Chairman’s Letter to Shareholders
|
4
|
Portfolio Manager’s Comments
|
5
|
Fund Leverage and Other Information
|
12
|
Common Share Dividend and Price Information
|
15
|
Performance Overviews
|
17
|
Shareholder Meeting Report
|
25
|
Report of Independent Registered Public Accounting Firm
|
31
|
Portfolios of Investments
|
32
|
Statement of Assets and Liabilities
|
76
|
Statement of Operations
|
78
|
Statement of Changes in Net Assets
|
80
|
Statement of Cash Flows
|
83
|
Financial Highlights
|
86
|
Notes to Financial Statements
|
98
|
Board Members and Officers
|
117
|
Reinvest Automatically, Easily and Conveniently
|
122
|
Glossary of Terms Used in this Report
|
124
|
Additional Fund Information
|
127
|
4
|
Nuveen Investments
|
Nuveen Investments
|
5
|
6
|
Nuveen Investments
|
Nuveen Investments
|
7
|
1-Year
|
5-Year
|
10-Year
|
|
Uninsured Funds
|
|||
NCU
|
25.65%
|
6.45%
|
6.66%
|
NAC
|
25.30%
|
5.66%
|
6.53%
|
NVX
|
22.90%
|
6.25%
|
6.69%
|
NZH
|
22.89%
|
4.66%
|
6.06%
|
Standard & Poor’s (S&P) California Municipal Bond Index*
|
14.84%
|
5.17%
|
5.38%
|
Standard & Poor’s (S&P) National Municipal Bond Index*
|
12.87%
|
5.19%
|
5.36%
|
Lipper California Municipal Debt Funds Classification Average*
|
25.87%
|
4.71%
|
6.17%
|
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares.
|
|
For additional information, see the Performance Overview page for your Fund in this report.
|
|
*
|
Refer to Glossary of Terms Used in This Report for definitions.
|
8
|
Nuveen Investments
|
1-Year
|
5-Year
|
10-Year
|
|
Insured Funds
|
|||
NPC
|
24.47%
|
6.31%
|
6.22%
|
NCL
|
25.33%
|
6.30%
|
6.24%
|
NKL
|
24.87%
|
6.59%
|
N/A
|
NKX
|
21.95%
|
5.18%
|
N/A
|
Standard & Poor’s (S&P) California Municipal Bond Index*
|
14.84%
|
5.17%
|
5.38%
|
Standard & Poor’s (S&P) Insured National Municipal Bond Index*
|
13.78%
|
5.24%
|
5.41%
|
Lipper Single-State Insured Municipal Debt Funds Classification Average*
|
21.81%
|
5.94%
|
6.06%
|
Nuveen Investments
|
9
|
•
|
Each Fund eliminated the investment policy requiring it, under normal circumstances, to invest at least 80 percent of its managed assets in municipal securities that are covered by insurance which currently guarantees the timely payment of principal and interest.
|
•
|
Each Fund adopted a new investment policy requiring it, under normal circumstances, to invest at least 80 percent of its managed assets in municipal securities that pay interest exempt from federal and California income tax.
|
10
|
Nuveen Investments
|
•
|
Each Fund eliminated the old fundamental loan policy and adopted a new fundamental loan policy, which states that each Fund may not make loans, except as permitted by the Investment Company Act of 1940, as amended, and exemptive orders granted under the Investment Company Act of 1940, as amended.
|
•
|
Each Fund will continue to invest substantially all (at least 80 percent) of its managed assets in investment grade quality municipal securities.
|
•
|
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX) will continue its policy of investing, under normal circumstances, at least 80% of its assets in AMT-free municipal securities.
|
Acquired Funds
|
Acquiring Fund
|
|
•
|
Nuveen Insured California Premium
|
|
Income Municipal Fund, Inc. (NPC)
|
||
•
|
Nuveen Insured California Premium
|
Nuveen California AMT Free
|
Income Municipal Fund 2, Inc. (NCL)
|
Municipal Income Fund (NKX)
|
|
•
|
Nuveen Insured California Dividend
|
|
Advantage Municipal Fund (NKL)
|
Nuveen Investments
|
11
|
MTP Shares Issued |
Annual
|
NYSE
|
|||||||||||
Fund
|
Series
|
at Liquidation Value |
Interest Rate
|
Ticker
|
|||||||||
NCU
|
2015
|
$
|
35,250,000
|
2.00
|
%
|
NCU PrC
|
|||||||
NVX
|
2014
|
$
|
42,846,300
|
2.35
|
%
|
NVX PrA
|
|||||||
NVX
|
2015
|
$
|
55,000,000
|
2.05
|
%
|
NVX PrC
|
|||||||
NZH
|
2014
|
$
|
27,000,000
|
2.35
|
%
|
NZH PrA
|
|||||||
NZH
|
2014-1
|
$
|
46,294,500
|
2.25
|
%
|
NZH PrB
|
|||||||
NZH
|
2015
|
$
|
86,250,000
|
2.95
|
%
|
NZH PrC
|
12
|
Nuveen Investments
|
VRDP Shares Issued
|
|||
Fund
|
at Liquidation Value
|
||
NPC
|
$
|
42,700,000
|
|
NCL
|
$
|
74,000,000
|
|
NAC
|
$
|
136,200,000
|
|
NKL
|
$
|
104,400,000
|
|
NKX
|
$
|
35,500,000
|
Nuveen Investments
|
13
|
14
|
Nuveen Investments
|
Short-Term Capital Gains
|
|||||||
Long-Term Capital Gains
|
and/or Ordinary Income
|
||||||
Fund
|
(per share)
|
(per share)
|
|||||
NPC
|
$
|
0.0780
|
$
|
0.0240
|
|||
NCL
|
—
|
$
|
0.0118
|
||||
NAC
|
—
|
$
|
0.0045
|
||||
NKL
|
—
|
$
|
0.0053
|
Nuveen Investments
|
15
|
Common Shares
|
% of Outstanding
|
|
Fund
|
Repurchased and Retired
|
Common Shares
|
NPC
|
17,700
|
0.3%
|
NCL
|
55,700
|
0.4%
|
NCU
|
44,500
|
0.8%
|
NAC
|
—
|
—
|
NVX
|
50,700
|
0.3%
|
NZH
|
12,900
|
0.1%
|
NKL
|
32,700
|
0.2%
|
NKX
|
—
|
—
|
2/29/12
|
Twelve-Month Average
|
|
Fund
|
(+)Premium/(-)Discount
|
(-)Discount
|
NPC
|
(+)1.07%
|
(-)2.41%
|
NCL
|
(+)2.54%
|
(-)2.14%
|
NCU
|
(-)1.05%
|
(-)5.57%
|
NAC
|
(+)1.82%
|
(-)3.08%
|
NVX
|
(+)0.58%
|
(-)3.20%
|
NZH
|
(+)3.16%
|
(-)2.08%
|
NKL
|
(+)2.50%
|
(-)1.01%
|
NKX
|
(+)2.24%
|
(-)5.56%
|
16
|
Nuveen Investments
|
NPC
|
Nuveen Insured California
|
|
Performance
|
Premium Income
|
|
OVERVIEW
|
Municipal Fund, Inc.
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
16.06
|
||
Common Share Net Asset Value (NAV)
|
$
|
15.89
|
||
Premium/(Discount) to NAV
|
1.07
|
%
|
||
Market Yield
|
5.42
|
%
|
||
Taxable-Equivalent Yield1
|
8.30
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
102,481
|
||
Leverage
|
||||
Regulatory Leverage
|
29.41
|
%
|
||
Effective Leverage
|
35.25
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 11/19/92)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
29.53
|
%
|
24.47
|
%
|
|||
5-Year
|
7.72
|
%
|
6.31
|
%
|
|||
10-Year
|
6.59
|
%
|
6.22
|
%
|
Portfolio Composition4
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
36.2
|
%
|
||
Tax Obligation/General
|
21.1
|
%
|
||
U.S. Guaranteed
|
18.4
|
%
|
||
Water and Sewer
|
14.6
|
%
|
||
Other
|
9.7
|
%
|
||
Insurers4
|
||||
(as a % of total Insured investments)
|
||||
NPFG5
|
28.5
|
%
|
||
AMBAC
|
25.5
|
%
|
||
FGIC
|
18.8
|
%
|
||
AGM
|
17.3
|
%
|
||
AGC
|
7.7
|
%
|
||
SYNCORA GTY
|
2.2
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
The Fund intends to invest at least 80% of its managed assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Insurance for more information. At the end of the reporting period, 82% of the Fund’s total investments are invested in Insured securities.
|
3
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
4
|
Holdings are subject to change.
|
5
|
MBIA’s public finance subsidiary.
|
6
|
The Fund paid shareholders a net ordinary income distribution and a capital gains distribution in December 2011 of $0.024 and $0.078 per share.
|
Nuveen Investments
|
17
|
NCL
|
Nuveen Insured California
|
|
Performance
|
Premium Income
|
|
OVERVIEW
|
Municipal Fund 2, Inc.
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
15.76
|
||
Common Share Net Asset Value (NAV)
|
$
|
15.37
|
||
Premium/(Discount) to NAV
|
2.54
|
%
|
||
Market Yield
|
5.75
|
%
|
||
Taxable-Equivalent Yield1
|
8.81
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
194,712
|
||
Leverage
|
||||
Regulatory Leverage
|
27.54
|
%
|
||
Effective Leverage
|
36.48
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 3/18/93)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
35.03
|
%
|
25.33
|
%
|
|||
5-Year
|
8.41
|
%
|
6.30
|
%
|
|||
10-Year
|
6.78
|
%
|
6.24
|
%
|
Portfolio Composition4
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
44.3
|
%
|
||
Tax Obligation/General
|
21.4
|
%
|
||
Water and Sewer
|
14.0
|
%
|
||
Utilities
|
5.5
|
%
|
||
Other
|
14.8
|
%
|
||
Insurers4
|
||||
(as a % of total Insured investments)
|
||||
AMBAC
|
29.6
|
%
|
||
AGM
|
20.6
|
%
|
||
FGIC
|
19.0
|
%
|
||
NPFG5
|
17.9
|
%
|
||
AGC
|
12.3
|
%
|
||
SYNCORA GTY
|
0.6
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
The Fund intends to invest at least 80% of its managed assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Insurance for more information. At the end of the reporting period, 90% of the Fund’s total investments are invested in Insured securities.
|
3
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
4
|
Holdings are subject to change.
|
5
|
MBIA’s public finance subsidiary.
|
6
|
The Fund paid shareholders a net ordinary income distribution in December 2011 of $0.0118 per share.
|
18
|
Nuveen Investments
|
NCU
|
Nuveen California
|
|
Performance
|
Premium Income
|
|
OVERVIEW
|
Municipal Fund
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
15.15
|
||
Common Share Net Asset Value (NAV)
|
$
|
15.31
|
||
Premium/(Discount) to NAV
|
-1.05
|
%
|
||
Market Yield
|
5.74
|
%
|
||
Taxable-Equivalent Yield1
|
8.79
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
87,755
|
||
Leverage
|
||||
Regulatory Leverage
|
28.66
|
%
|
||
Effective Leverage
|
36.79
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 6/18/93)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
31.68
|
%
|
25.65
|
%
|
|||
5-Year
|
7.64
|
%
|
6.45
|
%
|
|||
10-Year
|
7.12
|
%
|
6.66
|
%
|
Portfolio Composition3
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
28.8
|
%
|
||
Health Care
|
21.9
|
%
|
||
Tax Obligation/General
|
19.5
|
%
|
||
U.S. Guaranteed
|
7.0
|
%
|
||
Water and Sewer
|
5.0
|
%
|
||
Consumer Staples
|
4.3
|
%
|
||
Other
|
13.5
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
3
|
Holdings are subject to change.
|
Nuveen Investments
|
19
|
NAC
|
Nuveen California
|
|
Performance
|
Dividend Advantage
|
|
OVERVIEW
|
Municipal Fund
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
15.14
|
||
Common Share Net Asset Value (NAV)
|
$
|
14.87
|
||
Premium/(Discount) to NAV
|
1.82
|
%
|
||
Market Yield
|
6.10
|
%
|
||
Taxable-Equivalent Yield1
|
9.34
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
349,203
|
||
Leverage
|
||||
Regulatory Leverage
|
28.06
|
%
|
||
Effective Leverage
|
33.74
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 5/26/99)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
32.82
|
%
|
25.30
|
%
|
|||
5-Year
|
6.16
|
%
|
5.66
|
%
|
|||
10-Year
|
7.43
|
%
|
6.53
|
%
|
Portfolio Composition3
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
26.8
|
%
|
||
Health Care
|
20.6
|
%
|
||
Tax Obligation/General
|
17.5
|
%
|
||
U.S. Guaranteed
|
8.9
|
%
|
||
Water and Sewer
|
6.6
|
%
|
||
Education and Civic Organizations
|
5.4
|
%
|
||
Other
|
14.2
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
3
|
Holdings are subject to change.
|
4
|
The Fund paid shareholders a net ordinary income distribution in December 2011 of $0.0045 per share.
|
20
|
Nuveen Investments
|
NVX
|
Nuveen California
|
|
Performance
|
Dividend Advantage
|
|
OVERVIEW
|
Municipal Fund 2
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
15.58
|
||
Common Share Net Asset Value (NAV)
|
$
|
15.49
|
||
Premium/(Discount) to NAV
|
0.58
|
%
|
||
Market Yield
|
6.16
|
%
|
||
Taxable-Equivalent Yield1
|
9.43
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
228,474
|
||
Leverage
|
||||
Regulatory Leverage
|
29.98
|
%
|
||
Effective Leverage
|
37.66
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 3/27/01)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
30.01
|
%
|
22.90
|
%
|
|||
5-Year
|
7.11
|
%
|
6.25
|
%
|
|||
10-Year
|
7.36
|
%
|
6.69
|
%
|
Portfolio Composition3
|
||||
(as a % of total investments)
|
||||
Health Care
|
17.4
|
%
|
||
Tax Obligation/General
|
16.9
|
%
|
||
Tax Obligation/Limited
|
14.3
|
%
|
||
U.S. Guaranteed
|
13.7
|
%
|
||
Water and Sewer
|
7.2
|
%
|
||
Education and Civic Organizations
|
6.4
|
%
|
||
Transportation
|
6.0
|
%
|
||
Utilities
|
5.9
|
%
|
||
Consumer Staples
|
5.1
|
%
|
||
Other
|
7.1
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
3
|
Holdings are subject to change.
|
Nuveen Investments
|
21
|
NZH
|
Nuveen California
|
|
Performance
|
Dividend Advantage
|
|
OVERVIEW
|
Municipal Fund 3
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
14.35
|
||
Common Share Net Asset Value (NAV)
|
$
|
13.91
|
||
Premium/(Discount) to NAV
|
3.16
|
%
|
||
Market Yield
|
6.27
|
%
|
||
Taxable-Equivalent Yield1
|
9.60
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
335,830
|
||
Leverage
|
||||
Regulatory Leverage
|
32.21
|
%
|
||
Effective Leverage
|
39.27
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 9/25/01)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
31.93
|
%
|
22.89
|
%
|
|||
5-Year
|
5.63
|
%
|
4.66
|
%
|
|||
10-Year
|
6.93
|
%
|
6.06
|
%
|
Portfolio Composition3
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
29.9
|
%
|
||
Health Care
|
22.1
|
%
|
||
U.S. Guaranteed
|
11.3
|
%
|
||
Tax Obligation/General
|
9.2
|
%
|
||
Consumer Staples
|
5.7
|
%
|
||
Education and Civic Organizations
|
4.4
|
%
|
||
Water and Sewer
|
4.3
|
%
|
||
Other
|
13.1
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
3
|
Holdings are subject to change.
|
22
|
Nuveen Investments
|
NKL
|
Nuveen Insured California
|
|
Performance
|
Dividend Advantage
|
|
OVERVIEW
|
Municipal Fund
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
16.42
|
||
Common Share Net Asset Value (NAV)
|
$
|
16.02
|
||
Premium/(Discount) to NAV
|
2.50
|
%
|
||
Market Yield
|
6.07
|
%
|
||
Taxable-Equivalent Yield1
|
9.30
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
244,521
|
||
Leverage
|
||||
Regulatory Leverage
|
29.92
|
%
|
||
Effective Leverage
|
35.05
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 3/25/02)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
34.78
|
%
|
24.87
|
%
|
|||
5-Year
|
7.74
|
%
|
6.59
|
%
|
|||
Since Inception
|
7.35
|
%
|
7.29
|
%
|
Portfolio Composition4
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
32.1
|
%
|
||
Tax Obligation/General
|
27.3
|
%
|
||
Water and Sewer
|
11.8
|
%
|
||
U.S. Guaranteed
|
11.3
|
%
|
||
Health Care
|
5.3
|
%
|
||
Utilities
|
5.2
|
%
|
||
Other
|
7.0
|
%
|
||
Insurers4
|
||||
(as a % of total Insured investments)
|
||||
AGM
|
31.2
|
%
|
||
AMBAC
|
24.7
|
%
|
||
FGIC
|
15.8
|
%
|
||
NPFG5
|
14.8
|
%
|
||
SYNCORA GTY
|
6.6
|
%
|
||
AGC
|
6.6
|
%
|
||
ACA
|
0.3
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
The Fund intends to invest at least 80% of its managed assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Insurance for more information. At the end of the reporting period, 83% of the Fund’s total investments are invested in Insured securities.
|
3
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
4
|
Holdings are subject to change.
|
5
|
MBIA’s public finance subsidiary.
|
6
|
The Fund paid shareholders a net ordinary income distribution in December 2011 of $0.0053 per share.
|
Nuveen Investments
|
23
|
NKX
|
Nuveen Insured California
|
|
Performance
|
Tax-Free Advantage
|
|
OVERVIEW
|
Municipal Fund
|
|
as of February 29, 2012
|
Fund Snapshot
|
||||
Common Share Price
|
$
|
15.06
|
||
Common Share Net Asset Value (NAV)
|
$
|
14.73
|
||
Premium/(Discount) to NAV
|
2.24
|
%
|
||
Market Yield
|
5.66
|
%
|
||
Taxable-Equivalent Yield1
|
8.67
|
%
|
||
Net Assets Applicable to Common Shares ($000)
|
$
|
86,731
|
||
Leverage
|
||||
Regulatory Leverage
|
29.04
|
%
|
||
Effective Leverage
|
34.05
|
%
|
Average Annual Total Returns
|
|||||||
(Inception 11/21/02)
|
|||||||
On Share Price
|
On NAV
|
||||||
1-Year
|
36.10
|
%
|
21.95
|
%
|
|||
5-Year
|
6.54
|
%
|
5.18
|
%
|
|||
Since Inception
|
5.98
|
%
|
6.01
|
%
|
Portfolio Composition4
|
||||
(as a % of total investments)
|
||||
Tax Obligation/Limited
|
34.1
|
%
|
||
Health Care
|
17.4
|
%
|
||
U.S. Guaranteed
|
14.5
|
%
|
||
Tax Obligation/General
|
8.8
|
%
|
||
Water and Sewer
|
7.7
|
%
|
||
Transportation
|
5.9
|
%
|
||
Long-Term Care
|
5.0
|
%
|
||
Other
|
6.6
|
%
|
||
Insurers4
|
||||
(as a % of total Insured investments)
|
||||
AMBAC
|
42.7
|
%
|
||
NPFG5
|
18.9
|
%
|
||
AGM
|
14.7
|
%
|
||
AGC
|
9.2
|
%
|
||
FGIC
|
8.1
|
%
|
||
BHAC
|
5.4
|
%
|
||
SYNCORA GTY
|
1.0
|
%
|
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance Overview page.
|
|
1
|
Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 34.7%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower.
|
2
|
The Fund intends to invest at least 80% of its managed assets in municipal securities that are covered by insurance guaranteeing the timely payment of principal and interest. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Insurance for more information. At the end of the reporting period, 78% of the Fund’s total investments are invested in Insured securities.
|
3
|
Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor’s Group, Moody’s Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below-investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.
|
4
|
Holdings are subject to change.
|
5
|
MBIA’s public finance subsidiary.
|
24
|
Nuveen Investments
|
NPC
|
Shareholder Meeting Report
|
|
NCL
|
||
NCU
|
The annual meeting of shareholders for NCU, NAC, NVX and NZH was held in the offices of Nuveen Investments on November 15, 2011; at this meeting the shareholders were asked to vote on the election of Board Members, the elimination of Fundamental Investment Policies and the approval of new Fundamental Investment Policies. The meeting was subsequently adjourned to December 16, 2011. The meeting for NVX was additionally adjourned to January 31, 2012.
|
|
The annual meeting of shareholders for NPC, NCL, NKL and NKX was held in the offices of Nuveen Investments on February 24, 2012; at this meeting the shareholders were asked to vote on the election of Board Members, the elimination of Fundamental Investment Policies, the approval of new Fundamental Investment Policies and the approval of an Agreement and Plan of Reorganization. The meeting was subsequently adjourned to March 30, 2012.
|
NPC
|
NCL
|
NCU
|
|||||||||||||||||
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
||||||||||||||
To approve the Agreement and Plan of Reorganization.
|
|||||||||||||||||||
For
|
3,291,576
|
427
|
6,573,781
|
740
|
—
|
—
|
|||||||||||||
Against
|
130,991
|
—
|
420,457
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
125,488
|
—
|
269,671
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
1,029,943
|
—
|
2,208,503
|
—
|
—
|
—
|
|||||||||||||
Total
|
4,577,998
|
427
|
9,472,412
|
740
|
—
|
—
|
|||||||||||||
To approve the issuance of additional common shares.
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Against
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
To approve the elimination of the existing fundamental investment policy related to the Fund’s investment of at least 80% of its assets in insured municipal securities.
|
|||||||||||||||||||
For
|
3,140,564
|
427
|
6,453,010
|
740
|
—
|
—
|
|||||||||||||
Against
|
286,637
|
—
|
536,813
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
120,854
|
—
|
274,086
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
1,029,943
|
—
|
2,208,503
|
—
|
—
|
—
|
|||||||||||||
Total
|
4,577,998
|
427
|
9,472,412
|
740
|
—
|
—
|
|||||||||||||
To approve a new fundamental investment policy related to the Fund’s investment of at least 80%of its assets in municipal securities.
|
|||||||||||||||||||
For
|
3,240,899
|
427
|
6,506,979
|
740
|
—
|
—
|
|||||||||||||
Against
|
182,188
|
—
|
505,824
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
124,968
|
—
|
251,106
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
1,029,943
|
—
|
2,208,503
|
—
|
—
|
—
|
|||||||||||||
Total
|
4,577,998
|
427
|
9,472,412
|
740
|
—
|
—
|
|||||||||||||
To approve the elimination of the fundamental policies relating to the Fund’s ability to make loans.
|
|||||||||||||||||||
For
|
3,143,173
|
427
|
6,382,348
|
740
|
3,845,643
|
1,277,924
|
|||||||||||||
Against
|
279,180
|
—
|
563,518
|
—
|
241,976
|
78,621
|
|||||||||||||
Abstain
|
125,702
|
—
|
318,043
|
—
|
102,597
|
14,000
|
|||||||||||||
Broker Non-Votes
|
1,029,943
|
—
|
2,208,503
|
—
|
1,453,355
|
527,864
|
|||||||||||||
Total
|
4,577,998
|
427
|
9,472,412
|
740
|
5,643,571
|
1,898,409
|
|||||||||||||
To approve the new fundamental policy relating to the Fund’s ability to make loans.
|
|||||||||||||||||||
For
|
3,209,392
|
427
|
6,404,965
|
740
|
3,851,482
|
1,277,424
|
|||||||||||||
Against
|
206,961
|
—
|
561,762
|
—
|
238,765
|
79,121
|
|||||||||||||
Abstain
|
131,702
|
—
|
297,182
|
—
|
99,969
|
14,000
|
|||||||||||||
Broker Non-Votes
|
1,029,943
|
—
|
2,208,503
|
—
|
1,453,355
|
527,864
|
|||||||||||||
Total
|
4,577,998
|
427
|
9,472,412
|
740
|
5,643,571
|
1,898,409
|
Nuveen Investments
|
25
|
NPC
|
Shareholder Meeting Report (continued)
|
|
NCL
|
||
NCU
|
NPC
|
NCL
|
NCU
|
|||||||||||||||||
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
||||||||||||||
Approval of the Board Members was reached as follows:
|
|||||||||||||||||||
John P. Amboian
|
|||||||||||||||||||
For
|
5,048,146
|
—
|
10,001,959
|
—
|
5,390,182
|
—
|
|||||||||||||
Withhold
|
141,859
|
—
|
368,152
|
—
|
253,389
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
5,643,571
|
—
|
|||||||||||||
Robert P. Bremner
|
|||||||||||||||||||
For
|
5,049,646
|
—
|
10,002,112
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
140,359
|
—
|
367,999
|
—
|
—
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
—
|
—
|
|||||||||||||
Jack B. Evans
|
|||||||||||||||||||
For
|
5,048,046
|
—
|
10,007,232
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
141,959
|
—
|
362,879
|
—
|
—
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
—
|
—
|
|||||||||||||
William C. Hunter
|
|||||||||||||||||||
For
|
—
|
427
|
—
|
740
|
—
|
1,804,800
|
|||||||||||||
Withhold
|
—
|
—
|
—
|
—
|
—
|
93,609
|
|||||||||||||
Total
|
—
|
427
|
—
|
740
|
—
|
1,898,409
|
|||||||||||||
David J. Kundert
|
|||||||||||||||||||
For
|
5,048,246
|
—
|
10,004,559
|
—
|
5,380,869
|
—
|
|||||||||||||
Withhold
|
141,759
|
—
|
365,552
|
—
|
262,702
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
5,643,571
|
—
|
|||||||||||||
William J. Schneider
|
|||||||||||||||||||
For
|
—
|
427
|
—
|
740
|
—
|
1,804,800
|
|||||||||||||
Withhold
|
—
|
—
|
—
|
—
|
—
|
93,609
|
|||||||||||||
Total
|
—
|
427
|
—
|
740
|
—
|
1,898,409
|
|||||||||||||
Judith M. Stockdale
|
|||||||||||||||||||
For
|
5,041,846
|
—
|
9,999,412
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
148,159
|
—
|
370,699
|
—
|
—
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
—
|
—
|
|||||||||||||
Carole E. Stone
|
|||||||||||||||||||
For
|
5,044,646
|
—
|
10,000,512
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
145,359
|
—
|
369,599
|
—
|
—
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
—
|
—
|
|||||||||||||
Virginia L. Stringer
|
|||||||||||||||||||
For
|
5,048,946
|
—
|
10,002,685
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
141,059
|
—
|
367,426
|
—
|
—
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
—
|
—
|
|||||||||||||
Terence J. Toth
|
|||||||||||||||||||
For
|
5,049,146
|
—
|
10,001,812
|
—
|
5,397,583
|
—
|
|||||||||||||
Withhold
|
140,859
|
—
|
368,299
|
—
|
245,988
|
—
|
|||||||||||||
Total
|
5,190,005
|
—
|
10,370,111
|
—
|
5,643,571
|
—
|
26
|
Nuveen Investments
|
NAC
|
|
NVX
|
|
NZH
|
NAC
|
NVX
|
NZH
|
|||||||||||||||||
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
||||||||||||||
To approve the Agreement and Plan of Reorganization.
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Against
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
To approve the issuance of additional common shares.
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Against
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
To approve the elimination of the existing fundamental investment policy related to the Fund’s investment of at least 80% of its assets in insured municipal securities.
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Against
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
To approve a new fundamental investment policy related to the Fund’s investment of at least 80% of its assets in municipal securities.
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Against
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Abstain
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Broker Non-Votes
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
To approve the elimination of the fundamental policies relating to the Fund’s ability to make loans.
|
|||||||||||||||||||
For
|
10,093,682
|
1,352
|
11,206,563
|
4,025,588
|
16,567,423
|
6,365,782
|
|||||||||||||
Against
|
361,206
|
—
|
725,943
|
251,156
|
875,986
|
282,007
|
|||||||||||||
Abstain
|
371,053
|
—
|
359,582
|
67,330
|
418,253
|
66,400
|
|||||||||||||
Broker Non-Votes
|
3,352,320
|
—
|
3,789,801
|
2,328,989
|
5,570,472
|
2,545,059
|
|||||||||||||
Total
|
14,178,261
|
1,352
|
16,081,889
|
6,673,063
|
23,432,134
|
9,259,248
|
|||||||||||||
To approve the new fundamental policy relating to the Fund’s ability to make loans.
|
|||||||||||||||||||
For
|
10,132,522
|
1,352
|
11,157,230
|
4,003,088
|
16,418,824
|
6,223,102
|
|||||||||||||
Against
|
380,292
|
—
|
753,423
|
273,656
|
1,025,811
|
420,187
|
|||||||||||||
Abstain
|
313,127
|
—
|
381,434
|
67,330
|
417,025
|
70,900
|
|||||||||||||
Broker Non-Votes
|
3,352,320
|
—
|
3,789,802
|
2,328,989
|
5,570,474
|
2,545,059
|
|||||||||||||
Total
|
14,178,261
|
1,352
|
16,081,889
|
6,673,063
|
23,432,134
|
9,259,248
|
Nuveen Investments
|
27
|
NAC
|
Shareholder Meeting Report (continued)
|
|
NVX
|
||
NZH
|
NAC
|
NVX
|
NZH
|
|||||||||||||||||
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
Common and
Preferred
shares voting
together
as a class
|
Preferred
shares voting
together
as a class
|
||||||||||||||
Approval of the Board Members was reached as follows:
|
|||||||||||||||||||
John P. Amboian
|
|||||||||||||||||||
For
|
13,822,072
|
—
|
13,983,321
|
—
|
22,358,217
|
—
|
|||||||||||||
Withhold
|
356,189
|
—
|
1,555,024
|
—
|
1,073,917
|
—
|
|||||||||||||
Total
|
14,178,261
|
—
|
15,538,345
|
—
|
23,432,134
|
—
|
|||||||||||||
Robert P. Bremner
|
|||||||||||||||||||
For
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Withhold
|
—
|
—
|