds shares. In this capacity, the
Distributor manages the offering of the Funds shares and is responsible for all sales and promotional activities. In order to reimburse the Distributor for its costs in connection with these activities, including compensation paid to financial
intermediaries, the Fund has adopted a distribution and service plan under Rule 12b-1 under the 1940 Act. See How You Can Buy and Sell SharesWhat Share Classes We Offer for a description of the distribution and service fees paid
under this plan.
Under the plan, the Distributor receives a distribution fee for Class C shares primarily for providing
compensation to financial intermediaries, including the Distributor, in connection with the distribution of shares. The Distributor receives a service fee for Class A and Class C shares to compensate financial intermediaries, including the
Distributor, for providing ongoing account services to shareholders. These services may include establishing and maintaining shareholder accounts, answering shareholder inquiries and providing other personal services to shareholders. These fees also
compensate the Distributor for other expenses, including printing and distributing prospectuses to persons other than shareholders, and preparing, printing, and distributing advertising materials, sales literature and reports to shareholders used in
connection with the sale of shares. Because these fees are paid out of the Funds assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
Long-term holders of Class C shares may pay more in distribution and service fees and CDSCs than the economic equivalent of the maximum front-end sales charge permitted under the Financial Industry Regulatory Authority Conduct Rules.
Other Payments to Financial Intermediaries
In addition to the sales commissions and certain payments from distribution and service fees to financial intermediaries as previously described, the Distributor may from time to time make additional payments, out
of its own
Section
4
General Information
29
resources, to certain financial intermediaries that sell shares of Nuveen Mutual Funds in order to promote the sales and retention of Fund shares by those firms and their customers. The amounts
of these payments vary by financial intermediary and, with respect to a given firm, are typically calculated by reference to the amount of the firms recent gross sales of Nuveen Mutual Fund shares and/or total assets of Nuveen Mutual Funds
held by the firms customers. The level of payments that the Distributor is willing to provide to a particular financial intermediary may be affected by, among other factors, the firms total assets held in and recent net investments into
Nuveen Mutual Funds, the firms level of participation in Nuveen Mutual Fund sales and marketing programs, the firms compensation program for its registered representatives who sell Fund shares and provide services to Fund shareholders,
and the asset class of the Nuveen Mutual Funds for which these payments are provided. For 2011, these payments in the aggregate were approximately 0.070% to 0.073% of the assets in the Nuveen Mutual Funds, although payments to particular financial
intermediaries can be significantly higher. The statement of additional information contains additional information about these payments, including the names of the firms to which payments are made. The Distributor may also make payments to
financial intermediaries in connection with sales meetings, due diligence meetings, prospecting seminars and other meetings at which the Distributor promotes its products and services.
In connection with the availability of Nuveen Mutual Funds within selected mutual fund no-transaction fee institutional platforms and fee-based
wrap programs (together,
Platform Programs
) at certain financial intermediaries, the Distributor also makes payments out of its own assets to those firms as compensation for certain recordkeeping, shareholder communications and
other account administration services provided to Nuveen Mutual Fund shareholders who own their Fund shares in these Platform Programs. These payments are in addition to the service fee and any applicable omnibus sub-accounting fees paid to these
firms with respect to these services by the Nuveen Mutual Funds out of Fund assets.
The amounts of payments to a financial intermediary
could be significant, and may create an incentive for the intermediary or its representatives to recommend or offer shares of the Fund to you. The intermediary may elevate the prominence or profile of the Fund within the intermediarys
organization by, for example, placing the Fund on a list of preferred or recommended funds and/or granting the Distributor and/or its affiliates preferential or enhanced opportunities to promote the Fund in various ways within the
intermediarys organization.
The price you pay for your shares is based on the Funds net asset value per share, which is determined as
of the close of trading (normally 4:00 p.m. New York time) on each day the NYSE is open for business. Net asset value is calculated for each class of the Fund by taking the value of the classs total assets, including interest or dividends
accrued but not yet collected, less all liabilities, and dividing by the total number of shares outstanding. The result, rounded to the nearest cent, is the net asset value per share. All valuations are subject to review by the Funds Board of
Trustees or its designee; however, the Board of Trustees retains oversight responsibility for valuing the Funds portfolio securities.
30
Section 4
General Information
In determining net asset value, portfolio instruments generally are valued using prices provided by
independent pricing services or obtained from other sources, such as broker-dealer quotations, all as approved by the Board of Trustees. Exchange-traded instruments generally are valued at the last reported sales price or official closing price on
an exchange, if available. Independent pricing services typically value non-exchange-traded instruments utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making
markets in such instruments, cash flows, and transactions for comparable instruments. In pricing certain instruments, the pricing services may consider information about an instruments issuer or market activity provided by the Funds
investment adviser or sub-adviser.
If a price cannot be obtained from a pricing service or other pre-approved source, or if Nuveen Fund
Advisors deems such price to be unreliable, a portfolio instrument may be valued by the Fund at its fair value as determined in good faith by the Board of Trustees or its designee. As a general principle, the fair value of a portfolio instrument is
the amount that an owner might reasonably expect to receive upon the instruments current sale. A range of factors and analysis may be considered when determining fair value, including relevant market data, interest rates, credit considerations
and/or issuer-specific news. The Fund may rely on an independent fair valuation service in making any such fair value determinations. A security that is fair valued may be valued at a price higher or lower than actual market quotations, the last
price determined by the pricing service, the last bid or ask price in the market or the value determined by other funds using their own fair valuation procedures.
The Fund is intended for long-term investment and should not be used for excessive trading. Excessive trading in
the Funds shares can disrupt portfolio management, lead to higher operating costs, and cause other operating inefficiencies for the Fund. However, the Fund is also mindful that shareholders may have valid reasons for periodically purchasing
and redeeming Fund shares.
Accordingly, the Fund has adopted a Frequent Trading Policy that seeks to balance the Funds need to
prevent excessive trading in Fund shares while offering investors the flexibility in managing their financial affairs to make periodic purchases and redemptions of Fund shares.
The Funds Frequent Trading Policy generally limits an investor to two round trip trades in a 60-day period. A round
trip is the purchase and subsequent redemption of Fund shares, including by exchange. Each side of a round trip may be comprised of either a single transaction or a series of closely-spaced transactions.
The Fund primarily receives share purchase and redemption orders through third-party financial intermediaries, some of whom rely on the use of
omnibus accounts. An omnibus account typically includes multiple investors and provides the Fund only with a net purchase or redemption amount on any given day where multiple purchases, redemptions and exchanges of shares occur in the account. The
identity of individual purchasers, redeemers and exchangers whose orders are aggregated in omnibus accounts, and the size of their orders, will generally not be known by the Fund. Despite the
Section 4
General Information
31
Funds efforts to detect and prevent frequent trading, the Fund may be unable to identify frequent trading because the netting effect in omnibus accounts often makes it more difficult to
identify frequent traders. The Distributor has entered into agreements with financial intermediaries that maintain omnibus accounts with the Funds transfer agent. Under the terms of these agreements, the financial intermediaries undertake to
cooperate with the Distributor in monitoring purchase, exchange and redemption orders by their customers in order to detect and prevent frequent trading in the Fund through such accounts. Technical limitations in operational systems at such
intermediaries or at the Distributor may also limit the Funds ability to detect and prevent frequent trading. In addition, the Fund may permit certain financial intermediaries, including broker-dealer and retirement plan administrators, among
others, to enforce their own internal policies and procedures concerning frequent trading. Such policies may differ from the Funds Frequent Trading Policy and may be approved for use in instances where the Fund reasonably believes that the
intermediarys policies and procedures effectively discourage inappropriate trading activity. Shareholders holding their accounts with such intermediaries may wish to contact the intermediary for information regarding its frequent trading
policy. Although the Fund does not knowingly permit frequent trading, it cannot guarantee that it will be able to identify and restrict all frequent trading activity.
The Fund reserves the right in its sole discretion to waive unintentional or minor violations (including transactions below certain dollar thresholds) if it determines that doing so would not harm the interests of
Fund shareholders. In addition, certain categories of redemptions may be excluded from the application of the Frequent Trading Policy, as described in more detail in the statement of additional information. These include, among others, redemptions
pursuant to systematic withdrawal plans, redemptions in connection with the total disability or death of the investor, involuntary redemptions by operation of law, redemptions in payment of account or plan fees, and certain redemptions by retirement
plans, including redemptions in connection with qualifying loans or hardship withdrawals, termination of plan participation, return of excess contributions, and required minimum distributions. The Fund may also modify or suspend the Frequent Trading
Policy without notice during periods of market stress or other unusual circumstances.
The Fund reserves the right to impose
restrictions on purchases or exchanges that are more restrictive than those stated above if it determines, in its sole discretion, that a transaction or a series of transactions involves market timing or excessive trading that may be detrimental to
Fund shareholders. The Fund also reserves the right to reject any purchase order, including exchange purchases, for any reason. For example, the Fund may refuse purchase orders if the Fund would be unable to invest the proceeds from the purchase
order in accordance with the Funds investment policies and/or objectives, or if the Fund would be adversely affected by the size of the transaction, the frequency of trading in the account or various other factors. For more information about
the Funds Frequent Trading Policy and its enforcement, see Purchase and Redemption of Fund SharesFrequent Trading Policy in the statement of additional information.
32
Section 4
General Information
The custodian of the assets of the Fund is State Street Bank & Trust Company, P.O. Box 5043, Boston,
Massachusetts 02206-5043. The custodian also provides certain accounting services to the Fund. The Funds transfer, shareholder services and dividend paying agent, Boston Financial Data Services, Inc., P.O. Box 8530, Boston, Massachusetts
02266-8530, performs bookkeeping, data processing and administrative services for the maintenance of shareholder accounts.
Section 4
General Information
33
Section 5
Glossary of Investment Terms
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Average cost basis method:
Calculating cost basis by determining the average price paid for Fund shares that may have been purchased at different times
for different prices.
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Derivatives:
Financial instruments whose performance is derived from the performance of an underlying asset, security or index. Derivatives may be used to
hedge risk, to exchange a floating rate of return for a fixed rate of return or to gain investment exposure. Derivatives include futures, options and swaps, among other instruments.
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Futures:
Derivative contracts obligating buyers to purchase an asset or sellers to sell an asset at a predetermined future date and price. Futures
contracts are standardized to facilitate trading on a futures exchange.
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Options:
Derivative investments giving buyers the right to buy or to sell shares of a specified stock at a specified price on or before a given date.
There are also options on currencies and other financial assets.
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Swaps:
Derivative contracts in which two parties agree to exchange one stream of cash flows for another stream. Swap agreements define the dates when the
cash flows will be paid and how the cash flows are calculated.
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Zero coupon bonds:
Zero coupon bonds pay no cash income to their holders until they mature. When held to maturity, their entire return comes from the
difference between their purchase price and their maturity value. They are issued at substantial discounts from their value at maturity.
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34
Section 5
Glossary of Investment Terms
Nuveen Mutual Funds
Nuveen offers a variety of mutual funds designed to help you reach your financial goals. The funds below are grouped by category.
Municipal-National
All-American Municipal Bond
High Yield Municipal Bond
Inflation Protected Municipal Bond
Intermediate Duration Municipal Bond
Limited Term Municipal Bond
Short Term Municipal Bond
Municipal-State
Arizona Municipal Bond
California High Yield Municipal Bond
California Municipal Bond
Colorado Municipal Bond
Connecticut Municipal Bond
Georgia Municipal Bond
Kansas Municipal Bond
Kentucky Municipal Bond
Louisiana Municipal Bond
Maryland Municipal Bond
Massachusetts Municipal Bond
Michigan Municipal Bond
Minnesota Intermediate Municipal Bond
Minnesota Municipal Bond
Missouri Municipal Bond
Nebraska Municipal Bond
New Jersey Municipal Bond
New Mexico Municipal Bond
New York Municipal Bond
North Carolina Municipal Bond
Ohio Municipal Bond
Municipal-State (continued)
Oregon Intermediate Municipal Bond
Pennsylvania Municipal Bond
Tennessee Municipal Bond
Virginia Municipal Bond
Wisconsin Municipal Bond
Taxable Fixed Income
Core
Plus Bond
Global Total Return Bond
High Income Bond
Inflation Protected Securities
Intermediate Government Bond
Intermediate Term Bond
NWQ Flexible Income
Preferred Securities
Short Term Bond
Strategic Income
Symphony Credit Opportunities
Symphony Floating Rate Income
Global/International
International
International Select
Santa Barbara Global Dividend Growth
Santa Barbara Global Growth
Santa Barbara International Growth
Symphony International Equity
Tradewinds Emerging Markets
Tradewinds Global All-Cap
Tradewinds Global Resources
Global/International (continued)
Tradewinds International Value
Tradewinds Japan
Tradewinds Small-Cap Opportunities
Value
Dividend Value
Mid Cap Value
Multi-Manager Large-Cap Value
NWQ Large-Cap Value
NWQ Multi-Cap Value
NWQ Small-Cap Value
NWQ Small/Mid-Cap Value
Small Cap Value
Tradewinds Value Opportunities
Growth
Large Cap Growth Opportunities
Mid Cap Growth Opportunities
Santa Barbara Growth
Small Cap Growth Opportunities
Symphony Large-Cap Growth
Winslow Large-Cap Growth
Core
Large Cap Select
Mid Cap Select
Santa Barbara Dividend Growth
Small Cap Select
Symphony Mid-Cap Core
Core
(continued)
Symphony Optimized Alpha
Real Assets
Global Infrastructure
Gresham Diversified Commodity Strategy
Real Asset Income
Real Estate Securities
Asset Allocation
Strategy Aggressive Growth Allocation
Strategy Balanced Allocation
Strategy Conservative Allocation
Strategy Growth Allocation
Quantitative/Enhanced
Quantitative Enhanced Core Equity
Index
Equity Index
Mid Cap Index
Small Cap Index
Non-Traditional Strategies
Gresham Long/Short Commodity Strategy
Intelligent Risk Conservative Allocation
Intelligent Risk Growth Allocation
Intelligent Risk Moderate Allocation
Tactical Market Opportunities
Several additional sources of information are available to you, including the codes of ethics adopted by the Fund,
Nuveen Investments, Nuveen Fund Advisors and Nuveen Asset Management. The statement of additional information, incorporated by reference into this prospectus, contains detailed information on the policies and operation of the Fund included in this
prospectus. Additional information about the Funds investments is available in the annual and semi-annual reports to shareholders. In the Funds annual report, you will find a discussion of the market conditions and investment strategies
that significantly affected the Funds performance during its last fiscal year. The Funds most recent statement of additional information, annual and semi-annual reports and certain other information are available, free of charge, by
calling Nuveen Investor Services at (800) 257-8787, on the Funds website at www.nuveen.com, or through your financial advisor. Shareholders may call the toll free number above with any inquiries.
You may also obtain this and other Fund information directly from the Securities and Exchange Commission (
SEC
). Reports and other information
about the Fund are available on the EDGAR Database on the SECs website at http://www.sec.gov or in person at the SECs Public Reference Room in Washington, D.C. Call the SEC at (202) 551-8090 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 SECs Public Reference Section at 100 F Street, NE, Washington, D.C. 20549-1520. The SEC may charge a copying fee for this information.
The Fund is a series of Nuveen Municipal Trust, whose Investment Company Act file number is 811-07873.
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Distributed by
Nuveen Securities, LLC
333 West Wacker Drive
Chicago, Illinois 60606
(800) 257-8787
www.nuveen.com
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The information in this Statement of Additional Information is not complete and may be changed. We
may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 16, 2012
, 2012
Nuveen Short Duration High Yield Municipal Bond Fund
Ticker Symbols: Class A, Class C, Class I
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information (
SAI
) is not a prospectus. This SAI relates to, and should be read in conjunction with,
the Prospectus dated , 2012 for Nuveen Short Duration High Yield Municipal Bond Fund (the
Fund
), a series of Nuveen Municipal Trust
(the
Trust
). A Prospectus may be obtained without charge from certain securities representatives, banks and other financial institutions that have entered into sales agreements with Nuveen Securities, LLC (the
Distributor
), or from the Fund, by written request to Nuveen Short Duration High Yield Municipal Bond Fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530, or by calling (800) 257-8787.
The audited financial statements for the Funds first fiscal period will appear in the Funds Annual Report dated April 30, 2013, which
will be incorporated by reference and will be available without charge by calling (800) 257-8787.
TABLE OF CONTENTS
S-1
S-2
GENERAL INFORMATION
The Fund is a diversified series of the Trust, an open-end management investment company organized as a Massachusetts business trust on July 1, 1996. Each series of the Trust represents shares of beneficial
interest in a separate portfolio of securities and other assets, with its own objective and policies. Currently, six series of the Trust are authorized and outstanding.
The Funds investment adviser is Nuveen Fund Advisors, Inc. (
Nuveen Fund Advisors
or the
Adviser
). The Funds sub-adviser is Nuveen Asset Management, LLC
(
Nuveen Asset Management
or the
Sub-Adviser
).
Certain matters under the Investment Company Act of
1940, as amended (the
1940 Act
), which must be submitted to a vote of the holders of the outstanding voting securities of a series, shall not be deemed to have been effectively acted upon unless approved by the holders of a
majority of the outstanding voting shares of each series affected by such matter.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and policies set forth in the Prospectuses and under Investment Policies and Techniques below,
the Fund is subject to the investment restrictions set forth below.
The investment objective and certain fundamental investment policies
of the Fund are described in the Prospectus. The Fund, as a fundamental policy, may not, without the approval of the holders of a majority of the shares of the Funds outstanding shares:
(1) With respect to 75% of its total assets, purchase securities of an issuer (other than (i) securities issued by other investment
companies, (ii) securities issued by the U.S. Government, its agencies, instrumentalities or authorities, or (iii) repurchase agreements fully collateralized by U.S. Government securities) if (a) such purchase would, at the time, cause more than 5%
of the Funds total assets taken at market value to be invested in the securities of such issuer; or (b) such purchase would, at the time, result in more than 10% of the outstanding voting securities of such issuer being held by the Fund.
(2) Borrow money, except as permitted under the 1940 Act, as interpreted or modified from time to time by any regulatory
authority having jurisdiction.
(3) Issue senior securities, except as permitted under the 1940 Act, as interpreted or
modified from time to time by any regulatory authority having jurisdiction.
(4) Underwrite any issue of securities,
except to the extent that the purchase or sale of securities in accordance with its investment objective, policies and limitations may be deemed to be an underwriting.
(5) Purchase or sell real estate, but this shall not prevent the Fund from investing in securities or other instruments backed by
real estate or interests therein or foreclosing upon and selling such a security or instrument.
(6) Purchase or sell
physical commodities or contracts relating to physical commodities.
(7) Make loans, except as permitted under the 1940
Act, as interpreted or modified from time to time by any regulatory authority having jurisdiction.
(8) Concentrate its
investments in a particular industry. For purposes of this limitation, the U.S. Government, and state or municipal governments and their political subdivisions are not considered members of any industry. Whether a Fund is concentrating in an
industry shall be determined in accordance with the 1940 Act, as interpreted or modified from time to time by any regulatory authority having jurisdiction.
For the purpose of applying the limitations set forth in paragraphs (1) and (8) above, an issuer shall be deemed the sole issuer of a security when its assets and revenues are separate from other governmental
entities and its securities are backed only by its assets and revenues. Similarly, in the case of a non-governmental user, such as an industrial corporation or a privately owned or operated
S-3
hospital, if the security is backed only by the assets and revenues of the non-governmental user, then such non-governmental user would be deemed to be the sole issuer. Where a security is also
backed by the enforceable obligation of a superior or unrelated governmental entity or other entity (other than a bond insurer), it shall also be included in the computation of securities owned that are issued by such governmental or other entity.
For purposes of applying the limitations set forth in numbers 2 and 3 above, under the 1940 Act as currently in
effect, the Fund is not permitted to issue senior securities, except that the Fund may borrow from any bank if immediately after such borrowing the value of the Funds total assets is at least 300% of the principal amount of all of the
Funds borrowings (i.e., the principal amount of the borrowings may not exceed 33
1
/
3
% of the Funds total assets). In the event that such asset coverage shall at any time fall below 300% the Fund shall, within
three days thereafter (not including Sundays and holidays) reduce the amount of its borrowings to an extent that the asset coverage of such borrowing shall be at least 300%.
For purposes of applying the limitation set forth in number 7 above, there are no limitations with respect to unsecured loans made by the Fund to an
unaffiliated party. However, when the Fund loans its portfolio securities, the obligation on the part of the Fund to return collateral upon termination of the loan could be deemed to involve the issuance of a senior security within the meaning of
Section 18(f) of the 1940 Act. In order to avoid violation of Section 18(f), the Fund may not make a loan of portfolio securities if, as a result, more than one-third of its total asset value (at market value computed at the time of making
a loan) would be on loan.
Where a security is guaranteed by a governmental entity or some other facility, such as a bank guarantee or
letter of credit, such a guarantee or letter of credit would be considered a separate security and would be treated as an issue of such government, other entity or bank.
Except with respect to paragraph (2) above, the foregoing restrictions and limitations, as well as the Funds policies as to ratings of portfolio investments, will apply only at the time of purchase of
securities, and the percentage limitations will not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of an acquisition of securities, unless otherwise indicated.
The foregoing fundamental investment policies, together with the investment objective of the Fund, cannot be changed without approval by holders of
a majority of the Funds outstanding voting shares. As defined in the 1940 Act, this means the vote of (i) 67% or more of the Funds shares present at a meeting, if the holders of more than 50% of the Funds shares are
present or represented by proxy, or (ii) more than 50% of the Funds shares, whichever is less.
In addition to the foregoing
fundamental investment policies, the Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Board of Trustees. The Fund may not:
(1) Invest more than 15% of its net assets in illiquid securities, including repurchase agreements maturing in more than
seven days. The term illiquid securities will have the same meaning as it does under the 1940 Act.
(2)
Purchase securities when borrowings exceed 5% of its total assets. If due to market fluctuations or other reasons, the value of the Funds assets falls below 300% of its borrowings, the Fund will reduce its borrowings within 3 business days.
Under normal market conditions, the Fund invests at least 80% of its net assets in municipal bonds that pay interest that is exempt from
regular federal personal income tax. A policy has been adopted by the Fund to provide shareholders with at least 60 days notice in the event of a planned change to this investment strategy. Such notice to shareholders will meet the
requirements of Rule 35d-1(c) of the 1940 Act.
S-4
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the discussion of the Funds investment objectives, principal investment strategies, policies and
techniques that appears in the Prospectus for the Fund. Additional information concerning principal investment strategies of the Fund, and other investment strategies that may be used by the Fund, is set forth below. The Fund has attempted to
identify investment strategies that will be employed in pursuing the Funds investment objectives. Additional information concerning the Funds investment restrictions is set forth above under Investment Restrictions.
If a percentage limitation on investments by the Fund stated in this SAI or its Prospectus is adhered to at the time of an investment, a
later increase or decrease in percentage resulting from changes in asset value will not be deemed to violate the limitation except in the case of the limitations on borrowing. The Fund, which is limited to investing in securities with specified
ratings or of a certain credit quality, is not required to sell a security if its rating is reduced or its credit quality declines after purchase, but may consider doing so. Descriptions of the rating categories of Standard & Poors
Ratings Services, a division of The McGraw-Hill Companies, Inc. (
Standard & Poors
), Fitch, Inc. (
Fitch
) and Moodys Investors Service, Inc. (
Moodys
) are contained in
Appendix A.
References in this section to the Adviser also apply, to the extent applicable, to the sub-adviser of the Fund.
Asset Coverage Requirements
To the extent required by Securities and Exchange Commission (
SEC
) guidelines, the Fund will only engage in transactions that expose it to an obligation to another party if it owns either
(a) an offsetting position for the same type of financial asset, or (b) cash or liquid securities, designated on the Funds books or held in a segregated account, with a value sufficient at all times to cover its potential obligations
not covered as provided in (a). Examples of transactions governed by these asset coverage requirements include, for example, options written by the Fund, futures contracts and options on futures contracts, swaps and when-issued and delayed delivery
transactions. Assets used as offsetting positions, designated on the Funds books, or held in a segregated account cannot be sold while the positions requiring cover are open unless replaced with other appropriate assets. As a result, the
commitment of a large portion of assets to be used as offsetting positions or to be designated or segregated in such a manner could impede portfolio management or the ability to meet redemption requests or other current obligations.
Derivatives
The
Fund may use derivative instruments, as described below. Generally, a derivative is a financial contract the value of which depends upon, or is derived from, the value of an underlying asset, reference rate or index. Derivatives generally take the
form of contracts under which the parties agree to payments between them based upon the performance of a wide variety of underlying references, such as stocks, bonds, loans, commodities, interest rates, currency exchange rates, and various domestic
and foreign indices. Derivative instruments that the Fund may use include options contracts, futures contracts, options on futures contracts and swap transactions, all of which are described in more detail below.
The Fund may use derivatives for a variety of reasons, including as a substitute for investing directly in securities and currencies, as an
alternative to selling a security short, as part of a hedging strategy (that is, for the purpose of reducing risk to the Fund), to manage the effective duration of the Funds portfolio, or for other purposes related to the management of the
Fund. Derivatives permit the Fund to increase or decrease the level of risk, or change the character of the risk, to which its portfolio is exposed in much the same way as the Fund can increase or decrease the level of risk, or change the character
of the risk, of its portfolio by making investments in specific securities. However, derivatives may entail investment exposures that are greater than their cost would suggest. As a result, a small investment in derivatives could have a large impact
on the Funds performance.
The Fund will not make any hedging investment (whether an initial premium or deposit or a subsequent
deposit) other than as necessary to close a prior investment if, immediately after such
S-5
investment, the sum of the amount of its premiums and deposits, with respect to all currently effective hedging investments, would exceed 5% of such series net assets. The Fund will invest
in these instruments only in markets believed by Nuveen Asset Management to be active and sufficiently liquid.
Derivatives can be
volatile and involve various types and degrees of risk, depending upon the characteristics of the particular derivative and the portfolio as a whole. If the Fund invests in derivatives at inopportune times or judges market conditions incorrectly,
such investments may lower the Funds return or result in a loss. The Fund also could experience losses or limit its gains if the performance of its derivatives is poorly correlated with the underlying instruments or the Funds other
investments, or if the Fund is unable to liquidate its position because of an illiquid secondary market. The market for derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes
in the prices for derivatives.
While transactions in some derivatives may be effected on established exchanges, many other derivatives
are privately negotiated and entered into in the over-the-counter market with a single counterparty. When exchange-traded derivatives are purchased and sold, a clearing agency associated with the exchange stands between each buyer and seller and
effectively guarantees performance of each contract, either on a limited basis through a guaranty fund or to the full extent of the clearing agencys balance sheet. Transactions in over-the-counter derivatives have no such protection. Each
party to an over-the-counter derivative bears the risk that its direct counterparty will default. In addition, over-the-counter derivatives may be less liquid than exchange-traded derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the derivative to be interested in bidding for it.
Derivatives generally involve leverage in
the sense that the investment exposure created by the derivative is significantly greater than the Funds initial investment in the derivative. As discussed above under Asset Coverage Requirements, the Fund may be required to
segregate permissible liquid assets, or engage in other permitted measures, to cover the Funds obligations relating to its transactions in derivatives. For example, in the case of futures contracts that are not contractually
required to cash settle, the Fund must set aside liquid assets equal to such contracts full notional value (generally, the total numerical value of the asset underlying a future contract at the time of valuation) while the positions are open.
With respect to futures contracts that are contractually required to cash settle, however, the Fund is permitted to set aside liquid assets in an amount equal to the Funds daily mark-to-market net obligation (i.e., the Funds daily net
liability) under the contracts, if any, rather than such contracts full notional value. By setting aside assets equal to only its net obligations under cash-settled futures contracts, the Fund may employ leverage to a greater extent than if
the Fund were required to segregate assets equal to the full notional value of such contracts.
Derivatives also may involve other types
of leverage. For example, an instrument linked to the value of a securities index may return income calculated as a multiple of the price movement of the underlying index. This leverage will increase the volatility of these derivatives since they
may increase or decrease in value more quickly than the underlying instruments.
The particular derivative instruments the Fund can use
are described below. The Funds portfolio managers may decide not to employ some or all of these instruments, and there is no assurance that any derivatives strategy used by the Fund will succeed. The Fund may employ new derivative instruments
and strategies when they are developed, if those investment methods are consistent with the Funds investment objective and are permissible under applicable regulations governing the Fund.
Futures and Options on Futures
The Fund may engage in futures transactions as a principal investment strategy. The Fund may buy and sell futures contracts that relate to: (1) interest rates, (2) debt securities, and (3) bond
indices. The Fund also may buy and write options on the futures contracts in which it may invest (
futures options
) and may write straddles, which consist of a call and a put option on the same futures contract. The Fund will only
write options and straddles which are covered. This means that, when writing a call option, the Fund must either segregate liquid assets with a value equal to the fluctuating market value of the optioned futures contract, or the Fund
must own an option to purchase the same futures contract having an exercise price that is (i) equal to or less than the exercise price of the call
S-6
written, or (ii) greater than the exercise price of the call written, provided the difference is maintained by the Fund in segregated liquid assets. When writing a put option, the Fund must
segregate liquid assets in an amount not less than the exercise price, or own a put option on the same futures contract where the exercise price of the put held is (i) equal to or greater than the exercise price of the put written, or
(ii) less than the exercise price of the put written, provided the difference is maintained by the Fund in segregated liquid assets. A straddle will be covered when sufficient assets are deposited to meet the Funds immediate obligations.
The Fund may use the same liquid assets to cover both the call and put options in a straddle where the exercise price of the call and put are the same, or the exercise price of the call is higher than that of the put. In such cases, the Fund will
also segregate liquid assets equivalent to the amount, if any, by which the put is in the money. The Fund may only enter into futures contracts and futures options which are standardized and traded on a U.S. or foreign exchange, board of
trade or similar entity, or quoted on an automated quotation system.
A futures contract is an agreement between two parties to buy and
sell a security, index, interest rate, currency or commodity (each a
financial instrument
) for a set price on a future date. Certain futures contracts, such as futures contracts relating to individual securities, call for making
or taking delivery of the underlying financial instrument. However, these contracts generally are closed out before delivery by entering into an offsetting purchase or sale of a matching futures contract (same exchange, underlying financial
instrument, and delivery month). Other futures contracts, such as futures contracts on interest rates and indices, do not call for making or taking delivery of the underlying financial instrument, but rather are agreements pursuant to which two
parties agree to take or make delivery of an amount of cash equal to the difference between the value of the financial instrument at the close of the last trading day of the contract and the price at which the contract was originally written. These
contracts also may be settled by entering into an offsetting futures contract.
Unlike when the Fund purchases or sells a security, no
price is paid or received by the Fund upon the purchase or sale of a futures contract. Initially, the Fund will be required to deposit with the futures broker, known as a futures commission merchant (
FCM
), an amount of cash or
securities equal to a varying specified percentage of the contract amount. This amount is known as initial margin. The margin deposit is intended to ensure completion of the contract. Minimum initial margin requirements are established by the
futures exchanges and may be revised. In addition, FCMs may establish margin deposit requirements that are higher than the exchange minimums. Cash held in the margin account generally is not income producing. However, coupon-bearing securities, such
as Treasury securities, held in margin accounts generally will earn income. Subsequent payments to and from the FCM, called variation margin, will be made on a daily basis as the price of the underlying financial instrument fluctuates, making the
futures contract more or less valuable, a process known as marking the contract to market. Changes in variation margin are recorded by the Fund as unrealized gains or losses. At any time prior to expiration of the futures contract, the Fund may
elect to close the position by taking an opposite position that will operate to terminate its position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the
Fund, and the Fund realizes a gain or loss. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the Fund, the Fund may be entitled to the return of margin owed to it only in proportion to the amount received by the
FCMs other customers, potentially resulting in losses to the Fund. Futures transactions also involve brokerage costs and the Fund may have to segregate additional liquid assets in accordance with applicable SEC requirements. See
Asset Coverage Requirements above.
A futures option gives the purchaser of such option the right, in return for the
premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option. Upon exercise of a call option, the purchaser acquires a long position in the
futures contract and the writer is assigned the opposite short position. Upon the exercise of a put option, the opposite is true. Futures options possess many of the same characteristics as options on securities, currencies and indices (discussed
below under Options Transactions).
S-7
Limitations on the Use of Futures and Futures Options.
The Trust has filed a notice of
eligibility for exclusion from the definition of the term commodity pool operator with the National Futures Association, the Futures industrys self-regulatory organization. The Fund will not enter into Futures and options
transactions if the sum of the initial margin deposits and premiums paid for unexpired options exceeds 5% of the Funds total assets. In addition, the Fund will not enter into Futures Contracts and options transactions if more than 30% of its
net assets would be committed to such instruments.
On February 9, 2012, the CFTC adopted amendments to its rules that, once effective,
may affect the ability of the Trust, on behalf of the Fund, to continue to claim this exclusion. The Fund that seeks to claim the exclusion after the effectiveness of the amended rules would be limited in its ability to use futures and options on
futures or commodities or engage in swap transactions. If the Fund were no longer able to claim the exclusion, the Adviser would be required to register as a commodity pool operator, and the Fund and the Adviser would be subject to
regulation under the Commodity Exchange Act.
Risks Associated with Futures and Futures Options.
There are risks associated with
the use of futures contracts and futures options. A purchase or sale of a futures contract may result in a loss in excess of the amount invested in the futures contract.
If futures are used for hedging purposes, there can be no guarantee that there will be a correlation between price movements in the futures contract and in the underlying financial instruments that are being
hedged. This could result from differences between the financial instruments being hedged and the financial instruments underlying the standard contracts available for trading (e.g., differences in interest rate levels, maturities and the
creditworthiness of issuers). In addition, price movements of futures contracts may not correlate perfectly with price movements of the financial instruments underlying the futures contracts due to certain market distortions.
Successful use of futures by the Fund also is subject to the Advisers ability to predict correctly movements in the direction of the relevant
market. For example, if the Fund uses futures to hedge against the possibility of a decline in the market value of securities held in its portfolio and the prices of such securities increase instead, the Fund will lose part or all of the benefit of
the increased value of the securities which it has hedged because it will have offsetting losses in its futures positions. Furthermore, if in such circumstances the Fund has insufficient cash, it may have to sell securities to meet daily variation
margin requirements. The Fund may have to sell such securities at a time when it may be disadvantageous to do so.
There can be no
assurance that a liquid market will exist at a time when the Fund seeks to close out a futures or a futures option position, and the Fund would remain obligated to meet margin requirements until the position is closed. Futures exchanges may limit
the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous days
settlement price at the end of the current trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price
movements during a particular trading day and therefore does not limit potential losses because the limit may work to prevent the liquidation of unfavorable positions. For example, futures prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses.
Options Transactions
To the extent set forth below, the Fund may purchase put and call options on interest rates and bond indices. Options on futures contracts are
discussed above under Futures and Options on Futures.
Options on Interest Rates and Indices.
The Fund may
purchase put and call options on interest rates and on bond indices. An option on interest rates or on an index gives the holder the right to receive, upon exercise of the option, an amount of cash if the closing value of the underlying interest
rate or index is greater than, in the case of a call, or less than, in the case of a put, the exercise price
S-8
of the option. This amount of cash is equal to the difference between the exercise-settlement value of the interest rate option or the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple (the multiplier). The writer of the option is obligated, for the premium received, to make delivery of this amount. Settlements for interest rate and index options are always in
cash.
Expiration or Exercise of Options.
If an option written by the Fund expires unexercised, the Fund realizes a capital gain
equal to the premium received at the time the option was written. If an option purchased by the Fund expires unexercised, the Fund realizes a capital loss equal to the premium paid. Prior to the earlier of exercise or expiration, an exchange traded
option may be closed out by an offsetting purchase or sale of an option of the same series (type, exchange, underlying security, currency or index, exercise price, and expiration). There can be no assurance, however, that a closing purchase or sale
transaction can be effected when the Fund desires.
The Fund may sell put or call options it has previously purchased, which could result
in a net gain or loss depending on whether the amount realized on the sale is more or less than the premium and other transaction costs paid on the put or call option which is sold. Prior to exercise or expiration, an option may be closed out by an
offsetting purchase or sale of an option of the same series. The Fund will realize a capital gain from a closing purchase transaction if the cost of the closing option is less than the premium received from writing the option, or, if it is more, the
Fund will realize a capital loss. If the premium received from a closing sale transaction is more than the premium paid to purchase the option, the Fund will realize a capital gain or, if it is less, the Fund will realize a capital loss. The
principal factors affecting the market value of a put or a call option include supply and demand, interest rates, the current market price of the underlying security, currency or index in relation to the exercise price of the option, the volatility
of the underlying security, currency or index, and the time remaining until the expiration date.
Risks Associated with Options
Transactions.
There are several risks associated with options transactions. For example, there are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a
given transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior
or unexpected events.
When the Fund purchases a put or call option, it risks a total loss of the premium paid for the option, plus any
transaction costs, if the price of the underlying security does not increase or decrease sufficiently to justify the exercise of such option. Also, where a put or call option on a particular security is purchased to hedge against price movements in
a related security, the price of the put or call option may move more or less than the price of the related security.
There can be no
assurance that a liquid market will exist when the Fund seeks to close out an option position. If the Fund were unable to close out an option that it had purchased on a security, it would have to exercise the option in order to realize any profit or
the option may expire worthless. There is also a risk that, if restrictions on exercise were imposed, the Fund might be unable to exercise an option it had purchased.
Interest Rate Caps, Floors and Collars
The Fund may enter into interest rate caps,
floors and collars.
The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a notional principal amount from the party
selling such interest rate floor. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises above a predetermined interest rate, to receive payments of interest on a notional principal amount from the
party selling such interest rate cap. Interest rate collars involve selling a cap and purchasing a floor or vice versa to protect the Fund against interest rate movements exceeding given minimum or maximum levels.
Risks Associated with Interest Rate Caps, Floors and Collars Transactions.
The use of interest rate caps, floors and collars transactions is
a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If the sub-adviser is
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incorrect in its forecasts of default risks, market spreads or other applicable factors the investment performance of the Fund would diminish compared with what it would have been if these
techniques were not used. The Fund may only close out a cap, floor or collar with its particular counterparty, and may only transfer a position with the consent of that counterparty. In addition, the price at which the Fund may close out such a two
party contract may not correlate with the price change in the underlying reference asset. If the counterparty defaults, the Fund will have contractual remedies, but there can be no assurance that the counterparty will be able to meet its contractual
obligations or that the Fund will succeed in enforcing its rights. It also is possible that developments in the derivatives market, including potential government regulation, could adversely affect the Funds ability to terminate existing
agreements or to realize amounts to be received under such agreements.
Swap Agreements
The Fund may invest in swap agreements. Swap agreements are two-party contracts entered into primarily by institutional investors for periods
ranging from a few weeks to several years. In a standard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns
to be exchanged or swapped between the parties are calculated with respect to a notional amount (the amount or value of the underlying asset used in computing the particular interest rate, return, or other amount to be exchanged) in a particular
foreign currency, or in a basket of securities representing a particular index. Swap agreements may include (i) interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest
rates exceed a specified rate or cap; (ii) interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level or floor; and (iii) interest rate
collars, under which a party sells a cap and purchases a floor, or vice versa, in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels or collar amounts.
The Fund may enter into interest rate, credit default, securities index, commodity, or security and currency exchange rate swap agreements for any
purpose consistent with the Funds investment objective, such as for the purpose of attempting to obtain, enhance, or preserve a particular desired return or spread at a lower cost to the Fund than if the Fund had invested directly in an
instrument that yielded that desired return or spread. The Fund also may enter into swaps in order to protect against an increase in the price of, or the currency exchange rate applicable to, securities that the Fund anticipates purchasing at a
later date.
Whether the Funds use of swap agreements will be successful in furthering their investment objectives will depend, in
part, on the ability to predict correctly whether certain types of investments are likely to produce greater returns than other investments and the changes in the future values, indices, or rates covered by the swap agreement. Swap agreements may be
considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Fund will enter swap agreements only
with counterparties that Nuveen Asset Management reasonably believes are capable of performing under the swap agreements. If there is a default by the other party to such a transaction, the Fund will have to rely on their contractual remedies (which
may be limited by bankruptcy, insolvency or similar laws) pursuant to the agreements related to the transaction. Certain restrictions imposed on the Fund by the Internal Revenue Code of 1986, as amended (the
Code
) may limit the
Funds ability to use swap agreements. The swap market is largely unregulated.
Illiquid Securities
The Fund may invest in illiquid securities (
i.e.
, securities that are not readily marketable). For purposes of this restriction, illiquid
securities include, but are not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may only be resold pursuant to Rule 144A under the Securities Act of 1933, as
amended (the
Securities Act
), but that are deemed to be illiquid; and repurchase agreements with maturities in excess of seven days. However, the Fund will not acquire illiquid securities if, as a result, such securities would
comprise more than 15% of the value of the Funds net assets. The Board of Trustees or its delegate has the ultimate authority to determine, to the extent permissible under the federal securities laws,
S-10
which securities are liquid or illiquid for purposes of this 15% limitation. The Board of Trustees has delegated to the Adviser the day-to-day determination of the illiquidity of any portfolio
security, although it has retained oversight over and ultimate responsibility for such determinations. The Adviser works with and to a large extent relies on the expertise and advice of Nuveen Asset Management in making those liquidity
determinations. Although no definitive liquidity criteria are used, the Board of Trustees has directed Nuveen Asset Management to look to such factors as (i) the nature of the market for a security (including the institutional private resale market;
the frequency of trades and quotes for the security; the number of dealers willing to purchase or sell the security; and the amount of time normally needed to dispose of the security, the method of soliciting offers and the mechanics of transfer),
(ii) the terms of certain securities or other instruments allowing for the disposition to a third party or the issuer thereof (e.g., certain repurchase obligations and demand instruments), and (iii) other permissible relevant facts.
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement
is in effect under the Securities Act. Where registration is required, the Fund may be obligated to pay all or part of the registration expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may
be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. Illiquid
securities will be priced at fair value as determined in good faith by the Board of Trustees or its delegate. If, through the appreciation of illiquid securities or the depreciation of liquid securities, the Fund should be in a position where more
than 15% of the value of its net assets are invested in illiquid securities, including restricted securities which are not readily marketable, the Fund will take such steps as is deemed advisable, if any, to protect liquidity.
Making of Loans to Issuers of Bonds Already in the Portfolio
The Fund may make a loan to (as opposed to investing in a bond issued by) an entity whose bonds the Fund already owns in its portfolio, in instances
where Nuveen Asset Management believes that doing so will enhance the value of the Funds total investments (both bonds and loans) in obligations of that entity. Typically, such loans will be made to entities suffering severe economic distress,
oftentimes in or near bankruptcy. Making a loan to such an entity may enable the entity to remain a going concern and enable the entity to both repay the loan as well as be better able to pay interest and principal on the pre-existing
bonds, instead of forcing the Fund to liquidate the entitys assets, which can reduce recovery value. It is generally much more time-consuming and expensive for a troubled entity to issue additional bonds, instead of borrowing, as a means of
obtaining liquidity in times of severe financial need.
Municipal Bonds and Other Municipal Obligations
The Fund invests principally in municipal bonds and other municipal obligations. These bonds and other obligations are issued by the states and by
their local and special-purpose political subdivisions. The term municipal bond includes short-term municipal notes issued by the states and their political subdivisions, including, but not limited to, tax anticipation notes
(
TANs
), bond anticipation notes (
BANs
), revenue anticipation notes (
RANs
), construction loan notes, tax free commercial paper, and tax free participation certificates. In general, municipal
obligations include debt obligations issued by states, cities and local authorities to obtain funds for various public purposes, including construction of a wide range of public facilities such as airports, bridges, highways, hospitals, housing,
mass transportation, schools, streets and water and sewer works. Industrial development bonds and pollution control bonds that are issued by or on behalf of public authorities to finance various privately-rated facilities are included within the
term municipal obligations if the interest paid thereon is exempt from federal income tax.
Obligations of issuers of municipal
obligations are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors. In addition, the obligations of such issuers may become subject to the laws enacted in the future by Congress, state
legislatures or referenda extending the time for payment of principal and/or interest, or imposing other constraints upon enforcement of such obligations or upon municipalities to levy taxes. There is also the possibility that, as a result of
legislation or other conditions, the power or ability of any issuer to pay, when due, the principal of and interest on its municipal obligations may be materially affected.
S-11
Municipal Bonds
The two general classifications of municipal bonds are general obligation bonds and revenue bonds. General obligation bonds are secured by the governmental issuers pledge of its faith,
credit and taxing power for the payment of principal and interest upon a default by the issuer of its principal and interest payment obligations. They are usually paid from general revenues of the issuing governmental entity. Revenue bonds, on the
other hand, are usually payable only out of a specific revenue source rather than from general revenues. Revenue bonds ordinarily are not backed by the faith, credit or general taxing power of the issuing governmental entity. The principal and
interest on revenue bonds for private facilities are typically paid out of rents or other specified payments made to the issuing governmental entity by a private company which uses or operates the facilities. Examples of these types of obligations
are industrial revenue bond and pollution control revenue bonds. Industrial revenue bonds are issued by governmental entities to provide financing aid to community facilities such as hospitals, hotels, business or residential complexes, convention
halls and sport complexes. Pollution control revenue bonds are issued to finance air, water and solids pollution control systems for privately operated industrial or commercial facilities.
Revenue bonds for private facilities usually do not represent a pledge of the credit, general revenues or taxing powers of issuing governmental
entity. Instead, the private company operating the facility is the sole source of payment of the obligation. Sometimes, the funds for payment of revenue bonds come solely from revenue generated by operation of the facility. Revenue bonds which are
not backed by the credit of the issuing governmental entity frequently provide a higher rate of return than other municipal obligations, but they entail greater risk than obligations which are guaranteed by a governmental unit with taxing power.
Federal income tax laws place substantial limitations on industrial revenue bonds, and particularly certain specified private activity bonds issued after August 7, 1986. In the future, legislation could be introduced in Congress which could
further restrict or eliminate the income tax exemption for interest on debt obligations in which the Fund may invest.
Refunded
Bonds
The Fund may invest in refunded bonds. Refunded bonds may have originally been issued as general obligation or revenue
bonds, but become refunded when they are secured by an escrow fund, usually consisting entirely of direct U.S. government obligations and/or U.S. government agency obligations sufficient for paying the bondholders. There are two types of refunded
bonds: pre-refunded bonds and escrowed-to-maturity (
ETM
) bonds. The escrow fund for a pre-refunded municipal bond may be structured so that the refunded bonds are to be called at the first possible date or a subsequent call date
established in the original bond debenture. The call price usually includes a premium from 1% to 3% above par. This type of structure usually is used for those refundings that either reduce the issuers interest payment expenses or change the
debt maturity schedule. In escrow funds for ETM refunded municipal bonds, the maturity schedules of the securities in the escrow funds match the regular debt-service requirements on the bonds as originally stated in the bond indentures.
Municipal Leases and Certificates of Participation
The Fund also may purchase municipal lease obligations, primarily through certificates of participation. Certificates of participation in municipal leases are undivided interests in a lease, installment purchase
contract or conditional sale contract entered into by a state or local governmental unit to acquire equipment or facilities. Municipal leases frequently have special risks which generally are not associated with general obligation bonds or revenue
bonds.
Municipal leases and installment purchase or conditional sales contracts (which usually provide for title to the leased asset to
pass to the governmental issuer upon payment of all amounts due under the contract) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of
municipal debt. The debt issuance limitations are deemed to be inapplicable because of the inclusion in many leases and contracts of non-appropriation clauses that provide that the governmental issuer has no obligation to make future
payments under the lease or contract unless money is appropriated for this purpose by the appropriate legislative body on a yearly or other periodic basis. Although these kinds of obligations are secured by the leased equipment or facilities, the
disposition of the pledged property
S-12
in the event of non-appropriation or foreclosure might, in some cases, prove difficult and time-consuming. In addition, disposition upon non-appropriation or foreclosure might not result in
recovery by the Fund of the full principal amount represented by an obligation.
Derivative Municipal Securities
The Fund may also acquire derivative municipal securities, which are custodial receipts of certificates underwritten by
securities dealers or banks that evidence ownership of future interest payments, principal payments or both on certain municipal securities. The underwriter of these certificates or receipts typically purchases municipal securities and deposits them
in an irrevocable trust or custodial account with a custodian bank, which then issues receipts or certificates that evidence ownership of the periodic unmatured coupon payments and the final principal payment on the obligation.
The principal and interest payments on the municipal securities underlying custodial receipts may be allocated in a number of ways. For example,
payments may be allocated such that certain custodial receipts may have variable or floating interest rates and others may be stripped securities which pay only the principal or interest due on the underlying municipal securities. The Fund may
invest in custodial receipts which have inverse floating interest rates and other inverse floating rate municipal obligations, as described below under Inverse Floating Rate Municipal Obligations.
Variable Rate Demand Notes (VRDNs)
VRDNs are long-term municipal obligations that have variable or floating interest rates and provide the Fund with the right to tender the security for repurchase at its stated principal amount plus accrued
interest. Such securities typically bear interest at a rate that is intended to cause the securities to trade at par. The interest rate may float or be adjusted at regular intervals (ranging from daily to annually), and is normally based on an
applicable interest index or another published interest rate or interest rate index. Most VRDNs allow the Fund to demand the repurchase of the security on not more than seven days prior notice. Other notes only permit the Fund to tender the security
at the time of each interest rate adjustment or at other fixed intervals. Variable interest rates generally reduce changes in the market value of municipal obligations from their original purchase prices. Accordingly, as interest rates decrease, the
potential for capital appreciation is less for variable rate municipal obligations than for fixed income obligations.
Inverse
Floating Rate Municipal Securities
The Fund may invest in inverse floating rate municipal securities or inverse
floaters, whose rates vary inversely to interest rates on a specified short-term municipal bond index or on another instrument. Such securities involve special risks as compared to conventional fixed-rate bonds. Should short-term interest
rates rise, the Funds investment in inverse floaters likely would adversely affect the Funds earnings and distributions to shareholders. Also, because changes in the interest rate on the other index or other instrument inversely affect
the rate of interest received on an inverse floater, and because inverse floaters essentially represent a leveraged investment in a long-term bond, the value of an inverse floater is generally more volatile than that of a conventional fixed-rate
bond having similar credit quality, redemption provisions and maturity. Although volatile in value, inverse floaters typically offer the potential for yields substantially exceeding the yields available on conventional fixed-rate bonds with
comparable credit quality, coupon, call provisions and maturity. The markets for inverse floating rate securities may be less developed and have less liquidity than the markets for conventional securities. The Fund will only invest in inverse
floating rate securities whose underlying bonds are rated A or higher.
Non-Investment Grade Debt Securities (Junk Bonds)
Under normal circumstances, at least 65% of the Funds net assets will be invested in non-investment grade debt securities,
which are medium- to low-quality Municipal Obligations. Municipal Obligations rated below investment grade (BB/Ba or lower) are commonly known as high-yield, high risk or junk bonds. Junk bonds, while generally
offering higher yields than investment grade securities with similar maturities, involve greater risks, including the possibility of default or bankruptcy. They are regarded as predominantly speculative with respect to the issuers capacity to
S-13
pay interest and repay principal. The special risk considerations in connection with investments in these securities are discussed below. Refer to Appendix A of this Statement of Additional
Information for a discussion of securities ratings.
(1)
Effect of Interest Rates and Economic Changes.
All
interest-bearing securities typically experience appreciation when interest rates decline and depreciation when interest rates rise. In addition, the market values of junk bond securities tend to reflect individual issuer developments to a greater
extent than do the market values of higher rated securities, which react primarily to fluctuations in the general level of interest rates. Junk bond securities also tend to be more sensitive to economic conditions than are higher rated securities.
As a result, they generally involve more credit risk than securities in the higher rated categories. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of junk bond securities may experience
financial stress and may not have sufficient revenues to meet their payment obligations. The risk of loss due to default by an issuer of these securities is significantly greater than by an issuer of higher rated securities because such securities
are generally unsecured and are often subordinated to other creditors. Further, if the issuer of a junk bond security defaults, the Fund may incur additional expenses to seek recovery. Periods of economic uncertainty and changes would also generally
result in increased volatility in the market prices of these and thus in the Funds net asset value.
The value of a
junk bond security will generally decrease in a rising interest rate market and, accordingly, so will the Funds net asset value. If the Fund experiences unexpected net redemptions in such a market, it may be forced to liquidate a portion of
its portfolio securities without regard to their investment merits. Due to the limited liquidity of junk bond securities, the Fund may be forced to liquidate these securities at a substantial discount. Any such liquidation would reduce the
Funds asset base over which expenses could be allocated and could result in a reduced rate of return for the Fund.
(2)
Payment Expectations.
Junk bond securities typically contain redemption, call, or prepayment provisions that permit the
issuer of securities containing such provisions to redeem the securities at its discretion. During periods of falling interest rates, issuers of these securities are likely to redeem or prepay the securities and refinance them with debt securities
with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them, the Fund may have to replace the securities with lower yielding securities, which could result in a lower return for the Fund.
(3)
Credit Ratings.
Credit ratings are issued by credit rating agencies and are indicative of the rated
securities safety of principal and interest payments. They do not, however, evaluate the market value risk of junk bond securities and, therefore, may not fully reflect the true risks of such an investment. In addition, credit rating agencies
may not make timely changes in a rating to reflect changes in the economy or in the condition of the issuer that affect the value of the security. Consequently, credit ratings are used only as a preliminary indicator of investment quality.
Investments in junk bonds will depend more upon credit analysis by Nuveen Asset Management than investments in investment grade debt securities. Nuveen Asset Management employs its own credit research and analysis, which includes a study of the
issuers existing debt, capital structure, ability to service debts and pay dividends, sensitivity to economic conditions, operating history, and current earnings trend. Nuveen Asset Management continually monitors the Funds investments
and carefully evaluates whether to dispose of or to retain junk bond securities whose credit ratings or credit quality may have changed.
(4)
Liquidity and Valuation.
The Fund may have difficulty disposing of certain junk bond securities because there may be a thin trading market for such securities. Not all dealers maintain markets in all
junk bond securities. As a result, there is no established retail secondary market for many of these securities. The Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. To the extent a
secondary trading market does exist, it is generally not as liquid as the secondary market for higher rated securities. The lack of a liquid secondary market may have an adverse impact on the market price of the security. The lack of a liquid
secondary market for certain securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its securities. Market quotations are
S-14
generally available on many junk bond issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During periods of thin
trading, the spread between bid and asked prices is likely to increase significantly. In addition, adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and liquidity of junk bond
securities, especially in a thinly traded market.
The Fund may invest up to 10% of its net assets in defaulted municipal obligations.
Municipal obligations in the lowest rating categories may be in default and are generally regarded as having poor prospects of attaining any real investment standing. A default or expected default in a municipal obligation owned by the Fund could
result in a significant decline in the value of that municipal obligation.
Other Investment Companies
The Fund may invest in other investment companies, such as mutual funds, closed-end funds, and exchange-traded funds (
ETFs
).
Under the 1940 Act, the Funds investment in such securities, subject to certain exceptions, currently is limited to 3% of the total voting stock of any one investment company; 5% of the Funds total assets with respect to any one
investment company; and 10% of the Funds total assets in the aggregate. The Fund will only invest in other investment companies that invest in Fund-eligible investments. The Funds investments in other investment companies may include
money market mutual funds. Investments in money market funds are not subject to the percentage limitations set forth above.
If the Fund
invests in other investment companies, Fund shareholders will bear not only their proportionate share of the Funds expenses, but also, indirectly, the similar expenses of the underlying investment companies. Shareholders would also be exposed
to the risks associated not only to the Fund, but also to the portfolio investments of the underlying investment companies. Shares of certain closed-end funds may at times be acquired only at market prices representing premiums to their net asset
values. Shares acquired at a premium to their net asset value may be more likely to subsequently decline in price, resulting in a loss to the Fund and its shareholders. The underlying securities in an ETF may not follow the price movements of the
industry or sector the ETFis designed to track. Trading in an ETF may be halted if the trading in one or more of the ETFs underlying securities is halted, which could result in the ETF being more volatile.
Other Investment Policies and Techniques
Structured Notes.
The Fund may invest in structured notes, including total rate of return swaps with rates of return determined by reference to the total rate of return on one or more loans
references in such notes. The rate of return on a structured note may be determined by applying a multiplier to the rate of total return on the referenced loan or loans. Application of a multiplier is comparable to the use of leverage which
magnifies the potential for gain and the risk of loss because a relatively small decline in the value of a referenced note could result in a relatively large loss in the value of the structured note.
Mortgage-Backed Securities.
The Fund may invest in fixed-income obligations backed by a pool of mortgages. Mortgage-backed securities are
issued both by U.S. government agencies, including the Government National Mortgage Association (GNMA) the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) and by private entities. The payment of
interest and principal on securities issued by U.S. government agencies is guaranteed by the full faith and credit of the U.S. government (in the case of GNMA securities) or the issuer (in the case of FNMA and FHLMC securities). However, the
guarantees do not apply to the market prices and yields of these securities, which vary with changes in interest rates. Mortgage-backed securities issued by private entities are structured similarly to mortgage-backed securities issued by GNMA, FNMA
and FHLMC. These securities and the underlying mortgages are not guaranteed by government agencies. However, these securities generally are structured with one or more types of credit enhancement by a third party. Mortgage-backed securities permit
borrowers to prepay their underlying mortgages. Prepayments by borrowers on underlying obligations can alter the effective maturity of these instruments.
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Standby Commitments.
The Fund may obtain standby commitments when it purchases Municipal
Obligations. A standby commitment gives the holder the right to sell the underlying security to the seller at an agreed-upon price on certain dates or within a specified period. The Fund will acquire standby commitments solely to facilitate
portfolio liquidity and not with a view to exercising them at a time when the exercise price may exceed the current value of the underlying securities. If the exercise price of a standby commitment held by the Fund should exceed the current value of
the underlying securities, the Fund may refrain from exercising the standby commitment in order to avoid causing the issuer of the standby commitment to sustain a loss and thereby jeopardizing the Funds business relationship with the issuer.
The Fund will enter into standby commitments only with banks and securities dealers that, in the opinion of Nuveen Asset Management, present minimal credit risks. However, if a securities dealer or bank is unable to meet its obligation to repurchase
the security when the Fund exercises a standby commitment, the Fund might be unable to recover all or a portion of any loss sustained from having to sell the security elsewhere. Standby commitments will be valued at zero in determining the
Funds net asset value.
Payment-In-Kind Debentures and Delayed Interest Securities
The Fund, as a non-principal investment strategy, may invest in debentures the interest on which may be paid in other securities rather than cash
(
PIKs
) or may be delayed (
delayed interest securities
). Typically, during a specified term prior to the debentures maturity, the issuer of a PIK may provide for the option or the obligation to make
interest payments in debentures, common stock or other instruments (i.e., in kind rather than in cash). The type of instrument in which interest may or will be paid would be known by the Fund at the time of investment. While PIKs
generate income for purposes of generally accepted accounting standards, they do not generate cash flow and thus could cause the Fund to be forced to liquidate securities at an inopportune time in order to distribute cash, as required by the
Internal Revenue Code (the
Code
).
Unlike PIKs, delayed interest securities do not pay interest for a specified
period. Because values of securities of this type are subject to greater fluctuations than are the values of securities that distribute income regularly, they may be more speculative than such securities.
Taxable Investments
The Prospectus discusses briefly the ability of the Fund to invest a portion of its assets in federally taxable short-term securities or shares of
money market funds (short-term investments). The Fund will invest only in taxable short-term investments that are either U.S. government securities or are rated within the highest grade by Moodys, S&P, or Fitch and mature
within one year from the date of purchase or carry a variable or floating rate of interest. See Appendix A for more information about ratings by Moodys, S&P, and Fitch.
The Fund may invest in the following taxable short-term investments:
Certificates of Deposit (CDs)
A certificate of deposit is a negotiable interest bearing instrument with a specific
maturity. CDs are issued by banks in exchange for the deposit of funds and normally can be traded in the secondary market, prior to maturity. The Fund will only invest in U.S. dollar denominated CDs issued by U.S. banks with assets of $1 billion or
more.
Commercial Paper
Commercial paper is the term used to designate unsecured short-term promissory notes
issued by corporations. Maturities on these issues vary from a few days to nine months. Commercial paper may be purchased from U.S. corporations.
Taxable Money Market Funds
These funds pay interest income that is taxable on the federal and state levels. The Fund will bear its proportionate share of the money market funds fees and expenses.
U.S. Government Direct Obligations
are issued by the United States Treasury and include bills, notes and bonds.
|
Treasury
|
bills are issued with maturities of up to one year. They are issued in bearer form, are sold on a discount basis and are payable at par value at maturity.
|
|
Treasury
|
notes are longer-term interest bearing obligations with original maturities of one to seven years.
|
|
Treasury
|
bonds are longer-term interest-bearing obligations with original maturities from five to thirty years.
|
S-16
U.S. Government Agencies Securities
Certain federal agencies have been
established as instrumentalities of the U.S. government to supervise and finance certain types of activities. These agencies include, but are not limited to, the Bank for Cooperatives, Federal Land Banks, Federal Intermediate Credit Banks, Federal
Home Loan Banks, Federal National Mortgage Association, Government National Mortgage Association, Export-Import Bank of the United States, and Tennessee Valley Authority. Issues of these agencies, while not direct obligations of the U.S. government,
are either backed by the full faith and credit of the United States or are guaranteed by the Treasury or supported by the issuing agencies right to borrow from the Treasury. There can be no assurance that the U.S. government itself will
pay interest and principal on securities as to which it is not legally so obligated.
The Fund reserves the right for
liquidity or defensive purposes (such as thinness in the market for municipal securities or an expected substantial decline in value of long-term obligations), to invest temporarily up to 20% of its assets in obligations issued or guaranteed by the
U.S. Government and its agencies or instrumentalities. Interest on each instrument is taxable for federal income tax purposes and would reduce the amount of tax-free interest payable to shareholders.
Other Corporate Obligations
The Fund may purchase notes, bonds and debentures issued by corporations if at the time of
purchase there is less than one year remaining until maturity or if they carry a variable or floating rate of interest.
Repurchase Agreements
A repurchase agreement is a contractual agreement whereby the seller of securities (U.S.
government or Municipal Obligations) agrees to repurchase the same security at a specified price on a future date agreed upon by the parties. The agreed upon repurchase price determines the yield during the Funds holding period. Repurchase
agreements are considered to be loans collateralized by the underlying security that is the subject of the repurchase contract. The Fund will only enter into repurchase agreements with dealers, domestic banks or recognized financial institutions
that in the opinion of Nuveen Asset Management present minimal credit risk. The risk to the Fund is limited to the ability of the issuer to pay the agreed-upon repurchase price on the delivery date; however, although the value of the underlying
collateral at the time the transaction is entered into always equals or exceeds the agreed-upon repurchase price, if the value of the collateral subsequently declines there is a risk of loss of both principal and interest. In the event of default,
the collateral may be sold but the Fund might incur a loss if the value of the collateral declines, and might incur disposition costs or experience delays in connection with liquidating the collateral. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, realization upon the collateral by the Fund may be delayed or limited. Nuveen Asset Management will monitor the value of collateral at the time the transaction is entered into and at all times
subsequent during the term of the repurchase agreement in an effort to determine that the value always equals or exceeds the agreed upon price. In the event the value of the collateral declined below the repurchase price, Nuveen Asset Management
will demand additional collateral from the issuer to increase the value of the collateral to at least that of the repurchase price. The Fund will not invest more than 10% of its assets in repurchase agreements maturing in more than seven days.
Variable, Floating, and Fixed Rate Debt Obligations
The debt obligations in which the Fund invests as either a principal or non-principal investment strategy may have variable, floating, or fixed
interest rates. Variable rate securities provide for periodic adjustments in the interest rate. Floating rate securities are generally offered at an initial interest rate which is at or above prevailing market rates. The interest rate paid on
floating rate securities is then reset periodically (commonly every 90 days) to an increment over some predetermined interest rate index. Commonly utilized indices include the three-month Treasury bill rate, the 180-day Treasury bill rate, the
one-month or three-month London Interbank Offered Rate (LIBOR), the prime rate of a bank, the commercial paper rates, or the longer-term rates on U.S. Treasury securities. Variable and floating rate securities are relatively long-term instruments
that often carry demand features permitting the holder to demand payment of principal at any time or at specified intervals prior to maturity. In order to most effectively use these securities, the Adviser must correctly assess probable movements in
S-17
interest rates. If the Adviser incorrectly forecasts such movements, the Fund could be adversely affected by use of variable and floating rate securities.
Fixed rate securities pay a fixed rate of interest and tend to exhibit more price volatility during times of rising or falling interest rates than
securities with variable or floating rates of interest. The value of fixed rate securities will tend to fall when interest rates rise and rise when interest rates fall. The value of variable or floating rate securities, on the other hand, fluctuates
much less in response to market interest rate movements than the value of fixed rate securities. This is because variable and floating rate securities behave like short-term instruments in that the rate of interest they pay is subject to periodic
adjustments according to a specified formula, usually with reference to some interest rate index or market interest rate. Fixed rate securities with short-term characteristics are not subject to the same price volatility as fixed rate securities
without such characteristics. Therefore, they behave more like variable or floating rate securities with respect to price volatility.
When-Issued and Delayed Delivery Transactions
The Fund may purchase securities on a when-issued or delayed delivery basis. When
such a transaction is negotiated, the purchase price is fixed at the time the purchase commitment is entered, but delivery of and payment for the securities take place at a later date. The Fund will not accrue income with respect to securities
purchased on a when-issued or delayed delivery basis prior to their stated delivery date.
The purchase of securities on a when-issued or
delayed delivery basis exposes the Fund to risk because the securities may decrease in value prior to delivery. In addition, the Funds purchase of securities on a when-issued or delayed delivery basis while remaining substantially fully
invested could increase the amount of the Funds total assets that are subject to market risk, resulting in increased sensitivity of net asset value to changes in market prices. A sellers failure to deliver securities to the Fund could
prevent the Fund from realizing a price or yield considered to be advantageous.
When the Fund agrees to purchase securities on a
when-issued or delayed delivery basis, the Fund will segregate cash or liquid securities in an amount sufficient to meet the Funds purchase commitments. It may be expected that the Funds net assets will fluctuate to a greater degree when
it sets aside securities to cover such purchase commitments than when it sets aside cash. In addition, because the Fund will set aside cash or liquid securities to satisfy its purchase commitments, its liquidity and the ability of the Adviser to
manage it might be affected in the event its commitments to purchase when-issued or delayed delivery securities ever became significant. The Fund will only make commitments to purchase municipal obligations on a when-issued or delayed-delivery basis
with the intention of actually acquiring the securities, but the Fund reserves the right to sell these securities before the settlement date if it is deemed advisable.
The Fund also may buy when-issued and delayed-delivery securities that settle more than 60 days after purchase. These transactions are called forwards. Municipal forwards pay higher interest after
settlement than standard bonds, to compensate the buyer for bearing market risk and deferring income during the settlement period, and can often be bought at attractive prices and yields. If the Fund knows that a portfolio bond will, or is likely
to, be called or mature on a specific future date, the Fund may buy forwards settling on or about that date to replace the called or maturing bond and lock in a currently attractive interest rate. The Fund also may invest up to 15% of
its assets in forwards that do not serve to replace a specific portfolio bond.
Zero Coupon and Step Coupon Securities
The Fund may invest in zero coupon and step coupon securities as a principal investment strategy. Zero coupon securities pay no cash
income to their holders until they mature. When held to maturity, their entire return comes from the difference between their purchase price and their maturity value. Step coupon securities are debt securities that may not pay interest for a
specified period of time and then, after the initial period, may pay interest at a series of different rates. Both zero coupon and step coupon securities are issued at substantial discounts from their value at maturity. Because interest on these
securities is not paid on a current basis, the values of securities of this type are subject to greater fluctuations than are the value of securities that distribute income regularly and may be more speculative than such securities. Accordingly, the
values of these securities may be highly
S-18
volatile as interest rates rise or fall. In addition, while such securities generate income for purposes of generally accepted accounting standards, they do not generate cash flow and thus could
cause the Fund to be forced to liquidate securities at an inopportune time in order to distribute cash, as required by the Code.
S-19
MANAGEMENT
The management of the Trust, including general supervision of the duties performed for the Fund by the Adviser under the Investment Management Agreement, is the responsibility of the Board of Trustees. The number
of trustees of the Trust is ten, one of whom is an interested person (as the term interested person is defined in the 1940 Act) and nine of whom are not interested persons (referred to herein as
independent
trustees
). None of the independent trustees has ever been a trustee, director or employee of, or consultant to, the Adviser or its affiliates. The names, business addresses and birthdates of the trustees and officers of the Fund, their
principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. The trustees of the Trust are directors or trustees, as the case may be, of 99
Nuveen-sponsored open-end funds (the
Nuveen Mutual Funds
) and 117 Nuveen-sponsored closed-end funds (collectively with the Nuveen Mutual Funds, the
Nuveen Funds
).
|
|
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s)
Held with
Trust
|
|
Term of Office
and Length of
Time Served with
Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held by
Trustee
During Past
Five
Years
|
|
|
|
Independent Trustees:
|
|
|
|
|
|
|
|
|
|
|
Robert P. Bremner
333 West Wacker Drive
Chicago, IL 60606 (8/22/40)
|
|
Chairman of the Board and Trustee/Director
|
|
TermIndefinite* Length of Service
Since 1996 for the Trust
Since 2011 for NIF
|
|
Private Investor and Management Consultant; Treasurer and Director, Humanities Council of Washington, D.C.; Board Member, Independent Directors Council affiliated with the Investment Company
Institute.
|
|
216
|
|
None
|
|
|
|
|
|
|
Jack B. Evans
333 West Wacker Drive
Chicago, IL 60606 (10/22/48)
|
|
Trustee/
Director
|
|
TermIndefinite* Length of Service
Since 2003 for the Trust
Since 2011 for NIF
|
|
President, The Hall-Perrine Foundation, a private philanthropic corporation (since 1996); Member, Board of Regents for the State of Iowa University System; Director, Source Media Group; Life
Trustee of Coe College and the Iowa College Foundation; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm.
|
|
216
|
|
Director and Chairman, United Fire Group, a publicly held company; formerly, Director, Alliant Energy.
|
S-20
|
|
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s)
Held with
Trust
|
|
Term of Office
and Length of
Time Served with
Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held by
Trustee
During Past
Five
Years
|
|
|
|
|
|
|
William C. Hunter
333 West Wacker
Drive
Chicago, IL 60606
(3/6/48)
|
|
Trustee/
Director
|
|
TermIndefinite* Length of Service
Since 2004 for the Trust
Since 2011 for NIF
|
|
Dean Emeritus (since June 30, 2012), formerly, Dean (2006-2012), Tippie College of Business, University of lowa; Director (since 2005) and President (since July 2012), Beta Gamma Sigma, Inc.,
The International Honor Society; Director of Wellmark, Inc. (since 2009); formerly, Director (1997-2007), Credit Research Center at Georgetown University; formerly, Dean and Distinguished Professor of Finance, School of Business at the University of
Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003).
|
|
216
|
|
Director (since 2004) of Xerox Corporation.
|
|
|
|
|
|
|
David J. Kundert
333 West Wacker Drive
Chicago, IL 60606 (10/28/42)
|
|
Trustee/
Director
|
|
TermIndefinite*
Length of Service
Since 2005 for the
Trust
Since 2011 for NIF
|
|
Director, Northwestern Mutual Wealth Management Company; retired (since 2004) as Chairman, JPMorgan Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and
President, One Group Mutual Funds; prior thereto, Executive Vice President, Bank One Corporation and Chairman and CEO, Banc One Investment Management Group; Member, Board of Regents, Luther College; Member of the Wisconsin Bar Association; Member of
Board of Directors, Friends of Boerner Botanical Gardens; Member of Board of Directors and Chair of Investment Committee, Greater Milwaukee Foundation.
|
|
216
|
|
None
|
S-21
|
|
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s)
Held with
Trust
|
|
Term of Office
and Length of
Time Served with
Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held by
Trustee
During Past
Five
Years
|
|
|
|
|
|
|
William J. Schneider
333 West Wacker
Drive
Chicago, IL 60606
(9/24/44)
|
|
Trustee/
Director
|
|
TermIndefinite* Length of Service
Since 1996 for the Trust
Since 2011 for NIF
|
|
Chairman of Miller-Valentine Partners Ltd., a real estate investment company; Member, Mid-America Health System Board; Member, University of Dayton Business School Advisory Council; formerly,
Senior Partner and Chief Operating Officer (retired, 2004) of Miller-Valentine Group; formerly, Member, Dayton Philharmonic Orchestra Association; formerly, Director, Dayton Development Coalition; formerly, Member, Business Advisory Council,
Cleveland Federal Reserve Bank.
|
|
216
|
|
None
|
|
|
|
|
|
|
Judith M. Stockdale
333 West Wacker
Drive
Chicago, IL 60606
(12/29/47)
|
|
Trustee/
Director
|
|
TermIndefinite* Length of Service
Since 1996 for the Trust
Since 2011 for NIF
|
|
Executive Director, Gaylord and Dorothy Donnelley Foundation (since 1994); prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994).
|
|
216
|
|
None
|
|
|
|
|
|
|
Carole E. Stone
333 West Wacker Drive Chicago, IL
60606
(6/28/47)
|
|
Trustee/
Director
|
|
TermIndefinite*
Length of Service
Since 2007 for the Trust
Since
2011 for NIF
|
|
Director, C2 Options Exchange, Incorporated (since 2009); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010); formerly, Chair, New York Racing
Association Oversight Board (2005-2007).
|
|
216
|
|
Director, Chicago Board Options Exchange (since 2006).
|
|
|
|
|
|
|
Virginia L. Stringer
333 West Wacker
Drive
Chicago, IL 60606
(8/16/44)
|
|
Trustee/
Director
|
|
TermIndefinite* Length of Service
Since 2011 for the Trust
Since 1987 for NIF
|
|
Board Member, Mutual Fund Directors Forum; former Member, Governing Board, Investment Company Institutes Independent Directors Council; Governance consultant and non-profit board
member; former Owner and President, Strategic Management Resources, Inc., a management consulting firm; previously, held several executive positions in general management, marketing and human resources at IBM and The Pillsbury Company.
|
|
216
|
|
Previously, Independent Director (1987-2010) and Chair (1997-2010), First American Fund Complex.
|
S-22
|
|
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s)
Held with
Trust
|
|
Term of Office
and Length of
Time Served with
Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Trustee
|
|
Other
Directorships
Held by
Trustee
During Past
Five
Years
|
|
|
|
|
|
|
Terence J. Toth
333 West Wacker Drive
Chicago, IL 60606
(9/29/59)
|
|
Trustee/
Director
|
|
TermIndefinite*
Length of Service
Since 2008 for the Trust
Since 2011 for NIF
|
|
Director, Legal & General Investment Management America, Inc. (since 2008); Managing Partner, Promus Capital (since 2008); formerly, CEO and President, Northern Trust Global Investments
(2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); Member, Goodman Theatre Board (since 2004), Chicago Fellowship Board
(since 2005), Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board (since 2012) and a member of its investment committee; formerly, Member, Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board
(2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004).
|
|
216
|
|
None
|
|
Interested Trustee:
|
|
|
|
|
|
|
John P. Amboian**
333 West Wacker Drive
Chicago, IL 60606 (6/14/61)
|
|
Trustee/
Director
|
|
TermIndefinite*
Length of Service
Since 2008 for the Trust
Since
2011 for NIF
|
|
Chief Executive Officer and Chairman (since 2007) and Director (since 1999) of Nuveen Investments, Inc.; formerly, President (1999-2007); Chief Executive Officer (since 2007) of Nuveen
Investments Advisers Inc.; Director (since 1998), formerly, Chief Executive Officer (2007-2010) of Nuveen Fund Advisors, Inc.
|
|
216
|
|
None
|
*
|
|
Each trustee serves an indefinite term until his or her successor is elected.
|
**
|
|
Mr. Amboian is an interested person of the Trust, as defined in the 1940 Act, by reason of his positions with Nuveen Investments, Inc.
(Nuveen
Investments)
and certain of its subsidiaries.
|
S-23
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served
with Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Officer
|
|
|
Officers of the Trust:
|
|
|
|
|
|
|
|
Gifford R. Zimmerman
333 West Wacker Drive
Chicago, IL
60606
(9/9/56)
|
|
Chief Administrative Officer
|
|
TermUntil August 2013
Length of Service Since 1996 for the Trust Since 2011 for NIF
|
|
Managing Director (since 2002) and Assistant Secretary of Nuveen Securities, LLC; Managing Director (since 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of
Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Vice
President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary
of Symphony Asset Management LLC (since 2003); Vice President and Assistant Secretary of Santa Barbara Asset Management, LLC (since 2006) and Winslow Capital Management, LLC (since 2010); Chief Administrative Officer and Chief Compliance Officer
(since 2006) of Nuveen Commodities Asset Management, LLC; Chartered Financial Analyst.
|
|
216
|
|
|
|
|
|
Margo L. Cook
333 West Wacker Drive
Chicago, IL
60606
(4/11/64)
|
|
Vice President
|
|
TermUntil August 2013
Length of ServiceSince 2009 for the Trust Since 2011 for NIF
|
|
Executive Vice President (since 2008) of Nuveen Investments, Inc. and Nuveen Fund Advisors, Inc. (since 2011); Managing DirectorInvestment Services of Nuveen Commodities Asset
Management, LLC (since August 2011); previously, Head of Institutional Asset Management (2007-2008) of Bear Stearns Asset Management; Head of Institutional Asset Management (1986-2007) of Bank of NY Mellon; Chartered Financial Analyst.
|
|
216
|
|
|
|
|
|
Lorna C. Ferguson
333 West Wacker Drive
Chicago, IL 60606
(10/24/45)
|
|
Vice President
|
|
TermUntil
August 2013 Length of Service Since 1998 for the Trust Since 2011 for NIF
|
|
Managing Director (since 2004) of Nuveen Securities, LLC; Managing Director (since 2005) of Nuveen Fund Advisors, Inc.
|
|
216
|
|
|
|
|
|
Stephen D. Foy
333 West Wacker Drive
Chicago, IL
60606
(5/31/54)
|
|
Vice President and Controller
|
|
TermUntil
August 2013 Length of Service Since 1997 for the Trust Since 2011 for NIF
|
|
Senior Vice President (since 2010), formerly, Vice President (2004-2010) and Funds Controller of Nuveen Securities, LLC; Vice President of Nuveen Fund Advisors, Inc. (since 2005); Chief
Financial Officer (since 2010) of Nuveen Commodities Asset Management, LLC; Certified Public Accountant.
|
|
216
|
S-24
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served
with Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Officer
|
|
|
|
|
|
Scott S. Grace
333 West Wacker Drive
Chicago,
IL 60606 (8/20/70)
|
|
Vice President and Treasurer
|
|
TermUntil August 2013 Length of Service Since 2009 for the Trust Since 2011 for NIF
|
|
Managing Director, Corporate Finance & Development, Treasurer (since 2009) of Nuveen Securities, LLC; Managing Director and Treasurer (since 2009) of Nuveen Investments Advisers Inc.,
Nuveen Investments Holdings, Inc., Nuveen Fund Advisors, Inc., and (since 2011) Nuveen Asset Management, LLC; Vice President and Treasurer of NWQ Investment Management Company, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and
Winslow Capital Management, LLC; Vice President of Santa Barbara Asset Management, LLC; formerly, Treasurer (2006-2009), Senior Vice President (2008-2009), previously, Vice President (2006-2008) of Janus Capital Group, Inc.; formerly, Senior
Associate in Morgan Stanleys Global Financial Services Group (2000-2003); Chartered Accountant.
|
|
216
|
|
|
|
|
|
Walter M. Kelly
333 West Wacker Drive
Chicago, IL
60606
(2/24/70)
|
|
Vice President and Chief Compliance Officer
|
|
TermUntil
August 2013
Length of
Service Since 2004 for the Trust Since 2011 for NIF
|
|
Senior Vice President (since 2008) and Assistant Secretary (since 2003) of Nuveen Fund Advisors, Inc.; Senior Vice President (since 2008) of Nuveen Investments Holdings, Inc.; formerly,
Senior Vice President (2008-2011) of Nuveen Securities, LLC.
|
|
216
|
|
|
|
|
|
Tina M. Lazar
333 West Wacker Drive
Chicago, IL 60606
(8/27/61)
|
|
Vice President
|
|
TermUntil
August 2013 Length of Service Since 2000 for the Trust Since 2011 for NIF
|
|
Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc.
|
|
216
|
|
|
|
|
|
Kevin J. McCarthy
333 West Wacker Drive
Chicago, IL 60606 (3/26/66)
|
|
Vice President and Secretary
|
|
TermUntil August 2013
Length of
ServiceSince 2007 for the Trust Since 2011 for NIF
|
|
Managing Director and Assistant Secretary (since 2008), formerly, Vice President (2007-2008) of Nuveen Securities, LLC; Managing Director (since 2008), Vice President and Assistant Secretary
(since 2007) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Vice President and Assistant Secretary of Nuveen
Investments Advisers Inc., NWQ Investment Management Company, LLC, NWQ Holdings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC and Winslow Capital Management, LLC (since 2010); Vice President and Secretary (since 2010) of
Nuveen Commodities Asset Management, LLC; prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007).
|
|
216
|
S-25
|
|
|
|
|
|
|
|
|
Name, Business Address
and Birthdate
|
|
Position(s) Held
with Trust
|
|
Term of
Office and
Length of
Time Served
with Trust
|
|
Principal Occupation(s)
During Past Five Years
|
|
Number of
Portfolios
in Fund
Complex
Overseen by
Officer
|
|
|
|
|
|
Kathleen L. Prudhomme
901 Marquette Avenue
Minneapolis, MN 55402
(3/30/53)
|
|
Vice President and Assistant Secretary
|
|
TermUntil August 2013 Length of Service Since 2011 for the Trust Since 2011 for NIF
|
|
Managing Director and Assistant Secretary of Nuveen Securities, LLC (since 2011); Managing Director, Assistant Secretary and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.;
Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; formerly, Deputy General Counsel, FAF Advisors, Inc. (2004-2010).
|
|
216
|
|
|
|
|
|
Jeffery M. Wilson
333 West Wacker Drive
Chicago, IL 60606 (3/13/56)
|
|
Vice President
|
|
TermUntil August 2013 Length of Service Since 2011 for the Trust Since 2011 for NIF
|
|
Senior Vice President of Nuveen Securities, LLC (since 2011); formerly, Senior Vice President of FAF Advisors, Inc. (2000-2010).
|
|
99
|
S-26
Board Leadership Structure and Risk Oversight
The Board of Directors or the Board of Trustees (as the case may be, each is referred to hereafter as the
Board
or
Board
of Trustees
and the directors or trustees of the Nuveen Funds, as applicable, are each referred to herein as
trustees
) oversees the operations and management of the Nuveen Funds, including the duties performed for the
Nuveen Funds by the Adviser. The Board has adopted a unitary board structure. A unitary board consists of one group of directors who serve on the board of every fund in the complex. In adopting a unitary board structure, the trustees seek to provide
effective governance through establishing a board, the overall composition of which will, as a body, possess the appropriate skills, independence and experience to oversee the Nuveen Funds business. With this overall framework in mind, when
the Board, through its Nominating and Governance Committee discussed below, seeks nominees for the Board, the trustees consider, not only the candidates particular background, skills and experience, among other things, but also whether such
background, skills and experience enhance the Boards diversity and at the same time complement the Board given its current composition and the mix of skills and experiences of the incumbent trustees. The Nominating and Governance Committee
believes that the Board generally benefits from diversity of background, experience and views among its members, and considers this a factor in evaluating the composition of the Board, but has not adopted any specific policy on diversity or any
particular definition of diversity.
The Board believes the unitary board structure enhances good and effective governance, particularly
given the nature of the structure of the investment company complex. Funds in the same complex generally are served by the same service providers and personnel and are governed by the same regulatory scheme which raises common issues that must be
addressed by the directors across the fund complex (such as compliance, valuation, liquidity, brokerage, trade allocation or risk management). The Board believes it is more efficient to have a single board review and oversee common policies and
procedures which increases the Boards knowledge and expertise with respect to the many aspects of fund operations that are complex-wide in nature. The unitary structure also enhances the Boards influence and oversight over the investment
adviser and other service providers.
In an effort to enhance the independence of the Board, the Board also has a Chairman that is an
independent trustee. The Board recognizes that a chairman can perform an important role in setting the agenda for the Board, establishing the boardroom culture, establishing a point person on behalf of the Board for fund management, and reinforcing
the Boards focus on the long-term interests of shareholders. The Board recognizes that a chairman may be able to better perform these functions without any conflicts of interests arising from a position with fund management. Accordingly, the
trustees have elected Robert P. Bremner as the independent Chairman of the Board. Specific responsibilities of the Chairman include: (i) presiding at all meetings of the Board and of the shareholders; (ii) seeing that all orders and
resolutions of the trustees are carried into effect; and (iii) maintaining records of and, whenever necessary, certifying all proceedings of the trustees and the shareholders.
Although the Board has direct responsibility over various matters (such as advisory contracts, underwriting contracts and fund performance), the
Board also exercises certain of its oversight responsibilities through several committees that it has established and which report back to the full Board. The Board believes that a committee structure is an effective means to permit trustees to
focus on particular operations or issues affecting the Nuveen Funds, including risk oversight. More specifically, with respect to risk oversight, the Board has delegated matters relating to valuation and compliance to certain committees (as
summarized below) as well as certain aspects of investment risk. In addition, the Board believes that the periodic rotation of trustees among the different committees allows the trustees to gain additional and different perspectives of a Nuveen
Funds operations. The Board has established six standing committees: the Executive Committee, the Dividend Committee, the Audit Committee, the Compliance, Risk Management and Regulatory Oversight Committee, the Nominating and Governance
Committee and the Open-End Funds Committee. The Board may also from time to time create ad hoc committees to focus on particular issues as the need arises. The membership and functions of the standing committees are summarized below.
The Executive Committee, which meets between regular meetings of the Board, is authorized to exercise all of the powers of the Board. The
members of the Executive Committee are
S-27
Robert P. Bremner, Chair, Judith M. Stockdale and John P. Amboian. During the fiscal year ended April 30, 2012, the Executive Committee did not meet.
The Audit Committee assists the Board in the oversight and monitoring of the accounting and reporting policies, processes and practices of the
Nuveen Funds, and the audits of the financial statements of the Nuveen Funds; the quality and integrity of the financial statements of the Nuveen Funds; the Nuveen Funds compliance with legal and regulatory requirements relating to the Nuveen
Funds financial statements; the independent auditors qualifications, performance and independence; and the pricing procedures of the Nuveen Funds and the Advisers internal valuation group. It is the responsibility of the Audit
Committee to select, evaluate and replace any independent auditors (subject only to Board and, if applicable, shareholder ratification) and to determine their compensation. The Audit Committee is also responsible for, among other things, overseeing
the valuation of securities comprising the Nuveen Funds portfolios. Subject to the Boards general supervision of such actions, the Audit Committee addresses any valuation issues, oversees the Nuveen Funds pricing procedures and
actions taken by the Advisers internal valuation group which provides regular reports to the committee, reviews any issues relating to the valuation of the Nuveen Funds securities brought to its attention and considers the risks to the
Nuveen Funds in assessing the possible resolutions to these matters. The Audit Committee may also consider any financial risk exposures for the Nuveen Funds in conjunction with performing its functions.
To fulfill its oversight duties, the Audit Committee receives annual and semi-annual reports and has regular meetings with the external auditors for
the Nuveen Funds and the Advisers internal audit group. The Audit Committee also may review in a general manner the processes the Board or other Board committees have in place with respect to risk assessment and risk management as well as
compliance with legal and regulatory matters relating to the Nuveen Funds financial statements. The committee operates under a written charter adopted and approved by the Board. Members of the Audit Committee shall be independent (as set forth
in the charter) and free of any relationship that, in the opinion of the trustees, would interfere with their exercise of independent judgment as an Audit Committee member. The members of the Audit Committee are Robert P. Bremner, David J. Kundert,
Chair, William J. Schneider, Carole E. Stone and Terence J. Toth, each of whom is an independent trustee of the Nuveen Funds. During the fiscal year ended April 30, 2012, the Audit Committee met four times.
The Nominating and Governance Committee is responsible for seeking, identifying and recommending to the Board qualified candidates for election or
appointment to the Board. In addition, the Nominating and Governance Committee oversees matters of corporate governance, including the evaluation of Board performance and processes, the assignment and rotation of committee members, and the
establishment of corporate governance guidelines and procedures, to the extent necessary or desirable, and matters related thereto. Although the unitary and committee structure has been developed over the years and the Nominating and Governance
Committee believes the structure has provided efficient and effective governance, the committee recognizes that as demands on the Board evolve over time (such as through an increase in the number of funds overseen or an increase in the complexity of
the issues raised), the committee must continue to evaluate the Board and committee structures and their processes and modify the foregoing as may be necessary or appropriate to continue to provide effective governance. Accordingly, the Nominating
and Governance Committee has a separate meeting each year to, among other things, review the Board and committee structures, their performance and functions, and recommend any modifications thereto or alternative structures or processes that would
enhance the Boards governance of the Nuveen Funds.
In addition, the Nominating and Governance Committee, among other things, makes
recommendations concerning the continuing education of trustees; monitors performance of legal counsel and other service providers; establishes and monitors a process by which security holders are able to communicate in writing with members of the
Board; and periodically reviews and makes recommendations about any appropriate changes to trustee compensation. In the event of a vacancy on the Board, the Nominating and Governance Committee receives suggestions from various sources, including
shareholders, as to suitable candidates. Suggestions should be sent in writing to Lorna Ferguson, Manager of Fund Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, IL 60606. The Nominating and Governance Committee sets appropriate
standards and requirements for
S-28
nominations for new trustees and reserves the right to interview any and all candidates and to make the final selection of any new trustees. In considering a candidates qualifications, each
candidate must meet certain basic requirements, including relevant skills and experience, time availability (including the time requirements for due diligence site visits to sub-advisers and service providers) and, if qualifying as an independent
trustee candidate, independence from the Adviser, sub-advisers, the Distributor and other service providers, including any affiliates of these entities. These skill and experience requirements may vary depending on the current composition of the
Board, since the goal is to ensure an appropriate range of skills, diversity and experience, in the aggregate. Accordingly, the particular factors considered and weight given to these factors will depend on the composition of the Board and the
skills and backgrounds of the incumbent trustees at the time of consideration of the nominees. All candidates, however, must meet high expectations of personal integrity, independence, governance experience and professional competence. All
candidates must be willing to be critical within the Board and with management and yet maintain a collegial and collaborative manner toward other Board members. The committee operates under a written charter adopted and approved by the Board. This
committee is composed of the independent trustees of the Nuveen Funds. Accordingly, the members of the Nominating and Governance Committee are Robert P. Bremner, Chair, Jack B. Evans, William C. Hunter, David J. Kundert, William J. Schneider, Judith
M. Stockdale, Carole E. Stone, Virginia L. Stringer and Terence J. Toth. During the fiscal year ended April 30, 2012, the Nominating and Governance Committee met six times.
The Dividend Committee is authorized to declare distributions on the Nuveen Funds shares, including, but not limited to, regular and special
dividends, capital gains and ordinary income distributions. The members of the Dividend Committee are Jack B. Evans, Chair, Judith M. Stockdale and Terence J. Toth. During the fiscal year ended April 30, 2012, the Dividend Committee met
four times.
The Compliance, Risk Management and Regulatory Oversight Committee (the
Compliance Committee
) is
responsible for the oversight of compliance issues, risk management and other regulatory matters affecting the Nuveen Funds that are not otherwise the jurisdiction of the other committees. The Board has adopted and periodically reviews policies and
procedures designed to address the Nuveen Funds compliance and risk matters. As part of its duties, the Compliance Committee reviews the policies and procedures relating to compliance matters and recommends modifications thereto as necessary
or appropriate to the full Board; develops new policies and procedures as new regulatory matters affecting the Nuveen Funds arise from time to time; evaluates or considers any comments or reports from examinations from regulatory authorities and
responses thereto; and performs any special reviews, investigations or other oversight responsibilities relating to risk management, compliance and/or regulatory matters as requested by the Board.
In addition, the Compliance Committee is responsible for risk oversight, including, but not limited to, the oversight of risks related to
investments and operations. Such risks include, among other things, exposures to particular issuers, market sectors, or types of securities; risks related to product structure elements, such as leverage; and techniques that may be used to address
those risks, such as hedging and swaps. In assessing issues brought to the committees attention or in reviewing a particular policy, procedure, investment technique or strategy, the Compliance Committee evaluates the risks to the Nuveen Funds
in adopting a particular approach compared to the anticipated benefits to the Nuveen Funds and their shareholders. In fulfilling its obligations, the Compliance Committee meets on a quarterly basis, and at least once a year in person. The Compliance
Committee receives written and oral reports from the Nuveen Funds Chief Compliance Officer (
CCO
) and meets privately with the CCO at each of its quarterly meetings. The CCO also provides an annual report to the full Board
regarding the operations of the Nuveen Funds and other service providers compliance programs as well as any recommendations for modifications thereto. The Compliance Committee also receives reports from the Advisers investment
services group regarding various investment risks. Notwithstanding the foregoing, the full Board also participates in discussions with management regarding certain matters relating to investment risk, such as the use of leverage and hedging. The
investment services group therefore also reports to the full Board at its quarterly meetings regarding, among other things, fund performance and the various drivers of such performance. Accordingly, the Board directly and/or in conjunction with the
Compliance Committee oversees matters relating to investment risks. Matters not addressed at the committee level are addressed directly by the full Board. The committee operates under a written charter adopted and approved by the Board. The
S-29
members of the Compliance Committee are Jack B. Evans, William C. Hunter, William J. Schneider, Judith M. Stockdale, Chair, and Virginia L. Stringer. During the fiscal year ended April 30,
2012, the Compliance Committee met six times.
Effective January 1, 2012, the Board approved the creation of the Open-End Funds
Committee. The Open-End Funds Committee is responsible for assisting the Board in the oversight and monitoring of the Nuveen Funds that are registered as open-end management investment companies (
Open-End Funds
). The committee may
review and evaluate matters related to the formation and the initial presentation to the Board of any new Open-End Fund and may review and evaluate any matters relating to any existing Open-End Fund. The committee operates under a written charter
adopted and approved by the Board. The members of the Open-End Funds Committee are Robert P. Bremner, David J. Kundert, Judith M. Stockdale, Virginia L. Stringer and Terence J. Toth, Chair. During the fiscal year ended April 30, 2012, the
Open-End Funds Committee met one time.
Board Diversification and Trustee Qualifications
In determining that a particular trustee was qualified to serve on the Board, the Board has considered each trustees background, skills,
experience and other attributes in light of the composition of the Board with no particular factor controlling. The Board believes that trustees need to have the ability to critically review, evaluate, question and discuss information provided to
them, and to interact effectively with Fund management, service providers and counsel, in order to exercise effective business judgment in the performance of their duties, and the Board believes each trustee satisfies this standard. An effective
trustee may achieve this ability through his or her educational background; business, professional training or practice; public service or academic positions; experience from service as a board member or executive of investment funds, public
companies or significant private or not-for-profit entities or other organizations; and/or other life experiences. Accordingly, set forth below is a summary of the experiences, qualifications, attributes, and skills that led to the conclusion, as of
the date of this document, that each trustee should continue to serve in that capacity. References to the experiences, qualifications, attributes and skills of trustees are pursuant to requirements of the SEC, do not constitute holding out of the
Board or any trustee as having any special expertise or experience and shall not impose any greater responsibility or liability on any such person or on the Board by reason thereof.
John P. Amboian
Mr. Amboian, an interested trustee of the Nuveen Funds, joined Nuveen
Investments in June 1995 and became Chief Executive Officer in July 2007 and Chairman in November 2007. Prior to this, since 1999, he served as President with responsibility for the firms product, marketing, sales, operations and
administrative activities. Mr. Amboian initially served Nuveen Investments as Executive Vice President and Chief Financial Officer. Prior to joining Nuveen Investments, Mr. Amboian held key management positions with two consumer product
firms affiliated with the Phillip Morris Companies. He served as Senior Vice President of Finance, Strategy and Systems at Miller Brewing Company. Mr. Amboian began his career in corporate and international finance at Kraft Foods, Inc., where
he eventually served as Treasurer. He received a Bachelors degree in economics and a Masters of Business Administration (
MBA
) from the University of Chicago. Mr. Amboian serves on the Board of Directors of Nuveen
Investments and is a Board Member or Trustee of the Investment Company Institute Board of Governors, Boys and Girls Clubs of Chicago, Childrens Memorial Hospital and Foundation, the Council on the Graduate School of Business (University of
Chicago), and the North Shore Country Day School Foundation. He is also a member of the Civic Committee of the Commercial Club of Chicago and the Economic Club of Chicago.
Robert P. Bremner
Mr. Bremner, the Nuveen Funds Independent Chairman, is a private
investor and management consultant in Washington, D.C. His biography of William McChesney Martin, Jr., a former chairman of the Federal Reserve Board, was published by Yale University Press in November 2004. From 1994 to 1997, he was a Senior Vice
President at Samuels International Associates, an international consulting firm specializing in governmental policies, where he served in a part-time capacity. Previously, Mr. Bremner was a partner in the LBK Investors Partnership and was
chairman and majority stockholder with ITC Investors Inc., both private investment firms. He currently serves on the Board
S-30
and as Treasurer of the Humanities Council of Washington D.C. and is a Board Member of the Independent Directors Council affiliated with the Investment Company Institute. From 1984 to 1996,
Mr. Bremner was an independent Trustee of the Flagship Funds, a group of municipal open-end funds. He began his career at the World Bank in Washington D.C. He graduated with a Bachelor of Science degree from Yale University and received his MBA
from Harvard University.
Jack B. Evans
President of the Hall-Perrine Foundation, a private philanthropic corporation, since 1996, Mr. Evans was formerly President and Chief Operating Officer of the SCI Financial Group, Inc., a regional financial
services firm headquartered in Cedar Rapids, Iowa. Formerly, he was a member of the Board of the Federal Reserve Bank of Chicago as well as a Director of Alliant Energy. Mr. Evans is Chairman of the Board of United Fire Group, sits on the Board
of Source Media Group, is a member of the Board of Regents for the State of Iowa University System and is a Life Trustee of Coe College. He has a Bachelor of Arts degree from Coe College and an MBA from the University of Iowa.
William C. Hunter
Mr. Hunter became Dean
Emeritus of the Henry B.Tippie College of Business at the University of Iowa on June 30, 2012. He was appointed Dean of the Henry B. Tippie College of Business at the University of Iowa on July 1, 2006. He had been Dean and Distinguished
Professor of Finance at the University of Connecticut School of Business since June 2003. From 1995 to 2003, he was the Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago. While there he served as the Banks
Chief Economist and was an Associate Economist on the Federal Reserve Systems Federal Open Market Committee (FOMC). In addition to serving as a Vice President in charge of financial markets and basic research at the Federal Reserve Bank in
Atlanta, he held faculty positions at Emory University, Atlanta University, the University of Georgia and Northwestern University. A past Director of the Credit Research Center at Georgetown University, SS&C Technologies, Inc. (2005) and past
President of the Financial Management Association International, he has consulted with numerous foreign central banks and official agencies in Western Europe, Central and Eastern Europe, Asia, Central America and South America. From 1990 to 1995, he
was a U.S. Treasury Advisor to Central and Eastern Europe. He has been a Director of the Xerox Corporation since 2004 and Wellmark, Inc. since 2009. He is a Director and President of Beta Gamma Sigma, Inc., The International Business Honor Society.
David J. Kundert
Mr. Kundert retired in 2004 as Chairman of JPMorgan Fleming Asset Management, and as President and CEO of Banc One Investment Advisors
Corporation, and as President of One Group Mutual Funds. Prior to the merger between Bank One Corporation and JPMorgan Chase and Co., he was Executive Vice President, Bank One Corporation and, since 1995, the Chairman and CEO, Banc One Investment
Management Group. From 1988 to 1992, he was President and CEO of Bank One Wisconsin Trust Company. Currently, Mr. Kundert is a Director of the Northwestern Mutual Wealth Management Company. He started his career as an attorney for Northwestern
Mutual Life Insurance Company. Mr. Kundert has served on the Board of Governors of the Investment Company Institute and he is currently a member of the Wisconsin Bar Association. He is on the Board of the Greater Milwaukee Foundation and chairs
its Investment Committee. He received his Bachelor of Arts degree from Luther College, and his Juris Doctor from Valparaiso University.
William J.
Schneider
Mr. Schneider is currently Chairman, formerly Senior Partner and Chief Operating Officer (retired, December 2004) of
Miller-Valentine Partners Ltd., a real estate investment company. He was formerly a Director and Past Chair of the Dayton Development Coalition. He was formerly a member of the Community Advisory Board of the National City Bank in Dayton as well as
a former member of the Business Advisory Council of the Cleveland Federal Reserve Bank. Mr. Schneider is a member of the Business Advisory Council for the University of Dayton College of Business. Mr. Schneider was an independent Trustee
of the Flagship Funds, a group of municipal open-end funds. He also served as Chair of the Miami Valley Hospital and as Chair of the Finance Committee of its parent holding company. Mr. Schneider has a Bachelor of Science in Community Planning
from the University of Cincinnati and a Masters of Public Administration from the University of Dayton.
S-31
Judith M. Stockdale
Ms. Stockdale is currently Executive Director of the Gaylord and Dorothy Donnelley Foundation, a private foundation working in land conservation and artistic vitality in the Chicago region and the Low country
of South Carolina. Her previous positions include Executive Director of the Great Lakes Protection Fund, Executive Director of Openlands, and Senior Staff Associate at the Chicago Community Trust. She has served on the Boards of the Land Trust
Alliance, the National Zoological Park, the Governors Science Advisory Council (Illinois), the Nancy Ryerson Ranney Leadership Grants Program, Friends of Ryerson Woods and the Donors Forum. Ms. Stockdale, a native of the United Kingdom,
has a Bachelor of Science degree in geography from the University of Durham (UK) and a Master of Forest Science degree from Yale University.
Carole
E. Stone
Ms. Stone retired from the New York State Division of the Budget in 2004, having served as its Director for nearly
five years and as Deputy Director from 1995 through 1999. Ms. Stone is currently on the Board of Directors of the Chicago Board Options Exchange, CBOE Holdings, Inc. and C2 Options Exchange, Incorporated. She has also served as the Chair of the
New York Racing Association Oversight Board, as a Commissioner on the New York State Commission on Public Authority Reform and as a member of the Boards of Directors of several New York State public authorities. Ms. Stone has a Bachelor of Arts
from Skidmore College in Business Administration.
Virginia L. Stringer
Ms. Stringer served as the independent chair of the Board of the First American Fund Complex from 1997 to 2010, having joined such Board in 1987. Ms. Stringer serves on the board of the Mutual Fund
Directors Forum. She is a recipient of the Outstanding Corporate Director award from Twin Cities Business Monthly and the Minnesota Chapter of the National Association of Corporate Directors. Ms. Stringer is the past board chair of the Oak Leaf
Trust, director of the Saint Paul Riverfront Corporation and also served as President of the Minneapolis Clubs Governing Board. She is a director and former board chair of the Minnesota Opera and a Life Trustee and former board of the Voyageur
Outward Bound School. She also served as a trustee of Outward Bound USA. She was appointed by the Governor of Minnesota to the Board on Judicial Standards and also served on a Minnesota Supreme Court Judicial Advisory Committee to reform the
states judicial disciplinary process. She is a member of the International Womens Forum and attended the London Business School as an International Business Fellow. Ms. Stringer also served as board chair of the Human Resource
Planning Society, the Minnesota Womens Campaign Fund and the Minnesota Womens Economic Roundtable. Ms. Stringer is the retired founder of Strategic Management Resources, a consulting practice focused on corporate governance,
strategy and leadership. She has twenty five years of corporate experience having held executive positions in general management, marketing and human resources with IBM and the Pillsbury Company.
Terence J. Toth
Mr. Toth is a Director,
Legal & General Investment Management America, Inc. (since 2008) and a Managing Partner, Promus Capital (since 2008). From 2004 to 2007, he was Chief Executive Officer and President of Northern Trust Global Investments, and Executive Vice
President of Quantitative Management & Securities Lending from 2000 to 2004. He also formerly served on the Board of the Northern Trust Mutual Funds. He joined Northern Trust in 1994 after serving as Managing Director and Head of Global
Securities Lending at Bankers Trust (1986 to 1994) and Head of Government Trading and Cash Collateral Investment at Northern Trust from 1982 to 1986. He currently serves on the Boards of the Goodman Theatre and Chicago Fellowship, and is Chairman of
the Board of Catalyst Schools of Chicago. He is on the Mather Foundation Board (since 2012) and is a member of its investment committee. Mr. Toth graduated with a Bachelor of Science degree from the University of Illinois, and received his MBA
from New York University. In 2005, he graduated from the CEO Perspectives Program at Northwestern University.
S-32
Board Compensation
The following table shows, for each independent trustee, (1) the estimated aggregate compensation to be paid by the Fund for the fiscal period ended
April 30, 2013, (2) the estimated amount of total compensation paid by the Fund that will be deferred, and (3) the total compensation paid to each trustee by the Nuveen Funds during the fiscal year ended April 30, 2012.
|
|
|
|
|
|
|
Name of Trustee
|
|
Estimated
Aggregate
Compensation
From Fund
1
|
|
Amount of Total
Compensation that
Will Be Deferred
2
|
|
Total Compensation
From Nuveen Funds
Paid to Trustee
3
|
Robert P. Bremner
|
|
|
|
|
|
|
Jack B. Evans
|
|
|
|
|
|
|
William C.
Hunter
|
|
|
|
|
|
|
David J.
Kundert
|
|
|
|
|
|
|
William J. Schneider
|
|
|
|
|
|
|
Judith M. Stockdale
|
|
|
|
|
|
|
Carole E.
Stone
|
|
|
|
|
|
|
Virginia L.
Stringer
|
|
|
|
|
|
|
Terence J.
Toth
|
|
|
|
|
|
|
1
|
|
The estimated aggregate compensation to be paid, including deferred amounts, to the independent trustees for the period from
to April 30, 2013 for services to the Fund.
|
2
|
|
Pursuant to a deferred compensation agreement with the Fund, deferred amounts are treated as though an equivalent dollar amount has been invested in shares of
one or more eligible Nuveen Funds. The amounts provided are the total deferred fees (including the return from the assumed investment in the eligible Nuveen Funds) payable from the Fund.
|
3
|
|
Based on the compensation paid (including any amounts deferred) to the trustees for the one- year period ended April 30, 2012 for services to the Nuveen Funds.
|
Prior to January 1, 2012, independent trustees received a $120,000 annual retainer plus (a) a fee of
$4,500 per day for attendance in person or by telephone at regularly scheduled meetings of the Board; (b) a fee of $3,000 per meeting for attendance in person or by telephone at special, non-regularly scheduled Board meetings where
in-person attendance was required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not required; (c) a fee of $2,500 per meeting for attendance in person or by telephone at Audit
Committee meetings where in-person attendance was required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not required; (d) a fee of $2,500 per meeting for attendance in person or
by telephone at Compliance, Risk Management and Regulatory Oversight Committee meetings where in-person attendance was required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not
required; (e) a fee of $1,000 per meeting for attendance in person or by telephone at Dividend Committee meetings; and (f) a fee of $500 per meeting for attendance in person or by telephone at all other committee meetings ($1,000 for
shareholder meetings) where in-person attendance was required and $250 per meeting for attendance by telephone or in person at such committee meetings (excluding shareholder meetings) where in-person attendance was not required, and $100 per meeting
when the Executive Committee acted as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees were received for meetings held on days on which regularly scheduled Board meetings were held.
In addition to the payments described above, the Chairman of the Board received $75,000, the chairpersons of the Audit Committee, the Dividend Committee and the Compliance, Risk Management and Regulatory Oversight Committee received $10,000 each and
the chairperson of the Nominating and Governance Committee received $5,000 as additional retainers. Independent trustees also received a fee of $3,000 per day for site visits to entities that provided services to the Nuveen Funds on days on which no
Board meeting was held. When ad hoc committees were organized, the Nominating and Governance Committee at the time of formation determined compensation to be paid to the members of such committee; however, in general, such fees were $1,000 per
meeting for attendance
S-33
in person or by telephone at ad hoc committee meetings where in-person attendance was required and $500 per meeting for attendance by telephone or in person at such meetings where in-person
attendance was not required. The annual retainer, fees and expenses were allocated among the Nuveen Funds on the basis of relative net assets, although management might have, in its discretion, established a minimum amount to be allocated to each
fund.
Effective January 1, 2012, independent trustees receive a $130,000 annual retainer plus (a) a fee of $4,500 per day for
attendance in person or by telephone at regularly scheduled meetings of the Board; (b) a fee of $3,000 per meeting for attendance in person or by telephone at special, non-regularly scheduled Board meetings where in-person attendance is
required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (c) a fee of $2,500 per meeting for attendance in person or by telephone at Audit Committee meetings where
in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (d) a fee of $2,500 per meeting for attendance in person or by telephone at
Compliance, Risk Management and Regulatory Oversight Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required; (e) a
fee of $1,000 per meeting for attendance in person or by telephone at Dividend Committee meetings; (f) a fee of $500 per meeting for attendance in person or by telephone at all other committee meetings ($1,000 for shareholder meetings) where
in-person attendance is required and $250 per meeting for attendance by telephone or in person at such committee meetings (excluding shareholder meetings) where in-person attendance is not required, and $100 per meeting when the Executive Committee
acts as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees are received for meetings held on days on which regularly scheduled Board meetings are held; and (g) a fee of $2,500 per
meeting for attendance in person or by telephone at Open-End Funds Committee meetings where in-person attendance is required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required;
provided that no fees are received for meetings held on days on which regularly scheduled Board meetings are held. In addition to the payments described above, the Chairman of the Board receives $75,000, the chairpersons of the Audit Committee, the
Dividend Committee, the Compliance, Risk Management and Regulatory Oversight Committee and the Open-End Funds Committee receive $12,500 each and the chairperson of the Nominating and Governance Committee receives $5,000 as additional retainers.
Independent trustees also receive a fee of $3,000 per day for site visits to entities that provide services to the Nuveen Funds on days on which no Board meeting is held. When ad hoc committees are organized, the Nominating and Governance Committee
will at the time of formation determine compensation to be paid to the members of such committee; however, in general, such fees will be $1,000 per meeting for attendance in person or by telephone at ad hoc committee meetings where in-person
attendance is required and $500 per meeting for attendance by telephone or in person at such meetings where in-person attendance is not required. The annual retainer, fees and expenses are allocated among the Nuveen Funds on the basis of relative
net assets, although management may, in its discretion, establish a minimum amount to be allocated to each fund.
The Trust does not have
a retirement or pension plan. The Trust has a deferred compensation plan (the
Deferred Compensation Plan
) that permits any independent trustee to elect to defer receipt of all or a portion of his or her compensation as an
independent trustee. The deferred compensation of a participating trustee is credited to a book reserve account of the Trust when the compensation would otherwise have been paid to the trustee. The value of the trustees deferral account at any
time is equal to the value that the account would have had if contributions to the account had been invested and reinvested in shares of one or more of the eligible Nuveen Funds. At the time for commencing distributions from a trustees
deferral account, the independent trustee may elect to receive distributions in a lump sum or over a period of five years. The Trust will not be liable for any other funds obligations to make distributions under the Deferred Compensation Plan.
The Fund has no employees. The officers of the Trust and the trustee of the Trust who is not an independent trustee serve without any
compensation from the Fund.
S-34
Share Ownership
The following table sets forth the dollar range of equity securities beneficially owned by each trustee as of
, 2012:
|
|
|
|
|
|
|
Name of Trustee
|
|
Dollar Range
of Equity
Securities in
the Fund
|
|
Aggregate Dollar
Range of Equity
Securities in
All
Registered
Investment
Companies
Overseen by
Trustee in Family
of Investment
Companies
|
|
John P. Amboian
|
|
|
|
|
Over $100,000
|
|
Robert P. Bremner
|
|
|
|
|
Over $100,000
|
|
Jack B. Evans
|
|
|
|
|
Over $100,000
|
|
William C. Hunter
|
|
|
|
|
Over $100,000
|
|
David J. Kundert
|
|
|
|
|
Over $100,000
|
|
William J. Schneider
|
|
|
|
|
Over $100,000
|
|
Judith M. Stockdale
|
|
|
|
|
Over $100,000
|
|
Carole E.
Stone
|
|
|
|
|
Over $100,000
|
|
Virginia L.
Stringer
|
|
|
|
|
Over $100,000
|
|
Terence J. Toth
|
|
|
|
|
Over $100,000
|
|
As of November 15, 2012, the officers and trustees of the Trust, in the aggregate, owned less than 1% of the shares
of the Fund.
As of November 15, 2012, none of the independent trustees or their immediate family members owned, beneficially, or of
record, any securities in (i) an investment adviser or principal underwriter of the Fund or (ii) a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an
investment adviser or principal underwriter of the Fund.
Sales Loads
Trustees of the Fund and certain other Fund affiliates may purchase the Funds Class I shares. See the Funds Prospectus for details.
SERVICE PROVIDERS
Investment Adviser
Nuveen Fund Advisors, located at 333 West Wacker Drive, Chicago, Illinois 60606, serves as the investment
adviser of the Fund, with responsibility for the overall management of the Fund. The Adviser is also responsible for managing the Funds business affairs and providing day-to-day administrative services to the Fund. The Adviser has selected its
affiliate, Nuveen Asset Management, located at 333 West Wacker Drive, Chicago, Illinois 60606, to serve as sub-adviser to manage the investment portfolio of the Fund. For additional information regarding the management services performed by the
Adviser and Nuveen Asset Management, see Who Manages the Fund in the Prospectus.
The Adviser is an affiliate of the
Distributor, which is located at 333 West Wacker Drive, Chicago, Illinois 60606. The Distributor is the principal underwriter for the Nuveen Mutual Funds, and has served as co-managing underwriter for the shares of the Nuveen Closed-End Funds. The
Adviser and the Distributor are subsidiaries of Nuveen Investments.
On November 13, 2007, Nuveen Investments was acquired by investors
led by Madison Dearborn Partners, LLC, which is a private equity investment firm based in Chicago, Illinois.
For the management services
and facilities furnished by the Adviser, the Fund has agreed to pay an annual management fee at a rate set forth in the Prospectus under Who Manages the Fund. In addition, the Adviser has agreed to waive all or a portion of its
management fee or reimburse certain expenses of the Fund. The Prospectus includes current fee waivers and expense reimbursements for the Fund.
S-35
The Funds management fee is divided into two componentsa complex-level fee based on the
aggregate amount of all eligible Nuveen Fund assets and a specific fund-level fee based only on the amount of assets within the Fund. This pricing structure enables Fund shareholders to benefit from growth in the assets within the Fund as well as
from growth in the amount of complex-wide assets managed by the Adviser. Under no circumstances will this pricing structure result in the Fund paying management fees at a rate higher than would otherwise have been applicable had the complex-wide
management fee structure not been implemented.
The Fund has agreed to pay an annual fund-level management fee, payable monthly, based
upon the average daily net assets of the Fund as set forth in the Prospectus.
The annual complex-level management fee for the Fund,
payable monthly, which is additive to the fund-level fee, is based on the aggregate amount of total eligible assets managed for all Nuveen Funds as stated in the table below.
|
|
|
|
|
Complex-Level Asset Breakpoint Level*
|
|
Effective Rate at
Breakpoint
Level
|
|
$55 billion
|
|
|
0.2000
|
%
|
$56 billion
|
|
|
0.1996
|
%
|
$57 billion
|
|
|
0.1989
|
%
|
$60 billion
|
|
|
0.1961
|
%
|
$63 billion
|
|
|
0.1931
|
%
|
$66 billion
|
|
|
0.1900
|
%
|
$71 billion
|
|
|
0.1851
|
%
|
$76 billion
|
|
|
0.1806
|
%
|
$80 billion
|
|
|
0.1773
|
%
|
$91 billion
|
|
|
0.1691
|
%
|
$125 billion
|
|
|
0.1599
|
%
|
$200 billion
|
|
|
0.1505
|
%
|
$250 billion
|
|
|
0.1469
|
%
|
$300 billion
|
|
|
0.1445
|
%
|
*
|
The complex-level fee is calculated based upon the aggregate daily eligible assets of all Nuveen Funds. Except as described below, eligible assets include the net
assets of all Nuveen-branded closed-end and open-end registered investment companies organized in the United States. Eligible assets do not include assets attributable to investments in other Nuveen Funds or assets in excess of a determined amount
(originally $2 billion) added to the Nuveen Fund complex in connection with Nuveen Fund Advisors assumption of the management of the former First American Funds effective January 1, 2011. Eligible assets include closed-end fund assets managed
by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes the closed-end funds use of preferred stock and borrowings and certain investments in the residual interest certificates (also called
inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trusts issuance of floating rate securities, subject to an agreement by the
Adviser as to certain funds to limit the amount of such assets for determining eligible assets in certain circumstances. As of December 31, 2012, the Funds complex-level fee was
%.
|
In addition to the Advisers management
fee, the Fund also pays a portion of the Trusts general administrative expenses allocated in proportion to the net assets of the Fund. All fees and expenses are accrued daily and deducted before payment of dividends to investors.
Sub-Adviser
The
Adviser has selected its affiliate, Nuveen Asset Management, to serve as sub-adviser to manage the investment portfolio of the Fund. The Adviser pays Nuveen Asset Management a portfolio management fee for the Fund equal to
% of the advisory fee paid to the Adviser for its services to the Fund (net of any waivers, reimbursement payments, supermarket fees and alliance fees waived, reimbursed or paid
by the Adviser in respect of the Fund).
S-36
Portfolio Managers
John V. Miller, Timothy Ryan and Steven Hlavin have primary responsibility for the day-to-day implementation of the investment strategies of the
Fund.
Compensation
Portfolio
manager compensation consists primarily of base pay, an annual cash bonus and long-term incentive payments.
Base pay.
Base pay is
determined based upon an analysis of the portfolio managers general performance, experience, and market levels of base pay for such position.
Annual cash bonus.
The Funds portfolio managers are eligible for an annual cash bonus based on investment performance, qualitative evaluation and financial performance of Nuveen Asset Management.
A portion of each portfolio managers annual cash bonus is based on the Funds investment performance, generally measured over
the past one- and three or five-year periods unless the portfolio managers tenure is shorter. Investment performance for the Fund generally is determined by evaluating the Funds performance relative to its benchmark(s) and/or Lipper
industry peer group.
A portion of the cash bonus is based on a qualitative evaluation made by each portfolio managers supervisor
taking into consideration a number of factors, including the portfolio managers team collaboration, expense management, support of personnel responsible for asset growth, and his or her compliance with Nuveen Asset Managements policies
and procedures.
The final factor influencing a portfolio managers cash bonus is the financial performance of Nuveen Asset
Management based on its operating earnings.
Long-term incentive compensation
. Certain key employees of Nuveen Investments and its
affiliates, including certain portfolio managers, have received equity interests in the parent company of Nuveen Investments. In addition, certain key employees of Nuveen Asset Management, including certain portfolio managers, have received profits
interests in Nuveen Asset Management which entitle their holders to participate in the firms growth over time.
There are generally
no differences between the methods used to determine compensation with respect to the Fund and the Other Accounts shown in the table below.
Other
Accounts Managed
In addition to the Fund, as of
, 2012, the portfolio managers were also primarily responsible for the day-to-day portfolio management of the following accounts:
|
|
|
|
|
|
|
|
|
|
|
Portfolio Manager
|
|
Type of Account Managed
|
|
Number of
Accounts
|
|
Assets
|
|
Number of
Accounts
with
Performance
Based Fees
|
|
Assets of
Accounts
with
Performance
Based Fees
|
|
|
|
|
|
|
John V. Miller
|
|
Registered Investment Companies
|
|
|
|
|
|
|
|
|
|
|
Other Pooled Investment Vehicles
|
|
|
|
|
|
|
|
|
|
|
Other Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Ryan
|
|
Registered Investment Companies
|
|
|
|
|
|
|
|
|
|
|
Other Pooled Investment Vehicles
|
|
|
|
|
|
|
|
|
|
|
Other Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven Hlavin
|
|
Registered Investment Companies
|
|
|
|
|
|
|
|
|
|
|
Other Pooled Investment Vehicles
|
|
|
|
|
|
|
|
|
|
|
Other Accounts
|
|
|
|
|
|
|
|
|
S-37
Conflicts of Interest
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day management responsibilities with respect to more than one account. More specifically, portfolio managers who manage
multiple accounts are presented a number of potential conflicts, including, among others, those discussed below.
The management of
multiple accounts may result in a portfolio manager devoting unequal time and attention to the management of each account. Nuveen Asset Management seeks to manage such competing interests for the time and attention of portfolio managers by having
portfolio managers focus on a particular investment discipline. Most accounts managed by a portfolio manager in a particular investment strategy are managed using the same investment models.
If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one account, an account may not be able to
take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, Nuveen Asset Management has adopted procedures for allocating limited opportunities across
multiple accounts.
With respect to many of its clients accounts, Nuveen Asset Management determines which broker to use to execute
transaction orders, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts, Nuveen Asset Management may be limited by the client with respect to the selection of brokers or may be
instructed to direct trades through a particular broker. In these cases, Nuveen Asset Management may place separate, non-simultaneous, transactions for the Fund and other accounts which may temporarily affect the market price of the security or the
execution of the transaction, or both, to the detriment of the Fund or the other accounts.
Some clients are subject to different
regulations. As a consequence of this difference in regulatory requirements, some clients may not be permitted to engage in all the investment techniques or transactions or to engage in these transactions to the same extent as the other accounts
managed by the portfolio manager. Finally, the appearance of a conflict of interest may arise where Nuveen Asset Management has an incentive, such as a performance-based management fee, which relates to the management of some accounts, with respect
to which a portfolio manager has day-to-day management responsibilities.
Nuveen Asset Management has adopted certain compliance
procedures which are designed to address these types of conflicts common among investment managers. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Beneficial Ownership of Securities
The
following table indicates as of , 2012 the value, within the indicated range, of shares beneficially owned by the portfolio managers in the Fund they
manage and of shares in other Nuveen Funds managed by Nuveen Asset Managements municipal investment team. For purposes of this table, the following letters indicate the range listed next to each letter:
|
|
|
|
|
A
|
|
-
|
|
$0
|
B
|
|
-
|
|
$1-$10,000
|
C
|
|
-
|
|
$10,001-$50,000
|
D
|
|
-
|
|
$50,001-$100,000
|
E
|
|
-
|
|
$100,001-$500,000
|
F
|
|
-
|
|
$500,001-$1,000,000
|
G
|
|
-
|
|
More than $1 million
|
S-38
|
|
|
|
|
Name of Portfolio Manager
|
|
Ownership in
Fund
|
|
Dollar range
of
equity securities
beneficially owned
in the remainder
of Nuveen Funds
managed by
Nuveen Asset
Managements
municipal
investment team
|
John V. Miller
|
|
|
|
|
Timothy Ryan
|
|
|
|
|
Steven Hlavin
|
|
|
|
|
Distributor
Nuveen Securities, LLC, 333 West Wacker Drive, Chicago, Illinois 60606, serves as the distributor for the Funds shares pursuant to a best efforts arrangement as provided by a Distribution
Agreement dated January 1, 2011 (the
Distribution Agreement
). Pursuant to the Distribution Agreement, the Fund appointed the Distributor to be its agent for the distribution of the Funds shares on a continuous offering
basis.
Independent Registered Public Accounting Firm, Custodian and Transfer Agent
PricewaterhouseCoopers LLP (
PwC
), One North Wacker Drive, Chicago, Illinois 60606, independent registered public accounting firm,
has been selected as auditors for the Fund. In addition to audit services, PwC provides assistance on accounting, tax and related matters.
The custodian of the assets of the Fund is State Street Bank & Trust Company, P.O. Box 5043, Boston, Massachusetts 02206-5043. The custodian
performs custodial, fund accounting and portfolio accounting services.
The Funds transfer, shareholder services, and dividend
paying agent is Boston Financial Data Services, Inc. (
BFDS
), P.O. Box 8530, Boston, Massachusetts 02266-8530.
CODES OF ETHICS
The Fund, the Adviser, the Sub-Adviser and the Distributor have adopted codes of ethics pursuant to Rule 17j-1 under
the 1940 Act and with respect to the Adviser and Sub-Adviser, Rule 204A-1 under the Investment Advisers Acts of 1940, as amended, addressing personal securities transactions and other conduct by investment personnel and access persons who may
have access to information about the Funds securities transactions. The codes are intended to address potential conflicts of interest that can arise in connection with personal trading activities of such persons. Persons subject to the codes
are generally permitted to engage in personal securities transactions, including investing in securities eligible for investment by the Fund, subject to certain prohibitions, which may include prohibitions on investing in certain types of
securities, pre-clearance requirements, blackout periods, annual and quarterly reporting of personal securities holdings and limitations on personal trading of initial public offerings. Violations of the codes are subject to review by the Board of
Trustees and could result in severe penalties.
PROXY VOTING POLICIES
The Fund invests its assets primarily in municipal bonds and cash management securities. On rare occasions the Fund may acquire, directly or through
a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the Fund already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity
securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuers credit problem. In the course of exercising
control of a distressed municipal issuer, Nuveen Asset Management may pursue the Funds interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the
management
S-39
of the issuer. Nuveen Asset Management does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the Funds Board
of Trustees on its control activities on a quarterly basis.
In the rare event that a municipal issuer were to issue a proxy or that the
Fund were to receive a proxy issued by a cash management security, Nuveen Asset Management would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of
the Funds Board of Trustees or its representative. A member of Nuveen Asset Managements legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports
were filed with the Securities and Exchange Commission (
SEC
) on Form N-PX, and the results provided to the Funds Board of Trustees and made available to shareholders as required by applicable rules.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is
available without charge by calling (800) 257-8787 or by accessing the SECs website at http://www.sec.gov.
PORTFOLIO TRANSACTIONS
Nuveen Asset Management is responsible for decisions to buy and sell securities for the Fund, the negotiation of the prices to be paid or received
for principal trades, and the allocation of its transactions among various dealer firms. Portfolio securities will normally be purchased directly from an underwriter in a new issue offering or in the over-the-counter secondary market from the
principal dealers in such securities, unless it appears that a better price or execution may be obtained elsewhere. Portfolio securities will not be purchased from Nuveen or its affiliates except in compliance with the 1940 Act.
The Fund expects that substantially all portfolio transactions will be effected on a principal (as opposed to an agency) basis and, accordingly,
does not expect to pay significant amounts of brokerage commissions. Brokerage will not be allocated based on the sale of the Funds shares. Purchases from underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers will include the spread between the bid and asked price. It is the policy of Nuveen Asset Management to seek the best execution under the circumstances of each trade. Nuveen Asset Management evaluates price as
the primary consideration, with the financial condition, reputation and responsiveness of the dealer considered secondarily in determining best execution. Given the best execution obtainable, it may be Nuveen Asset Managements practice to
select dealers that, in addition, furnish research information (primarily credit analyses of issuers and general economic reports) and statistical and other services to Nuveen Asset Management. It is not possible to place a dollar value on
information and statistical and other services received from dealers. Since it is only supplementary to Nuveen Asset Managements own research efforts, the receipt of research information is not expected to reduce significantly Nuveen Asset
Managements expenses. For certain secondary market transactions where the execution capability of two brokers is judged to be of substantially similar quality, Nuveen Asset Management may randomly select one of them. While Nuveen Asset
Management will be primarily responsible for the placement of the portfolio transactions of the Fund, the policies and practices of Nuveen Asset Management in this regard must be consistent with the foregoing and will, at all times, be subject to
review by the Board of Trustees.
Nuveen Asset Management may manage other investment companies and investment accounts for other clients
that have investment objectives similar to the Fund. Subject to applicable laws and regulations, Nuveen Asset Management seeks to allocate portfolio transactions equitably whenever concurrent decisions are made to purchase or sell securities by the
Fund and another advisory account. In making such allocations the main factors to be considered will be the respective investment objectives, the relative size of the portfolio holdings of the same or comparable securities, the availability of cash
for investment or need to raise cash, and the size of investment commitments generally held. While this procedure could have a detrimental effect on the price or amount of the securities (or in the case of dispositions, the demand for securities)
available to the Fund from time to time, it is the opinion of the Board of Trustees that the benefits available from the Nuveen Asset Management organization will outweigh any disadvantage that may arise from exposure to simultaneous transactions.
S-40
Portfolio Trading and Turnover
The Fund will make changes in its investment portfolio from time to time in order to seek to take advantage of opportunities in the municipal market
and to limit exposure to market risk. The Fund may also engage to a limited extent in short-term trading consistent with its investment objectives. Securities may be sold in anticipation of market decline or purchased in anticipation of market rise
and later sold. In addition, a security may be sold and another of comparable quality purchased at approximately the same time to take advantage of what the Sub-Adviser believes to be a temporary disparity in the normal yield relationship between
the two securities. The Fund may make changes in its investment portfolio in order to limit its exposure to changing market conditions. Changes in the Funds investments are known as portfolio turnover.
DISCLOSURE OF PORTFOLIO HOLDINGS
The Nuveen Mutual Funds have adopted a portfolio holdings disclosure policy which governs the dissemination of the Funds portfolio holdings. In accordance with this policy, the Fund may provide portfolio
holdings information to third parties no earlier than the time a report is filed with the SEC that is required to contain such information or one day after the information is posted on the Funds publicly accessible website, www.nuveen.com. The
portfolio holdings information is posted monthly approximately five business days after the end of the month as of which the information is current. Additionally, the Fund publishes on the website a list of its top ten holdings as of the end of each
month, approximately two to five business days after the end of the month for which the information is current. This information will remain available on the website at least until the Fund files with the SEC its Form N-CSR or Form N-Q for the
period that includes the date as of which the website information is current.
Additionally, the Fund may disclose portfolio holdings
information that has not been included in a filing with the SEC or posted on the Funds website (i.e., non-public portfolio holdings information) only if there is a legitimate business purpose for doing so and if the recipient is required,
either by explicit agreement or by virtue of the recipients duties to the Fund as an agent or service provider, to maintain the confidentiality of the information and to not use the information in an improper manner (e.g., personal trading).
In this connection, the Fund may disclose on an ongoing basis non-public portfolio holdings information in the normal course of its investment and administrative operations to various service providers, including the Adviser and/or sub-adviser,
independent registered public accounting firm, custodian, financial printer (R.R. Donnelley Financial and Financial Graphic Services), proxy voting service(s) (including ISS, ADP Investor Communication Services, and Glass, Lewis & Co.), and to
the legal counsel for the Funds independent trustees (Chapman and Cutler LLP). Also, the Adviser may transmit to Vestek Systems, Inc. daily non-public portfolio holdings information on a next-day basis to enable the Adviser to perform
portfolio attribution analysis using Vesteks systems and software programs. Vestek is also provided with non-public portfolio holdings information on a monthly basis approximately 2-3 business days after the end of each month so that Vestek
may calculate and provide certain statistical information (but not the non-public holdings information itself) to its clients (including retirement plan sponsors or their consultants). The Adviser and/or sub-adviser may also provide certain
portfolio holdings information to broker-dealers from time to time in connection with the purchase or sale of securities or requests for price quotations or bids on one or more securities. In providing this information, reasonable precautions are
taken in an effort to avoid potential misuse of the disclosed information, including limitations on the scope of the portfolio holdings information disclosed, when appropriate.
Non-public portfolio holdings information may be provided to other persons if approved by the Funds Chief Administrative Officer or Secretary upon a determination that there is a legitimate business purpose
for doing so, the disclosure is consistent with the interests of the Fund, and the recipient is obligated to maintain the confidentiality of the information and not misuse it.
Compliance officers of the Fund and the Adviser and sub-adviser periodically monitor overall compliance with the policy to ascertain whether portfolio holdings information is disclosed in a manner that is
consistent with the Funds policy. Reports are made to the Funds Board of Trustees on an annual basis.
S-41
There is no assurance that the Funds policies on portfolio holdings information will protect the
Fund from the potential misuse of portfolio holdings information by individuals or firms in possession of such information.
The
following parties currently receive non-public portfolio holdings information regarding one or more of the Nuveen Mutual Funds on an ongoing basis pursuant to the various arrangements described above:
ADP Investor Communications Services
Altrinsic Global Advisors, LLC
Barclays Capital, Inc.
Barra
Bloomberg
BNP Paribas Prime Brokerage, Inc.
BNP Paribas Securities Corp.
Broadridge Systems
Cantor Fitzgerald & Co.
Chapman and Cutler LLP
Commerz Markets LLC
Credit Agricole Securities (USA) Inc.
Credit Suisse Securities (USA), LLC
Deutsche Bank Securities, Inc.
Dresdner Kleinwort Securities, LLC
Ernst & Young LLP
FactSet Research Systems
Financial Graphic Services
First Clearing, LLC
Forbes
Glass, Lewis & Co.
Goldman Sachs & Co.
Hansberger Global Investors, LLC
HSBC Securities (USA), Inc.
ING Financial Markets, LLC
The Investment Company Institute
ISS
Jefferies & Company, Inc.
J.P. Morgan Clearing Corp.
J.P. Morgan Securities, Inc.
Lazard Asset Management, Inc.
Lipper Inc.
Merrill Lynch, Pierce, Fenner & Smith
Moodys
Morgan Stanley & Co., Inc.
Morningstar, Inc.
MS Securities Services, Inc.
Newedge USA, LLC
Nuveen Asset Management, LLC
Nuveen Fund Advisors, Inc.
Pershing, LLC
PricewaterhouseCoopers LLP
Raymond James & Associates, Inc.
RBC Capital Markets Corporation
RBS Securities, Inc.
R.R. Donnelley & Sons Company
R.R. Donnelley Financial
Scotia Capital (USA), Inc.
SG Ameritas Securities, LLC
S-42
Societe Generale, New York Branch
Standard & Poors
State Street Bank & Trust Co.
Strategic Insight
TD Ameritrade Clearing, Inc.
ThomsonReuters LLC
UBS Securities, LLC
U.S. Bancorp Fund Services, LLC
U.S. Bank N.A.
Value Line
Vestek Systems, Inc.
Vickers
Wells Fargo Securities, LLC
Wilshire Associates Incorporated
NET ASSET VALUE
The Funds net asset value is determined as set forth in the Prospectus under General
InformationNet Asset Value.
SHARES OF BENEFICIAL INTEREST
The Board of Trustees of the Trust is authorized to issue an unlimited number of shares in one or more series, which may be divided into classes of
shares. Currently, there are six series authorized and outstanding, each of which may be generally divided into different classes of shares designated as Class A shares, Class B shares, Class C shares and Class I shares. Each class of shares
represents an interest in the same portfolio of investments of a Fund. Each class of shares has equal rights as to voting, redemption, dividends and liquidation, except that each bears different class expenses, including different distribution and
service fees, and each has exclusive voting rights with respect to any distribution or service plan applicable to its shares. There are no conversion, preemptive or other subscription rights, except that Class B shares (available only in certain
series and not available in the Fund) automatically convert into Class A shares. The Board of Trustees of the Trust has the right to establish additional series and classes of shares in the future, to change those series or classes and to
determine the preferences, voting powers, rights and privileges thereof.
The Trust is not required and does not intend to hold annual
meetings of shareholders. Shareholders owning more than 10% of the outstanding shares of the Fund have the right to call a special meeting to remove trustees or for any other purpose.
Under Massachusetts law applicable to Massachusetts business trusts, shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for its obligations. However, the Declaration of Trust of the Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of this disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Trust or the trustees. The Trusts Declaration of Trust further provides for indemnification out of the assets and property of the Trust for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which both inadequate insurance existed and the Trust or
the Fund itself was unable to meet its obligations. The Trust believes the likelihood of the occurrence of these circumstances is remote.
TAX MATTERS
Federal Income Tax Matters
This section summarizes some of the main U.S. federal income tax consequences of owning shares of the Fund. This section is current as of the date of this SAI. Tax laws and interpretations change frequently, and
this summary does not describe all of the tax consequences to all taxpayers.
S-43
For example, this summary generally does not describe your situation if you are a corporation, a non-U.S. person, a broker-dealer or other investor with special circumstances. In addition, this
section does not describe your state, local or non-U.S. tax consequences. This federal income tax summary is based in part on the advice of counsel to the Fund. The Internal Revenue Service could disagree with any conclusions set forth in this
section. In addition, Funds counsel was not asked to review, and has not reached a conclusion with respect to the federal income tax treatment of the assets to be deposited in the Fund. Consequently, this summary may not be sufficient for you
to use for the purpose of avoiding penalties under federal tax law. As with any investment, you should seek advice based on your individual circumstances from your own tax professional.
Fund Status
The Fund intends to qualify as a regulated
investment company under the federal tax laws. If the Fund qualifies as a regulated investment company and distributes its income as required by the tax law, the Fund generally will not pay federal income taxes.
Qualification as a Regulated Investment Company
As a regulated investment company, the Fund generally will not be subject to federal income tax on the portion of its investment company taxable income (as that term is defined in the Code, but without regard to
the deduction for dividends paid) and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss), if any, that it distributes to shareholders, provided that it distributes at least 90% of its investment
company taxable income and 90% of its net tax-exempt interest income for the year (the
Distribution Requirement
) and satisfies certain other requirements of the Code that are generally described below. The Fund also intends to
make such distributions as are necessary to avoid the otherwise applicable 4% non-deductible excise tax on certain undistributed earnings.
In addition to satisfying the Distribution Requirement, the Fund must, among other things, derive in each taxable year at least 90% of its gross
income from (1) dividends, interest, certain payments with respect to securities loans, gains from the sale or disposition of stock, securities or non-U.S. currencies and other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (2) net income derived from an interest in qualified publicly traded partnerships (as such term is defined in the Code).
The Fund must also satisfy an asset diversification test in order to qualify as a regulated investment company. Under this test, at the close of each quarter of the Funds taxable year, (1) 50% or more of the value of the Funds assets
must be represented by cash, and cash items (including receivables), United States government securities, securities of other regulated investment companies, and other securities, with such other securities limited, in respect of any one issuer, to
an amount not greater than 5% of the value of the Funds assets and not greater than 10% of the outstanding voting securities of such issuer and (2) not more than 25% of the value of the Funds assets may be invested in securities of (a)
any one issuer (other than U.S. government securities or securities of other regulated investment companies), or of two or more issuers which the Fund controls and which are engaged in the same, similar or related trades or businesses or (b) in the
securities of one or more qualified publicly traded partnerships (as such term is defined in the Code). There are certain exceptions for failure to qualify if the failure is for reasonable cause or is de minimis and certain corrective
action is taken and certain tax payments are made by the Fund.
Distributions
After the end of each year, you will receive a tax statement that separates your Funds distributions into four categories, exempt-interest
dividends, ordinary income distributions, capital gains dividends and returns of capital. Exempt-interest dividends generally are excluded from your gross income for federal income tax purposes. Some or all of the exempt-interest dividends, however,
may be taken into account in determining your alternative minimum tax and may have other tax consequences (e.g., they may affect the amount of your social security benefits that are taxed). Ordinary income distributions are generally taxed at your
ordinary tax rate. Generally, you will treat all capital gains dividends as long-term capital gains regardless of how long you have owned your shares. To determine your actual tax liability for your capital gains dividends, you must calculate your
total net capital gain or loss for the tax year after considering all of your other taxable transactions, as
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described below. In addition, the Fund may make distributions that represent a return of capital for tax purposes and thus will generally not be taxable to you unless the distribution exceeds
your basis in your shares. The tax status of your distributions from your Fund is not affected by whether you reinvest your distributions in additional shares or receive them in cash. The income from your Fund that you must take into account for
federal income tax purposes is not reduced by amounts used to pay a deferred sales fee, if any. The tax laws may require you to treat distributions made to you in January as if you had received them on December 31 of the previous year. Under the
Health Care and Education Reconciliation Act of 2010, income from the Fund may also be subject to a new 3.8 percent medicare tax imposed for taxable years beginning after 2012. This tax will generally apply to your net
investment income if your adjusted gross income exceeds certain threshold amounts, which are $250,000 in the case of married couples filing joint returns and $200,000 in the case of single individuals. Interest that is excluded from gross income and
exempt-interest dividends from the Fund are generally not included in your net investment income for purposes of this tax.
Dividends Received Deduction
A corporation that owns shares generally will not be entitled to the dividends received deduction with respect to dividends received from the Fund because the dividends received deduction is generally not available
for distributions from regulated investment companies.
If You Sell or Redeem Your Shares
If you sell or redeem your shares, you will generally recognize a taxable gain or loss. To determine the amount of this gain or loss, you must
subtract your tax basis in your shares from the amount you receive in the transaction. Your tax basis in your shares is generally equal to the cost of your shares, generally including sales charges. In some cases, however, you may have to adjust
your tax basis after you purchase your shares. Further, if you hold your shares for six months or less, any loss incurred by you related to the disposition of such a share will be disallowed to the extent of the exempt-interest dividends you
received, except as otherwise described in the next section.
Taxation of Capital Gains and Losses
If you are an individual, the maximum marginal federal tax rate for net capital gain is generally 15% (generally 0% for certain taxpayers in the 10%
and 15% tax brackets). These capital gains rates are generally effective for taxable years beginning before January 1, 2013. For later periods, if you are an individual, the maximum marginal federal tax rate for net capital gain is generally 20%
(10% for certain taxpayers in the 10% and 15% tax brackets). The 20% rate is reduced to 18% for net capital gains from most property acquired after December 31, 2000 with a holding period of more than five years, and the 10% rate is reduced to 8%
for net capital gains from most property (regardless of when acquired) with a holding period of more than five years.
Net capital gain
equals net long-term capital gain minus net short-term capital loss for the taxable year. Capital gain or loss is long-term if the holding period for the asset is more than one year and is short-term if the holding period for the asset is one year
or less. You must exclude the date you purchase your shares to determine your holding period. If you hold a share for six months or less, any loss incurred by you related to the disposition of such share will be disallowed to the extent of the
exempt-interest dividends you received, except in the case of a regular dividend paid by the Fund if the Fund declares exempt-interest dividends on a daily basis in an amount equal to at least 90 percent of its net tax-exempt interest and
distributes such dividends on a monthly or more frequent basis. To the extent, if any, it is not disallowed, it will be recharacterized as long-term capital loss to the extent of the capital gain dividend received. The tax rates for capital gains
realized from assets held for one year or less are generally the same as for ordinary income. The Code treats certain capital gains as ordinary income in special situations.
Exempt-Interest Dividends
A regulated investment company may report
any portion of a dividend (other than a capital gain dividend) as an exempt-interest dividend, if at least half of the regulated investment companys assets consist of tax-exempt state and local bonds. In the case of a qualified
fund of funds, the regulated investment company may pay exempt-interest dividends without regard to the requirement that at least 50 percent of the value of its total assets consist of tax-exempt state and local bonds. For
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this purpose, a qualified fund of funds means a regulated investment company at least 50 percent of the value of the total assets of which (at the close of each quarter of the taxable year) is
represented by interests in other regulated investment companies. The shareholder treats an exempt-interest dividend as an item of tax-exempt interest.
Your Fund intends to qualify either under the percentage of assets test or as a qualified fund of funds, as described above. If your Fund qualifies under either test, some or all of a dividend paid by the Fund may
be treated as an exempt-interest dividend.
In-Kind Distributions
Under certain circumstances, as described in the Prospectus, you may receive an in-kind distribution of Fund securities when you redeem shares or
when your Fund terminates. This distribution will be treated as a sale for federal income tax purposes and you will generally recognize gain or loss, generally based on the value at that time of the securities and the amount of cash received. The
Internal Revenue Service could, however, assert that a loss may not be currently deducted.
Exchanges
If you exchange shares of the Fund for shares of another Nuveen Mutual Fund, the exchange would generally be considered a sale for federal income
tax purposes.
Deductibility of Fund Expenses
Expenses incurred and deducted by your Fund will generally not be treated as income taxable to you. In some cases, however, you may be required to treat your portion of these Fund expenses as income. In these cases
you may be able to take a deduction for these expenses. However, certain miscellaneous itemized deductions, such as investment expenses, may be deducted by individuals only to the extent that all of these deductions exceed 2% of the
individuals adjusted gross income. Further, because the Fund pays exempt-interest dividends, which are treated as exempt interest for federal income tax purposes, you will not be able to deduct some of your interest expense for debt that you
incur or continue to purchase or carry your shares.
Non-U.S. Investors
If you are a non-U.S. investor (i.e., an investor other than a U.S. citizen or resident or a U.S. corporation, partnership, estate or trust), you
should be aware that, generally, subject to applicable tax treaties, distributions from the Fund will be characterized as dividends for federal income tax purposes (other than dividends which the Fund properly reports as capital gain dividends) and,
other than exempt-interest dividends, will be subject to U.S. income taxes, including withholding taxes, subject to certain exceptions described below. However, distributions received by a non-U.S. investor from the Fund that are properly reported
by the Fund as capital gain dividends may not be subject to U.S. federal income taxes, including withholding taxes, provided that the Fund makes certain elections and certain other conditions are met. Distributions in respect of shares after
December 31, 2013 may be subject to a U.S. withholding tax of 30% in the case of distributions to (i) certain non-U.S. financial institutions that have not entered into an agreement with the U.S. Treasury to collect and disclose certain information
and (ii) certain other non-U.S. entities that do not provide certain certifications and information about the entitys U.S. owners. Dispositions of shares by such persons may be subject to such withholding after December 31, 2014.
State Tax Matters
Distributions by the Fund to shareholders and the ownership of shares may be subject to state and local taxes. In many states, exempt-interest
dividends from interest earned on municipal securities of that state, or its political subdivisions, will be exempt from that states personal income taxes. Most states, however, do not grant tax-free treatment to interest on investments in
municipal securities of other states. In some states, all exempt-interest dividends are subject to state and local income taxes. Shareholders are urged to contact their tax advisors regarding state and local tax laws affecting an investment in
shares of the Fund.
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PURCHASE AND REDEMPTION OF FUND SHARES
As described in the Prospectus, the Fund provides you with alternative ways of purchasing Fund shares based upon your individual investment needs
and preferences. The Fund is generally not a suitable investment for individuals investing through retirement plans.
Each class of
shares of the Fund represents an interest in the same portfolio of investments. Each class of shares is identical in all respects except that each class bears its own class expenses, including distribution and administration expenses, and each class
has exclusive voting rights with respect to any distribution or service plan applicable to its shares. As a result of the differences in the expenses borne by each class of shares, net income per share, dividends per share and net asset value per
share will vary among the Funds classes of shares. There are no conversion, preemptive or other subscription rights.
Shareholders
of each class will share expenses proportionately for services that are received equally by all shareholders. A particular class of shares will bear only those expenses that are directly attributable to that class, where the type or amount of
services received by a class varies from one class to another. For example, class-specific expenses generally will include distribution and service fees for those classes that pay such fees.
The expenses to be borne by specific classes of shares may include (i) transfer agency fees attributable to a specific class of shares, (ii)
printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses and proxy statements to current shareholders of a specific class of shares, (iii) SEC and state securities registration fees
incurred by a specific class of shares, (iv) the expense of administrative personnel and services required to support the shareholders of a specific class of shares, (v) litigation or other legal expenses relating to a specific class of shares, (vi)
trustees fees or expenses incurred as a result of issues relating to a specific class of shares, (vii) accounting expenses relating to a specific class of shares and (viii) any additional incremental expenses subsequently identified and
determined to be properly allocated to one or more classes of shares.
Class A Shares
Class A shares may be purchased at a public offering price equal to the applicable net asset value per share plus an up-front sales charge imposed
at the time of purchase as set forth in the Prospectus. Shareholders may qualify for a reduced sales charge, or the sales charge may be waived in its entirety, as described below. Class A shares are also subject to an annual service fee of 0.20%.
See Distribution and Service Plan. Set forth below is an example of the method of computing the offering price of the Class A shares of the Fund. The example assumes a purchase of Class A shares from the Fund aggregating less than
$50,000 subject to the schedule of sales charges set forth in the Prospectus at a price based upon the initial net asset value of the Class A shares.
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Net Asset Value per share
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$
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Per Share Sales Charge % of public offering price
( % of net asset value per share)
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Per Share Offering Price to the Public
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$
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The Fund receives the entire net asset value of all Class A shares that are sold. The Distributor retains the full
applicable sales charge from which it pays the uniform reallowances shown in the Prospectus to financial intermediaries.
Reduction or Elimination of Up-Front Sales Charge on Class A Shares
Rights of Accumulation.
You may qualify for a reduced sales charge on a purchase of Class A shares of the Fund if the amount of your
purchase, when added to the value that day of all of your shares of any Nuveen Mutual Fund, falls within the amounts stated in the Class A Sales Charges and Commissions table in How You Can Buy and Sell Shares in the Prospectus. You or
your financial advisor must notify the Distributor or the Funds transfer agent of any cumulative discount whenever you plan to purchase Class A shares of the Fund that you wish to qualify for a reduced sales charge.
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Letter of Intent.
You may qualify for a reduced sales charge on a purchase of Class A shares of
the Fund if you plan to purchase Class A shares of Nuveen Mutual Funds over the next 13 months and the total amount of your purchases would, if purchased at one time, qualify you for one of the reduced sales charges shown in the Class A Sales
Charges and Commissions table in How You Can Buy and Sell Shares in the Prospectus. In order to take advantage of this option, you must complete the applicable section of the Application Form or sign and deliver to your financial advisor
or other financial intermediary or to the Funds transfer agent a written Letter of Intent in a form acceptable to the Distributor. A Letter of Intent states that you intend, but are not obligated, to purchase over the next 13 months a stated
total amount of Class A shares that would qualify you for a reduced sales charge shown above. You may count shares of all Nuveen Mutual Funds that you already own and any Class C and Class I shares of a Nuveen Mutual Fund that you purchase over the
next 13 months towards completion of your investment program, but you will receive a reduced sales charge only on new Class A shares you purchase with a sales charge over the 13 months. You cannot count towards completion of your investment program
Class A shares that you purchase without a sales charge through investment of distributions from a Nuveen Mutual Fund or a Nuveen Defined Portfolio, or otherwise.
By establishing a Letter of Intent, you agree that your first purchase of Class A shares of the Fund following execution of the Letter of Intent will be at least 5% of the total amount of your intended purchases.
You further agree that shares representing 5% of the total amount of your intended purchases will be held in escrow pending completion of these purchases. All dividends and capital gains distributions on Class A shares held in escrow will be
credited to your account. If total purchases, less redemptions, prior to the expiration of the 13 month period equal or exceed the amount specified in your Letter of Intent, the Class A shares held in escrow will be transferred to your account. If
the total purchases, less redemptions, are less than the amount specified, you must pay the Distributor an amount equal to the difference between the amounts paid for these purchases and the amounts which would have been paid if the higher sales
charge had been applied. If you do not pay the additional amount within 20 days after written request by the Distributor or your financial advisor, the Distributor will redeem an appropriate number of your escrowed Class A shares to meet the
required payment. By establishing a Letter of Intent, you irrevocably appoint the Distributor as attorney to give instructions to redeem any or all of your escrowed shares, with full power of substitution in the premises.
You or your financial advisor must notify the Distributor or the Funds transfer agent whenever you make a purchase of Fund shares that you
wish to be covered under the Letter of Intent option.
For purposes of determining whether you qualify for a reduced sales charge as
described under
Rights of Accumulation
and
Letter of Intent
, you may include together with your own purchases those made by your spouse or domestic partner and your children under the age of 21 years, whether these purchases are made
through a taxable or non-taxable account. You may also include purchases made by a corporation, partnership or sole proprietorship which is 100% owned, either alone or in combination, by any of the foregoing. In addition, a trustee or other
fiduciary can count all shares purchased for a single trust, estate or other single fiduciary account that has multiple accounts (including one or more employee benefit plans of the same employer).
Elimination of Sales Charge on Class A Shares.
Class A shares of the Fund may be purchased at net asset value without a sales charge by the
following categories of investors:
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investors purchasing $1,000,000 or more;
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current and former trustees/directors of the Nuveen Funds;
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full-time and retired employees and directors of Nuveen Investments, and subsidiaries thereof, or their immediate family members (immediate family members are
defined as their spouses or domestic partners, parents, children, grandparents, grandchildren, parents-in-law, sons-in-law and daughters-in-law, siblings, a siblings spouse and a spouses siblings);
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any person who, for at least the last 90 days, has been an officer, director or employee of any financial intermediary, or their immediate family members;
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bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, advisory, custodial or similar capacity;
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investors purchasing on a periodic fee, asset-based fee or no transaction fee basis through a broker-dealer sponsored mutual fund purchase program;
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clients of investment advisers, financial planners or other financial intermediaries that charge periodic or asset-based fees for their services; and
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investors purchasing through a financial intermediary that has entered into an agreement with the Distributor to offer the Funds shares to self-directed
investment brokerage accounts and that may or may not charge a transaction fee to its customers.
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Any Class A shares
purchased pursuant to a special sales charge waiver must be acquired for investment purposes and on the condition that they will not be transferred or resold except through redemption by the Fund. You or your financial advisor must notify the
Distributor or your Funds transfer agent whenever you make a purchase of Class A shares of the Fund that you wish to be covered under these special sales charge waivers.
Class A shares of the Fund may be issued at net asset value without a sales charge in connection with the acquisition by the Fund of another investment company. All purchases under the special sales charge waivers
will be subject to minimum purchase requirements as established by the Fund.
The reduced sales charge programs may be modified or
discontinued by the Fund at any time. For more information about the purchase of Class A shares or the reduced sales charge program, or to obtain the required application forms, call Nuveen Investor Services toll-free at (800) 257-8787.
Class C Shares
You may purchase Class C shares at a public offering price equal to the applicable net asset value per share without any up-front sales charge.
Class C shares are subject to an annual distribution fee of 0.55% to compensate the Distributor for paying your financial advisor or other financial intermediary an ongoing sales commission. Class C shares are also subject to an annual service fee
of 0.20% to compensate financial intermediaries for providing you with ongoing financial advice and other account services. The Distributor compensates financial intermediaries for sales of Class C shares at the time of the sale at a rate of 0.75%
of the amount of Class C shares purchased, which represents an advance of the first years distribution fee of 0.55% plus an advance on the first years annual service fee of 0.20%. See Distribution and Service Plan.
Class C share purchase orders equaling or exceeding $1,000,000 will not be accepted. In addition, purchase orders for a single purchaser
that, when added to the value that day of all of such purchasers shares of any class of any Nuveen Mutual Fund, cause the purchasers cumulative total of shares in Nuveen Mutual Funds to equal or exceed the aforementioned limit will not
be accepted. Purchase orders for a single purchaser equal to or exceeding the foregoing limit should be placed only for Class A shares, unless such purchase has been reviewed and approved as suitable for the client by the appropriate compliance
personnel of the financial intermediary, and the Fund receives written confirmation of such approval.
Redemption of Class C shares
within 12 months of purchase may be subject to a contingent deferred sales charge (
CDSC
) of 1% of the lower of the purchase price or redemption proceeds. Because Class C shares do not convert to Class A shares and continue to pay
an annual distribution fee indefinitely, Class C shares should normally not be purchased by an investor who expects to hold shares for significantly longer than eight years.
Reduction or Elimination of Contingent Deferred Sales Charge
Class
A shares are normally redeemed at net asset value, without any CDSC. However, in the case of Class A shares purchased at net asset value without a sales charge because the purchase amount exceeded $1 million, a CDSC is imposed on any redemption
within 18 months of purchase. Class C shares are redeemed at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon any redemption within 12 months of purchase (except in cases where a shareholder is eligible for a waiver).
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In determining whether a CDSC is payable, the Fund will first redeem shares not subject to any charge
and then will redeem shares held for the longest period, unless the shareholder specifies another order. No CDSC is charged on shares purchased as a result of automatic reinvestment of dividends or capital gains paid. In addition, no CDSC will be
charged on exchanges of shares into another Nuveen Mutual Fund. The holding period is calculated on a monthly basis and begins on the first day of the month in which the purchase was made. The CDSC is assessed on an amount equal to the lower of the
then current market value or the cost of the shares being redeemed. Accordingly, no sales charge is imposed on increases of net asset value above the initial purchase price. The Distributor receives the amount of any CDSC shareholders pay.
The CDSC may be waived or reduced under the following circumstances: (i) in the event of total disability (as evidenced by a
determination by the federal Social Security Administration) of the shareholder (including a registered joint owner) occurring after the purchase of the shares being redeemed; (ii) in the event of the death of the shareholder (including a registered
joint owner); (iii) for redemptions made pursuant to a systematic withdrawal plan, up to 1% monthly, 3% quarterly, 6% semiannually or 12% annually of an accounts net asset value depending on the frequency of the plan as designated by the
shareholder; (iv) involuntary redemptions caused by operation of law; (v) redemptions in connection with a payment of account or plan fees; (vi) redemptions in connection with the exercise of a reinstatement privilege whereby the proceeds of a
redemption of the Funds shares subject to a sales charge are reinvested in shares of certain Funds within a specified number of days; (vii) redemptions in connection with the exercise of the Funds right to redeem all shares in an account
that does not maintain a certain minimum balance or that the Board of Trustees has determined may have material adverse consequences to the shareholders of the Fund; (viii) in whole or in part for redemptions of shares by shareholders with accounts
in excess of specified breakpoints that correspond to the breakpoints under which the up-front sales charge on Class A shares is reduced pursuant to Rule 22d-1 under the Act; (ix) redemptions of shares purchased under circumstances or by a category
of investors for which Class A shares could be purchased at net asset value without a sales charge; (x) redemptions of Class A or Class C shares if the proceeds are transferred to an account managed by the Adviser and the Adviser refunds the
advanced service and distribution fees to the Distributor; (xi) redemptions of Class C shares in cases where the Distributor did not advance the first years service and distribution fees when such shares were purchased; and (xii) redemptions
of Class A shares where the Distributor did not pay a sales commission when such shares were purchased. If the Fund waives or reduces the CDSC, such waiver or reduction would be uniformly applied to all Fund shares in the particular category. In
waiving or reducing a CDSC, the Fund will comply with the requirements of Rule 22d-1 under the 1940 Act.
Class I Shares
Class I shares are available for purchase by clients of financial intermediaries who charge such clients an ongoing fee for
advisory, investment, consulting or related services. Such clients may include individuals, corporations, endowments and foundations. The minimum initial investment for such clients is $100,000, but this minimum will be lowered to $250 for clients
of financial intermediaries that have accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of financial intermediaries anticipated to reach this Class I share
holdings level.
Class I shares are also available for purchase by family offices and their clients. A family office is a company that
provides certain financial and other services to a high net worth family or families. The minimum initial investment for family offices and their clients is $100,000, but this minimum will be lowered to $250 for clients of family offices that have
accounts holding Class I shares with an aggregate value of at least $100,000. The Distributor may also lower the minimum to $250 for clients of family offices anticipated to reach this Class I share holdings level.
Class I shares also are available for purchase, with no minimum initial investment, by the following categories of investors:
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bank or broker-affiliated trust departments investing funds over which they exercise exclusive discretionary investment authority and that are held in a
fiduciary, agency, advisory, custodial or similar capacity;
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advisory accounts of Nuveen Fund Advisors and its affiliates, including other Nuveen Mutual Funds whose investment policies permit investments in other
investment companies;
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any registered investment company that is not affiliated with the Nuveen Funds and which invests in securities of other investment companies;
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any plan organized under section 529 under the Code (i.e., a 529 plan);
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current and former trustees/directors of any Nuveen Fund, and their immediate family members (immediate family members are defined as spouses or
domestic partners, parents, children, grandparents, grandchildren, parents-in-law, sons-in-law and daughters-in-law, siblings, a siblings spouse and a spouses siblings);
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officers, directors and former directors of Nuveen Investments and its affiliates, and their immediate family members;
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full-time and retired employees of Nuveen Investments and its affiliates, and their immediate family members; and
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any person who, for at least the last 90 days, has been an officer, director or employee of any financial intermediary, and their immediate family members.
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Any shares purchased by investors falling within any of the last four categories listed above must be acquired for
investment purposes and on the condition that they will not be transferred or resold except through redemption by the Fund.
Holders of
Class I shares may purchase additional Class I shares using dividends and capital gains distributions on their shares.
If you are
eligible to purchase either Class I shares or Class A shares without a sales charge at net asset value, you should be aware of the differences between these two classes of shares. Class A shares are subject to an annual service fee to compensate
financial intermediaries for providing you with ongoing account services. Class I shares are not subject to a distribution or service fee and, consequently, holders of Class I shares may not receive the same types or levels of services from
financial intermediaries. In choosing between Class A shares and Class I shares, you should weigh the benefits of the services to be provided by financial intermediaries against the annual service fee imposed upon the Class A shares.
Shareholder Programs
Exchange
Privilege
You may exchange Fund shares into an identically registered account for the same class of another Nuveen Mutual Fund
available in your state. Your exchange must meet the minimum purchase requirements of the fund into which you are exchanging. You may also, under certain limited circumstances, exchange between certain classes of shares of the same Fund. An exchange
between classes of shares of the same Fund may not be considered a taxable event; please consult your own tax advisor for further information.
If you hold your shares directly with the Fund, you may exchange your shares by either sending a written request to the Fund, c/o Nuveen Investor Services, P.O. Box 8530, Boston, Massachusetts 02266-8530 or by
calling Nuveen Investor Services toll free at (800) 257-8787.
If you exchange shares between different Nuveen Mutual Funds and your
shares are subject to a CDSC, no CDSC will be charged at the time of the exchange. However, if you subsequently redeem the shares acquired through the exchange, the redemption may be subject to a CDSC, depending on when you purchased your original
shares and the CDSC schedule of the fund from which you exchanged your shares. If you exchange between classes of shares of the same Fund and your original shares are subject to a CDSC, the CDSC will be assessed at the time of the exchange.
For federal income tax purposes, an exchange between different Nuveen Mutual Funds constitutes a sale and purchase of shares and may
result in capital gain or loss. Before making any exchange, you should obtain the Prospectus for the Nuveen Mutual Fund you are purchasing and read it carefully. If the registration of the account for the Fund you are purchasing is not exactly the
same as
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that of the fund account from which the exchange is made, written instructions from all holders of the account from which the exchange is being made must be received, with signatures guaranteed
by a member of an approved Medallion Signature Guarantee Program or in such other manner as may be acceptable to the Fund. You may also exchange shares by telephone if you authorize telephone exchanges by checking the applicable box on the
Application Form or by calling Nuveen Investor Services toll-free at (800) 257-8787 to obtain an authorization form. The Fund reserves the right to revise or suspend the exchange privilege, limit the amount or number of exchanges, or reject any
exchange. Shareholders will be provided with at least 60 days notice of any material revision to or termination of the exchange privilege.
The exchange privilege is not intended to permit the Fund to be used as a vehicle for short-term trading. Excessive exchange activity may interfere with portfolio management, raise expenses and otherwise have an
adverse effect on all shareholders. In order to limit excessive exchange activity and in other circumstances where Fund management believes doing so would be in the best interest of the Fund, the Fund reserves the right to revise or terminate the
exchange privilege, or limit the amount or number of exchanges or reject any exchange. Shareholders would be notified of any such action to the extent required by law. See Frequent Trading Policy below.
Reinstatement Privilege
If you redeemed
Class A or Class C shares of the Fund or any other Nuveen Mutual Fund that were subject to a sales charge or a CDSC, you have up to one year to reinvest all or part of the full amount of the redemption in the same class of shares of the Fund at net
asset value. This reinstatement privilege can be exercised only once for any redemption, and reinvestment will be made at the net asset value next calculated after reinstatement of the appropriate class of Fund shares. If you reinstate shares that
were subject to a CDSC, your holding period as of the redemption date also will be reinstated for purposes of calculating a CDSC and the CDSC paid at redemption will be refunded. The federal income tax consequences of any capital gain realized on a
redemption will not be affected by reinstatement, but a capital loss may be disallowed in whole or in part depending on the timing, the amount of the reinvestment and the fund from which the redemption occurred.
Suspension of Right of Redemption
The Fund
may suspend the right of redemption of Fund shares or delay payment more than seven days (a) during any period when the New York Stock Exchange (
NYSE
) is closed (other than customary weekend and holiday closings), (b) when trading
in the markets the Fund normally utilizes is restricted or an emergency exists as determined by the SEC so that trading of the Funds investments or determination of its net asset value is not reasonably practicable, or (c) for any other
periods that the SEC by order may permit for protection of Fund shareholders.
Redemption In-Kind
The Fund has reserved the right to redeem in-kind (that is, to pay redemption requests in cash and portfolio securities, or wholly in portfolio
securities). The Fund voluntarily has committed to pay in cash all requests for redemption by any shareholder, limited as to each shareholder during any 90-day period to the lesser of $250,000 or 1% of the net asset value of the Fund at the
beginning of the 90-day period.
Frequent Trading Policy
The Funds Frequent Trading Policy is as follows:
Nuveen Mutual Funds are intended as long-term investments and not as short-term trading vehicles. At the same time, the Fund recognizes the need of investors to periodically make purchases and redemptions of Fund
shares when rebalancing their portfolios and as their financial needs or circumstances change. Nuveen Mutual Funds have adopted the following Frequent Trading Policy that seeks to balance these needs against the potential for higher operating costs,
portfolio management disruption and other inefficiencies that can be caused by excessive trading of Fund shares.
S-52
1. Definition of Round Trip
A Round Trip trade is the purchase and subsequent redemption of Fund shares, including by exchange. Each side of a Round Trip trade may be comprised of either a single transaction or a series of closely-spaced
transactions.
2. Round Trip Trade Limitations
Nuveen Mutual Funds limit the frequency of Round Trip trades that may be placed in the Fund. Subject to certain exceptions noted below, the Fund limits an investor to two Round Trips per trailing 60-day period.
3. Enforcement
Trades
placed in violation of the foregoing policies are subject to rejection or cancellation by Nuveen Mutual Funds. Nuveen Mutual Funds may also bar an investor (and/or the investors financial advisor) who has violated these policies from opening
new accounts with the Fund and may restrict the investors existing account(s) to redemptions only. Nuveen Mutual Funds reserve the right, in their sole discretion, to (a) interpret the terms and application of these policies,
(b) waive unintentional or minor violations (including transactions below certain dollar thresholds) if Nuveen Mutual Funds determine that doing so does not harm the interests of Fund shareholders, and (c) exclude certain classes of
redemptions from the application of the trading restrictions set forth above.
Nuveen Mutual Funds reserve the right to impose
restrictions on purchases or exchanges that are more restrictive than those stated above if they determine, in their sole discretion, that a proposed transaction or series of transactions involve market timing or excessive trading that is likely to
be detrimental to the Fund. The Fund may also modify or suspend the Frequent Trading Policy without notice during periods of market stress or other unusual circumstances.
The ability of Nuveen Mutual Funds to implement the Frequent Trading Policy for omnibus accounts at certain financial intermediaries may be dependent on receiving from those intermediaries sufficient shareholder
information to permit monitoring of trade activity and enforcement of the Funds Frequent Trading Policy. In addition, the Fund may rely on a financial intermediarys policy to restrict market timing and excessive trading if the Fund
believes that the policy is reasonably designed to prevent market timing that is detrimental to the Fund. Such policy may be more or less restrictive than the Funds Policy. The Fund cannot ensure that these financial intermediaries will in all
cases apply the Funds policy or their own policies, as the case may be, to accounts under their control.
Exclusions from the Frequent Trading
Policy
As stated above, certain redemptions are eligible for exclusion from the Frequent Trading Policy, including:
(i) redemptions or exchanges by shareholders investing through the fee-based platforms of certain financial intermediaries (where the intermediary charges an asset-based or comprehensive wrap fee for its services) that are effected
by the financial intermediaries in connection with systematic portfolio rebalancing; (ii) when there is a verified trade error correction, which occurs when a dealer firm sends a trade to correct an earlier trade made in error and then the firm
sends an explanation to the Nuveen Mutual Funds confirming that the trade is actually an error correction; (iii) in the event of total disability (as evidenced by a determination by the federal Social Security Administration) of the shareholder
(including a registered joint owner) occurring after the purchase of the shares being redeemed; (iv) in the event of the death of the shareholder (including a registered joint owner); (v) redemptions made pursuant to a systematic
withdrawal plan, up to 1% monthly, 3% quarterly, 6% semiannually or 12% annually of an accounts net asset value depending on the frequency of the plan as designated by the shareholder; (vi) redemptions of shares that were purchased
through a systematic investment program; (vii) involuntary redemptions caused by operation of law; (viii) redemptions in connection with a payment of account or plan fees; (ix) redemptions or exchanges by any fund of funds
advised by the Adviser; and (x) redemptions in connection with the exercise of the Funds right to redeem all shares in an account that does not maintain a certain minimum balance or that the board has determined may have material adverse
consequences to the shareholders of the Fund.
S-53
In addition, the following redemptions of shares by an employer-sponsored
qualified defined contribution retirement plan are excluded from the Frequent Trading Policy: (i) partial or complete redemptions in connection with a distribution without penalty under Section 72(t) of the Code from a retirement plan:
(a) upon attaining age
59
1
/
2
; (b) as part of a series of substantially equal periodic payments; or (c) upon separation from service and attaining age 55; (ii) partial or complete redemptions in connection with a qualifying loan
or hardship withdrawal; (iii) complete redemptions in connection with termination of employment, plan termination, transfer to another employers plan or IRA or changes in a plans recordkeeper; and (iv) redemptions resulting
from the return of an excess contribution. Also, the following redemptions of shares held in an IRA account are excluded from the application of the Frequent Trading Policy: (i) redemptions made pursuant to an IRA systematic withdrawal based on
the shareholders life expectancy including, but not limited to, substantially equal periodic payments described in Code Section 72(t)(A)(iv) prior to age
59
1
/
2
; and (ii) redemptions to satisfy required minimum distributions after age 70
1
/
2
from an IRA account.
Distribution and Service Plan
The Fund has adopted a plan (the
Plan
) pursuant to Rule 12b-1 under the 1940 Act, pursuant to which Class C shares are subject to an annual distribution fee and Class A and Class C shares are subject to an annual service fee. The Fund may spend up to 0.20% per
year of the average daily net assets of Class A shares as a service fee under the Plan as applicable to Class A shares. The Fund may spend up to 0.55% per year of the average daily net assets of Class C shares as a distribution fee and up to 0.20%
per year of the average daily net assets of Class C shares as a service fee under the Plan as applicable to such classes. Class I shares are not subject to either distribution or service fees. Distribution and service fees collectively are referred
to herein as 12b-1 fees.
The distribution fee applicable to Class C shares under the Funds Plan compensates the
Distributor for expenses incurred in connection with the distribution of Class C shares. These expenses include payments to financial intermediaries, including the Distributor, who are brokers of record with respect to the Class C shares, as well
as, without limitation, expenses of printing and distributing Prospectuses to persons other than shareholders of the Fund, expenses of preparing, printing and distributing advertising and sales literature and reports to shareholders used in
connection with the sale of Class C shares, certain other expenses associated with the distribution of Class C shares, and any other distribution-related expenses that may be authorized from time to time by the Board of Trustees.
The service fee applicable to Class A and Class C shares under the Funds Plan is used to compensate financial intermediaries in connection
with the provision of ongoing account services to shareholders. These services may include establishing and maintaining shareholder accounts, answering shareholder inquiries and providing other personal services to shareholders.
Under the Funds Plan, the Fund will report quarterly to the Board of Trustees for its review all amounts expended per class of shares under
the Plan. The Plan may be terminated at any time with respect to any class of shares, without the payment of any penalty, by a vote of a majority of the independent trustees who have no direct or indirect financial interest in the Plan or by vote of
a majority of the outstanding voting securities of such class. The Plan may be renewed from year to year if approved by a vote of the Board of Trustees and a vote of the independent trustees who have no direct or indirect financial interest in the
Plan cast in person at a meeting called for the purpose of voting on the Plan. The Plan may be continued only if the trustees who vote to approve such continuance conclude, in the exercise of reasonable business judgment and in light of their
fiduciary duties under applicable law, that there is a reasonable likelihood that the Plan will benefit the Fund and its shareholders. The Plan may not be amended to increase materially the cost which a class of shares may bear under the Plan
without the approval of the shareholders of the affected class, and any other material amendments of the Plan must be approved by the independent trustees by a vote cast in person at a meeting called for the purpose of considering such amendments.
During the continuance of the Plan, the selection and nomination of the independent trustees of the Trust will be committed to the discretion of the independent trustees then in office. With the exception of the Distributor and its affiliates, no
interested person of the Fund, as that term is defined in the 1940 Act, and no trustee of the Fund has a direct or indirect financial interest in the operation of the Plan or any related agreement.
S-54
General Matters
The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate other
intermediaries to accept purchase and redemption orders on the Funds behalf. The Fund will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a brokers authorized designee accepts the
order. Customer orders received by such broker (or their designee) will be priced at the Funds net asset value next computed after they are accepted by an authorized broker (or their designee). Orders accepted by an authorized broker (or their
designee) before the close of regular trading on the NYSE will receive that days share price; orders accepted after the close of trading will receive the next business days share price.
If you choose to invest in the Fund, an account will be opened and maintained for you by BFDS, the Funds shareholder services agent. Shares
will be registered in the name of the investor or the investors financial advisor. A change in registration or transfer of shares held in the name of a financial advisor may only be made by an order in good standing form from the financial
advisor acting on the investors behalf. The Fund reserves the right to reject any purchase order and to waive or increase minimum investment requirements.
The Fund does not issue share certificates.
Distribution Arrangements
The Distributor sells shares to or through brokers, dealers, banks or other qualified financial intermediaries (collectively referred to as
Dealers
), or others, in a manner consistent with the then effective registration statement of the Trust. Pursuant to the Distribution Agreement, the Distributor, at its own expense, finances certain activities incident to the sale
and distribution of the Funds shares, including printing and distributing of prospectuses and statements of additional information to other than existing shareholders, the printing and distributing of sales literature, advertising and payment
of compensation and giving of concessions to Dealers.
The Distributor receives for its services the excess, if any, of the sales price
of the Funds shares less the net asset value of those shares, and reallows a majority or all of such amounts to the Dealers who sold the shares. The Distributor also receives distribution fees pursuant to a distribution plan adopted by the
Trust pursuant to Rule 12b-1 and described herein under Distribution and Service Plan. The Distributor also receives any CDSCs imposed on redemptions of shares, but any amounts as to which a reinstatement privilege is not exercised are
set off against and reduce amounts otherwise payable to the Distributor pursuant to the distribution plan. The Distributor may also act as a Dealer.
To help financial advisors and investors better understand and more efficiently use the Fund to reach their investment goals, the Distributor may advertise and create specific investment programs and systems. For
example, this may include information on how to use the Fund to accumulate assets for future education needs or periodic payments such as insurance premiums. The Distributor may produce software, electronic information sites or additional sales
literature to promote the advantages of using the Fund to meet these and other specific investor needs. In addition, wholesale representatives of the Distributor may visit financial advisors on a regular basis to educate them about the Fund and to
encourage the sale of Fund shares to their clients. The costs and expenses associated with these efforts may include travel, lodging, sponsorship at educational seminars and conferences, entertainment and meals to the extent permitted by law. Nuveen
wholesalers may receive additional compensation if they meet certain targets for sales of one or more Nuveen Mutual Funds.
Additional Payments to Financial Intermediaries and Other Payments
In addition to the sales charge payments and the distribution, service and transfer agency fees described in the Prospectus and elsewhere in this
SAI, the Adviser and/or the Distributor may make additional payments out of its own assets to selected intermediaries that sell shares of the Nuveen Mutual Funds (such as brokers, dealers, banks, registered investment advisers, retirement plan
administrators and other intermediaries; hereinafter, individually,
Intermediary
, and collectively,
Intermediaries
) under the categories described below for the purposes of promoting the sale of Fund shares,
maintaining share balances and/or for sub-accounting, administrative or shareholder processing services.
S-55
The amounts of these payments could be significant and may create an incentive for an Intermediary or
its representatives to recommend or offer shares of the Nuveen Mutual Funds to its customers. The Intermediary may elevate the prominence or profile of the Fund within the Intermediarys organization by, for example, placing the Fund on a list
of preferred or recommended funds and/or granting the Adviser and/or the Distributor preferential or enhanced opportunities to promote the Fund in various ways within the Intermediarys organization.
These payments are made pursuant to negotiated agreements with Intermediaries. The payments do not change the price paid by investors for the
purchase of a share or the amount the Fund will receive as proceeds from such sales. Furthermore, these payments are not reflected in the fees and expenses listed in the fee table section of the Funds Prospectus and described above because
they are not paid by the Fund.
The categories of payments described below are not mutually exclusive, and a single Intermediary may
receive payments under all categories.
The Adviser and/or the Distributor may also make other additional payments out of its own assets
as described under Other Payments below.
Marketing Support Payments and Program Servicing Payments
The Adviser and/or the Distributor may make payments for marketing support and/or program servicing to selected Intermediaries that are registered
as holders or dealers of record for accounts invested in one or more of the Nuveen Mutual Funds or that make Nuveen Mutual Fund shares available through employee benefit plans or fee-based advisory programs to compensate them for the variety of
services they provide.
Marketing Support Payments
. Services for which an Intermediary receives marketing support payments may
include business planning assistance, advertising, educating the Intermediarys personnel about the Nuveen Mutual Funds in connection with shareholder financial planning needs, placement on the Intermediarys preferred or recommended fund
company list, and access to sales meetings, sales representatives and management representatives of the Intermediary. In addition, Intermediaries may be compensated for enabling representatives of the Adviser and/or the Distributor to participate in
and/or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client and investor events and other events sponsored by the Intermediary.
The Adviser and/or the Distributor compensate Intermediaries differently depending upon, among other factors, the number or value of Nuveen Mutual
Funds shares that the Intermediary sells or may sell, the value of the assets invested in the Nuveen Mutual Funds by the Intermediarys customers, redemption rates, ability to attract and retain assets, reputation in the industry and the level
and/or type of marketing assistance and educational activities provided by the Intermediary. Such payments are generally asset-based but also may include the payment of a lump sum.
Program Servicing Payments
. Services for which an Intermediary receives program servicing payments typically include recordkeeping,
reporting, or transaction processing, but may also include services rendered in connection with fund/investment selection and monitoring, employee enrollment and education, plan balance rollover or separation, or other similar services. An
Intermediary may perform program services itself or may arrange with a third party to perform program services.
Program servicing
payments typically apply to employee benefit plans, such as retirement plans, or fee-based advisory programs but may apply to retail sales and assets in certain situations. The payments are based on such factors as the type and nature of services or
support furnished by the Intermediary and are generally asset-based.
Marketing Support and Program Servicing Payment Guidelines
.
In the case of any one Intermediary, marketing support and program servicing payments are not expected, with certain limited exceptions, to exceed, in the aggregate, 0.35% of the average net assets of Fund shares attributable to that Intermediary on
an annual basis. In connection with the sale of a business by U.S. Bank N.A. to Great-West Life & Annuity Insurance Company (
Great-West
), the Adviser and/or the
S-56
Distributor has a services agreement with GWFS Equities, Inc., an affiliate of Great-West, which provides for payments of up to 0.60% of the average net assets of Fund shares attributable to GWFS
Equities, Inc. on an annual basis.
Other Payments
From time to time, the Adviser and/or the Distributor, at its expense, may provide other compensation to Intermediaries that sell or arrange for the sale of shares of the Fund, which may be in addition to marketing
support and program servicing payments described above. For example, the Adviser and/or the Distributor may: (i) compensate Intermediaries for National Securities Clearing Corporation networking system services (e.g., shareholder communication,
account statements, trade confirmations, and tax reporting) on an asset-based or per account basis; (ii) compensate Intermediaries for providing Fund shareholder trading information; (iii) make one-time or periodic payments to reimburse selected
Intermediaries for items such as ticket charges (i.e., fees that an Intermediary charges its representatives for effecting transactions in Fund shares) of up to $25 per purchase or exchange order, operational charges (e.g., fees that an Intermediary
charges for establishing the Fund on its trading system), and literature printing and/or distribution costs; and (iv) at the direction of a retirement plans sponsor, reimburse or pay direct expenses of an employee benefit plan that would
otherwise be payable by the plan.
When not provided for in a marketing support or program servicing agreement, the Adviser and/or the
Distributor may pay Intermediaries for enabling the Adviser and/or the Distributor to participate in and/or present at conferences or seminars, sales or training programs for invited registered representatives and other Intermediary employees,
client and investor events and other Intermediary-sponsored events, and for travel expenses, including lodging incurred by registered representatives and other employees in connection with prospecting, asset retention and due diligence trips. These
payments may vary depending upon the nature of the event. The Adviser and/or the Distributor make payments for such events as it deems appropriate, subject to its internal guidelines and applicable law.
The Adviser and/or the Distributor occasionally sponsors due diligence meetings for registered representatives during which they receive updates on
various Nuveen Mutual Funds and are afforded the opportunity to speak with portfolio managers. Although invitations to these meetings are not conditioned on selling a specific number of shares, those who have shown an interest in Nuveen Mutual Funds
are more likely to be considered. To the extent permitted by their firms policies and procedures, all or a portion of registered representatives expenses in attending these meetings may be covered by the Adviser and/or the Distributor.
Representatives of the Distributor or its affiliates may receive additional compensation from the Adviser and/or the Distributor if
certain targets are met for sales of one or more Nuveen Mutual Funds. Such compensation may vary by Fund and by Intermediary.
Other
compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as FINRA. Investors can ask their Intermediary for information about any payments it receives from the Adviser and/or the Distributor and the
services it provides for those payments.
Investors may wish to take Intermediary payment arrangements into account when considering and
evaluating any recommendations relating to Fund shares.
Intermediaries Receiving Additional Payments
The following is a list of Intermediaries receiving one or more of the types of payments discussed above as of
, 2012:
ADP Broker-Dealer, Inc.
Alliance Fund Distributors
American United Life Insurance Company
Ameriprise Financial Services, Inc.
Ascensus (formerly BISYS Retirement Services,
Inc.)
Benefit Plans Administrative Services, Inc.
S-57
Benefit Trust Company
Charles Schwab & Co., Inc.
Chase Investment Services
Citigroup Global Markets Inc.
Commonwealth Equity Services, LLP, DBA Commonwealth Financial Network
CPI Qualified Plan Consultants, Inc.
Digital Retirement Solutions, Inc.
Dyatech, LLC
Edward Jones
ExpertPlan, Inc.
Fidelity Brokerage Services LLC/National Financial Services LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)/Fidelity Advisors
Retirement
Genesis Employee Benefits, Inc. DBA Americas VEBA Solution
Great West Life and
Annuity Insurance Co.
GWFS Equities, Inc.
Hartford Life Insurance Company
Hartford Securities Distribution Company, Inc.
Hewitt Associates LLC
ICMA Retirement Corporation
ING Life Insurance and Annuity Company/ING Institutional Plan Services LLC/ING Financial
Advisors, LLC (formerly CitiStreet LLC/CitiStreet Advisors LLC)
J.P. Morgan
Retirement Plan Services, LLC
Janney Montgomery Scott LLC
Lincoln Retirement Services Company LLC/AMG Service Corp.
Linsco/Private Ledger Corp.
Marshall & IlsIey Trust Company, N.A.
Massachusetts Mutual Life Insurance Company
Mercer HR Outsourcing LLC
Merrill Lynch, Pierce, Fenner & Smith Inc.
Mid Atlantic Capital Corporation
Morgan Stanley & Co., Incorporated/Morgan Stanley Smith Barney LLC
MSCS Financial Services, LLC
Nationwide Financial Services, Inc.
Newport Retirement Services, Inc.
NYLife Distributors LLC
Pershing LLC
Princeton Retirement Group/GPC Securities, Inc.
Principal Life Insurance Company
Prudential Insurance Company of America (The)
Prudential Investment Management
Services, LLC/Prudential Investments LLC
Raymond James & Associates/Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Reliance Trust Company
Retirement Plan Company, LLC (The)
Robert W. Baird & Co., Inc.
Savings Institute and Bank
Smith Barney
Stifel, Nicolaus & Co., Inc.
T. Rowe Price Investment Services, Inc./T. Rowe Price Retirement Plan Services, Inc.
TD Ameritrade, Inc.
TD Ameritrade Trust Company (formerly Fiserv Trust Company/International Clearing Trust
Company)
TIAA-CREF Individual & Institutional Services, LLC
U.S. Bancorp Investments, Inc.
U.S. Bank N.A.
S-58
UBS Financial Services, Inc.
Unified Trust Company, N.A.
VALIC Retirement Services Company (formerly AIG Retirement Services Company)
Vanguard
Group, Inc.
Wells Fargo Advisors, LLC
Wells Fargo Bank, N.A.
Wilmington Trust Company
Wilmington Trust Retirement and Institutional Services
Company (formerly AST Capital Trust
Company)
Any additions, modifications or deletions to the list of Intermediaries identified above that have occurred since ,
2012 are not reflected in the list.
FINANCIAL STATEMENTS
The audited financial statements for the Funds first fiscal period will appear in the Funds Annual Report dated April 30, 2013. The
Funds Annual Report will be incorporated by reference into the SAI and is available without charge by calling (800) 257-8787.
S-59
APPENDIX A
RATINGS OF INVESTMENTS
Standard & Poors Ratings Group
A brief
description of the applicable Standard & Poors (
S&P
) rating symbols and their meanings (as published by S&P) follows:
Issue Credit Ratings
A S&P issue credit rating is a forward-looking opinion about the
creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). It takes into
consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated.
The opinion reflects S&Ps view of the obligors capacity and willingness to meet its financial commitments as they come due, and may
assess terms, such as collateral security and subordination, which could affect ultimate payment in the event of default.
Issue credit
ratings can be either long-term or short-term. Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than
365 daysincluding commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating
addresses the put feature, in addition to the usual long-term rating. Medium-term notes are assigned long-term ratings.
Long-Term Issue Credit
Ratings
Issue credit ratings are based, in varying degrees, on S&Ps analysis of the following considerations:
1. Likelihood of paymentcapacity and willingness of the obligor to meet its financial commitment on an obligation in
accordance with the terms of the obligation;
2. Nature of and provisions of the obligation;
3. Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors rights.
Issue ratings are an assessment of default risk, but may
incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation
may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)
AAA
|
An obligation rated AAA has the highest rating assigned by S&P. The obligors capacity to meet its financial commitment on the obligation is extremely
strong.
|
AA
|
An obligation rated AA differs from the highest rated obligations only to a small degree. The obligors capacity to meet its financial commitment on the
obligation is very strong.
|
A
|
An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated
categories. However, the obligors capacity to meet its financial commitment on the obligation is still strong.
|
BBB
|
An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened
capacity of the obligor to meet its financial commitment on the obligation.
|
Obligations rated BB,
B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such
A-1
obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB
|
An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to the obligors inadequate capacity to meet its financial commitment on the obligation.
|
B
|
An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligors capacity or willingness to meet its financial commitment on the obligation.
|
CCC
|
An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
|
CC
|
An obligation rated CC is currently highly vulnerable to nonpayment.
|
C
|
A C rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the
documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the C rating may be assigned to subordinated debt, preferred stock or other
obligations on which cash payments have been suspended in accordance with the instruments terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash
or replaced by other instruments having a total value that is less than par.
|
D
|
An obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due unless S&P
believes that such payments will be made within five business days, irrespective of any grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation
are jeopardized. An obligations rating is lowered to D upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total
value that is less than par.
|
Plus (+) or Minus (): The ratings from AA to CCC may be
modified by the addition of a plus or minus sign to show relative standing within the major rating categories.
NR
|
This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a
matter of policy.
|
Municipal Short-Term Note Ratings
A S&P U.S. municipal note rating reflects S&Ps opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating.
Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to assign, S&Ps analysis will review the following considerations:
|
|
|
Amortization schedulethe larger the final maturity relative to other maturities, the more likely it will be treated as a note; and
|
|
|
|
Source of paymentthe more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.
|
SP-1
|
Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
|
SP-2
|
Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
|
SP-3
|
Speculative capacity to pay principal and interest.
|
A-2
Moodys Investors Service, Inc.
A brief description of the applicable Moodys
Investors Service, Inc. (
Moodys
) rating symbols and their meanings (as published by Moodys) follows:
Ratings assigned on Moodys global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of
financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity
of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Short-term ratings are assigned to obligations with an original maturity of
thirteen months or less and reflect the likelihood of a default on contractually promised payments.
Long-Term Obligation Ratings
Aaa
|
Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
|
Aa
|
Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
|
A
|
Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
|
Baa
|
Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
|
Ba
|
Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
|
B
|
Obligations rated B are considered speculative and are subject to high credit risk.
|
Caa
|
Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
|
Ca
|
Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
|
C
|
Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
|
Note: Moodys appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aaa through Caa. The modifier 1 indicates that
the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
Medium-Term Note Program Ratings
Moodys assigns provisional ratings to medium-term note (MTN) programs and definitive ratings to the individual debt securities issued from
them (referred to as drawdowns or notes).
MTN program ratings are intended to reflect the ratings likely to be assigned to drawdowns
issued from the program with the specified priority of claim (e.g. senior or subordinated). To capture the contingent nature of a program rating, Moodys assigns provisional ratings to MTN programs. A provisional rating is denoted by a (P) in
front of the rating.
The rating assigned to a drawdown from a rated MTN or bank/deposit note program is definitive in nature, and may
differ from the program rating if the drawdown is exposed to additional credit risks besides the issuers default, such as links to the defaults of other issuers, or has other structural features that warrant a different rating. In some
circumstances, no rating may be assigned to a drawdown.
Moodys encourages market participants to contact Moodys Ratings
Desks or visit www.moodys.com directly if they have questions regarding ratings for specific notes issued under a medium-term note program. Unrated notes issued under an MTN program may be assigned an NR (not rated) symbol.
A-3
U.S. Municipal Short-Term Debt and Demand Obligation Ratings
Short-Term Obligation Ratings
The Municipal
Investment Grade (MIG) scale is used to rate US municipal bond anticipation notes of up to three years maturity. Municipal notes rated on the MIG scale may be secured by either pledged revenues or proceeds of a take-out financing received prior to
note maturity. MIG ratings expire at the maturity of the obligation, and the issuers long-term rating is only one consideration in assigning the MIG rating. MIG ratings are divided into three levelsMIG 1 through MIG 3while
speculative grade short-term obligations are designated SG.
MIG 1
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This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based
access to the market for refinancing.
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MIG 2
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This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.
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MIG 3
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This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.
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SG
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This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.
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Demand Obligation Ratings
In the case of
variable rate demand obligations (VRDOs), a two-component rating is assigned: a long or short-term debt rating and a demand obligation rating. The first element represents Moodys evaluation of risk associated with scheduled principal and
interest payments. The second element represents Moodys evaluation of risk associated with the ability to receive purchase price upon demand (
demand feature
). The second element uses a rating from a variation of the MIG
scale called the Variable Municipal Investment Grade (VMIG) scale.
VMIG 1
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This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal
protections that ensure the timely payment of purchase price upon demand.
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VMIG 2
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This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal
protections that ensure the timely payment of purchase price upon demand.
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VMIG 3
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This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and
legal protections that ensure the timely payment of purchase price upon demand.
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SG
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This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade
short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.
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Fitch Ratings
A brief description of the applicable Fitch Ratings (
Fitch
) ratings symbols and meanings (as published by Fitch) follows:
Structured, Project & Public Finance ObligationsLong-Term Rating Scales
Ratings of structured finance, project finance and public finance obligations on the long-term scale, including the financial obligations of sovereigns, consider the obligations relative vulnerability to
default. These ratings are typically assigned to an individual security or tranche in a transaction and not to an issuer.
AAA
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Highest credit quality. AAA ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of
financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
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A-4
AA
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Very high credit quality. AA ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable events.
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A
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High credit quality. A ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
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BBB
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Good credit quality. BBB ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered
adequate but adverse business or economic conditions are more likely to impair this capacity.
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BB
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Speculative. BB ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.
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B
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Highly speculative. B ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met;
however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
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CCC
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Substantial credit risk. Default is a real possibility.
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CC
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Very high levels of credit risk. Default of some kind appears probable.
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C
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Exceptionally high levels of credit risk. Default appears imminent or inevitable.
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D
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Default. Indicates a default. Default generally is defined as one of the following:
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failure to make payment of principal and/or interest under the contractual terms of the rated obligation;
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the bankruptcy filings, administration, receivership, liquidation or other winding-up or cessation of the business of an issuer/obligor; or
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the distressed exchange of an obligation, where creditors were offered securities with diminished structural or economic terms compared with the existing
obligation to avoid a probable payment default.
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In the case of structured and project finance, while the ratings do
not address the loss severity given default of the rated liability, loss severity assumptions on the underlying assets are nonetheless typically included as part of the analysis. Loss severity assumptions are used to derive pool cash flows available
to service the rated liability.
The suffix sf denotes an issue that is a structured finance transaction. For an
explanation of how Fitch determines structured finance ratings, please see our criteria available at www.Fitchratings.com.
In the case
of public finance, the ratings do not address the loss given default of the rated liability, focusing instead on the vulnerability to default of the rated liability.
The modifiers + or - may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the AAA Long-Term Rating category, or
categories below B.
Limitations of the Structured, Project and Public Finance Obligation Rating Scale
Specific limitations relevant to the structured, project and public finance obligation rating scale include:
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The ratings do not predict a specific percentage of default likelihood over any given time period.
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The ratings do not opine on the market value of any issuers securities or stock, or the likelihood that this value may change.
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The ratings do not opine on the liquidity of the issuers securities or stock.
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A-5
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The ratings do not opine on the possible loss severity on an obligation should an obligation default.
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The ratings do not opine on any quality related to a transactions profile other than the agencys opinion on the relative vulnerability to default of
each rated tranche or security.
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Short-Term Ratings Assigned to Issuers or Obligations in Corporate, Public and Structured Finance
A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or
security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as short
term based on market convention. Typically, this means up to 13 months for corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets.
F1
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Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added + to denote any
exceptionally strong credit feature.
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F2
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Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.
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F3
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Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.
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B
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Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and
economic conditions.
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C
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High short-term default risk. Default is a real possibility.
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RD
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Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to
entity ratings only.
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D
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Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.
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Limitations of the Short-Term Ratings Scale
Specific limitations relevant to the Short-Term
Ratings scale include:
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The ratings do not predict a specific percentage of default likelihood over any given time period.
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The ratings do not opine on the market value of any issuers securities or stock, or the likelihood that this value may change.
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The ratings do not opine on the liquidity of the issuers securities or stock.
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The ratings do not opine on the possible loss severity on an obligation should an obligation default.
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The ratings do not opine on any quality related to an issuer or transactions profile other than the agencys opinion on the relative vulnerability to
default of the rated issuer or obligation.
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Ratings assigned by Fitch Ratings articulate an opinion on discrete and
specific areas of risk. The above list is not exhaustive, and is provided for the readers convenience.
A-6
[ ]
PART COTHER INFORMATION
Item 28. Exhibits
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(a)(1)
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Declaration of Trust of Registrant, dated July 1, 1996.(1)
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(a)(2)
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Certificate of Amendment to Declaration of Trust, dated August 9, 2000.(5)
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(a)(3)
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Amended Establishment and Designation of Classes, dated November 2, 2000.(6)
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(a)(4)
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Amended and Restated Designation of Series, dated August 24, 2012.(10)
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(b)
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By-Laws of Registrant, amended and restated as of November 18, 2009.(8)
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(c)
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Specimen Certificates of Shares of each Fund.(2)
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(d)(1)
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Investment Management Agreement between Registrant and Nuveen Fund Advisors, Inc. (f/k/a Nuveen Asset Management), dated November 13, 2007.(7)
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(d)(2)
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Amendment of Investment Management Agreement, dated March 8, 2011.(9)
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(d)(3)
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Renewal of Investment Management Agreement between Registrant and Nuveen Fund Advisors, Inc. (f/k/a Nuveen Asset Management), dated May 23, 2012.(10)
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(d)(4)
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Investment Sub-Advisory Agreement between Nuveen Fund Advisors, Inc. and Nuveen Asset Management, LLC.(14)
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(e)(1)
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Distribution Agreement between Registrant and John Nuveen & Co. Incorporated, dated February 1, 1997.(3)
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(e)(2)
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Renewal of Distribution Agreement between Registrant and Nuveen Securities, LLC (f/k/a Nuveen Investments, LLC), dated August 6, 2012.(10)
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(e)(3)
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Form of Dealer Distribution, Shareholder Servicing and Fee-Based Program Agreement.(12)
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(e)(4)
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Form of Rule 22c-2 Agreement.(11)
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(f)
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Not applicable.
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(g)(1)
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Amended and Restated Master Custodian Agreement between the Nuveen Funds and State Street Bank and Trust Company, dated February 25, 2005.(12)
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(g)(2)
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Appendix A to the Custodian Agreement, dated July 26, 2012.(10)
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(h)(1)
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Transfer Agency and Service Agreement between the Nuveen Mutual Funds and Boston Financial Data Services, Inc., dated May 11, 2012.(10)
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(h)(2)
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Amendment and Schedule A to Transfer Agency and Service Agreement, dated July 25, 2012 and July 30, 2012, respectively.(10)
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(i)(1)
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Opinion and Consent of Bingham McCutchen LLP.(14)
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(i)(2)
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Opinion and Consent of Chapman and Cutler LLP.(14)
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(j)
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Not applicable.
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(k)
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Not applicable.
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(l)
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Not applicable.
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(m)(1)
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Plan of Distribution and Service Pursuant to Rule 12b-1, dated July 23, 1998.(4)
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(m)(2)
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Exhibit A to Plan of Distribution and Service Pursuant to Rule 12b-1.(10)
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(n)
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Multiple Class Plan Adopted Pursuant to Rule 18f-3, as amended January 19, 2011.(10)
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(o)
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Not applicable.
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(p)
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Code of Ethics and Reporting Requirements, as amended August 15, 2011.(10)
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(q)
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Original Powers of Attorney of Messrs. Amboian, Bremner, Evans, Hunter, Kundert, Schneider and Toth and Mss. Stockdale, Stone and Stringer, dated January 1, 2011.(13)
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(1)
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Incorporated by reference to the initial registration statement filed on Form N-1A for Registrant.
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C-1
(2)
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Incorporated by reference to the pre-effective amendment no. 2 filed on Form N-1A for Registrant.
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(3)
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Incorporated by reference to the post-effective amendment no. 1 filed on Form N-1A for Registrant.
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(4)
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Incorporated by reference to the post-effective amendment no. 6 filed on Form N-1A for Registrant.
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(5)
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Incorporated by reference to the post-effective amendment no. 7 filed on Form N-1A for Registrant.
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(6)
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Incorporated by reference to the post-effective amendment no. 9 filed on Form N-1A for Registrant.
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(7)
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Incorporated by reference to the post-effective amendment no. 17 filed on Form N-1A for Registrant.
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(8)
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Incorporated by reference to the post-effective amendment no. 21 filed on Form N-1A for Registrant.
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(9)
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Incorporated by reference to the post-effective amendment no. 27 filed on Form N-1A for Registrant.
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(10)
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Incorporated by reference to the post-effective amendment no. 31 filed on Form N-1A for Registrant.
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(11)
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Incorporated by reference to the post-effective amendment no. 12 filed on Form N-1A for Nuveen Multistate Trust I.
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(12)
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Incorporated by reference to the post-effective amendment no. 13 filed on Form N-1A for Nuveen Multistate Trust II.
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(13)
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Incorporated by reference to the post-effective amendment no. 25 filed on Form N-1A for Nuveen Investment
Trust III.
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(14)
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To be filed by amendment.
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Item 29. Persons Controlled by or
under Common Control with the Fund
Not applicable.
Item 30. Indemnification
Section 4 of Article XII of Registrants Declaration of Trust,
as amended, provides as follows:
Subject to the exceptions and limitations contained in this Section 4, every person who is, or has
been, a Trustee, officer, employee or agent of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder,
creditor or otherwise (hereinafter referred to as a Covered Person), shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement
thereof.
No indemnification shall be provided hereunder to a Covered Person:
(a) against any liability to the Trust or its Shareholders by reason of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office;
(b) with respect to any matter as to which he shall have been finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Trust; or
(c) in the event of a settlement or other disposition
not involving a final adjudication (as provided in paragraph (a) or (b)) and resulting in a payment by a Covered Person, unless there has been either a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his office by the court or other body approving the settlement or other disposition or a reasonable determination, based on a review of readily available facts (as opposed to
a full trial-type inquiry), that he did not engage in such conduct:
(i) by a vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
C-2
The rights of indemnification herein provided may be insured against by policies maintained by the
Trust, shall be severable, shall not affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be such a Covered Person and shall inure to the benefit of the heirs,
executors and administrators of such a person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding subject to a claim for indemnification under this
Section 4 shall be advanced by the Trust prior to final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it is ultimately determined that he is not entitled to indemnification under this
Section 4, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate security or
the Trust shall be insured against losses arising out of any such advances; or
(b) a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter) or independent legal counsel in a written opinion shall determine, based upon a review of the readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the recipient ultimately will be found entitled to indemnification.
As used in this Section 4, a Disinterested Trustee is one (x) who is not an Interested Person of the Trust (including, as such
Disinterested Trustee, anyone who has been exempted from being an Interested Person by any rule, regulation or order of the Commission), and (y) against whom none of such actions, suits or other proceedings or another action, suit or other
proceeding on the same or similar grounds is then or has been pending.
As used in this Section 4, the words claim,
action, suit or proceeding shall apply to all claims, actions, suits, proceedings (civil, criminal, administrative or other, including appeals), actual or threatened; and the word liability and
expenses shall include without limitation, attorneys fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
The trustees and officers of the Registrant are covered by Investment Trust Errors and Omission policies in the aggregate amount of $70,000,000
(with a $2,500,000 deductible for operational failures (after the deductible is satisfied, the insurer would cover 80% of any operational failure claims and the Fund would be liable for 20% of any such claims) and $1,000,000 for all other claims)
against liability and expenses of claims of wrongful acts arising out of their position with the Registrant, except for matters which involved willful acts, bad faith, gross negligence and willful disregard of duty (
i.e.,
where the insured
did not act in good faith for a purpose he or she reasonably believed to be in the best interest of the Registrant or where he or she shall have had reasonable cause to believe this conduct was unlawful).
Insofar as the indemnification for liabilities arising under the Securities Act of 1933, as amended, (the 1933 Act) may be permitted to
the officers, trustees or controlling persons of the Registrant pursuant to the Declaration of Trust of the Registrant or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by an officer or
trustee or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such officer, trustee or controlling person in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
C-3
Item 31. Business and Other Connections of Investment Adviser
(a) Nuveen Fund Advisors, Inc. (Nuveen Fund Advisors) (formerly
known as Nuveen Asset Management) manages the Registrant and serves as investment adviser or manager to other open-end and closed-end management investment companies. The principal business address for all of these investment companies and the
persons named below is 333 West Wacker Drive, Chicago, Illinois 60606.
A description of any business, profession, vocation or
employment of a substantial nature in which the directors and officers of Nuveen Fund Advisors who serve as officers or Trustees of the Registrant have engaged during the last two years for his or her account or in the capacity of director, officer,
employee, partner or trustee appears under Management in the Statement of Additional Information. Such information for the remaining senior officers of Nuveen Fund Advisors appears below:
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Name and Position
with Nuveen Fund Advisors
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Other Business, Profession, Vocation or
Employment During Past Two Years
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Thomas J. Schreier, Jr., Co-President
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Vice Chairman, Wealth Management of Nuveen Investments, Inc.; Co-Chief Executive Officer (since 2011) of Nuveen Securities, LLC; Chairman of Nuveen Asset Management, LLC; formerly, Chief
Executive Officer and Chief Investment Officer of FAF Advisors; formerly, President of First American Funds.
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William Adams IV, Co-President
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Senior Executive Vice President, Global Structured Products, formerly, Executive Vice President (1999-2010), of Nuveen Investments, Inc.; Executive Vice President of Nuveen Securities, LLC;
President (since August 2011), formerly, Managing Director (2010-2011) of Nuveen Commodities Asset Management, LLC.
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Sherri A. Hlavacek, Managing Director and Corporate Controller
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Managing Director and Corporate Controller of Nuveen Investments, Inc., Nuveen Securities, LLC, Nuveen Investments Advisers Inc., Nuveen Investments Holdings, Inc.
and of Nuveen Asset Management, LLC (since 2011); Vice President and Controller of NWQ Investment Management Company, LLC, NWQ Holdings, LLC, Santa Barbara Asset Management, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and
Winslow Capital Management, LLC; Certified Public Accountant.
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Mary E. Keefe, Managing Director and Chief Compliance Officer
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Managing Director (since 2004) and Director of Compliance of Nuveen Investments, Inc.; Managing Director and Chief Compliance Officer of Nuveen Securities, LLC,
Nuveen Asset Management, LLC, Nuveen Investments Advisers Inc., Symphony Asset Management LLC and Santa Barbara Asset Management, LLC; Vice President and Assistant Secretary of Winslow Capital Management, LLC and NWQ Holdings,
LLC.
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C-4
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Name and Position
with Nuveen Fund Advisors
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Other Business, Profession, Vocation or
Employment During Past Two Years
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John L. MacCarthy, Director, Executive Vice President and Secretary
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Executive Vice President (since 2008), Secretary and General Counsel (since 2006) of Nuveen Investments, Inc.; Executive Vice President (since 2008) and Secretary
(since 2006) of Nuveen Investments Advisers Inc., Nuveen Investments Holdings, Inc. and (since 2011) of Nuveen Asset Management, LLC; Vice President and Secretary of NWQ Investment Management Company, LLC, Santa Barbara Asset Management, LLC,
Tradewinds Global Investors, LLC and Symphony Asset Management LLC; Director, Vice President and Secretary of Winslow Capital Management, LLC.
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Glenn R. Richter, Director
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Executive Vice President, Chief Operating Officer of Nuveen Investments, Inc. (since 2006); Co-Chief Executive Officer and Chief Operating Officer (since 2011) of Nuveen Securities, LLC;
Executive Vice President of Nuveen Investments Holdings, Inc.; Chief Administrative Officer of NWQ Holdings, LLC.
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(b) Nuveen Asset Management, LLC (Nuveen Asset Management) acts as sub-investment adviser to the
Registrant and also serves as sub-investment adviser to other open-end and closed-end funds and investment adviser to separately managed accounts. The following is a list of the senior officers of Nuveen Asset Management. The principal business
address of each person is 333 West Wacker Drive, Chicago, Illinois 60606.
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Name
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Position and Offices with
Nuveen Asset Management
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Other Business, Profession, Vocation or
Employment During Past Two Years
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Thomas J. Schreier, Jr.
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Chairman
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Vice Chairman, Wealth Management of Nuveen Investments, Inc. (since 2011); Co-President of Nuveen Fund Advisors, Inc.; Co-Chief Executive Officer of Nuveen Securities, LLC; formerly,
Chief Executive Officer and Chief Investment Officer of FAF Advisors, formerly, President, First American Funds.
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William T. Huffman
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President
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Previously, Chief Operating Officer, Municipal Fixed Income (2008-2010) of Nuveen Fund Advisors, Inc.; CPA.
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John L. MacCarthy
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Executive Vice President and Secretary
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Director, Executive Vice President and Secretary of Nuveen Fund Advisors, Inc.; Executive Vice President (since 2008), Secretary and General Counsel (since 2006) of Nuveen Investments, Inc.;
Executive Vice President (since 2008) and Secretary (since 2006) of Nuveen Investments Advisers Inc. and Nuveen Investments Holdings, Inc.; Vice President and Secretary of NWQ Investment Management Company, LLC, Santa Barbara Asset Management, LLC,
Tradewinds Global Investors, LLC and Symphony Asset Management LLC; Director, Vice President and Secretary of Winslow Capital Management, LLC.
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C-5
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Name
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Position and Offices with
Nuveen Asset Management
|
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Other Business, Profession, Vocation or
Employment During Past Two Years
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Charles R. Manzoni, Jr.
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Managing Director, Chief Operating Officer and General Counsel
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Managing Director and General Counsel of Nuveen Securities, LLC; formerly, Chief Risk Officer, and Secretary and General Counsel, director on Board of Directors, FAF
Advisors.
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Sherri A. Hlavacek
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Managing Director and Corporate Controller
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Managing Director and Corporate Controller of Nuveen Securities, LLC, Nuveen Investments, Inc., Nuveen Investments Advisers Inc., Nuveen Investments Holdings, Inc. and (since 2011) Nuveen
Fund Advisors, Inc.; Vice President and Controller of NWQ Investment Management Company, LLC, NWQ Holdings, LLC, Santa Barbara Asset Management, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and Winslow Capital Management,
LLC; Certified Public Accountant.
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Mary E. Keefe
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Managing Director and Chief Compliance Officer
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Managing Director and Chief Compliance Officer (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director (since 2004) and Director of Compliance of Nuveen Investments, Inc.; Managing
Director and Chief Compliance Officer of Nuveen Securities, LLC, Nuveen Investments Advisers Inc., Symphony Asset Management LLC and Santa Barbara Asset Management, LLC; Vice President and Assistant Secretary of Winslow Capital Management, LLC and
NWQ Holdings, LLC.
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Item 32. Principal Underwriters
(a) Nuveen Securities, LLC (Nuveen) acts as principal underwriter to the following open-end management type investment companies: Nuveen Multistate Trust I, Nuveen Multistate Trust II, Nuveen Multistate
Trust III, Nuveen Multistate Trust IV, Nuveen Managed Accounts Portfolios Trust, Nuveen Investment Trust, Nuveen Investment Trust II, Nuveen Investment Trust III, Nuveen Investment Trust V, Nuveen Investment Funds, Inc., Nuveen Strategy Funds, Inc.
and the Registrant.
(b)
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Name and Principal
Business Address
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Positions and Offices
with Nuveen Securities
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Positions and Offices
with Registrant
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William Adams IV
333 West Wacker Drive
Chicago, IL 60606
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Executive Vice President
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None
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Scott S. Grace
333 West Wacker Drive
Chicago, IL 60606
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Managing Director and Treasurer
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Vice President and Treasurer
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Sherri A. Hlavacek
333 West Wacker
Drive
Chicago, IL 60606
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Managing Director and
Corporate Controller
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None
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Carl M. Katerndahl
333 West Wacker Drive
Chicago, IL 60606
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Executive Vice President and
Head of Distribution
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None
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C-6
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Name and Principal
Business Address
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Positions and Offices
with Nuveen Securities
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Positions and Offices
with Registrant
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Mary E. Keefe
333 West Wacker Drive
Chicago, IL 60606
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Managing Director and
Chief Compliance Officer
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None
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Charles R. Manzoni, Jr.
333 West Wacker
Drive
Chicago, IL 60606
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Managing Director and General Counsel
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None
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Kevin J. McCarthy
333 West Wacker Drive
Chicago, IL 60606
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Managing Director and Assistant Secretary
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Vice President and Secretary
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Kathleen L. Prudhomme
901 Marquette
Avenue
Minneapolis, MN 55402
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Managing Director and Assistant Secretary
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Vice President and Assistant Secretary
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Glenn R. Richter
333 West Wacker Drive
Chicago, IL 60606
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Co-Chief Executive Officer and Chief Operating Officer
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None
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Thomas S. Schreier, Jr.
333 West Wacker
Drive
Chicago, IL 60606
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Co-Chief Executive Officer
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None
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Frank M. Wheeler
333 West Wacker Drive
Chicago, IL 60606
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Managing Director and Head of Product and Marketing
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None
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Gifford R. Zimmerman
333 West Wacker Drive
Chicago, IL 60606
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Managing Director and
Assistant Secretary
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Chief Administrative Officer
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(c) Not applicable.
Item 33. Location of Accounts and Records
Nuveen Fund Advisors, 333 West Wacker Drive, Chicago, Illinois 60606, maintains the Declaration of Trust, By-Laws, minutes of trustees and
shareholder meetings and contracts of the Registrant and all advisory material of the investment adviser.
State Street Bank and Trust
Company, P.O. Box 5043, Boston, Massachusetts 02206-5043, currently maintains all general and subsidiary ledgers, journals, trial balances, records of all portfolio purchases and sales, and all other required records not maintained by Nuveen Fund
Advisors.
Boston Financial Data Services, Inc., P.O. Box 8530, Boston, Massachusetts 02266-8530, maintains all the required records in
its capacity as transfer, dividend paying, and shareholder service agent for the Registrant.
Item 34. Management Services
Not applicable.
Item 35. Undertakings
Not applicable.
C-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant has duly caused this post-effective amendment to its registration
statement to be signed on its behalf by the undersigned, duly authorized, in the City of Chicago and State of Illinois, on the 16th day of November, 2012.
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NUVEEN MUNICIPAL TRUST
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By:
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/
S
/ K
EVIN
J.
M
C
C
ARTHY
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Kevin J. McCarthy
Vice President and
Secretary
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Pursuant to the requirements of the Securities Act of 1933, as amended, this post-effective amendment to the registration
statement has been signed below by the following persons in the capacities and on the date indicated.
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Signature
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Title
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Date
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/
S
/ S
TEPHEN
D.
F
OY
S
TEPHEN
D. F
OY
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Vice President and Controller (principal financial and accounting officer)
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November 16, 2012
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/
S
/ G
IFFORD
R. Z
IMMERMAN
G
IFFORD
R. Z
IMMERMAN
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Chief Administrative Officer (principal executive officer)
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November 16, 2012
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R
OBERT
P. B
REMNER
*
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Chairman of the Board and Trustee
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By:
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/
S
/ K
EVIN
J. M
C
C
ARTHY
K
EVIN
J.
M
C
C
ARTHY
Attorney-in-Fact
November 16, 2012
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J
OHN
P. A
MBOIAN
*
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Trustee
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J
ACK
B. E
VANS
*
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Trustee
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W
ILLIAM
C. H
UNTER
*
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Trustee
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D
AVID
J. K
UNDERT
*
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Trustee
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W
ILLIAM
J. S
CHNEIDER
*
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Trustee
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J
UDITH
M. S
TOCKDALE
*
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Trustee
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C
AROLE
E. S
TONE
*
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Trustee
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V
IRGINIA
L. S
TRINGER
*
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Trustee
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T
ERENCE
J. T
OTH
*
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Trustee
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*
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An original power of attorney authorizing, among others, Kevin J. McCarthy and Gifford R. Zimmerman to execute this registration statement, and amendments thereto, for each of
the trustees of the Registrant on whose behalf this registration statement is filed, has been executed and has previously been filed with the Securities and Exchange Commission and is incorporated by reference herein.
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EXHIBIT INDEX