SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[X]
Registration No. 33-
Pre-Effective Amendment No.--- [_]
Post-Effective Amendment No.
--- [_]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[X]
Registration No. 811-
Amendment No.
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NUVEEN INVESTMENT TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)
333 West Wacker Drive, Chicago, 60606
Illinois (Zip Code)
(Address of Principal Executive
Offices)
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Registrant's Telephone Number, Including Area Code: (312) 917-7700
Copies to:
James J. Wesolowski, Esq.-Vice Cathy G. O'Kelly, Esq.
President and Secretary Vedder, Price, Kaufman & Kammholz
333 West Wacker Drive 222 North LaSalle Street
Chicago, Illinois 60606 Chicago, Illinois 60601
(Name and Address of Agent for Service)
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It is proposed that this filing will become effective (check appropriate box):
[_]
immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph
(a)(1)
[_]
on (date) pursuant to paragraph (b)
[_] 75 days after filing pursuant to par-
agraph (a)(2)
[_]
60 days after filing pursuant to paragraph (a)(1)
on (date) pursuant to paragraph
(a)(2) of Rule 485.
[_]
If appropriate, check the following box:
[_]
This post-effective amendment designates a new effective date for a previ-
ously filed post-effective amendment.
PURSUANT TO RULE 24F-2 OF THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT HEREBY DECLARES THAT AN INDEFINITE NUMBER OF SHARES OF THE TRUST ARE BEING REGISTERED UNDER THE SECURITIES ACT OF 1933. A REGISTRATION FILING FEE OF $500 IS PAID WITH THIS FILING.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGIS- TRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
CONTENTS
OF
REGISTRATION STATEMENT
The Registration Statement comprises the following papers and contents:
The Facing Sheet
Cross-Reference Sheet
Part A-Prospectus for Nuveen Select Stock Fund
Prospectus for Nuveen Balanced Fund
Prospectus for Nuveen Income and Growth Fund
Part B-The Statement of Additional Information
Part C-Other Information
Signatures
Index to Exhibits
Exhibits
NUVEEN INVESTMENT TRUST
CROSS REFERENCE SHEET
PART A--PROSPECTUS
ITEM IN PART A
OF FORM N-1A PROSPECTUS LOCATION
-------------- -------------------
1 Cover Page Cover Page
2 Synopsis Summary of Fund Expenses; How to Determine If
The Fund Is Right For You
3 Condensed Financial Not Applicable
Information
4 General Description of General Information; What Are The Fund's
Registrant Investment Objective and Policies
5 Management of the Fund Summary of Fund Expenses; Who Is Responsible
for the Operation of the Fund; Management of
the Fund; General Information
5A Management's Discussion of Not Applicable
Fund
Performance
6 Capital Stock and Other General Information; Distributions and Taxes
Securities
7 Purchase of Securities Flexible Sales Charge Program; How to Buy Fund
Being Offered Shares; Distribution and Service Plan;
Management of the Fund; Net Asset Value
8 Redemption or Repurchase How to Redeem Fund Shares
9 Pending Legal Proceedings Not Applicable
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PART B--STATEMENT OF ADDITIONAL INFORMATION
ITEM IN PART A LOCATION IN STATEMENT
OF FORM N-1A OF ADDITIONAL INFORMATION
-------------- -------------------------
10 Cover Page Cover Page
11 Table of Contents Cover Page
12 General Information and Not Applicable
History
13 Investment Objectives Investment Policies and Restrictions; Investment
and Policies Policies and Techniques
14 Management of the Fund Management
15 Control Persons and Management
Principal Holders of
Securities
16 Investment Advisory and Fund Manager and Portfolio Manager; Distribution
Other Services and Service Plans; Independent Public Accountants
and Custodian
17 Brokerage Allocation and Portfolio Transactions
Other Practices
18 Capital Stock and Other See "General Information" in the Prospectus
Securities
19 Purchase, Redemption and Additional Information on the Purchase and
Pricing of Redemption of Fund Shares; Distribution and
Securities Service Plans; Net Asset Value
20 Tax Status Tax Matters
21 Underwriters Additional Information on the Purchase and
Redemption of Fund Shares; See "How to Buy
Fund Shares" and "Management of the Funds" in
the Prospectus
22 Calculation of Performance Information
Performance Data
23 Financial Statements Financial Statements
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NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen Select Stock Fund
Prospectus
, 1996
The NUVEEN SELECT STOCK FUND (the "Fund") seeks to provide over time a superior
total return from a diversified portfolio consisting primarily of equity
securities of domestic companies with market capitalizations of at least $500
million. Under normal market conditions, in seeking to enhance returns and to
preserve capital, the Fund may also invest up to 35% of its total assets in
cash and short-term fixed income securities. Over time, this strategy is
designed to enable you to earn greater returns than the Standard & Poor's 500
Stock Index (the "S&P 500") while bearing an equal or lower degree of risk than
the S&P 500.
The Fund has adopted a Flexible Pricing Program, which offers you the
opportunity to purchase Fund shares in the same manner you typically make other
investments. The Program features four alternative ways to purchase Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. The Program is
designed to permit you and your financial adviser to choose the method of
purchasing shares that you believe is most beneficial given the amount of your
purchase and current investment, the length of time you expect to hold your
investment, and other relevant circumstances. See "Flexible Pricing Program,"
"How to Buy Fund Shares" and "Summary of Fund Expenses."
The Fund is a series of the Nuveen Investment Trust (the "Trust"). This
Prospectus contains information you should know before investing in the Fund.
Please retain it for future reference. You can find more detailed information
about the Fund in the Statement of Additional Information dated , 1996,
as amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
of the Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CONTENTS 3 Summary of fund expenses 5 How to determine if the fund is right for you 8 Who is responsible for the operation of the fund? 9 What are the fund's investment objective and policies? 14 Flexible Pricing Program 16 How to buy fund shares 28 Distribution and service plan 29 How to redeem fund shares 33 Management of the fund 36 How the fund shows performance 38 Distributions and taxes 39 Net asset value 40 General information Application |
SUMMARY OF FUND EXPENSES
Shareholder Transaction Expenses (as a percent of offering price)(1) Class A Class B Class C Class R(2) - -------------------------------------------------------------------------------------------- Maximum Sales Charge Imposed 5.25%(3) None None None on Purchases Maximum Sales Charge Imposed None None None None on Reinvested Dividends Exchange Fees None None None None Deferred Sales Charge (as a None(4) Yes(5) Yes(6) None percentage of lesser of pur- chase price or redemption proceeds) |
Annual Fund Operating Expenses
(as a percent of average daily
net assets) Class A Class B Class C Class R
- -----------------------------------------------------------------------------------------
Management Fees .85% .85% .85% .85%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses .10% .10% .10% .10%
-------------- -------------- -------------- --------------
Total Expenses 1.20% 1.95% 1.95% .95%
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(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their
materials for details.
(2) Class R Shares are available for purchase only under certain limited
circumstances, or by specified classes of investors, as described below under
"How to Buy Fund Shares--Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Class A purchases at net asset value of $1 million or more may be subject
to a 1% contingent deferred sales charge if redeemed within 18 months of
purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a
Contingent Deferred Sales Charge of 5% during the first year, 4% during the
second year, 3% during the third and fourth years, 2% during the fifth year,
and 1% during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
Contingent Deferred Sales Charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of average daily net assets to compensate Authorized Dealers for ongoing
account services. In addition, Class B and Class C Shares are subject to annual
distribution fees of .75% to reimburse Nuveen for costs in connection with the
sale of Fund shares. See "Distribution and Service Plan." Long-term holders of
Class A, Class B and Class C Shares may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted under the
National Association of Securities Dealers Rules of Fair Practice.
The purpose of the tables above is to help you understand all expenses and fees that you would bear directly or indirectly as a Fund shareholder. The percentages shown are estimated for the current fiscal year. Actual fees and expenses may be greater or less than those shown.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over various time periods, assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
Class A $ $ $ $
Class B** $ $ $ $
Class C*** $ $ $ $
Class R $ $ $ $
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*This example does not represent past or future expenses,
which may be greater or less than those shown. Moreover, the
Fund's actual rate of return may be greater or less than the
hypothetical 5% return shown in this example. This example
assumes that the percentage amounts listed under Annual
Operating Expenses remain the same in each of the periods.
For additional information about the Fund's fees and
expenses, see "Distribution and Service Plan" and "Management
of the Fund."
**Assumes that the shareholder redeemed on the first day of
the next year and the contingent deferred sales charge was
applied as follows: 1 year (4%) and 3 years (3%). See "How to
Buy Shares--Class B Shares."
***Assumes that the shareholder redeemed on the first day of
the second year and the contingent deferred sales charge was
not applicable for any of the periods shown. See "How to Buy
Shares--Class C Shares."
HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
There are many reasons why you might invest in the Fund.
These may include:
. pursuing a conservative, value-oriented equity strategy as
the core of an overall diversified investment plan
. preserving and building wealth through prudent capital
management
While there can be no assurance that the Fund will enable you to achieve your individual investment goals, it has been designed for investors who have these kinds of investment goals in mind.
In addition, the Fund incorporates the following features and benefits. You should carefully review the more detailed description of these features and benefits elsewhere in the Prospectus to make sure they serve your individual investment goals.
VALUE-ORIENTED INVESTMENT STRATEGY
The Fund's portfolio consists primarily of equity securities of domestic companies with market capitalizations of at least $500 million. Equity securities are selected on the basis of the portfolio manager's evaluation of each security's relative value in terms of projected relative price-earnings ratios and earnings stability, with a clear catalyst for significant price appreciation over a defined time horizon. Under normal market conditions, in seeking to enhance returns and to preserve capital, the Fund may also invest up to 35% of its total assets in cash and short-term fixed income securities. Over time, this strategy is designed to enable you to earn greater returns than the S&P 500 while bearing an equal or lower risk than the S&P 500.
EXPERIENCED MANAGEMENT
Overall management of the Fund is the responsibility of Nuveen Institutional Advisory Corp. ("NIAC"), which oversees the management of the Fund's investment portfolio and administers the Fund's business affairs. NIAC is a wholly- owned subsidiary of John Nuveen & Co. Incorporated ("Nuveen"), which is the principal underwriter of the Fund's shares. Nuveen has sponsored or underwritten over $60 billion of investment company securities. Institutional Capital Corporation ("ICAP") manages the Fund's investment portfolio. ICAP, which was organized in 1970, acts as the investment adviser primarily to institutional clients, and has investment portfolios totaling approximately $5 billion.
LOW MINIMUMS
You can start your investment with a low initial purchase of $1,000 in a particular class. See "How to Buy Fund Shares."
FLEXIBILITY IN PURCHASING FUND SHARES
The Fund has adopted a Flexible Pricing Program, which offers you the opportunity to purchase Fund Shares in the same manner you typically make other investments. The Program features four alternative ways to purchase Fund shares (Classes A, B, C and R), each with a different combination of sales charges, ongoing fees, eligibility requirements, and other features. The Program is designed to permit you and your financial adviser to choose the method of purchasing shares that you believe is most beneficial given the amount of your investment and current holdings of Fund shares, the length of time you expect to hold your investment, and other relevant circumstances. Please refer to "Flexible Pricing Program," "How to Buy Fund Shares" and "How to Redeem Fund Shares" for a discussion of the Program's features and additional information about these four classes of shares.
AUTOMATIC DEPOSIT PLANS
The Fund offers a number of investment options, including automatic deposit, direct deposit and payroll deduction, to help you add to your account on a regular basis.
AUTOMATIC REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares will be reinvested automatically into additional shares of the same class without a sales charge, unless you elect to receive them in cash. Separately, distributions from any Nuveen unit trust (a "Nuveen UIT") may be used to buy Class A Shares without a sales charge at net asset value.
EXCHANGE PRIVILEGE
Shares of a class may be quickly and easily exchanged by telephone, without a sales charge, for shares of the same or equivalent class of another Nuveen Mutual Fund or for shares of certain Nuveen money market funds.
LIQUIDITY
You may redeem all or a portion of your Fund shares on any business day at the net asset value next computed for the class of shares you are redeeming. Class B and Class C Shares, as well as certain Class A purchases of $1 million or more at net asset value, may be subject to a contingent deferred sales charge ("CDSC") upon redemption. Remember that share prices will fluctuate with market conditions and upon redemption may be worth more or less than their original cost. See "How to Redeem Fund Shares."
AUTOMATIC WITHDRAWAL
If you own shares totalling $10,000 or more, you can arrange to have $50 or more sent to you from your account either monthly or quarterly.
TELEPHONE REDEMPTIONS
You may establish free telephone redemption privileges for your account.
RISKS AND SPECIAL CONSIDERATIONS
You should consider certain other factors about the Fund before investing. As with other equity mutual funds, the value of the Fund's investment portfolio will tend to vary with changes in the stock market. Accordingly, the Fund should be considered a long-term investment, designed to provide the best results when held for a multi-year period. The Fund may not be suitable if you have a short-term investment horizon. In addition, investments by the Fund in American Depository Receipts ("ADRs") of foreign companies involve opportunities and risks not typically associated with investing in U.S. companies. There are special risks associated with options and futures transactions. See "What Are the Fund's Investment Objective and Policies?"
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the
services and features offered by the Fund:
ORGANIZATION FUNCTION DUTIES
--------------------------------------------------------------
John Nuveen & Co. Fund Sponsor and Sponsors and manages
Incorporated Principal Underwriter the offering of Fund
("Nuveen") shares
Nuveen Institutional Fund Manager; Oversees the Fund's
Advisory Corp. Administrator portfolio manager,
("NIAC") manages the Fund's
business affairs and
provides day-to-day
administrative
services to the Fund
Institutional Capital Portfolio Manager Manages the Fund's
Corporation ("ICAP") investment portfolio
Shareholder Services, Transfer Agent; Maintains shareholder
Inc. ("SSI") Shareholder Services accounts, handles
Agent; Dividend Paying share redemptions and
Agent exchanges and
dividend payments
The Chase Manhattan Custodian Maintains custody of
Bank, N.A. ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
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WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
INVESTMENT OBJECTIVE
The Fund seeks to provide over time a superior total return from a diversified portfolio consisting primarily of equity securities of domestic companies with market capitalizations of at least $500 million. There is no assurance that this objective will be realized. The Fund's investment objective may not be changed without shareholder approval. Other investment restrictions that may not be changed without shareholder approval are contained in the Statement of Additional Information.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund ICAP will select equity securities on the basis of its
employs a evaluation of each security's relative value in terms of
value-oriented projected relative price/earnings ratios and earnings
strategy when stability, with a clear catalyst for significant price
selecting appreciation over a defined time horizon. When making
equity investment decisions, ICAP develops an economic framework
securities (including an interest rate, inflation, and business cycle
outlook) and analyzes strategic economic and/or industry
themes to identify appropriate investments. ICAP uses a
variety of proprietary research techniques and computer
models to search for equity securities possessing best
relative value based on proprietary price/earnings
projections and analysis of earnings stability. Furthermore,
a clear catalyst, either stock-specific, industry or
economic, which ICAP believes will trigger significant price
appreciation within a definable period must exist. In order
to enhance its internal research, ICAP also utilizes a wide
variety of external sources for investment information
including recognized strategists, economists, technical and
fundamental analysts, corporate executives, and industry
sources.
For each investment, ICAP establishes an upside price target
and a downside risk potential. This strategy allows for
continuous monitoring of fundamental conditions and stock
price performance. Although ICAP typically expects the
investment potential of each investment to be realized over a
nine to eighteen month time period, it is not unusual for
equities to be held for a longer period if the potential is
justified. Investments that underperform the market are
reviewed intensively. If the risk/reward of a particular
investment becomes unattractive or the reasons for owning the
security no longer appear valid, the investment is typically
sold expeditiously to avoid future underperformance.
The Fund also In addition to investments in equity securities, in order to
invests in preserve capital and to enhance returns, under normal market
fixed-income conditions the Fund may invest up to 35% of its total assets
securities in in cash and short-term fixed income securities, and may
order to invest up to 100% of its assets in such instruments as a
reduce risk temporary defensive measure. Over time,
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this strategy is designed to provide the potential for
earning greater returns than the S&P 500 while bearing an
equal or lower degree of risk.
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DESCRIPTION OF THE FUND'S INVESTMENTS
Equity Under normal market conditions, the Fund will invest
Securities primarily in equity securities of domestic companies with
market capitalizations of at least $500 million, which
include, but are not limited to, common stocks; preferred
stocks; warrants to purchase common stocks or preferred
stocks; and securities convertible into common or preferred
stocks, such as convertible bonds and debentures. Such
convertible securities must be rated Baa or higher by Moody's
Investors Service ("Moody's") or BBB or higher by Standard &
Poor's ("S&P"), Duff & Phelps, Inc. ("D&P") or Fitch
Investors Service, Inc. ("Fitch"). Bonds rated Baa or BBB,
although considered investment grade, have speculative
characteristics and may be subject to greater fluctuations in
value than higher-rated bonds. For a more extensive
discussion of ratings, see the Statement of Additional
Information. In addition, the Fund may invest in equity
securities of foreign issuers through investments in American
Depository Receipts (ADRs).
Short-Term The Fund may invest up to 35% of its total assets in cash and
Fixed Income short-term fixed income securities. In addition, when ICAP
Securities believes that market conditions warrant, the Fund may invest
up to 100% of its assets in such instruments for temporary
defensive purposes. Short-term fixed income securities must
be issued by issuers having a long-term rating of at least A
or higher by S&P, Moody's or Fitch or A- or higher by D&P,
and have a maturity of one year or less from the date of
purchase. Such securities include, without limitation, the
following: U.S. government securities that are either issued
or guaranteed by the U.S. Treasury or by U.S. governmental
agencies or instrumentalities; certificates of deposit; bank
time deposits; bankers' acceptances; commercial paper rated
A-1 or better by S&P, Prime-1 or better by Moody's, Duff 2 or
higher by D&P, or Fitch 2 or higher by Fitch; or repurchase
agreements entered into only with respect to obligations of
the U.S. government, its agencies or instrumentalities.
Repurchase agreements could involve certain risks in the
event of the default or insolvency of the other party to the
agreement, including possible delays or restrictions upon a
Fund's ability to dispose of the underlying securities.
When-Issued The Fund may invest without limitation in securities
Securities purchased on a when-issued or delayed delivery basis ("When-
Issued Securities"). Although the payment and terms of these
securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and
paid for at a future date,
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generally within 45 days. Purchasing When-Issued Securities
allows the Fund to lock in a fixed price on a security it
intends to purchase. The Fund will segregate and maintain
cash, cash equivalents, U.S. government securities, or other
high-quality, liquid debt securities in an amount at least
equal to the amount of outstanding commitments for When-
Issued Securities at all times. Such securities involve a
risk of loss if the value of the security to be purchased
declines prior to the settlement date.
ADRs The Fund may invest in ADRs or other instruments denominated
in U.S. dollars that permit indirect investment in foreign
securities. Foreign investments are limited to 20% of net
assets. ADRs are receipts typically issued by a U.S. bank or
trust company evidencing ownership of the underlying foreign
security and denominated in U.S. dollars. ADRs do not
eliminate all the risk inherent in investing in foreign
issuers, such as changes in foreign currency exchange rates.
However, by investing in ADRs rather than directly in foreign
issuers' stock, the Fund avoids currency risks during the
settlement period.
Investments in securities of foreign issuers involve risks
that are in addition to the usual risks inherent in domestic
investment, including currency risks. The U.S. Dollar value
of a foreign security tends to decrease when the value of the
U.S. Dollar rises against the foreign currency in which the
security is denominated and tends to increase when the value
of the U.S. Dollar falls against such currency. Some
institutions issuing ADRs may not be sponsored by the issuer.
Unsponsored ADRs are affected by the fact that in many
countries there is less publicly available information about
issuers than is available in the reports and ratings
published about companies in the U.S. and companies may not
be subject to uniform accounting, auditing and financial
reporting standards. Other risks inherent in foreign
investment include expropriation; confiscatory taxation;
withholding taxes on dividends and interest; less extensive
regulation of foreign brokers, securities markets and
issuers; diplomatic developments; and political or social
instability. Foreign economies may differ favorably or
unfavorably from the U.S. economy in various respects, and
many foreign securities are less liquid and their prices tend
to be more volatile than comparable U.S. securities. From
time to time, foreign securities may be difficult to
liquidate rapidly without adverse price effects.
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CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
Options and The Fund may engage in options and futures transactions,
Futures which are sometimes referred to as derivative transactions.
Transactions The Fund's options and futures transactions may include
instruments such as stock index options and futures
contracts. Such transactions may be used for several reasons,
including hedging unrealized portfolio gains. The Fund will
only engage in futures and options transactions that,
pursuant to regulations promulgated by the Commodity Futures
Trading Commission (the "CFTC"), constitute bona fide hedging
or other permissible risk management transactions and will
not enter into such transactions if the sum of the initial
margin deposits and premiums paid for unexpired options
exceeds 5% of the Fund's total assets. In addition, the Fund
will not enter into options and futures transactions if more
than 30% of the Fund's net assets would be committed to such
instruments. The ability of the Fund to benefit from options
and futures is largely dependent upon ICAP's ability to
correctly use such instruments, which may involve skills
different from those associated with managing securities
generally. The Fund could lose money on a futures transaction
or an option could expire worthless, as well as the Fund
suffering a loss on the value of its portfolio assets. For a
further discussion of options and futures transactions,
please see the Statement of Additional Information.
Lending of The Fund may lend its portfolio securities, up to 33 1/3% of
Portfolio its total assets, to broker-dealers or institutional
Securities investors. The loans will be secured continuously by
collateral at least equal to the value of the securities lent
by "marking to market" daily. The Fund will continue to
receive the equivalent of the interest or dividends paid by
the issuer of the securities lent and will retain the right
to call, upon notice, the lent securities. The Fund may also
receive interest on the investment of the collateral or a fee
from the borrower as compensation for the loan. As with other
extensions of credit, there are risks of delay in recovery or
even loss of rights in the collateral should the borrower of
the securities fail financially. However, loans will be made
only to firms deemed by the portfolio manager to be of good
standing.
Illiquid The Fund may invest up to 10% of its net assets in illiquid
Securities securities, which include, but are not limited to, restricted
securities (securities the disposition of which is restricted
under the federal securities laws); securities that may be
resold pursuant to Rule 144A under the Securities Act of 1933
but that are deemed to be illiquid; and repurchase agreements
with maturities in excess of seven days.
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Portfolio Under normal market conditions, the Fund anticipates that its
Turnover annual portfolio turnover rate will be between 100% and 125%,
and will generally not exceed 150%. A turnover rate of 100%
would occur, for example, if all of the securities held by a
Fund were replaced within one year.
Other The Fund will not invest more than 5% of its net assets in
Investment any one of the following types of investments: warrants;
Policies and unseasoned companies; and transactions in short sales against
Restrictions the box. In addition, the Fund has adopted several
restrictions on the investments and other activities of the
Fund that may not be changed without shareholder approval.
For example, the Fund may not:
. With respect to 75% of its total assets, purchase the
securities of any issuer (except securities issued or
guaranteed by the U.S. government or any agency or
instrumentality thereof) if, as a result, (i) more than 5%
of the Fund's total assets would be invested in securities
of that issuer, or (ii) the Fund would hold more than 10%
of the outstanding voting securities of that issuer.
. Borrow money, except that the Fund may (i) borrow money
from banks for temporary or emergency purposes (but not for
leverage or the purchase of investments) and (ii) make
other investments or engage in other transactions
permissible under the Investment Company Act of 1940 that
may involve a borrowing, provided that the combination of
(i) and (ii) shall not exceed 33 1/3% of the value of the
Fund's total assets (including the amount borrowed), less
the Fund's liabilities (other than borrowings).
If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage beyond
the specified limit resulting from a change in values or
assets will not be considered a violation.
Except as specifically noted above or in the Statement of
Additional Information, the Fund's investment policies are
not fundamental and may be changed without shareholder
approval. For a more complete description of investment
restrictions that may be changed without a shareholder vote,
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see the Statement of Additional Information.
FLEXIBLE PRICING PROGRAM
The Fund The Fund has adopted a Flexible Pricing Program that offers offers various you four alternative ways to purchase Fund shares (Classes A, methods of B, C and R), each with a different combination of sales purchasing charges, ongoing fees, eligibility requirements, and other shares which features. The Program is designed to permit you and your are designed financial adviser to choose the method of purchasing shares to meet your that you believe is most beneficial given the amount of your individual investment and current holdings of Fund shares, the length of investment time you expect to hold your investment, and other relevant needs and circumstances. A summary of the four alternatives is set |
preferences forth below:
UP-FRONT CONTINGENT DEFERRED ANNUAL 12B-1 ANNUAL 12B-1
SALES CHARGE SALES CHARGE ("CDSC") DISTRIBUTION FEE SERVICE FEE
-------------------------------------------------------------------
Class A 5.25%(1) None(2) None .25%
Class B None 5%(3) .75%(4) .25%
Class C None 1%(5) .75% .25%
Class R None None None None
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(1) Maximum up-front sales charge, which is reduced for
purchases of $50,000 or more. Up-front sales charge may be
reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1
million or more may be subject to a 1% CDSC if redeemed
within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six
years.
(4) Class B Shares convert to Class A Shares after eight
years, which reduces the ongoing expenses borne by an
investor.
(5) CDSC is applicable to shares redeemed within 12 months of
purchase.
For more information regarding features of each class, see
"How to Buy Fund Shares," "How to Redeem Fund Shares" and
"Distribution and Service Plan" below.
Which Option When you purchase Class A Shares, you will normally pay an
is Right For up-front sales charge. As a result, you will have less money
You? invested initially and you will own fewer Class A Shares than
you would in the absence of an up-front sales charge.
Alternatively, when you purchase Class B or Class C Shares,
you will not pay an up-front sales charge and all of your
monies will be fully invested at the time of purchase.
However, Class B and Class C Shares are subject to an annual
distribution fee which constitutes an asset-based sales
charge whose purpose is the same as an up-front sales charge.
In addition, Class B Shares when redeemed are subject to a
CDSC, which will vary depending on the length of time you
owned your shares. Class B Shares automatically convert to
Class A Shares eight years after purchase, which reduces the
annual expenses borne by an investor. Class C Shares are
subject to a CDSC of 1% if redeemed within 12 months of
purchase. 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. Class A, Class B and Class C Shares
are
subject to annual service fees, which are identical in amount
and are used to
14
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compensate Authorized Dealers for providing you with ongoing
account services. You may qualify for a reduced sales charge
or a sales charge waiver on a purchase of Class A Shares, as
described below under "How the Sales Charge on Class A Shares
May Be Reduced or Waived." Class R Shares are available for
purchase at a price equal to their net asset value, but only
under certain circumstances or for certain categories of
investors, as described below under "How to Buy Fund Shares--
Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or
Class R Shares, you should consider all relevant factors,
including the dollar amount of your purchase, the length of
time you expect to hold the shares and whether a CDSC would
apply, the amount of any applicable up-front sales charge,
the amount of any applicable distribution or service fees
that may be incurred while you own the shares, whether or not
you will be reinvesting income or capital gain distributions
in additional shares, whether or not you meet applicable
eligibility requirements or qualify for a sales charge waiver
or reduction, and the relative level of services that your
financial adviser may provide to different classes.
Authorized Dealers and other persons distributing the Fund's
shares may receive different compensation for selling
different classes of shares.
Differences Each class of shares represents an interest in the same
Between portfolio of investments. Each class of shares is identical
the Classes of in all respects except that each class has its own sales
Shares charge structure, each class bears its own class expenses,
including distribution and service expenses, and each class
has exclusive voting rights with respect to any distribution
or service plan applicable to its shares. In addition, the
Class B Shares are subject to a conversion feature. As a
result of the differences in the expenses borne by each class
of shares, and differences in the purchase and redemption
activity for each class, net income per share, dividends per
share and net asset value per share will vary among the
Fund's classes of shares.
Dealer Upon notice to all Authorized Dealers, Nuveen may reallow to
Incentives Authorized Dealers electing to participate up to the full
applicable Class A Share sales charge during periods and for
transactions specified in the notice. The reallowances made
during these periods may be based upon attainment of minimum
sales levels. Further, Nuveen may from time to time make
additional reallowances only to certain Authorized Dealers
who sell or are expected to sell certain minimum amounts of
the Fund or other Nuveen Mutual Funds and Nuveen UITs during
specified time periods. Nuveen will reimburse the Authorized
Dealer for up to one-half of specified media costs incurred
in the placement of advertisements which jointly feature the
Authorized Dealer and Nuveen Funds and Nuveen unit trusts.
15
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Such reimbursement to the Authorized Dealer will be based on
the number of its financial advisers who have sold Nuveen
Fund shares and unit trust units during the prior calendar
year according to an established schedule. The staff of the
Securities and Exchange Commission takes the position that
dealers who receive 90% or more of the applicable sales
charge may be deemed underwriters under the Securities Act of
1933, as amended.
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HOW TO BUY FUND SHARES
CLASS A SHARES
Class A Shares You may purchase Class A Shares at a public offering price
are offered at equal to the applicable net asset value per share plus an up-
their net front sales charge imposed at the time of purchase as set
asset value forth below. You may qualify for a reduced sales charge, or
plus an up- the sales charge may be waived in its entirety, as described
front sales below under "How the Up-Front Sales Charge on Class A Shares
charge May Be Reduced or Waived." Class A Shares are also subject to
an annual service fee of .25%. See "Flexible Pricing Program"
and "Distribution and Service Plan."
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The up-front sales charges for Class A Shares are as follows:
SALES CHARGE AS SALES CHARGE AS REALLOWANCE AS
% OF PUBLIC % OF NET % OF PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
-----------------------------------------------------------------
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less than
$100,000 4.25% 4.44% 4.00%
$100,000 but less than
$250,000 3.50% 3.63% 3.25%
$250,000 but less than
$500,000 2.75% 2.83% 2.50%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%*
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*Authorized Dealers are eligible to receive a commission from Nuveen as discussed below.
The Fund receives the entire net asset value of all Class A Shares that are sold. Nuveen retains the full applicable sales charge from which it pays the uniform reallowances shown above to Authorized Dealers. See "Flexible Pricing Program--Dealer Incentives" above for more information about reallowances and other compensation to Authorized Dealers.
Certain commercial banks may make Class A Shares of the Fund available to their customers on an agency basis. Pursuant to the agreements between Nuveen and these banks, some or all of the sales charge paid by a bank customer in connection with a purchase of Class A Shares may be retained by or paid to the bank. Certain banks and other financial institutions may be required to register as securities dealers in certain states.
Class A Share Class A Share purchases of $1 million or more are sold at net
purchases of asset value without an up-front sales charge. Nuveen pays
$1 million and Authorized Dealers of record on such Class A Share purchases
over may be a commission of up to 1.00% of the amount of the purchase. If
subject to a such shares are redeemed within 18 months of purchase, a CDSC
CDSC of 1% of the lower of the purchase price or the redemption
proceeds may be imposed upon the redemption. Shares purchased
by investors investing $1 million or more who have made
arrangements with Nuveen and whose dealer of record waived
the commission are not subject to the CDSC.
[HOW THE UP-FRONT SALES CHARGE MAY BE REDUCED OR WAIVED]
There are There are several ways to reduce or eliminate the up-front
several ways sales charge:
to reduce or . cumulative discount;
eliminate the . letter of intent;
up-front sales . purchases with monies representing distributions from
charge Nuveen-sponsored UITs;
. group purchase programs;
. reinvestment of redemption proceeds from non-affiliated
funds; and
. special sales charge waivers for certain categories of
investors.
Cumulative You may qualify for a reduced sales charge as shown above on
Discount a purchase of Class A Shares if the amount of your purchase,
when added to the value that day of all of your prior
purchases of shares of the Fund or of another Nuveen Mutual
Fund, or units of a Nuveen UIT, on which an up-front sales
charge or ongoing distribution fee is imposed, falls within
the amounts stated in the table. You or your financial
adviser must notify Nuveen or SSI 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.
Letter of You may qualify for a reduced sales charge on a purchase of
Intent Class A Shares 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 above.
In order to take advantage of this option, you must complete
the applicable section of the Application Form or sign and
deliver either to an Authorized Dealer or to SSI a written
Letter of Intent in a form acceptable to Nuveen. A Letter of
Intent states that you intend, but are not obligated, over
the next 13 months to purchase a stated total amount of Class
A Shares that would qualify you for a reduced sales charge
shown above. You may count shares of a Nuveen Mutual Fund
that you already own on which you paid an
17
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up-front sales charge or an ongoing distribution fee and any
Class B and Class C 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 UIT, or
otherwise.
By establishing a Letter of Intent, you agree that your first
purchase of Class A Shares 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, exceed the amount specified in
your Letter of Intent and thereby qualify for a lower sales
charge than the sales charge specified in your Letter of
Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher
sales charge paid will be used to purchase additional Class A
Shares on your behalf. If the total purchases, less
redemptions, are less than the amount specified, you must pay
Nuveen an amount equal to the difference between the amounts
paid for these purchases and the amounts that 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 Nuveen or your financial adviser, Nuveen 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 Nuveen 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 adviser must notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
Reinvestment You may purchase Class A Shares without an up-front sales
of Nuveen UIT charge by reinvestment of distributions from any of the
Distributions various unit trusts sponsored by Nuveen. There is no initial
or subsequent minimum investment requirement for such
reinvestment purchases.
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Group Purchase If you are a member of a qualified group, you may purchase
Programs Class A Shares of the Fund or of another Nuveen Mutual Fund
at the reduced sales charge applicable to the group's
purchases taken as a whole. A "qualified group" is one which
has been in existence for more than six months, has a purpose
other than investment, has five or more participating
members, has agreed to include Fund sales publications in
mailings to members and has agreed to comply with certain
administrative requirements relating to its group purchases.
Under any group purchase program, the minimum monthly
investment in Class A Shares of any particular fund or
portfolio by each participant is $25, and the minimum monthly
investment in Class A Shares of any particular fund or
portfolio for all participants in the program combined is
$1,000. No certificates will be issued for any participant's
account. All dividends and other distributions by the Fund
will be reinvested in additional Class A Shares of the Fund.
No participant may utilize a systematic withdrawal program.
To establish a group purchase program, both the group itself
and each participant must fill out special application
materials, which the group administrator may obtain from the
group's financial adviser, by checking the applicable box on
the enclosed Application Form or by calling Nuveen toll-free
at 800-621-7227. See the Statement of Additional Information
for more complete information about "qualified groups" and
group purchase programs.
Reinvestment You may also purchase Class A Shares at net asset value
of Redemption without a sales charge if the purchase takes place through a
Proceeds from broker-dealer and represents the reinvestment of the proceeds
Unaffiliated of the redemption of shares of one or more registered
Funds investment companies not affiliated with Nuveen. You must
provide appropriate documentation that the redemption
occurred not more than 60 days prior to the reinvestment of
the proceeds in Class A Shares, and that you either paid an
up-front sales charge or were subject to a contingent
deferred sales charge in respect of the redemption of such
shares of such other investment company.
Special Sales Class A Shares of the Fund may be purchased at net asset
Charge Waivers value without a sales charge and in any amount by: officers,
trustees and retired trustees of the Trust; bona fide, full-
time and retired employees of Nuveen or ICAP, any parent
company of Nuveen, and subsidiaries thereof, or their
immediate family members (as defined below); any person who,
for at least 90 days, has been an officer, director or bona
fide employee of any Authorized Dealer, or their immediate
family members; officers and directors of bank holding
companies that make Fund shares available directly or
19
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through subsidiaries or bank affiliates; bank or broker-
affiliated trust departments; clients of broker-dealers that
sponsor mutual fund purchase programs on a periodic fee,
asset-based fee or no transaction fee basis; and clients of
investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for
their services. For further details about these special
categories and their eligibility requirements, please consult
your financial adviser or consult the Statement of Additional
Information, or call Nuveen at 800-621-7227.
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
adviser must notify Nuveen or SSI whenever you make a
purchase of Class A Shares that you wish to be covered under
these special sales charge waivers. All purchases under the
Special Sales Charge Waivers will be subject to minimum
purchase requirements as established by the Fund. All of the
above categories of investors are also eligible to purchase
Class R Shares, as described below under "Class R Shares."
Finally, Class A Shares may be issued at net asset value
without a sales charge in connection with the acquisition by
the Fund of another investment company.
In general In determining the amount of your purchases of Class A Shares
that may qualify for a reduced sales charge, the following
purchases may be combined: (1) all purchases by a trustee or
other fiduciary for a single trust estate or fiduciary
account; (2) all purchases by individuals and their immediate
family members (i.e., their spouses and their children under
21 years of age); or (3) all purchases made through a group
purchase program as described above.
The reduced sales charge programs may be modified or
discontinued by the Fund at any time upon prior written
notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR
REDUCED SALES CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED
APPLICATION FORMS, CALL NUVEEN TOLL-FREE AT 800-621-7227.
CLASS B SHARES
Class B Shares You may purchase Class B Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Since Class B Shares are sold without
their net an initial sales charge, the full amount of your purchase
asset value, payment will be invested in Class B Shares. Class B Shares
but are are subject to an annual distribution fee to compensate
subject to an Nuveen for its costs in connection with the sale of Class B
annual shares, and are also subject to an annual service fee to
distribution compensate Authorized Dealers for providing you with ongoing
fee and a CDSC financial advice and other account services.
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You may be subject to a CDSC if you redeem your Class B shares within a specified period after purchase, as shown in the table below. See "Flexible Pricing Program" and "Distribution and Service Plan." Nuveen compensates Authorized Dealers for sales of Class B Shares at the time of sale at the rate of 4.00% of the amount of Class B Shares purchased, which represents a sales commission of 3.75% plus an advance on the first year's annual service fee of .25%.
If redeemed prior to the end of the sixth year after purchase, Class B Shares may be subject to a CDSC, as set forth below:
YEARS SINCE
PURCHASE CDSC
------------------------------------------------------
0-1 5%
1-2 4%
2-3 3%
3-4 3%
4-5 2%
5-6 1%
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Class B Shares acquired through the reinvestment of dividends
are not subject to a CDSC. Any CDSC will be imposed on the
lower of the redeemed shares' cost or net asset value at the
time of redemption. For more information regarding the
imposition of the CDSC, see "How to Redeem Fund Shares--Class
B Shares," below.
Class B Shares Class B Shares will automatically convert to Class A Shares
automatically eight years after purchase. All conversions will be done at
convert to net asset value without the imposition of any sales load,
Class A Shares fee, or other charge, so that the value of each shareholder's
eight years account immediately before conversion will be the same as the
after purchase value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions will
convert into Class A Shares based on the date of the initial
purchase to which such shares relate. For this purpose, Class
B Shares acquired through reinvestment of distributions will
be attributed to particular purchases of Class B Shares in
accordance with such procedures as the Board of Trustees may
determine from time to time. Class B Shares that are
converted to Class A Shares will remain subject to an annual
service fee that is identical in amount for both Class B
Shares and Class A Shares. Since net asset value per share of
the Class B Shares and the Class A Shares may differ at the
time of conversion, a shareholder
may receive more or fewer Class A Shares than the number of
Class B Shares converted. Any conversion of Class B Shares
into Class A Shares will be subject to
21
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the continuing availability of an opinion of counsel or a
private letter ruling from the Internal Revenue Service to
the effect that the conversion of shares would not constitute
a taxable event under federal income tax law. Conversion of
Class B Shares into Class A Shares might be suspended if such
an opinion or ruling were no longer available.
CLASS C SHARES
Class C Shares You may purchase Class C Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Class C Shares are subject to an
their net annual distribution fee to compensate Nuveen for its costs in
asset value, connection with the sale of Class C Shares. Class C Shares
but are are also subject to an annual service fee of .25% to
subject to an compensate Authorized Dealers for providing you with ongoing
annual financial advice and other account services. Nuveen
distribution compensates Authorized Dealers for sales of Class C Shares at
fee the time of the sale at a rate of 1% of the amount of Class C
Shares purchased, which represents a sales commission of .75%
plus an advance on the first year's annual service fee of
.25%. See "Flexible Pricing Program" and "Distribution and
Service Plan."
Redemptions of Class C Shares within 12 months of purchase
may be subject to a CDSC of 1% of the lower of the purchase
price or redemption proceeds. See "How to Redeem Fund
Shares--Class C Shares."
CLASS R SHARES
Class R Shares If you are making a purchase of $1 million or more of Fund
are offered at shares in a single transaction, you may purchase Class R
their net shares at a public offering price equal to the applicable net
asset value asset value per share without any up-front sales charge or
only under ongoing distribution or service fees. You also may purchase
limited Class R Shares subject only to the Fund's minimum investment
circumstances requirement of $1,000 if you are within the following
or to specified categories of investors who are eligible to
specified purchase Class A Shares at net asset value without an up-
classes of front sales charge: officers, trustees and retired trustees
investors of the Trust; bona fide, full-time and retired employees of
Nuveen or ICAP, any parent company of Nuveen, and
subsidiaries thereof, or their immediate family members; any
person who, for at least 90 days, has been an officer,
director or bona fide employee of any Authorized Dealer, or
their immediate family members; officers and directors of
bank holding companies that make Fund shares available
directly or through subsidiaries or bank affiliates; bank or
broker-affiliated trust departments; clients of broker-
dealers that sponsor mutual fund purchase programs on a
periodic fee, asset-based fee or no transaction fee basis;
and clients of investment advisers, financial planners or
other financial intermediaries that charge
22
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periodic or asset-based fees for their services. For further
details about these special categories and their eligibility
requirements, please consult your financial adviser or the
Statement of Additional Information, or call Nuveen at 800-
621-7227.
If you are eligible to purchase either Class R 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 Authorized Dealers for providing you with
ongoing account services. Class R Shares are not subject to a
distribution or service fee and, consequently, holders of
Class R Shares may not receive the same types or levels of
services from Authorized Dealers. In choosing between Class A
Shares and Class R Shares, you should weigh the benefits of
the services to be provided by Authorized Dealers against the
annual service fee imposed upon the Class A Shares.
INITIAL AND SUBSEQUENT PURCHASES OF SHARES
The Fund You may buy Fund shares through Authorized Dealers or by
offers a calling or directing your financial adviser to call Nuveen
number of toll-free at 800-843-6765. You may pay for your purchase by
convenient Federal Reserve draft or by check made payable to "Nuveen
ways to Select Stock Fund, Class [A], [B], [C], [R]," delivered to
purchase the financial adviser through whom the investment is to be
shares made for forwarding to the Fund's shareholder services agent,
SSI. When making your initial investment, you must also
furnish the information necessary to establish your Fund
account by completing and enclosing with your payment the
attached Application Form. After your initial investment, you
may make subsequent purchases at any time by forwarding to
SSI a check in the amount of your purchase made payable to
"Nuveen Select Stock Fund, Class [A], [B], [C], [R]," and
indicating on the check your account number. All payments
must be in U.S. dollars and should be sent directly to SSI at
its address listed on the back cover of this Prospectus. A
check drawn on a foreign bank or payable other than to the
order of the Fund generally will not be acceptable. You may
also wire Federal Funds directly to SSI, but you may be
charged a fee for this. For instructions on how to make Fund
purchases by wire transfer, call Nuveen toll-free at
800-621-7227.
PURCHASE PRICE
The price at which you purchase Fund shares is based on the
next calculation of the Fund's net asset value after the
order is placed. The Fund's net asset value per share is
determined as of the close of trading (currently 4:00 p.m.
Eastern Time) on each day the New York Stock Exchange is open
for business. See "Net Asset Value," below for a description
of how net asset value is calculated.
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MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's shares must be for $1,000 or more. Additional purchases may be in amounts of $100 or more. These minimums may be changed at any time by the Fund. There are exceptions to these minimums for shareholders who qualify under one or more of the Fund's automatic deposit, group purchase or reinvestment programs.
SYSTEMATIC INVESTMENT PROGRAMS
The Fund The Fund offers you several opportunities to capture the
offers several benefits of "dollar cost averaging" through systematic
ways to make investment programs. In a regularly followed dollar cost
systematic averaging program, you would purchase more shares when Fund
investments share prices are lower and fewer shares when Fund share
prices are higher, so that the average price paid for Fund
shares is less than the average price of the Fund shares over
the same time period. Dollar cost averaging does not assure
profits or protect against losses in a steadily declining
market. Since dollar cost averaging involves continuous
investment regardless of fluctuating price levels, you should
consider your financial ability to continue investing in
declining as well as rising markets before deciding to invest
in this way. The Fund offers two different types of
systematic investment programs:
Automatic Once you have established a Fund account, you may make
Deposit Plan regular investments in an amount of $25 or more each month by
authorizing SSI to draw preauthorized checks on your bank
account. There is no obligation to continue payments and you
may terminate your participation at any time at your
discretion. No charge in addition to the applicable sales
charge is made in connection with this Plan, and there is no
cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the
enclosed Application Form or call Nuveen toll-free at 800-
621-7227.
Payroll Direct Once you have established a Fund account, you may, with your
Deposit Plan employer's consent, make regular investments in Fund shares
of $25 or more per pay period by authorizing your employer to
deduct this amount automatically from your paycheck. There is
no obligation to continue payments and you may terminate your
participation at any time at your discretion. No charge in
addition to the applicable sales charge is made for this
Plan, and there is no cost to the Fund. To obtain an
application form for the Payroll Direct Deposit Plan, check
the applicable box on the enclosed Application Form or call
Nuveen toll-free at 800-621-7227.
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OTHER SHAREHOLDER PROGRAMS
Exchange You may exchange shares of a class of the Fund for shares of
Privilege the same class of any other Nuveen Mutual Fund with
reciprocal exchange privileges, at net asset value without a
sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330. Similarly, Class A, Class B, Class C and Class R Shares
of other Nuveen Mutual Funds may be exchanged for the same
class of shares of the Fund at net asset value without a
sales charge. Exchanges of shares from any Nuveen money
market fund will be made into Class A Shares, Class B Shares,
Class C Shares or Class R Shares of the Fund at the public
offering price. If, however, a sales charge has previously
been paid on the investment represented by the exchanged
shares (i.e., the shares to be exchanged were originally
issued in exchange for shares on which a sales charge was
paid), the exchange of shares from a Nuveen money market fund
will be made into shares of the Fund at net asset value.
Class A Shares, Class C Shares or Class R Shares may be
exchanged for shares of any Nuveen money market fund, but
Class B Shares may not be exchanged for shares of a Nuveen
money market fund.
Class A shares of Nuveen Mutual Funds sold with a maximum up-
front sales charge of less than the maximum charged by other
Nuveen Mutual Funds will be subject to the appropriate "sales
charge differential" upon the exchange of such shares for
Class A shares of a Fund sold with a higher up-front sales
charge. The "sales charge differential" is limited to a
percentage rate no greater than the excess of the sales
charge rate applicable to purchases of shares of the Nuveen
Mutual Fund being acquired in the exchange over the sales
charge rate(s) actually paid on the mutual fund shares
relinquished in the exchange and on any predecessor of those
shares. For purposes of the exchange privilege, shares
obtained through automatic reinvestment of dividends and
capital gain distributions are treated as having paid the
same sales charges applicable to the shares on which the
dividends or distributions were paid; however, if no sales
charge was imposed upon the initial purchase of the shares,
any shares obtained through automatic reinvestment will be
subject to a sales charge differential upon exchange.
If you exchange shares 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.
The shares to be purchased must be offered in your state of
residence and you must have held the shares you are
exchanging for at least 15 days. The total value of
25
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exchanged shares must at least equal the minimum investment
requirement of the Nuveen Mutual Fund being purchased. For
federal income tax purposes, any exchange 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 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 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 enclosed Application Form or by calling Nuveen toll-
free at 800-621-7227 to obtain an authorization form. The
exchange privilege may be modified or discontinued by the
Fund at any time upon prior written notice to shareholders of
the Fund.
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.
Fund Direct You can use Fund Direct to link your Fund account to your
account at a bank or other financial institution. Fund Direct
enables you to transfer money electronically between these
accounts and perform a variety of account transactions. These
include purchases of shares by telephone, investments under
Automatic Deposit Plan, and sending dividends and
distributions, redemption payments or Automatic Withdrawal
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Plan payments directly to your bank account. Please refer to the Application for details, or call SSI for more information.
Fund Direct privileges must be requested via an Application you obtain by calling 800-621-7227. Fund Direct privileges will apply to each shareholder listed in the registration on your account as well as to your Authorized Dealer representative of record unless and until SSI receives written instructions terminating or changing those privileges. After you establish Fund Direct for your account, any change of bank account information must be made by signature-guaranteed instructions to SSI signed by all shareholders who own the account.
Purchases may be made by telephone only after your account
has been established. To purchase shares in amounts up to
$250,000 through a telephone representative, call SSI at 800-
621-7227. The purchase payment will be debited from your bank
account.
Reinstatement If you redeemed Class A, Class B or Class C Shares of the
Privilege 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 of the appropriate class of Fund shares next calculated
after reinstatement. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption
date will also be reinstated. The 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 and amount of the
reinvestment.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO
OBTAIN THE APPLICATION FORMS REQUIRED FOR SOME OF THEM, CALL
NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be
opened and maintained for you by SSI, the Fund's shareholder
services agent. Share certificates will be issued to you only
upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to
reject any purchase order and to waive or increase minimum
investment requirements. A change in registration or transfer
of shares held in the name of your financial adviser's firm
can only be made by an order in good form from the financial
adviser acting on your behalf.
Authorized Dealers are encouraged to open single master
accounts. However, some Authorized Dealers may wish to use
SSI's sub-accounting system to minimize their internal
recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other
than the master account or sub-accounting service offered by
SSI will be required to enter into a separate agreement with
another agent for these services for a fee that will depend
upon the level of services to be provided.
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DISTRIBUTION AND SERVICE PLAN
Subject to the rules and regulations of the Securities and
Exchange Commission, the Fund reserves the right to suspend
the continuous offering of its shares at any time, but no
suspension shall affect your right of redemption as described
below.
The Fund has adopted a plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, which
provides that Class B and Class C Shares will be subject to
an annual distribution fee and Class A, Class B and Class C
Shares will be subject to an annual service fee. Class R
Shares will not be subject to either distribution or service
fees.
The distribution fee applicable to Class B and Class C Shares under the Plan will be payable to reimburse Nuveen for services and expenses incurred in connection with the distribution of such Shares. The distribution fee primarily reimburses Nuveen for providing compensation to Authorized Dealers, including Nuveen, either at the time of sale or on an ongoing basis. The other expenses for which Nuveen may be reimbursed include, 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 such Shares, certain other expenses associated with the distribution of such 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, Class B and Class C Shares under the Plan will be payable to Nuveen, to be used to compensate Authorized Dealers, including Nuveen, 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.
The Fund may spend up to .25 of 1% per year of the average daily net assets of Class A Shares as a service fee under the Plan applicable to Class A Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class B Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class B Shares as a service fee under the Plan applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class C Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class C Shares as a service fee under the Plan applicable to Class C Shares.
HOW TO REDEEM FUND SHARES
You may require the Fund at any time to redeem for cash your
shares of the Fund at the net asset value next computed after
instructions and required documents and certificates, if any,
are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any contingent deferred sales charge. However, in the case of purchases at net asset value of Class A shares of $1 million or more, where the dealer of record has not waived the sales commission, a CDSC of 1% is imposed on any redemptions within 18 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS B SHARES
A CDSC may be imposed upon redemption of Class B Shares. The rate of the CDSC is determined by how long you have owned your shares, as described under "How to Buy Fund Shares-- Class B Shares," above. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any contingent deferred sales charge, except that a CDSC of 1% may be imposed upon redemption of Class C Shares that are redeemed within 12 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not subject to any charge, and then in the order in which the Class B Shares were purchased or in the reverse order in which the Class A or Class C Shares were purchased, except if another order of redemption would result in a lower charge or you specify 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 or money market fund. Your holding period is calculated on a monthly basis and begins the first day of the month in which the order for investment is received. The CDSC is calculated based on the lower of the redeemed shares' cost or net asset value at the time of the redemption and is deducted from the redemption proceeds. Nuveen receives the amount of any CDSC you pay.
By Written You may redeem shares by sending a written request for
Request redemption directly to the Fund, c/o Shareholder Services,
Inc., P.O. Box 5330, Denver, CO 80217-5330, accompanied by
duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be signed
by each shareholder and, if the redemption proceeds exceed
$50,000 or are payable other than to the shareholder of
record at the address of record (which address may not have
changed in the preceding 60 days), the signature must be
guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the
Fund. You will receive payment based on the net asset value
per share next determined after receipt by the Fund of a
properly executed redemption request in proper form. A check
for the redemption proceeds will be mailed to you within
seven days after receipt of your redemption request. For
accounts registered in the name of a broker-dealer, payment
will be forwarded within three business days. However, if any
shares to be redeemed were purchased by check within 15 days
prior to the date the redemption request is received, the
Fund will not mail the redemption proceeds until the check
received for the purchase of shares has cleared, which may
take up to 15 days.
By TEL-A-CHECK If you have authorized telephone redemption and your account
address has not changed within the last 60 days, you can
redeem shares that are held in non-certificate form and that
are worth $50,000 or less by calling Nuveen at 800-621-7227.
While you or anyone authorized by you may make telephone
redemption requests, redemption checks will be issued only in
the name of the shareholder of record and will be mailed to
the address of record. If your telephone request is received
prior to 4:00 p.m. eastern time, the redemption check will
normally be mailed the next business day. For requests
received after 4:00 p.m. eastern time, the redemption will be
effected at 4:00 p.m. eastern time the following business day
and the check will normally be mailed on the second business
day after the request.
By TEL-A-WIRE If you have authorized TEL-A-WIRE redemption or established
or Fund Direct Fund Direct privileges, you can take advantage of the
following expedited redemption procedures to redeem shares
held in non-certificate form that are worth at least $1,000.
You may make TEL-A-WIRE redemption requests through a phone
representative or Fund Direct redemption requests by calling
Nuveen at 800-621-7227. If a redemption request is received
by 4:00 p.m. eastern time, the redemption will be made as of
4:00 p.m. that day. If the redemption request is received
after 4:00 p.m. eastern time, the redemption will be made as
of 4:00 p.m. the following business day. Proceeds of
redemptions through TEL-A-WIRE will normally be wired on the
second business day following the redemption, but may be
delayed one additional
30
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business day if the Federal Reserve Bank of Boston or the
Federal Reserve Bank of New York is closed on the day
redemption proceeds would ordinarily be wired. The Fund
reserves the right to charge a fee for TEL-A-WIRE. Proceeds
of redemptions through Fund Direct will normally be wired to
your Fund Direct bank account on the second or third business
day after the redemption.
Before you may redeem shares by TEL-A-CHECK, TEL-A-WIRE or
Fund Direct, you must complete the telephone redemption
authorization section of the enclosed Application Form or the
Fund Direct Application Form and return it to Nuveen or SSI.
If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption
authorization form by writing the Fund or by calling Nuveen
toll-free at 800-621-7227. Proceeds of share redemptions made
by TEL-A-WIRE will be transferred by Federal Reserve wire
only to the commercial bank account specified by the
shareholder on the application form. You must send a written
request to Nuveen or SSI in order to establish multiple
accounts, or to change the account or accounts designated to
receive redemption proceeds. These requests must be signed by
each account owner with signatures guaranteed by a member of
an approved Medallion Guarantee Program or in such other
manner as may be acceptable to the Fund. Further
documentation may be required from corporations, executors,
trustees or personal representatives.
For the convenience of shareholders, the Fund has authorized
Nuveen as its agent to accept orders from financial advisers
by wire or telephone for the redemption of Fund shares. The
redemption price is the first net asset value determined
following receipt of an order placed by the financial
adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly
upon presentation of required documents with signatures
guaranteed as described above. Neither the Fund nor Nuveen
charges any redemption fees other than any CDSC as described
above. However, your financial adviser may charge you for
serving as agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions
and, at its option, may limit the timing, amount or frequency
of these redemptions. Telephone redemption procedures may be
modified or terminated at any time, on 30 days' notice, by
the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be
genuine. The Fund employs procedures reasonably designed to
confirm that telephone instructions are genuine. These
procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting
upon a caller's instructions. If the Fund does
31
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not follow reasonable procedures for protecting shareholders
against loss on telephone transactions, it may be liable for
any losses due to unauthorized or fraudulent telephone
instructions.
Automatic If you own Fund shares currently worth at least $10,000, you
Withdrawal may establish an Automatic Withdrawal Plan by completing an
Plan application form for the Plan. You may obtain an application
form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at 800-621-
7227.
The Plan permits you to request periodic withdrawals on a
monthly, quarterly, semi-annual or annual basis in an amount
of $50 or more. Depending upon the size of the withdrawals
requested under the Plan and fluctuations in the net asset
value of Fund shares, these withdrawals may reduce or even
exhaust your account.
The purchase of Class A Shares, other than through
reinvestment, while you are participating in the Automatic
Withdrawal Plan with respect to Class A Shares will usually
be disadvantageous because you will be paying a sales charge
on any Class A Shares you purchase at the same time you are
redeeming shares. Similarly, use of the Automatic Withdrawal
Plan for Class B Shares held for less than six years or Class
C Shares held for less than 12 months may be disadvantageous
because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
General 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 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 Securities and Exchange
Commission so that trading of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for any other periods that the Securities
and Exchange Commission by order may permit for protection of
Fund shareholders.
The Fund may, from time to time, establish a minimum total
investment for Fund shareholders, and the Fund reserves the
right to redeem your shares if your investment is less than
the minimum after giving you at least 30 days' notice. If any
minimum total investment is established, and if your account
is below the minimum, you will be allowed 30 days following
the notice in which to purchase sufficient shares to meet the
minimum. So long as the Fund continues to offer shares at net
asset value to holders of Nuveen UITs who are investing their
Nuveen UIT distributions, no minimum total investment will be
established for the Fund.
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MANAGEMENT OF THE FUND
Board of The management of the Fund, including general supervision of
Trustees the duties performed for the Fund by NIAC under the
Management Agreement, is the responsibility of the Board of
Trustees of the Trust.
NIAC oversees Overall management of the Fund is the responsibility of NIAC,
operation of which is located at 333 West Wacker Drive, Chicago, Illinois
the Fund 60606. NIAC oversees the management of the Fund's investment
portfolio and manages the day-to-day business affairs of the
Fund. NIAC has entered into a Sub-Advisory Agreement with
ICAP under which ICAP manages the Fund's investment
portfolio.
NIAC is a wholly-owned subsidiary of Nuveen, the oldest and
largest investment banking firm (based on number of
employees) specializing in the underwriting and distribution
of tax-exempt securities. Nuveen, the principal underwriter
of the Fund's shares, is sponsor of the Nuveen Tax-Free Unit
Trust, a registered unit investment trust. It is also the
principal underwriter for the Nuveen Mutual Funds, and served
as co-managing underwriter for the shares of the Nuveen
Exchange-Traded Funds. Over 1,000,000 individuals have
invested to date in Nuveen's funds and trusts. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 80% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located in St.
Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.
For the fund management services and facilities furnished by
NIAC, the Fund has agreed to pay an annual management fee as
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follows:
AVERAGE DAILY NET ASSET VALUE FUND MANAGEMENT FEE
---------------------------------------------
For the first $125 million .8500 of 1%
For the next $125 million .8375 of 1%
For the next $250 million .8250 of 1%
For the next $500 million .8125 of 1%
For the next $1 billion .8000 of 1%
For assets over $2 billion .7750 of 1%
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ICAP manages ICAP was founded in 1970 and is located at 225 West Wacker
the Fund's Drive, Suite 2400, Chicago, IL 60606. Under the Sub-Advisory
investment Agreement, NIAC pays ICAP a portfolio management fee on the
portfolio Fund's average daily net asset value at an annual rate as set
forth below, which is determined by reference to the average
daily market value of that portion of the assets of all
Nuveen-sponsored investment products for which ICAP serves as
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portfolio manager:
ASSETS OF NUVEEN-SPONSORED PORTFOLIO
INVESTMENT PRODUCTS MANAGEMENT
MANAGED BY ICAP FEE
---------------------------------
For the first $500 million .35 of 1%
For the next $500 million .30 of 1%
For assets over $1 billion .25 of 1%
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The investment decisions for the Fund are made through a team approach, with all of the ICAP investment professionals contributing to the process. Each of the investment officers and other investment professionals of ICAP has developed an expertise in at least one functional investment area, including equity research, strategy, fixed income analysis, quantitative research, technical research, and trading. A key element in the decision making process is a formal investment committee meeting generally held each business day and attended by all the investment professionals. These meetings also provide for the ongoing review of ICAP's investment position. Pertinent information from outside sources is shared and incorporated into the investment outlook. The investment strategy, asset sectors, and individual security holdings are reviewed to verify their continued appropriateness. Investment recommendations are presented to the committee for decisions.
ICAP provides continuous advice and recommendations concerning the Fund's investments, and is responsible for selecting the broker-dealers who execute the portfolio transactions. In executing such transactions, ICAP seeks to obtain the best net results for the Fund. ICAP also serves as investment adviser to the ICAP Funds, Inc. and to pension and profit-sharing plans, and other institutional and private investors. As of May 1, 1996, ICAP had approximately $5 billion under management. Mr. Robert H. Lyon, President of ICAP, owns shares representing 51% of the voting rights of ICAP. In addition, The John Nuveen Company owns preferred shares of ICAP, which are convertible after several years into a 20% common stock interest of ICAP.
NIAC serves as
Fund
Administrator
NIAC serves as administrator for the Fund. In such capacity,
it provides office facilities and equipment. As
administrator, NIAC has also agreed to provide or to
obtain at its expense for the Fund all other services including custodial, transfer agent, accounting, legal and certain clerical, bookkeeping and administrative services, and to pay all other expenses of the Fund (other than investment management fees, distribution fees and service fees, brokerage costs, organizational costs, interest charges and extraordinary expenses), including but not limited to share registration expenses, printing and mailing expenses, compensation and expenses of trustees not affiliated with NIAC or ICAP, taxes and insurance. For these services, each class pays the Administrator an annual fee of %.
HOW THE FUND SHOWS PERFORMANCE
The Fund may from time to time compare its investment results to various passive indices or other mutual funds and cite such comparisons in reports to shareholders, sales literature, and advertisements. The results may be calculated on the basis of average annual total return, total return, or cumulative total return.
All total return figures assume the reinvestment of all dividends and measure the net investment income generated by, and the effect of any realized and unrealized appreciation or depreciation of, the underlying investments in the Fund over a specified period of time. Average annual total return figures are annualized and therefore represent the average annual percentage change over the specified period. Cumulative total return figures are not annualized and represent the aggregate percentage or dollar value change over a stated period of time. Average annual total return and cumulative total return are based upon the historical results of the Fund and are not necessarily representative of the future performance of the Fund.
Growth of a $10,000 Investment January 1976 - December 1995
Unmanaged Index Consumer
ICAP with S & P with with Dividends Price
Dividends Reinvested Dividends Reinvested Reinvested Index (Inflation)
1/76 10,000 10,000 10,000 10,000
1/77 11,265 12,008 11,713 10,482
1/78 11,237 11,510 11,446 11,192
1/79 12,144 12,887 12,691 12,203
1/80 13,561 14,491 14,173 13,827
1/81 16,904 17,553 16,869 15,542
1/82 17,452 17,074 16,853 16,932
1/83 21,913 18,776 18,898 17,586
1/84 25,099 27,084 25,907 18,255
1/85 25,560 28,381 27,459 18,975
1/86 33,970 32,572 31,447 19,693
1/87 38,980 42,899 40,013 19,918
1/88 49,749 61,500 54,036 20,798
1/89 53,776 53,907 49,638 21,716
1/90 71,013 71,612 63,385 22,724
1/91 71,199 64,951 59,778 24,110
1/92 94,088 85,255 75,687 24,851
1/93 99,842 94,641 83,374 25,568
1/94 115,059 106,931 92,605 26,272
1/95 115,913 110,864 95,851 26,974
12/31/95 158,375 143,755 119,711 27,658
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The Fund does not have any prior operating history. The following chart illustrates the growth of a hypothetical $10,000 investment based upon the investment performance of the ICAP Discretionary Equity Composite between December 31, 1975 and December 31, 1995. The ICAP Discretionary Equity Composite represents the composite performance of the [x] managed accounts totalling [$2] billion for which ICAP serves as investment adviser and that have the same investment objectives and policies as the Fund.
LOGO
The ICAP performance results assume payment of the maximum Class A sales charge of 5.25% and reflect the investment performance of the ICAP Discretionary Equity Composite before deduction of any investment advisory fees or other expenses, less Class A's projected annual operating expenses as summarized in the Summary of Fund Expenses on page [3]. These performance results would be different from a comparable Class B, C or R investment, reflecting the different sales charge and ongoing operating expenses of each respective class. The Unmanaged Index represents the investment performance of an unmanaged index comprised 80% of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and 20% of the U.S. One Year Treasury Index (the "One Year Treasury Index"), whose variability of returns is designed to reflect the variability of returns of the ICAP Discretionary Equity Composite over the time period presented. The S&P 500 is a widely-recognized, unmanaged index of common stock prices. S&P 500 returns assume reinvestment of all dividends paid by the stocks included in the index, but do not include brokerage commissions or other fees an investor would incur by investing in the portfolio of stocks comprising the index. The One Year Treasury Index is an unmanaged index of the returns on the U.S. Treasury Bill with maturity closest to one year, as reported in The Wall Street Journal. All returns used in the chart above are quarterly returns.
DISTRIBUTIONS AND TAXES
The Fund intends to operate as a "Regulated Investment
Company" under Subchapter M of the Internal Revenue Code, and
therefore will not be liable for federal income taxes to the
extent earnings are distributed on a timely basis.
For federal income tax purposes, UNLESS YOU ARE EXEMPT FROM TAXATION OR ENTITLED TO A TAX DEFERRAL, ALL DIVIDENDS PAID BY THE FUND AND NET REALIZED SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET REALIZED LONG-TERM CAPITAL GAINS ARE TAXABLE AS A CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES. The capital gain holding period is determined by the length of time the Fund has held the security and not the length of time you have held shares in the Fund. Investors are informed annually as to the amount and nature of all dividends and capital gains paid during the prior year. Such capital gains and dividends may also be subject to state or local taxes. If you are not required to pay taxes on your income, you are generally not required to pay federal income taxes on the amounts distributed to you.
Income dividends are usually distributed quarterly, and capital gains, if any, are usually distributed annually in December. When a dividend or capital gain is distributed, the Fund's net asset value decreases by the amount of the payment. ANY SUCH DISTRIBUTION WILL BE SUBJECT TO INCOME TAXES WHENEVER IT IS RECEIVED, EVEN IF THE DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES. All dividends or capital gains distributions will automatically be reinvested in shares of the Fund at the then prevailing net asset value unless an investor specifically requests that either dividends or capital gains or both be paid in cash. The election to receive dividends or reinvest them may be changed by writing to: Nuveen Funds, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Such notice must be received at least 5 days prior to the record date of any dividend or capital gain distribution.
If you do not furnish the Fund with your correct social security number or employer identification number, the Fund is required by federal law to withhold federal income tax from your distributions and redemption proceeds at a rate of 31%.
This section is not intended to be a full discussion of federal income tax laws and the effect of such laws on you. There may be other federal, state, or local tax considerations applicable to a particular investor. You are urged to consult your own tax adviser.
NET ASSET VALUE
Net asset The Fund's net asset value per share is determined as of the
value is close of trading (currently 4:00 p.m. eastern time) on each
calculated day the New York Stock Exchange is open for business. The
daily Fund's net asset value may not be calculated on days during
which the Fund receives no orders to purchase shares and no
shares are tendered for redemption. Net asset value is
calculated by taking the fair value of the Fund's 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. In
determining net asset value, expenses are accrued and applied
daily and securities and other assets for which market
quotations are available are valued at market value. Common
stocks and other equity-type securities are valued at the
last sales price on the national securities exchange or
Nasdaq on which such securities are primarily traded;
however, securities traded on a national securities exchange
or Nasdaq for which there were no transactions on a given day
or securities not listed on a national securities exchange or
Nasdaq are valued at the most recent bid prices. Debt
securities are valued by a pricing service that utilizes
electronic data processing techniques to determine values for
normal institutional-sized trading units of debt securities
without regard to the existence of sale or bid prices when
such values are believed to more accurately reflect the fair
market value of such securities; otherwise, actual sale or
bid prices are used. Any securities or other assets for which
market quotations are not readily available are valued at
fair value as determined in good faith by the Board of
Trustees. Debt securities having remaining maturities of 60
days or less when purchased are valued by the amortized cost
method when the Board of Trustees determines that the fair
market value of such securities is their amortized cost.
Under this method of valuation, a security is initially
valued at its acquisition cost, and thereafter amortization
of any discount or premium is assumed each day, regardless of
the impact of fluctuating interest rates on the market value
of the security. Regardless of the method employed to value a
particular security, all valuations are subject to review by
the Fund's Board of Trustees or its delegate who may
determine the appropriate value of a security whenever the
value as calculated is significantly different from the
previous day's calculated value.
Fund expenses In addition to the Fund management fee and administrative fee
paid to NIAC and the distribution and service fees paid to
Nuveen, the Fund is responsible for its own expenses that are
not covered under such agreements, including, without
limitation: interest charges; brokerage commissions;
organizational expenses; and extraordinary expenses.
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GENERAL INFORMATION
Custodian and The Custodian of the assets of the Fund is The Chase
Transfer and Manhattan Bank, N.A. ("Chase"), 770 Broadway, New York, New
Shareholder York 10003. Chase also provides certain accounting services
Service Agent to the Fund. The Fund's transfer, shareholder services and
dividend paying agent, Shareholder Services, Inc., P.O. Box
5330, Denver, CO 80217-5330, performs bookkeeping, data
processing and administrative services for the maintenance of
shareholder accounts.
Organization The Fund is a series of the Nuveen Investment Trust
("Trust"). The Trust is an open-end diversified management
investment company under the Investment Company Act of 1940.
The Trust was organized as a Massachusetts business trust on
May , 1996. The Board of Trustees of the Trust is
authorized to issue an unlimited number of shares in one or
more series or "Funds," which may be divided into classes of
shares. Currently, there are three series authorized and
outstanding, each of which is divided into four classes of
shares designated as Class A Shares, Class B Shares, Class C
Shares and Class R Shares. Each class of shares represents an
interest in the same portfolio of investments of the 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 automatically
convert into Class A Shares, as described above. 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 owing 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 Fund's Declaration of Trust further provides
for indemnification out of the assets and property of the
Trust for all loss and expense of any shareholder held
personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring
40
|
financial loss on account of shareholder liability is limited
to circumstances in which both inadequate insurance existed
and the Trust or Fund itself was unable to meet its
obligations. The Trust believes the likelihood of the
occurrence of these circumstances is remote.
|
NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen Balanced Fund
Prospectus
, 1996
The NUVEEN BALANCED FUND (the "Fund") seeks to provide over time an attractive
total return from a diversified portfolio of equity securities, fixed-income
securities and cash. The Fund emphasizes capital appreciation in favorable
market environments and capital preservation in adverse market environments by
actively shifting the allocation of the Fund's portfolio between equity
securities, fixed-income securities and cash, depending upon the relative
risk/reward characteristics of these asset categories, within defined ranges
for each asset category.
The Fund has adopted a Flexible Pricing Program, which offers you the
opportunity to purchase Fund shares in the same manner you typically make other
investments. The Program features four alternative ways to purchase Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. The Program is
designed to permit you and your financial adviser to choose the method of
purchasing shares that you believe is most beneficial given the amount of your
purchase and current investment, the length of time you expect to hold your
investment, and other relevant circumstances. See "Flexible Pricing Program,"
"How to Buy Fund Shares" and "Summary of Fund Expenses."
The Fund is a series of The Nuveen Investment Trust (the "Trust"). This
Prospectus contains information you should know before investing in the Fund.
Please retain it for future reference. You can find more detailed information
about the Fund in the Statement of Additional Information dated , 1996,
as amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
of the Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CONTENTS 3 Summary of fund expenses 5 How to determine if the fund is right for you 8 Who is responsible for the operation of the fund? 9 What are the fund's investment objective and policies? 15 Flexible Pricing Program 18 How to buy fund shares 30 Distribution and service plan 31 How to redeem fund shares 35 Management of the fund 37 How the fund shows performance 39 Distributions and taxes 40 Net asset value 41 General information Application |
SUMMARY OF FUND EXPENSES
Shareholder Transaction Class A Class B Class C Class R(2)
Expenses (as a percent of
offering price)(1)
- --------------------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed 5.25%(3) None None None
on
Purchases
Maximum Sales Charge Imposed None None None None
on
Reinvested Dividends
Exchange Fees None None None None
Deferred Sales Charge (as a None(4) Yes(5) Yes(6) None
percentage of lesser of pur-
chase price or redemption
proceeds)
Annual Fund Operating Expenses
(as a percent of average daily
net assets) Class A Class B Class C Class R
- --------------------------------------------------------------------------------------------------------
Management Fees .75% .75% .75% .75%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses .10% .10% .10% .10%
----- ----- ----- ----
Total Expenses 1.10% 1.85% 1.85% .85%
|
(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their
materials for details.
(2) Class R Shares are available for purchase only under certain limited
circumstances, or by specified classes of investors as described below under
"How to Buy Fund Shares--Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Class A purchases at net asset value of $1 million or more may be subject
to a 1% contingent deferred sales charge if redeemed within 18 months of
purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a
Contingent Deferred Sales Charge of 5% during the first year, 4% during the
second year, 3% during the third and fourth years, 2% during the fifth year,
and 1% during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
Contingent Deferred Sales Charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of average daily net assets to compensate Authorized Dealers for ongoing
account services. In addition, Class B and Class C Shares are subject to annual
distribution fees of .75% to reimburse Nuveen for costs in connection with the
sale of Fund shares. See "Distribution and Service Plan." Long-term holders of
Class A, Class B and Class C Shares may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted under the
National Association of Securities Dealers Rules of Fair Practice.
The purpose of the tables above is to help you understand all expenses and fees that you would bear directly or indirectly as a Fund shareholder. The percentages shown are estimated for the current fiscal year. Actual fees and expenses may be greater or less than those shown.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over various time periods, assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
- --------------------------------------------------------------------------------------
Class A $ $ $ $
Class B** $ $ $ $
Class C*** $ $ $ $
Class R $ $ $ $
|
*This example does not represent past or future expenses,
which may be greater or less than those shown. Moreover, the
Fund's actual rate of return may be greater or less than the
hypothetical 5% return shown in this example. This example
assumes that the percentage amounts listed under Annual
Operating Expenses remain the same in each of the periods.
For additional information about the Fund's fees and
expenses, see "Distribution and Service Plan" and "Management
of the Fund."
**Assumes that the shareholder redeemed on the first day of
the next year and the contingent deferred sales charge was
applied as follows: 1 year (4%) and 3 years (3%). See "How to
Buy Shares--Class B Shares."
***Assumes that the shareholder redeemed on the first day of
the second year and the contingent deferred sales charge was
not applicable for any of the periods shown. See "How to Buy
Shares--Class C Shares."
HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
There are many reasons why you might invest in the Fund.
These may include:
. investing with an emphasis on balancing regular income, the
potential for capital growth and capital preservation
. preserving and building wealth through prudent capital
management
While there can be no assurance that the Fund will enable you to achieve your individual investment goals, it has been designed for investors who have these kinds of investment goals in mind.
In addition, the Fund incorporates the following features and benefits. You should carefully review the more detailed description of these features and benefits elsewhere in the Prospectus to make sure they serve your individual investment goals.
BALANCED INVESTMENT STRATEGY
By investing in a conservative mix of stocks, bonds and cash, the Fund seeks to provide regular income and long-term capital appreciation, while at the same time moderating the effect of equity market risk on total returns.
CONSERVATIVE INVESTMENT MIX
The Fund's target investment mix is 55% stocks, 40% bonds and 5% cash. The Fund will actively shift the allocation of its investment portfolio in order to emphasize capital appreciation in favorable market environments and capital preservation in adverse market environments. The Fund will shift its investment mix within defined ranges for each asset category based upon each category's relative risk and reward characteristics. The Fund will also rebalance its investment portfolio when necessary in order to prevent the portfolio's investment mix from moving outside these defined ranges under normal market conditions. The table below summarizes the Fund's target investment mix and the allowable range of each asset category's target mix.
TARGET
INVESTMENT ALLOWABLE
MIX RANGE
----------------------
Stocks 55% 40-70%
Bonds 40% 25-55%
Cash 5% 0-20%
|
EXPERIENCED MANAGEMENT
Overall management of the Fund is the responsibility of Nuveen Institutional Advisory Corp. ("NIAC"), which oversees the management of the Fund's
investments and administers the Fund's business affairs. NIAC is a wholly-owned subsidiary of John Nuveen & Co. Incorporated ("Nuveen"), which is the principal underwriter of the Fund's shares. Nuveen has sponsored or underwritten over $60 billion of investment company securities. Institutional Capital Corporation ("ICAP") manages the Fund's investment portfolio. ICAP, which was organized in 1970, acts as the investment adviser primarily to institutional clients, and has investment portfolios totaling approximately $5 billion.
LOW MINIMUMS
You can start your investment with a low initial purchase of $1,000 in a particular class. See "How to Buy Fund Shares."
FLEXIBILITY IN PURCHASING FUND SHARES
The Fund has adopted a Flexible Pricing Program, which offers you the opportunity to purchase Fund shares in the same manner you typically make other investments. The Program features four alternative ways to purchase Fund shares (Classes A, B, C and R), each with a different combination of sales charges, ongoing fees, eligibility requirements, and other features. The Program is designed to permit you and your financial adviser to choose the method of purchasing shares that you believe is most beneficial given the amount of your investment and current holdings of Fund shares, the length of time you expect to hold your investment, and other relevant circumstances. Please refer to the "Flexible Pricing Program," "How to Buy Fund Shares" and "How to Redeem Fund Shares" for a discussion of the Program's features and additional information about these four classes of shares.
AUTOMATIC DEPOSIT PLANS
The Fund offers a number of investment options, including automatic deposit, direct deposit and payroll deduction, to help you add to your account on a regular basis.
AUTOMATIC REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares will be reinvested automatically into additional shares of the same class without a sales charge, unless you elect to receive them in cash. Separately, distributions from any Nuveen unit trust (a "Nuveen UIT") may be used to buy Class A Shares without a sales charge at net asset value.
EXCHANGE PRIVILEGE
Shares of a class may be quickly and easily exchanged by telephone, without a sales charge, for shares of the same or equivalent class of another Nuveen Mutual Fund or for shares of certain Nuveen money market funds.
LIQUIDITY
You may redeem all or a portion of your Fund shares on any business day at the net asset value next computed for the class of shares you are redeeming. Class B and Class C Shares, as well as certain Class A Shares purchases of $1 million or more at net asset value, may be subject to a contingent deferred sales charge ("CDSC") upon redemption. Remember that share prices will fluctuate with market conditions and upon redemption may be worth more or less than their original cost. See "How to Redeem Fund Shares."
AUTOMATIC WITHDRAWAL
If you own shares totalling $10,000 or more, you can arrange to have $50 or more sent to you from your account either monthly or quarterly.
TELEPHONE REDEMPTIONS
You may establish free telephone redemption privileges for your account.
RISKS AND SPECIAL CONSIDERATIONS
You should consider certain other factors about the Fund
before investing. The value and market risk of the Fund's
investment portfolio will tend to vary with changes in the
allocation of its investments among different asset classes
and changes in the fixed income and equity markets. The
Fund's equity investments are subject to equity market risk,
i.e. the risk that equity prices could decline over short or
even extended periods. The equity markets tend to be
cyclical, with periods of generally rising prices and periods
of generally declining prices. The Fund's fixed-income
investments are subject to interest rate and credit risk. In
general, the market value of the Fund's fixed-income
investments will increase when interest rates decline and
decrease when interest rates rise. Although the prices of
equity and fixed-income securities often rise and fall at
different times so that a fall in price of one will be offset
by a rise in, or at least buffered by price stability in, the
other, prices in the two markets often move in tandem.
Accordingly, the Fund should be considered a long-term
investment, designed to provide the best results when held
for a multi-year period. The Fund may not be suitable if you
have a short-term investment horizon. In addition,
investments by the Fund in American Depository Receipts
("ADRs") of foreign companies involve opportunities and risks
not typically associated with investing in U.S. companies.
There are special risks associated with options and futures
transactions. See "What Are the Fund's Investment Objective
and Policies?"
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the
services and features offered by the Fund:
ORGANIZATION FUNCTION DUTIES
--------------------------------------------------------------
John Nuveen & Co. Fund Sponsor and Sponsors and manages
Incorporated Principal Underwriter the offering of Fund
("Nuveen") shares
Nuveen Institutional Fund Manager; Oversees the Fund's
Advisory Corp. Administrator portfolio manager,
("NIAC") manages the Fund's
business affairs and
provides day-to-day
administrative
services to the Fund
Institutional Capital Portfolio Manager Manages the Fund's
Corporation ("ICAP") investment portfolio
Shareholder Services, Transfer Agent; Maintains shareholder
Inc. ("SSI") Shareholder Services accounts, handles
Agent; Dividend Paying share redemptions and
Agent exchanges and
dividend payments
The Chase Manhattan Custodian Maintains custody of
Bank, N.A. ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
|
WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive total return from a diversified portfolio of equity securities, fixed income securities and cash. The Fund will emphasize capital appreciation in favorable markets and capital preservation in adverse market environments. There is no assurance that this objective will be realized. The Fund's investment objective may not be changed without shareholder approval. Other investment restrictions that may not be changed without shareholder approval are contained in the Statement of Additional Information.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund The Fund's investment portfolio will be invested in a
invests in a diversified portfolio of equity securities, fixed-income
conservative securities and cash. The Fund's target investment mix is 55%
mix of stocks, equity securities, 40% fixed-income securities and 5% cash,
bonds and cash reflecting the Fund's anticipated average allocation of its
investment portfolio over a full market cycle. The Fund will
actively shift the allocation of its investment portfolio in
order to emphasize capital appreciation in favorable market
environments and capital preservation in adverse market
environments. The Fund will shift its investment mix within
defined ranges for each asset category based upon each
category's relative risk and reward characteristics. The Fund
will also rebalance its investment portfolio when necessary
in order to prevent the portfolio's investment mix from
moving outside these defined ranges under normal market
conditions. The table below summarizes the Fund's target
investment mix and the allowable range of each asset
category's target mix.
|
TARGET
INVESTMENT ALLOWABLE
MIX RANGE
---------------------------------------
Equity Securities 55% 40-70%
Fixed-Income Securities 40% 25-55%
Cash 5% 0-20%
|
The Fund's Board of Trustees from time to time, without shareholder approval, may change the Fund's target investment mix and the allowable range for each asset category if, after consultation with NIAC and ICAP, the Board determines that such a change is in the best interests of shareholders, provided however, that the target investment mix for any asset category may not be set outside the allowable range for that asset category, as reflected above.
During temporary defensive periods, the Fund may invest any percentage of its assets in temporary investments, as described below under "Temporary Investments." During such periods, which may occur at a time when the Fund would otherwise rebalance its investment mix, the proportion of the Fund's assets invested in an asset category may fall outside the allowable range for that asset category.
DESCRIPTION OF THE FUND'S INVESTMENTS
Equity "Equity Securities" are common stocks; preferred stocks;
Securities warrants to purchase common stocks or preferred stocks; and
securities convertible into common or preferred stocks, such
as convertible bonds and debentures and other equity-type
securities. The Fund will invest the assets allocated to
equity investments primarily in Equity Securities of domestic
companies with market capitalizations of at least $500
million. Equity Securities are selected on the basis of
ICAP's evaluation of each security's relative value in terms
of projected price-earnings ratios and earnings stability,
with a clear catalyst for significant price appreciation over
a defined time horizon. When making investment decisions,
ICAP develops an economic framework (including an interest
rate, inflation, and business cycle outlook) and analyzes
strategic economic and/or industry themes to identify
appropriate investments. ICAP uses a variety of proprietary
research techniques and computer models to search for equity
securities possessing best relative value based on
proprietary price/earnings projections and analysis of
earnings stability. Furthermore, a clear catalyst, either
stock-specific, industry or economic, which ICAP believes
will trigger significant price appreciation in a definable
period must exist. In order to enhance its internal research,
ICAP also utilizes a wide variety of external sources for
investment information including recognized strategists,
economists, technical and fundamental analysts, corporate
executives, and industry sources. Convertible bonds and
debentures must be rated Baa or higher by Moody's Investors
Service ("Moody's") or BBB or higher by Standard & Poor's
("S&P"), Duff & Phelps, Inc. ("Duff & Phelps") or Fitch
Investors Service, Inc. ("Fitch"). A general description of
S&P's and Moody's ratings is set forth in the Statement of
Additional Information. In addition, the Fund may invest in
equity securities of foreign issuers through investments in
American Depository Receipts (ADRs).
The Fund For each equity investment, ICAP establishes an upside price
employs a target and a downside risk potential. This strategy allows
value-oriented for continuous monitoring of fundamental conditions and stock
strategy when price performance. Although ICAP typically expects the
selecting investment potential of each investment to be realized over a
equity nine to eighteen month time period, it is not unusual for
securities equities to be held for a longer period if
10
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the potential is justified. Investments that underperform the
market are reviewed intensively. If the risk/reward of a
particular investment becomes unattractive or the reasons for
owning the security no longer appear valid, the investment is
typically sold expeditiously to avoid future
underperformance.
Fixed-Income The Fund will invest the portion of its net assets allocated
Securities to fixed-income securities in U.S. Treasury and investment
grade debt securities with maturities of one to fifteen
years. These securities are selected on the basis of the
shape of the yield curve and ICAP's outlook for interest
rates. Investment grade debt securities include bonds rated
Baa or higher by Moody's and BBB or higher by S&P, D&P or
Fitch. Bonds rated BBB by S&P or Baa by Moody's, although
considered investment grade, have speculative characteristics
and may be subject to greater fluctuations in value than
higher-rated bonds. For a more extensive discussion of these
ratings, see the Statement of Additional Information.
Cash The Fund will invest the portion of its net assets allocated
Equivalents to cash in cash equivalents and short-term fixed-income
securities issued by issuers having a long-term rating of A
or higher by S&P, Moody's or Fitch, or A- or higher by Duff &
Phelps, and have a maturity of one year or less. Cash
equivalents may include U.S. Government securities,
certificates of deposit, bankers' acceptances, commercial
paper rated A-1 or higher by S&P, Prime-1 or higher by
Moody's, Duff 2 or higher by Duff & Phelps or Fitch 2 or
higher by Fitch, and repurchase agreements with respect to
U.S. government obligations.
Temporary During certain temporary periods, in order to keep cash on
Investments hand fully invested or, as a defensive measure in response to
prevailing market conditions, the Fund may invest without
limitation in cash equivalents and short-term fixed-income
securities. See the Statement of Additional Information under
"Investment Policies and Techniques--Short-Term Fixed Income
Securities" for additional information.
When-Issued The Fund may invest without limitation in securities
Securities purchased on a when-issued or delayed delivery basis ("When-
Issued Securities"). Although the payment and terms of these
securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and
paid for at a future date, generally within 45 days.
Purchasing When-Issued Securities allows the Fund to lock in
a fixed price on a security it intends to purchase. The Fund
will segregate and maintain cash, cash equivalents, U.S.
government securities, or other high-quality, liquid debt
securities in an amount at least equal to the amount of
11
|
outstanding commitments for When-Issued Securities at all
times. Such securities involve a risk of loss if the value of
the security to be purchased declines prior to the settlement
date.
ADRs The Fund may invest in ADRs or other instruments denominated
in U.S. dollars that permit indirect investment in foreign
securities. Foreign investments are limited to 20% of net
assets. ADRs are receipts typically issued by a U.S. bank or
trust company evidencing ownership of the underlying foreign
security and denominated in U.S. dollars. ADRs do not
eliminate all the risk inherent in investing in foreign
issuers, such as changes in foreign currency exchange rates.
However, by investing in ADRs rather than directly in foreign
issuers' stock, the Fund avoids currency risks during the
settlement period.
Investments in securities of foreign issuers involve risks
that are in addition to the usual risks inherent in domestic
investment, including currency risks. The U.S. Dollar value
of a foreign security tends to decrease when the value of the
U.S. Dollar rises against the foreign currency in which the
security is denominated and tends to increase when the value
of the U.S. Dollar falls against such currency. Some ADRs may
not be sponsored by the issuer. Unsponsored ADRs are affected
by the fact that in many countries there is less publicly
available information about issuers than is available in the
reports and ratings published about companies in the U.S. and
companies may not be subject to uniform accounting, auditing
and financial reporting standards. Other risks inherent in
foreign investment include expropriation; confiscatory
taxation; withholding taxes on dividends and interest; less
extensive regulation of foreign brokers, securities markets
and issuers; diplomatic developments; and political or social
instability. Foreign economies may differ favorably or
unfavorably from the U.S. economy in various respects, and
many foreign securities are less liquid and their prices tend
to be more volatile than comparable U.S. securities. From
time to time, foreign securities may be difficult to
liquidate rapidly without adverse price effects.
CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
Options and The Fund may engage in options and futures transactions,
Futures which are sometimes referred to as derivative transactions.
Transactions The Fund's options and futures transactions may include
instruments such as stock index options and futures
contracts. Such transactions may be used for several reasons,
including hedging unrealized portfolio gains. The Fund will
only engage in futures and options transactions that,
pursuant
12
|
to regulations promulgated by the Commodity Futures Trading
Commission (the "CFTC"), constitute bona fide hedging or
other permissible risk management transactions and will not
enter into such transactions if the sum of the initial margin
deposits and premiums paid for unexpired options exceeds 5%
of the Fund's total assets. In addition, the Fund will not
enter into options and futures transactions if more than 30%
of the Fund's net assets would be committed to such
instruments. The ability of the Fund to benefit from options
and futures is largely dependent upon ICAP's ability to
correctly use such instruments, which may involve skills
different from those associated with managing securities
generally. The Fund could lose money on a futures transaction
or an option could expire worthless, as well as the Fund
suffering a loss on the value of its portfolio assets. For a
further discussion of options and futures transactions,
please see the Statement of Additional Information.
Lending of The Fund may lend its portfolio securities, up to 33 1/3% of
Portfolio its total assets, to broker-dealers or institutional
Securities investors. The loans will be secured continuously by
collateral at least equal to the value of the securities lent
by "marking to market" daily. The Fund will continue to
receive the equivalent of the interest or dividends paid by
the issuer of the securities lent and will retain the right
to call, upon notice, the lent securities. The Fund may also
receive interest on the investment of the collateral or a fee
from the borrower as compensation for the loan. As with other
extensions of credit, there are risks of delay in recovery or
even loss of rights in the collateral should the borrower of
the securities fail financially. However, loans will be made
only to firms deemed by the portfolio manager to be of good
standing.
Illiquid The Fund may invest up to 10% of its net assets in illiquid
Securities securities, which include, but are not limited to, restricted
securities (securities the disposition of which is restricted
under the federal securities laws); securities which may be
resold pursuant to Rule 144A under the Securities Act of 1933
but that are deemed to be illiquid; and repurchase agreements
with maturities in excess of seven days.
Portfolio Under normal market conditions, the Fund anticipates that its
Turnover annual portfolio turnover rate will be between 75% and 100%,
and will generally not exceed 125%. A turnover rate of 100%
would occur, for example, if all of the securities held by a
Fund were replaced within one year.
|
Other The Fund will not invest more than 5% of its net assets in
Investment any one of the following types of investments: warrants;
Policies and unseasoned companies; and transactions in short sales against
Restrictions the box. In addition the Fund has adopted several
restrictions on the investments and other activities of the
Fund that may not be changed without shareholder approval.
For example, the Fund may not:
. With respect to 75% of its total assets, purchase the
securities of any issuer (except securities issued or
guaranteed by the U.S. government or any agency or
instrumentality thereof) if, as a result, (i) more than 5%
of the Fund's total assets would be invested in securities
of that issuer, or (ii) the Fund would hold more than 10%
of the outstanding voting securities of that issuer.
. Borrow money, except that the Fund may (i) borrow money
from banks for temporary or emergency purposes (but not for
leverage or the purchase of investments) and (ii) make
other investments or engage in other transactions
permissible under the Investment Company Act of 1940 that
may involve a borrowing, provided that the combination of
(i) and (ii) shall not exceed 33 1/3% of the value of the
Fund's total assets (including the amount borrowed), less
the Fund's liabilities (other than borrowings).
If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage beyond
the specified limit resulting from a change in values or
assets will not be considered a violation.
Except as specifically noted above or in the Statement of
Additional Information, the Fund's investment policies are
not fundamental and may be changed without shareholder
approval. For a more complete description of investment
restrictions that may be changed without a shareholder vote,
|
see the Statement of Additional Information.
FLEXIBLE PRICING PROGRAM
The Fund The Fund has adopted a Flexible Pricing Program that offers offers various you four alternative ways to purchase Fund shares (Classes A, methods of B, C and R), each with a different combination of sales purchasing charges, ongoing fees, eligibility requirements, and other shares which features. The Program is designed to permit you and your are designed financial adviser to choose the method of purchasing shares to meet your that you believe is most beneficial given the amount of your individual investment and current holdings of Fund shares, the length of investment time you expect to hold your investment, and other relevant needs and circumstances. A summary of the four alternatives is set |
preferences forth below:
UP-FRONT CONTINGENT DEFERRED SALES ANNUAL 12B-1 ANNUAL 12B-1
SALES CHARGE CHARGE "CDSC" DISTRIBUTION FEE SERVICE FEE
-----------------------------------------------------------------------
Class A 5.25%(1) None(2) None .25%
Class B None 5%(3) .75%(4) .25%
Class C None 1%(5) .75% .25%
Class R None None None None
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(1) Maximum up-front sales charge, which is reduced for
purchases of $50,000 or more. Up-front sales charge may
be reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1
million or more may be subject to a 1% CDSC if redeemed
within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six
years.
(4) Class B Shares convert to Class A Shares after eight
years, which reduces the ongoing expenses borne by an
investor.
(5) CDSC is applicable to shares redeemed within 12 months of
purchase.
For more information regarding features of each class, see
"How to Buy Fund Shares," "How to Redeem Fund Shares" and
"Distribution and Service Plan" below.
Which Option When you purchase Class A Shares, you will normally pay an
is Right For up-front sales charge. As a result, you will have less money
You? invested initially and you will own fewer Class A Shares than
you would in the absence of an up-front sales charge.
Alternatively, when you purchase Class B or Class C Shares,
you will not pay an up-front sales charge and all of your
monies will be fully invested at the time of purchase.
However, Class B and Class C Shares are subject to an annual
distribution fee which constitutes an asset-based sales
charge whose purpose is the same as an up-front sales charge.
In addition, Class B Shares when redeemed are subject to a
CDSC, which will vary depending on the length of time you
owned your shares. Class B Shares
automatically convert to Class A Shares eight years after
purchase, which reduces the annual expenses borne by an
investor. Class C Shares are subject to a CDSC of 1% if
redeemed within 12 months of purchase. 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. Class A,
Class B and Class C Shares are
15
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subject to annual service fees, which are identical in amount
and are used to compensate Authorized Dealers for providing
you with ongoing account services. You may qualify for a
reduced sales charge or a sales charge waiver on a purchase
of Class A Shares, as described below under "How the Sales
Charge on Class A Shares May Be Reduced or Waived." Class R
Shares are available for purchase at a price equal to their
net asset value, but only under certain circumstances or for
certain categories of investors, as described below under
"How to Buy Fund Shares--Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or
Class R Shares, you should consider all relevant factors,
including the dollar amount of your purchase, the length of
time you expect to hold the shares and whether a CDSC would
apply, the amount of any applicable up-front sales charge,
the amount of any applicable distribution or service fees
that may be incurred while you own the shares, whether or not
you will be reinvesting income or capital gain distributions
in additional shares, whether or not you meet applicable
eligibility requirements or qualify for a sales charge waiver
or reduction, and the relative level of services that your
financial adviser may provide to different classes.
Authorized Dealers and other persons distributing the Fund's
shares may receive different compensation for selling
different classes of shares.
Differences Each class of shares represents an interest in the same
Between the portfolio of investments. Each class of shares is identical
Classes of in all respects except that each class has its own sales
Shares charge structure, each class bears its own class expenses,
including distribution and service expenses, and each class
has exclusive voting rights with respect to any distribution
or service plan applicable to its shares. In addition, the
Class B Shares are subject to a conversion feature. As a
result of the differences in the expenses borne by each class
of shares, and differences in the purchase and redemption
activity for each class, net income per share, dividends per
share and net asset value per share will vary among the
Fund's classes of shares.
Dealer Upon notice to all Authorized Dealers, Nuveen may reallow to
Incentives Authorized Dealers electing to participate up to the full
applicable Class A Share sales charge during periods and for
transactions specified in the notice. The reallowances made
during these periods may be based upon attainment of minimum
sales levels. Further, Nuveen may from time to time make
additional reallowances only to certain
Authorized Dealers who sell or are expected to sell certain
minimum amounts of the Fund or other Nuveen Mutual Funds and
Nuveen UITs during specified time periods. Nuveen will
reimburse the Authorized Dealer for up to one-half of
specified
16
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media costs incurred in the placement of advertisements which
jointly feature the Authorized Dealer and Nuveen Funds and
Nuveen unit trusts.
Such reimbursement to the Authorized Dealer will be based on
the number of its financial advisers who have sold Nuveen
Fund shares and unit trust units during the prior calendar
year according to an established schedule. The staff of the
Securities and Exchange Commission takes the position that
dealers who receive 90% or more of the applicable sales
charge may be deemed underwriters under the Securities Act of
1933, as amended.
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HOW TO BUY FUND SHARES
CLASS A SHARES
Class A Shares You may purchase Class A Shares at a public offering price
are offered at equal to the applicable net asset value per share plus an up-
their net front sales charge imposed at the time of purchase as set
asset value forth below. You may qualify for a reduced sales charge, or
plus an up- the sales charge may be waived in its entirety, as described
front sales below under "How the Up-Front Sales Charge on Class A Shares
charge May Be Reduced or Waived." Class A Shares are also subject to
an annual service fee of .25%. See "Flexible Pricing Program"
and "Distribution and Service Plan."
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The up-front sales charges for Class A Shares are as follows:
SALES CHARGE AS SALES CHARGE AS REALLOWANCE AS
% OF PUBLIC % OF NET % OF PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
----------------------------------------------------------------
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less than
$100,000 4.25% 4.44% 3.75%
$100,000 but less than
$250,000 3.50% 3.63% 3.25%
$250,000 but less than
$500,000 2.75% 2.83% 2.50%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%*
|
*Authorized Dealers are eligible to receive commission from
Nuveen as discussed below.
The Fund receives the entire net asset value of all Class A
Shares that are sold. Nuveen retains the full applicable
sales charge from which it pays the uniform reallowances
shown above to Authorized Dealers. See "Flexible Sales Charge
Program--Dealer Incentives" above for more information about
reallowances and other compensation to Authorized Dealers.
Certain commercial banks may make Class A Shares of the Fund
available to their customers on an agency basis. Pursuant to
the agreements between Nuveen and these banks, some or all of
the sales charge paid by a bank customer in connection with a
purchase of Class A Shares may be retained by or paid to the
bank. Certain banks and other financial institutions may be
required to register as securities dealers in certain states.
Class A Share Class A Share purchases of $1 million or more are sold at net
purchases of asset value without an up-front sales charge. Nuveen pays
$1 million and Authorized Dealers of record on such Class A Share purchases
over may be a commission of up to 1.00% of the amount of the purchase. If
subject to a such shares are redeemed within 18 months of purchase, a CDSC
CDSC of 1% of the lower of the purchase price or the redemption
proceeds may be imposed upon the redemption. Shares purchased
by investors investing $1 million or more who have
18
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made arrangements with Nuveen and whose dealer of record
waived the commission are not subject to the CDSC.
[HOW THE UP-FRONT SALES CHARGE MAY BE REDUCED OR WAIVED]
There are There are several ways to reduce or eliminate the up-front
several ways sales charge:
to reduce or . cumulative discount;
eliminate the . letter of intent;
up-front sales . purchases with monies representing distributions from
charge Nuveen-sponsored UITs;
. group purchase programs;
. reinvestment of redemption proceeds from non-affiliated
funds; and
. special sales charge waivers for certain categories of
investors.
Cumulative You may qualify for a reduced sales charge as shown above on
Discount a purchase of Class A Shares if the amount of your purchase,
when added to the value that day of all of your prior
purchases of shares of the Fund or of another Nuveen Mutual
Fund, or units of a Nuveen UIT, on which an up-front sales
charge or ongoing distribution fee is imposed, falls within
the amounts stated in the table. You or your financial
adviser must notify Nuveen or SSI 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.
Letter of You may qualify for a reduced sales charge on a purchase of
Intent Class A Shares 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 above.
In order to take advantage of this option, you must complete
the applicable section of the Application Form or sign and
deliver either to an Authorized Dealer or to SSI a written
Letter of Intent in a form acceptable to Nuveen. A Letter of
Intent states that you intend, but are not obligated, over
the next 13 months to purchase a stated total amount of Class
A Shares that would qualify you for a reduced sales charge
shown above. You may count shares of a Nuveen Mutual Fund
that you already own on which you paid an up-front sales
charge or an ongoing distribution fee and any Class B and
Class C 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 UIT, or otherwise.
|
By establishing a Letter of Intent, you agree that your first
purchase of Class A Shares 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, exceed the amount specified in
your Letter of Intent and thereby qualify for a lower sales
charge than the sales charge specified in your Letter of
Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher
sales charge paid will be used to purchase additional Class A
Shares on your behalf. If the total purchases, less
redemptions, are less than the amount specified, you must pay
Nuveen an amount equal to the difference between the amounts
paid for these purchases and the amounts that 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 Nuveen or your financial adviser, Nuveen 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 Nuveen 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 adviser must notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
Reinvestment You may purchase Class A Shares without an up-front sales
of Nuveen UIT charge by reinvestment of distributions from any of the
Distributions various unit trusts sponsored by Nuveen. There is no initial
or subsequent minimum investment requirement for such
reinvestment purchases.
Group Purchase If you are a member of a qualified group, you may purchase
Programs Class A Shares of the Fund or of another Nuveen Mutual Fund
at the reduced sales charge applicable to the group's
purchases taken as a whole. A "qualified group" is one which
has been in existence for more than six months, has a purpose
other than investment, has five or more participating
members, has agreed to include Fund sales publications in
mailings to members and has agreed to comply with certain
administrative requirements relating to its group purchases.
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Under any group purchase program, the minimum monthly
investment in Class A Shares of any particular fund or
portfolio by each participant is $25, and the minimum monthly
investment in Class A Shares of any particular fund or
portfolio for all participants in the program combined is
$1,000. No certificates will be issued for any participant's
account. All dividends and other distributions by the Fund
will be reinvested in additional Class A Shares of the Fund.
No participant may utilize a systematic withdrawal program.
To establish a group purchase program, both the group itself
and each participant must fill out special application
materials, which the group administrator may obtain from the
group's financial adviser, by checking the applicable box on
the enclosed Application Form or by calling Nuveen toll-free
at 800-621-7227. See the Statement of Additional Information
for more complete information about "qualified groups" and
group purchase programs.
Reinvestment You may also purchase Class A Shares at net asset value
of Redemption without a sales charge if the purchase takes place through a
Proceeds from broker-dealer and represents the reinvestment of the proceeds
Unaffiliated of the redemption of shares of one or more registered
Funds investment companies not affiliated with Nuveen. You must
provide appropriate documentation that the redemption
occurred not more than 60 days prior to the reinvestment of
the proceeds in Class A Shares, and that you either paid an
up-front sales charge or were subject to a contingent
deferred sales charge in respect of the redemption of such
shares of such other investment company.
Special Sales Class A Shares of the Fund may be purchased at net asset
Charge Waivers value without a sales charge and in any amount by officers,
trustees and retired trustees of the Trust; bona fide, full-
time and retired employees of Nuveen or ICAP, any parent
company of Nuveen, and subsidiaries thereof, or their
immediate family members (as defined below); any person who,
for at least 90 days, has been an officer, director or bona
fide employee of any Authorized Dealer, or their immediate
family members; officers and directors of bank holding
companies that make Fund shares available directly or through
subsidiaries or bank affiliates; bank or broker-affiliated
trust departments; clients of broker-dealers that sponsor
mutual fund purchase programs on a periodic fee, asset-based
fee or no transaction fee basis; and clients of investment
advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for
their services. For further details about these special
categories and their eligibility requirements, please consult
your financial adviser or the Statement of Additional
Information, or call Nuveen at 800-621-7227.
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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
adviser must notify Nuveen or SSI whenever you make a
purchase of Class A Shares that you wish to be covered under
these special sales charge waivers. All purchases under the
Special Sales Charge Waivers will be subject to minimum
purchase requirements as established by the Fund. All of the
above categories of investors are also eligible to purchase
Class R Shares, as described below under "Class R Shares."
Finally, Class A Shares may be issued at net asset value
without a sales charge in connection with the acquisition by
the Fund of another investment company.
In general In determining the amount of your purchases of Class A Shares
that may qualify for a reduced sales charge, the following
purchases may be combined: (1) all purchases by a trustee or
other fiduciary for a single trust estate or fiduciary
account; (2) all purchases by individuals and their immediate
family members (i.e., their spouses and their children under
21 years of age); or (3) all purchases made through a group
purchase program as described above.
The reduced sales charge programs may be modified or
discontinued by the Fund at any time upon prior written
notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR
REDUCED SALES CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED
APPLICATION FORMS, CALL NUVEEN TOLL-FREE AT 800-621-7227.
CLASS B SHARES
Class B Shares You may purchase Class B Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Since Class B Shares are sold without
their net an initial sales charge, the full amount of your purchase
asset value, payment will be invested in Class B Shares. Class B Shares
but are are subject to an annual distribution fee to compensate
subject to an Nuveen for its costs in connection with the sale of Class B
annual shares, and are also subject to an annual service fee to
distribution compensate Authorized Dealers for providing you with ongoing
fee and a CDSC financial advice and other account services.
You may be subject to a CDSC if you redeem your Class B
shares within a specified period after purchase, as shown in
the table below. See "Flexible Pricing Program" and
"Distribution and Service Plan." Nuveen compensates
Authorized Dealers for sales of Class B Shares at the time of
sale at the rate of 4.00% of the amount of Class B Shares
purchased, which represents a sales commission of 3.75% plus
an advance on the first year's annual service fee of .25%.
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If redeemed prior to the end of the sixth year after purchase, Class B Shares may be subject to a CDSC, as set forth below:
YEARS
SINCE
PURCHASE CDSC
------
0-1 5%
1-2 4%
2-3 3%
3-4 3%
4-5 2%
5-6 1%
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Class B Shares acquired through the reinvestment of dividends
are not subject to a CDSC. Any CDSC will be imposed on the
lower of the redeemed shares' cost or net asset value at the
time of redemption. For more information regarding the
imposition of the CDSC, see "How to Redeem Fund Shares --
Class B Shares," below.
Class B Shares Class B Shares will automatically convert to Class A Shares
automatically eight years after purchase. All conversions will be done at
convert to net asset value without the imposition of any sales load,
Class A Shares fee, or other charge, so that the value of each shareholder's
eight years account immediately before conversion will be the same as the
after purchase value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions will
convert into Class A Shares based on the date of the initial
purchase to which such shares relate. For this purpose, Class
B Shares acquired through reinvestment of distributions will
be attributed to particular purchases of
Class B Shares in accordance with such procedures as the
Board of Trustees may determine from time to time. Class B
Shares that are converted to Class A Shares will remain
subject to an annual service fee that is identical in amount
for both Class B Shares and Class A Shares. Since net asset
value per share of the Class B Shares and the Class A Shares
may differ at the time of conversion, a shareholder may
receive more or fewer Class A Shares than the number of Class
B Shares converted. Any conversion of Class B Shares into
Class A Shares will be subject to the continuing availability
of an opinion of counsel or a private letter ruling from the
Internal Revenue Service to the effect that the conversion of
shares would not constitute a taxable event under federal
income tax law. Conversion of Class B Shares into Class A
Shares might be suspended if such an opinion or ruling were
no longer available.
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CLASS C SHARES
Class C Shares You may purchase Class C Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Class C Shares are subject to an
their net annual distribution fee to compensate Nuveen for its costs in
asset value, connection with the sale of Class C Shares. Class C Shares
but are are also subject to an annual service fee to compensate
subject to an Authorized Dealers for providing you with ongoing financial
annual advice and other account services. Nuveen compensates
distribution Authorized Dealers for sales of Class C Shares at the time of
fee the sale at a rate of 1% of the amount of Class C Shares
purchased, which represents a sales commission of .75% plus
an advance on the first year's annual service fee of .25%.
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See "Flexible Pricing Program" and "Distribution and Service Plan."
Redemptions of Class C Shares within 12 months of purchase may be subject to a CDSC of 1% of the lower of the purchase price or redemption proceeds. See "How to Redeem Fund Shares -- Class C Shares."
CLASS R SHARES
Class R Shares If you are making a purchase of $1 million or more of Fund
are offered at shares in a single transaction, you may purchase Class R
their net shares at a public offering price equal to the applicable net
asset value asset value per share without any up-front sales charge or
only under ongoing distribution or service fees. You also may purchase
limited Class R Shares subject only to the Fund's minimum investment
circumstances requirement of $1,000 if you are within the following
or to specified categories of investors who are eligible to
specified purchase Class A Shares at net asset value without an up-
classes of front sales charge: officers, trustees and retired trustees
investors of the Trust; bona fide, full-time and retired employees of
Nuveen or ICAP, any parent company of Nuveen, and
subsidiaries thereof, or their immediate family members; any
person who, for at least 90 days, has been an officer,
director or
bona fide employee of any Authorized Dealer, or their
immediate family members; officers and directors of bank
holding companies that make Fund shares available directly or
through subsidiaries or bank affiliates; bank or broker-
affiliated trust departments; clients of broker-dealers that
sponsor mutual fund purchase programs on a periodic fee,
asset-based fee or no transaction fee basis; and clients of
investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for
their services. For further details about these special
categories and their eligibility requirements, please consult
your financial adviser or the Statement of Additional
Information, or call Nuveen at 800-621-7227.
If you are eligible to purchase either Class R 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
24
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Authorized Dealers for providing you with ongoing account
services. Class R Shares are not subject to a distribution or
service fee and, consequently, holders of Class R Shares may
not receive the same types or levels of services from
Authorized Dealers. In choosing between Class A Shares and
Class R Shares, you should weigh the benefits of the services
to be provided by Authorized Dealers against the annual
service fee imposed upon the Class A Shares.
INITIAL AND SUBSEQUENT PURCHASES OF SHARES
The Fund You may buy Fund shares through Authorized Dealers or by
offers a calling or directing your financial adviser to call Nuveen
number of toll-free at 800-843-6765. You may pay for your purchase by
convenient Federal Reserve draft or by check made payable to "Nuveen
ways to Balanced Fund, Class [A], [B], [C], [R]," delivered to the
purchase financial adviser through whom the investment is to be made
shares for forwarding to the Fund's shareholder services agent, SSI.
When making your initial investment, you must also furnish
the information necessary to establish your Fund account by
completing and enclosing with your payment the attached
Application Form. After your initial investment, you may make
subsequent purchases at any time by forwarding to SSI a check
in the amount of your purchase made payable to "Nuveen
Balanced Fund, Class [A], [B], [C], [R]," and indicating on
the check your account number. All payments must be in U.S.
dollars and should be sent directly to SSI at its address
listed on the back cover of this Prospectus. A check drawn on
a foreign bank or payable other than to the order of the Fund
generally will not be acceptable. You may also wire Federal
Funds directly to SSI, but you may be charged a fee for this.
For instructions on how to make Fund purchases by wire
transfer, call Nuveen toll-free at 800-621-7227.
PURCHASE PRICE
The price at which you purchase Fund shares is based on the
next calculation of the Fund's net asset value after the
order is placed. The Fund's net asset value per share is
determined as of the close of trading (currently 4:00 p.m.
eastern time) on each day the New York Stock Exchange is open
for business. See "Net Asset Value," below for a description
of how net asset value is calculated.
MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's
shares must be for $1,000 or more. Additional purchases may
be in amounts of $100 or more. These minimums may be changed
at any time by the Fund. There are exceptions to these
minimums for shareholders who qualify under one or more of
the Fund's automatic deposit, group purchase or reinvestment
programs.
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SYSTEMATIC INVESTMENT PROGRAMS
The Fund The Fund offers you several opportunities to capture the
offers several benefits of "dollar cost averaging" through systematic
ways to make investment programs. In a regularly followed dollar cost
systematic averaging program, you would purchase more shares when Fund
investments share prices are lower and fewer shares when Fund share
prices are higher, so that the average price paid for Fund
shares is less than the average price of the Fund shares over
the same time period. Dollar cost averaging does not assure
profits or protect against losses in a steadily declining
market. Since dollar cost averaging involves continuous
investment regardless of fluctuating price levels, you should
consider your financial ability to continue investing in
declining as well as rising markets before deciding to invest
in this way. The Fund offers two different types of
systematic investment programs:
Automatic Once you have established a Fund account, you may make
Deposit Plan regular investments in an amount of $25 or more each month by
authorizing SSI to draw preauthorized checks on your bank
account. There is no obligation to continue payments and you
may terminate your participation at any time at your
discretion. No charge in addition to the applicable sales
charge is made in connection with this Plan, and there is no
cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the
enclosed Application Form or call Nuveen toll-free at 800-
621-7227.
Payroll Direct Once you have established a Fund account, you may, with your
Deposit Plan employer's consent, make regular investments in Fund shares
of $25 or more per pay period by authorizing your employer to
deduct this amount automatically from your
paycheck. There is no obligation to continue payments and you
may terminate your participation at any time at your
discretion. No charge in addition to the applicable sales
charge is made for this Plan, and there is no cost to the
Fund. To obtain an application form for the Payroll Direct
Deposit Plan, check the applicable box on the enclosed
Application Form or call Nuveen toll-free at [800-621-7227.]
OTHER SHAREHOLDER PROGRAMS
Exchange You may exchange shares of a class of the Fund for shares of
Privilege the same class of any other Nuveen Mutual Fund with
reciprocal exchange privileges, at net asset value without a
sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330. Similarly, Class A, Class B, Class C and Class R Shares
of other Nuveen Mutual Funds may be exchanged for the same
class of shares of the Fund at net asset value without a
sales charge. Exchanges of shares from any Nuveen money
market fund will be made into Class A Shares,
26
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Class B Shares, Class C Shares or Class R Shares of the Fund
at the public offering price. If, however, a sales charge has
previously been paid on the investment represented by the
exchanged shares (i.e., the shares to be exchanged were
originally issued in exchange for shares on which a sales
charge was paid), the exchange of shares from a Nuveen money
market fund will be made into shares of the Fund at net asset
value. Class A Shares, Class C Shares or Class R Shares may
be exchanged for shares of any Nuveen money market fund, but
Class B Shares may not be exchanged for shares of a Nuveen
money market fund.
Class A shares of Nuveen Mutual Funds sold with a maximum up-
front sales charge of less than the maximum charged by other
Nuveen Mutual Funds will be subject to the appropriate "sales
charge differential" upon the exchange of such shares for
Class A shares of a Fund sold with a higher up-front sales
charge. The "sales charge differential" is limited to a
percentage rate no greater than the excess of the sales
charge rate applicable to purchases of shares of the Nuveen
Mutual Fund being acquired in the exchange over the sales
charge rate(s) actually paid on the mutual fund shares
relinquished in the exchange and on any predecessor of those
shares. For purposes of the exchange privilege, shares
obtained through automatic reinvestment of dividends and
capital gain distributions are treated as having paid the
same sales charges applicable to the shares on which the
dividends or distributions were paid; however, if no sales
charge was imposed upon the initial purchase of the shares,
any shares obtained through automatic reinvestment will be
subject to a sales charge differential upon exchange.
If you exchange shares 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.
The shares to be purchased must be offered in your state of
residence and you must have held the shares you are
exchanging for at least 15 days. The total value of exchanged
shares must at least equal the minimum investment requirement
of the Nuveen Mutual Fund being purchased. For federal income
tax purposes, any exchange 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 that of the fund account from
which the exchange is made, written instructions from all
holders of
27
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the account from which the exchange is being made must be
received, with signatures guaranteed by a member of an
approved Medallion 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 enclosed Application Form
or by calling Nuveen toll-free at 800-621-7227 to obtain an
authorization form. The exchange privilege may be modified or
discontinued by the Fund at any time upon prior written
notice to shareholders of the Fund.
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.
Fund Direct You can use Fund Direct to link your Fund account to your
account at a bank or other financial institution. Fund Direct
enables you to transfer money electronically between these
accounts and perform a variety of account transactions. These
include purchases of shares by telephone, investments under
Automatic Deposit Plan, and sending dividends and
distributions, redemption payments or Automatic Withdrawal
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Plan payments directly to your bank account. Please refer to the Application for details, or call SSI for more information.
Fund Direct privileges must be requested via an Application you obtain by calling 800-621-7227. Fund Direct privileges will apply to each shareholder listed in the registration on your account as well as to your Authorized Dealer representative of record unless and until SSI receives written instructions terminating or changing those privileges. After you establish Fund Direct for your account, any change of bank account information must be made by signature-guaranteed instructions to SSI signed by all shareholders who own the account.
Purchases may be made by telephone only after your account has been established. To purchase shares in amounts up to $250,000 through a telephone representative, call SSI at 800- 621-7227. The purchase payment will be debited from your bank account.
Reinstatement If you redeemed Class A, Class B or Class C Shares of the
Privilege 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 of the appropriate class of Fund shares next calculated
after reinstatement. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption
date will also be reinstated. The 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 and amount of the
reinvestment.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO
OBTAIN THE APPLICATION FORMS REQUIRED FOR SOME OF THEM, CALL
NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be
opened and maintained for you by SSI, the Fund's shareholder
services agent. Share certificates will be issued to you only
upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to
reject any purchase order and to waive or increase minimum
investment requirements. A change in registration or transfer
of shares held in the name of your financial adviser's firm
can only be made by an order in good form from the financial
adviser acting on your behalf.
Authorized Dealers are encouraged to open single master
accounts. However, some Authorized Dealers may wish to use
SSI's sub-accounting system to minimize their internal
recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other
than the master account or sub-accounting service offered by
SSI will be required to enter into a separate agreement with
another agent for these services for a fee that will depend
upon the level of services to be provided.
Subject to the rules and regulations of the Securities and
Exchange Commission, the Fund reserves the right to suspend
the continuous offering of its shares at any time, but no
suspension shall affect your right of redemption as described
below.
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DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, which
provides that Class B and Class C Shares will be subject to
an annual distribution fee and Class A, Class B and Class C
Shares will be subject to an annual service fee. Class R
Shares will not be subject to either distribution or service
fees.
The distribution fee applicable to Class B and Class C Shares under the Plan will be payable to reimburse Nuveen for services and expenses incurred in connection with the distribution of such Shares. The distribution fee primarily reimburses Nuveen for providing compensation to Authorized Dealers, including Nuveen, either at the time of sale or on an ongoing basis. The other expenses for which Nuveen may be reimbursed include, 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 such Shares, certain other expenses associated with the distribution of such 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, Class B and Class C Shares under the Plan will be payable to Nuveen, to be used to compensate Authorized Dealers, including Nuveen, 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.
The Fund may spend up to .25 of 1% per year of the average daily net assets of Class A Shares as a service fee under the Plan applicable to Class A Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class B Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class B Shares as a service fee under the Plan applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class C Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class C Shares as a service fee under the Plan applicable to Class C Shares.
HOW TO REDEEM FUND SHARES
You may require the Fund at any time to redeem for cash your
shares of the Fund at the net asset value next computed after
instructions and required documents and certificates, if any,
are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any contingent deferred sales charge. However, in the case of purchases at net asset value of Class A shares of $1 million or more, where the dealer of record has not waived the sales commission, a CDSC of 1% is imposed on any redemptions within 18 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS B SHARES
A CDSC may be imposed upon redemption of Class B Shares. The rate of the CDSC is determined by how long you have owned your shares, as described under "How to Buy Fund Shares -- Class B Shares," above. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any contingent deferred sales charge, except that a CDSC of 1% may be imposed upon redemption of Class C Shares that are redeemed within 12 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not subject to any charge, and then in the order in which the Class B Shares were purchased or in the reverse order in which the Class A or Class C Shares were purchased, except if another order of redemption would result in a lower charge or you specify 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 or money market fund. Your holding period is calculated on a monthly basis and begins the first day of the month in which the order for investment is received. The CDSC is calculated based on the lower of the redeemed shares' cost or net asset value at the time of the redemption and is deducted from the redemption proceeds. Nuveen receives the amount of any CDSC you pay.
By Written You may redeem shares by sending a written request for
Request redemption directly to the Fund, c/o Shareholder Services,
Inc., P.O. Box 5330, Denver, CO 80217-5330, accompanied by
duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be signed
by each shareholder and, if the redemption proceeds exceed
$50,000 or are payable other than to the shareholder of
record at the address of record (which address may not have
changed in the preceding 60 days), the signature must be
guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the
Fund. You will receive payment based on the net asset value
per share next determined after receipt by the Fund of a
properly executed redemption request in proper form. A check
for the redemption proceeds will be mailed to you within
seven days after receipt of your redemption request. For
accounts registered in the name of a broker-dealer, payment
will be forwarded within three business days. However, if any
shares to be redeemed were purchased by check within 15 days
prior to the date the redemption request is received, the
Fund will not mail the redemption proceeds until the check
received for the purchase of shares has cleared, which may
take up to 15 days.
By TEL-A-CHECK If you have authorized telephone redemption and your account
address has not changed within the last 60 days, you can
redeem shares that are held in non-certificate form and that
are worth $50,000 or less by calling Nuveen at 800-621-7227.
While you or anyone authorized by you may make telephone
redemption requests, redemption checks will be issued only in
the name of the shareholder of record and will be mailed to
the address of record. If your telephone request is received
prior to 4:00 p.m. eastern time, the redemption check will
normally be mailed the next business day. For requests
received after 4:00 p.m. eastern time, the redemption will be
effected at 4:00 p.m. eastern time the following business day
and the check will normally be mailed on the second business
day after the request.
By TEL-A-WIRE If you have authorized TEL-A-WIRE redemption or established
or Fund Direct Fund Direct privileges, you can take advantage of the
following expedited redemption procedures to redeem shares
held in non-certificate form that are worth at least $1,000.
You may make TEL-A-WIRE redemption requests through a phone
representative or Fund Direct redemption requests by calling
Nuveen at 800-621-7227. If a redemption request is received
by 4:00 p.m. eastern time, the redemption will be made as of
4:00 p.m. that day. If the redemption request is received
after 4:00 p.m. eastern time, the redemption will be made as
of 4:00 p.m. the following business day. Proceeds of
redemptions through TEL-A-WIRE will normally be wired on the
second business day following the redemption, but may be
delayed one additional
32
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business day if the Federal Reserve Bank of Boston or the
Federal Reserve Bank of New York is closed on the day
redemption proceeds would ordinarily be wired. The Fund
reserves the right to charge a fee for TEL-A-WIRE. Proceeds
of redemptions through Fund Direct will normally be wired to
your Fund Direct bank account on the second or third business
day after the redemption.
Before you may redeem shares by TEL-A-CHECK, TEL-A-WIRE or
Fund Direct, you must complete the telephone redemption
authorization section of the enclosed Application Form or the
Fund Direct Application Form and return it to Nuveen or SSI.
If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption
authorization form by writing the Fund or by calling Nuveen
toll-free at 800-621-7227. Proceeds of share redemptions made
by TEL-A-WIRE will be transferred by Federal Reserve wire
only to the commercial bank account specified by the
shareholder on the application form. You must send a written
request to Nuveen or SSI in order to establish multiple
accounts, or to change the account or accounts designated to
receive redemption proceeds. These requests must be signed by
each account owner with signatures guaranteed by a member of
an approved Medallion Guarantee Program or in such other
manner as may be acceptable to the Fund. Further
documentation may be required from corporations, executors,
trustees or personal representatives.
For the convenience of shareholders, the Fund has authorized
Nuveen as its agent to accept orders from financial advisers
by wire or telephone for the redemption of Fund shares. The
redemption price is the first net asset value determined
following receipt of an order placed by the financial
adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly
upon presentation of required documents with signatures
guaranteed as described above. Neither the Fund nor Nuveen
charges any redemption fees other than any CDSC as described
above. However, your financial adviser may charge you for
serving as agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions
and, at its option, may limit the timing, amount or frequency
of these redemptions. Telephone redemption procedures may be
modified or terminated at any time, on 30 days' notice, by
the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be
genuine. The Fund employs procedures reasonably designed to
confirm that telephone instructions are genuine. These
procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting
upon a caller's instructions. If the Fund does
33
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not follow reasonable procedures for protecting shareholders
against loss on telephone transactions, it may be liable for
any losses due to unauthorized or fraudulent telephone
instructions.
Automatic If you own Fund shares currently worth at least $10,000, you
Withdrawal may establish an Automatic Withdrawal Plan by completing an
Plan application form for the Plan. You may obtain an application
form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at 800-621-
7227.
The Plan permits you to request periodic withdrawals on a
monthly, quarterly, semi-annual or annual basis in an amount
of $50 or more. Depending upon the size of the withdrawals
requested under the Plan and fluctuations in the net asset
value of Fund shares, these withdrawals may reduce or even
exhaust your account.
The purchase of Class A Shares, other than through
reinvestment, while you are participating in the Automatic
Withdrawal Plan with respect to Class A Shares will usually
be disadvantageous because you will be paying a sales charge
on any Class A Shares you purchase at the same time you are
redeeming shares. Similarly, use of the Automatic Withdrawal
Plan for Class B Shares held for less than six years or Class
C Shares held for less than 12 months may be disadvantageous
because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
General 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 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 Securities and Exchange
Commission so that trading of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for any other periods that the Securities
and Exchange Commission by order may permit for protection of
Fund shareholders.
The Fund may, from time to time, establish a minimum total
investment for Fund shareholders, and the Fund reserves the
right to redeem your shares if your investment is less than
the minimum after giving you at least 30 days' notice. If any
minimum total investment is established, and if your account
is below the minimum, you will be allowed 30 days following
the notice in which to purchase sufficient shares to meet the
minimum. So long as the Fund continues to offer shares at net
asset value to holders of Nuveen UITs who are investing their
Nuveen UIT distributions, no minimum total investment will be
established for the Fund.
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MANAGEMENT OF THE FUND
Board of The management of the Fund, including general supervision of
Trustees the duties performed for the Fund by NIAC under the
Management Agreement, is the responsibility of the Board of
Trustees of the Trust.
NIAC oversees Overall management of the Fund is the responsibility of NIAC,
operation of which is located at 333 West Wacker Drive, Chicago, Illinois
the Fund 60606. NIAC oversees the management of the Fund's investment
portfolio and manages the day-to-day business affairs of the
Fund. NIAC has entered into an agreement with ICAP under
which ICAP manages the Fund's investment portfolio.
NIAC is a wholly-owned subsidiary of Nuveen, the oldest and
largest investment banking firm (based on number of
employees) specializing in the underwriting and distribution
of tax-exempt securities. Nuveen, the principal underwriter
of the Fund's shares, is sponsor of the Nuveen Tax-Free Unit
Trust, a registered unit investment trust. It is also the
principal underwriter for the Nuveen Mutual Funds, and served
as co-managing underwriter for the shares of the Nuveen
Exchange-Traded Funds. Over 1,000,000 individuals have
invested to date in Nuveen's funds and trusts. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 80% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located in St.
Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.
For the fund management services and facilities furnished by
NIAC, the Fund has agreed to pay an annual management fee as
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follows:
AVERAGE DAILY NET ASSET
VALUE FUND MANAGEMENT FEE
-----------------------------------------
For the first $125 million .7500 of 1%
For the next $125 million .7375 of 1%
For the next $250 million .7250 of 1%
For the next $500 million .7125 of 1%
For the next $1 billion .7000 of 1%
For assets over $2 billion .6750 of 1%
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ICAP manages ICAP was founded in 1970 and is located at 225 West Wacker
the Fund's Drive, Suite 2400, Chicago, IL 60606. Under the Sub-Advisory
investment Agreement, NIAC pays ICAP a portfolio management fee on the
portfolio Fund's average daily net asset value at an annual rate as set
forth below, which is determined by reference to the average
daily market value of that portion of the assets of all
Nuveen-sponsored investment products for which ICAP serves as
portfolio manager.
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ASSETS OF NUVEEN-SPONSORED PORTFOLIO
INVESTMENT PRODUCTS MANAGEMENT
MANAGED BY ICAP FEE
------------------------------------------------------------
For the first $500 million .29 of 1%
For the next $500 million .24 of 1%
For assets over $1 billion .20 of 1%
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The investment decisions for the Fund are made through a team
approach, with all of the ICAP investment professionals
contributing to the process. Each of the officers and other
investment professionals of ICAP has developed an expertise
in at least one functional investment area, including equity
research, strategy, fixed income analysis, quantitative
research, technical research, and trading. A key element in
the decision making process is a formal investment committee
meeting generally held each business day and attended by all
the investment professionals. At this meeting, a
comprehensive review of ICAP's investment position is
undertaken. Pertinent information from outside sources is
shared and incorporated into the investment outlook. The
investment strategy, each asset sector, and each individual
security holding are reviewed to verify their continued
appropriateness. Investment recommendations are presented to
the committee for decisions.
ICAP provides continuous advice and recommendations
concerning the Fund's investments, and is responsible for
selecting the broker-dealers who execute the portfolio
transactions. In executing such transactions, ICAP seeks to
obtain the best net results for the Funds. ICAP also serves
as investment adviser to the ICAP Funds, Inc. and to pension
and profit-sharing plans, and other institutional and private
investors. As of May 1, 1996, ICAP had approximately $5
billion under management. Mr. Robert H. Lyon, President of
ICAP, owns shares representing 51% of the voting rights of
ICAP. In addition, The John Nuveen Company owns preferred
shares of ICAP, which are convertible after several years
into a 20% common stock interest of ICAP.
NIAC serves as NIAC serves as administrator for the Fund. In such capacity,
Fund it provides office facilities and equipment. As
Administrator administrator, NIAC has also agreed to provide or to obtain
at its expense for the Fund all other services including
custodial, transfer agent, accounting, legal and certain
clerical, bookkeeping and administrative services, and to pay
all other expenses of the Fund (other than investment
management fees, distribution fees and service fees,
brokerage costs, organizational costs, interest charges and
extraordinary expenses), including but not limited to share
registration expenses, printing and mailing expenses,
compensation and expenses of trustees not affiliated with
NIAC or ICAP, taxes and insurance. For these services, each
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class pays the Administrator an annual fee of %.
How the Fund The Fund may from time to time compare its investment results
shows to various passive indices or other mutual funds and cite
performance such comparisons in reports to shareholders, sales
literature, and advertisements. The results may be calculated
on the basis of average annual total return, total return, or
cumulative total return.
All total return figures assume the reinvestment of all
dividends and measure the net investment income generated by,
and the effect of any realized and unrealized appreciation or
depreciation of, the underlying investments in the Fund over
a specified period of time. Average annual total return
figures are annualized and therefore represent the average
annual percentage change over the specified period.
Cumulative total return figures are not annualized and
represent the aggregate percentage or dollar value change
over a stated period of time. Average annual total return and
cumulative total return are based upon the historical results
of the Fund and are not necessarily representative of the
future performance of the Fund.
The Fund does not have any prior operating history. The
following chart illustrates the growth of a hypothetical
$10,000 investment based upon the investment performance of
the ICAP Balanced Composite between December 31, 1975 and
December 31, 1995. The ICAP Balanced Composite represents the
composite performance of the [x] managed accounts totalling
[$500] million for which ICAP serves as investment adviser
and that have the same investment objectives and policies as
the Fund.
Growth of a $10,000 Investment
January 1976 - December 1995
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Consumer
50% S&P Price
ICAP with 50% Lehman with Dividend Index
Dividends Reinvested Reinvested (inflation)
--------------------------------------------------------------------
1/76 10,000 10,000 10,000
1/77 10,873 11,767 10,482
1/78 11,065 11,510 11,192
1/79 12,419 12,050 12,203
1/80 13,187 13,572 13,827
1/81 16,416 16,216 15,542
1/82 16,904 16,679 16,932
1/83 23,050 20,603 17,586
1/84 23,490 23,743 18,255
1/85 26,613 26,174 18,975
1/86 37,645 32,785 19,693
1/87 46,889 38,020 19,918
1/88 49,313 40,359 20,798
1/89 54,081 44,991 21,716
1/90 64,446 54,856 22,724
1/91 75,950 56,690 24,110
1/92 84,845 69,313 24,851
1/93 96,608 74,401 25,568
1/94 101,313 81,181 26,272
1/95 110,881 81,003 26,974
12/31/95 131,832 102,546 27,658
--------------------------------------------------------------------
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Mountain chart comparing the performance of a hypothetical $10,000 investment over the period from January 1976 through December 1995, whose returns were generated by one of the following three indices: the ICAP Balanced Composite, net of the Class A sales charge and assumed ongoing expenses; an unmanaged index comprised 50% of the S&P 500 Index and 50% of the Lehman Intermediate Treasury Index; and the Consumer Price Index (CPI).
The ICAP performance results assume payment of the maximum Class A sales charge of 5.25% and reflect the investment performance of the ICAP Balanced Composite before deduction of any investment advisory fees or other expenses, less Class A's projected annual operating expenses as summarized in the Summary of Fund Expenses on page [3]. These performance results would be different from a comparable Class B, C or R investment, reflecting the different sales charge and ongoing operating expenses of each respective class. The 50/50 Balanced Index represents the investment performance of an unmanaged index comprised 50% of Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and 50% of the Lehman Brothers Intermediate Treasury Index (the "Lehman Index"). S&P 500 returns assume reinvestment of all dividends paid by the stocks included in the index, but do not include brokerage commissions or other fees an investor would incur by investing in the portfolio of stocks comprising the index. The Lehman Index is an unmanaged index of all public obligations of the U.S. Treasury with maturities between one and ten years and an outstanding par value of at least $100 million. All returns used in the chart above are quarterly returns.
DISTRIBUTIONS AND TAXES
The Fund intends to operate as a "Regulated Investment
Company" under Subchapter M of the Internal Revenue Code, and
therefore will not be liable for federal income taxes to the
extent earnings are distributed on a timely basis.
For federal income tax purposes, UNLESS YOU ARE EXEMPT FROM TAXATION OR ENTITLED TO A TAX DEFERRAL, ALL DIVIDENDS PAID BY THE FUND AND NET REALIZED SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET REALIZED LONG-TERM CAPITAL GAINS ARE TAXABLE AS A CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES. The capital gain holding period is determined by the length of time the Fund has held the security and not the length of time you have held shares in the Fund. Investors are informed annually as to the amount and nature of all dividends and capital gains paid during the prior year. Such capital gains and dividends may also be subject to state or local taxes. If you are not required to pay taxes on your income, you are generally not required to pay federal income taxes on the amounts distributed to you.
Income dividends are usually distributed quarterly, and capital gains, if any, are usually distributed annually in December. When a dividend or capital gain is distributed, the Fund's net asset value decreases by the amount of the payment. ANY SUCH DISTRIBUTION WILL BE SUBJECT TO INCOME TAXES WHENEVER IT IS RECEIVED, EVEN IF THE DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES. All dividends or capital gains distributions will automatically be reinvested in shares of the Fund at the then prevailing net asset value unless an investor specifically requests that either dividends or capital gains or both be paid in cash. The election to receive dividends or reinvest them may be changed by writing to: Nuveen Funds, c/o Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-5330. Such notice must be received at least 5 days prior to the record date of any dividend or capital gain distribution.
If you do not furnish the Fund with your correct social security number or employer identification number, the Fund is required by federal law to withhold federal income tax from your distributions and redemption proceeds at a rate of 31%.
This section is not intended to be a full discussion of federal income tax laws and the effect of such laws on you. There may be other federal, state, or local tax considerations applicable to a particular investor. You are urged to consult your own tax adviser.
NET ASSET VALUE
Net asset The Fund's net asset value per share is determined as of the
value is close of trading (currently 4:00 p.m. eastern time) on each
calculated day the New York Stock Exchange is open for business. The
daily Fund's net asset value may not be calculated on days during
which the Fund receives no orders to purchase shares and no
shares are tendered for redemption. Net asset value is
calculated by taking the fair value of the Fund's 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. In
determining net asset value, expenses are accrued and applied
daily and securities and other assets for which market
quotations are available are valued at market value. Common
stocks and other equity-type securities are valued at the
last sales price on the national securities exchange or
Nasdaq on which such securities are primarily traded;
however, securities traded on a national securities exchange
or Nasdaq for which there were no transactions on a given day
or securities not listed on a national securities exchange or
Nasdaq are valued at the most recent bid prices. Debt
securities are valued by a pricing service that utilizes
electronic data processing techniques to determine values for
normal institutional-sized trading units of debt securities
without regard to the existence of sale or bid prices when
such values are believed to more accurately reflect the fair
market value of such securities; otherwise, actual sale or
bid prices are used. Any securities or other assets for which
market quotations are not readily available are valued at
fair value as determined in good faith by the Board of
Trustees. Debt securities having remaining maturities of 60
days or less when purchased are valued by the amortized cost
method when the Board of Trustees determines that the fair
market value of such securities is their amortized cost.
Under this method of valuation, a security is initially
valued at its acquisition cost, and thereafter amortization
of any discount or premium is assumed each day, regardless of
the impact of fluctuating interest rates on the market value
of the security. Regardless of the method employed to value a
particular security, all valuations are subject to review by
the Fund's Board of Trustees or its delegate who may
determine the appropriate value of a security whenever the
value as calculated is significantly different from the
previous day's calculated value.
Fund expenses In addition to the Fund management fee and administrative fee
paid to NIAC and the distribution and service fees paid to
Nuveen, the Fund is responsible for its own expenses that are
not covered under such agreements, including, without
limitation: interest charges; brokerage commissions;
organizational expenses; and extraordinary expenses.
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GENERAL INFORMATION
Custodian and The Custodian of the assets of the Fund is The Chase
Transfer and Manhattan Bank, N.A., 770 Broadway, New York, New York 10003.
Shareholder Chase also provides certain accounting services to the Fund.
Service Agent The Fund's transfer, shareholder services and dividend paying
agent, Shareholder Services, Inc., P.O. Box 5330, Denver, CO
80217-5330, performs bookkeeping, data processing and
administrative services for the maintenance of shareholder
accounts.
Organization The Fund is a series of the Nuveen Investment Trust
("Trust"). The Trust is an open-end diversified management
investment company under the Investment Company Act of 1940.
The Trust was organized as a Massachusetts business trust on
May , 1996. The Board of Trustees is authorized to issue an
unlimited number of shares in one or more series or "Funds,"
which may be divided into classes of shares. Currently, there
are three series authorized and outstanding, each of which is
divided into four classes of shares designated as Class A
Shares, Class B Shares, Class C Shares and Class R 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 automatically convert into Class A Shares
of the same Fund, as described above. The Board of Trustees
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 owing more than 10% of
the outstanding shares of the Trust 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 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 Declaration of Trust further provides for
indemnification out of the assets and property of the Trust
for all loss and expense 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 itself was
unable to meet its obligations. The Trust believes the
likelihood of the occurrence of these circumstances is
remote.
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NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen Income and Growth Fund
Prospectus
, 1996
The NUVEEN INCOME AND GROWTH FUND (the "Fund") seeks to provide over time an
attractive after-tax total return through a combination of federally tax-exempt
income and long-term capital appreciation, and preservation of capital in
adverse markets. The Fund pursues this objective by investing in a diversified
portfolio of securities consisting of investment grade quality municipal
obligations and equity securities of domestic companies with market
capitalizations of at least $500 million. The Fund is designed to offer you a
tax-efficient investment strategy that reduces taxable distributions and offers
a balance between after-tax total returns and capital preservation.
The Fund has adopted a Flexible Pricing Program, which offers you the
opportunity to purchase Fund shares in the same manner you typically make other
investments. The Program features four alternative ways to purchase Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. The Program is
designed to permit you and your financial adviser to choose the method of
purchasing shares that you believe is most beneficial given the amount of your
purchase and current investment, the length of time you expect to hold your
investment, and other relevant circumstances. See "Flexible Pricing Program,"
"How to Buy Fund Shares" and "Summary of Fund Expenses."
The Fund is a series of The Nuveen Investment Trust (the "Trust"). This
Prospectus contains information you should know before investing in the Fund.
Please retain it for future reference. You can find more detailed information
about the Fund in the Statement of Additional Information dated , 1996,
as amended from time to time. For a free copy of this Statement, write to the
Nuveen Mutual Funds, 333 West Wacker Drive, Chicago, IL 60606, or call Nuveen
toll-free at 800-621-7227. The Statement has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
of the Fund involve investment risks, including possible loss of principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
CONTENTS 3 Summary of fund expenses 5 How to determine if the fund is right for you 8 Who is responsible for the operation of the fund? 9 What are the fund's investment objective and policies? 18 Flexible Pricing Program 20 How to buy fund shares 32 Distribution and service plan 33 How to redeem fund shares 37 Management of the fund 40 How the fund shows performance 42 Distributions and taxes 43 Tax Matters 45 Net asset value 46 General information Application |
SUMMARY OF FUND EXPENSES
Shareholder Transaction
Expenses (as a percent of
offering price)(1) Class A Class B Class C Class R(2)
- --------------------------------------------------------------------------------------------------------
Maximum Sales Charge Imposed 5.25%(3) None None None
on
Purchases
Maximum Sales Charge Imposed None None None None
on
Reinvested Dividends
Exchange Fees None None None None
Deferred Sales Charge (as a None(4) Yes(5) Yes(6) None
percentage of lesser of pur-
chase price or redemption
proceeds)
Annual Fund Operating Expenses
(as a percent of average daily
net assets) Class A Class B Class C Class R
- --------------------------------------------------------------------------------------------------------
Management Fees .75% .75% .75% .75%
Rule 12b-1 Fees(7) .25% 1.00% 1.00% None
Other Operating Expenses .10% .10% .10% .10%
---- ---- ---- ----
Total Expenses 1.10% 1.85% 1.85% .85%
|
(1) Investment dealers and other firms may independently charge additional fees
for shareholder transactions or for advisory services; please see their
materials for details.
(2) Class R Shares are available for purchase only under certain limited
circumstances, or by specified classes of investors as described below under
"How to Buy Fund Shares--Class R Shares."
(3) Reduced sales charges apply to purchases of $50,000 or more. See "How to
Buy Fund Shares--Class A Shares."
(4) Class A purchases at net asset value of $1 million or more may be subject
to a 1% contingent deferred sales charge if redeemed within 18 months of
purchase. See "How to Buy Fund Shares--Class A Shares."
(5) Class B Shares redeemed within six years of purchase are subject to a
Contingent Deferred Sales Charge of 5% during the first year, 4% during the
second year, 3% during the third and fourth years, 2% during the fifth year,
and 1% during the sixth year.
(6) Class C Shares redeemed within one year of purchase are subject to a 1%
Contingent Deferred Sales Charge.
(7) Class A, Class B and Class C Shares are subject to an annual service fee of
.25% of average daily net assets to compensate Authorized Dealers for ongoing
account services. In addition, Class B and Class C Shares are subject to annual
distribution fees of .75% to reimburse Nuveen for costs in connection with the
sale of Fund shares. See "Distribution and Service Plan." Long-term holders of
Class A, Class B and Class C Shares may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted under the
National Association of Securities Dealers Rules of Fair Practice.
The purpose of the tables above is to help you understand all expenses and fees that you would bear directly or indirectly as a Fund shareholder. The percentages shown are estimated for the current fiscal year. Actual fees and expenses may be greater or less than those shown.
EXAMPLE*
For the Fund, you would pay the following expenses on a $1,000 investment over various time periods, assuming (1) a 5% annual rate of return and (2) redemption at the end of each time period:
1 Year 3 Years 5 Years 10 Years
- ----------------------------------------------------------------
Class A $ $ $ $
Class B** $ $ $ $
Class C*** $ $ $ $
Class R $ $ $ $
|
*This example does not represent past or future expenses,
which may be greater or less than those shown. Moreover, the
Fund's actual rate of return may be greater or less than the
hypothetical 5% return shown in this example. This example
assumes that the percentage amounts listed under Annual
Operating Expenses remain the same in each of the periods.
For additional information about the Fund's fees and
expenses, see "Distribution and Service Plan" and "Management
of the Fund."
**Assumes that the shareholder redeemed on the first day of
the next year and the contingent deferred sales charge was
applied as follows: 1 year (4%) and 3 years (3%). See "How to
Buy Shares--Class B Shares."
***Assumes that the shareholder redeemed on the first day of
the second year and the contingent deferred sales charge was
not applicable for any of the periods shown. See "How to Buy
Shares--Class C Shares."
HOW TO DETERMINE IF THE FUND IS
RIGHT FOR YOU
There are many reasons why you might invest in the Fund.
These may include:
. investing with an emphasis on balancing regular tax-free
income, the potential for capital growth and capital
preservation
. preserving and building wealth through prudent capital
management
While there can be no assurance that the Fund will enable you to achieve your individual investment goals, it has been designed for investors who have these kinds of investment goals in mind.
In addition, the Fund incorporates the following features and benefits. You should carefully review the more detailed description of these features and benefits elsewhere in the Prospectus to make sure they serve your individual investment goals.
TAX-EFFICIENT, BALANCED INVESTMENT STRATEGY
By investing in a conservative mix of Municipal Obligations and Equity Securities, the Fund seeks to provide regular tax- free income and long-term capital appreciation, while at the same time moderating the effect of equity market risk on total returns. The Fund's emphasis on fixed-income securities whose income is exempt from regular federal income tax is part of a tax-efficient investment strategy designed to reduce taxable distributions and increase after-tax total returns.
CONSERVATIVE INVESTMENT MIX
The Fund's target investment mix is 60% Municipal Obligations and 40% Equity Securities. Over time, the allocation of the Fund's investment portfolio will vary with the market prices of its investments. The Fund will rebalance its investment portfolio when necessary in order to prevent the Fund's investment mix from moving outside defined ranges for each asset category under normal market conditions. The Fund from time to time in response to changing market conditions may also shift the allocation of its investment portfolio within these defined ranges when such changes are believed to enhance the Fund's ability to meet its investment objectives. The table below summarizes the Fund's target investment mix and the allowable range for each asset category under normal market conditions.
TARGET ALLOWABLE
ASSET CATEGORY INVESTMENT MIX RANGE
-----------------------------------------
Equity Securities 40% 35%-45%
Municipal Obligations 60% 55%-65%
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EXPERIENCED MANAGEMENT
Overall management of the Fund is the responsibility of Nuveen Institutional Advisory Corp. ("NIAC"). NIAC manages the Fund's municipal investments, oversees the management of the Fund's equity investments and administers the Fund's business affairs. NIAC is a wholly-owned subsidiary of John Nuveen & Co. Incorporated ("Nuveen"), which is the principal underwriter of the Fund's shares. Nuveen has sponsored or underwritten over $60 billion of investment company securities. Institutional Capital Corporation ("ICAP") manages the Fund's equity investments. ICAP, which was organized in 1970, acts as the investment adviser primarily to institutional clients with investment portfolios totaling approximately $5 billion.
LOW MINIMUMS
You can start your investment with a low initial purchase of $1,000 in a particular class. See "How to Buy Fund Shares."
FLEXIBILITY IN PURCHASING FUND SHARES
The Fund has adopted a Flexible Pricing Program, which offers you the opportunity to purchase Fund shares in the same manner you typically make other investments. The Program features four alternative ways to purchase Fund shares (Classes A, B, C and R), each with a different combination of sales charges, ongoing fees, eligibility requirements, and other features. The Program is designed to permit you and your financial adviser to choose the method of purchasing shares that you believe is most beneficial given the amount of your investment and current holdings of Fund shares, the length of time you expect to hold your investment, and other relevant circumstances. Please refer to "Flexible Pricing Program," "How to Buy Fund Shares" and "How to Redeem Fund Shares" for a discussion of the Program's features and additional information about these four classes of shares.
AUTOMATIC DEPOSIT PLANS
The Fund offers a number of investment options, including automatic deposit, direct deposit and payroll deduction, to help you add to your account on a regular basis.
AUTOMATIC REINVESTMENT
All income dividends or capital gains paid with respect to each class of shares will be reinvested automatically into additional shares of the same class without a sales charge, unless you elect to receive them in cash. Separately, distributions from any
Nuveen unit trust (a "Nuveen UIT") may be used to buy Class A Shares without a sales charge at net asset value.
EXCHANGE PRIVILEGE
Shares of a class may be quickly and easily exchanged by telephone, without a sales charge, for shares of the same or equivalent class of another Nuveen Mutual Fund or for shares of certain Nuveen money market funds.
LIQUIDITY
You may redeem all or a portion of your Fund shares on any business day at the net asset value next computed for the class of shares you are redeeming. Class B and Class C Shares, as well as certain Class A purchases of $1 million or more at net asset value, may be subject to a contingent deferred sales charge ("CDSC") upon redemption. Remember that share prices will fluctuate with market conditions and upon redemption may be worth more or less than their original cost. See "How to Redeem Fund Shares."
AUTOMATIC WITHDRAWAL
If you own shares totalling $10,000 or more, you can arrange to have $50 or more sent to you from your account either monthly or quarterly.
TELEPHONE REDEMPTIONS
You may establish free telephone redemption privileges for your account.
RISKS AND SPECIAL CONSIDERATIONS
You should consider certain other factors about the Fund before investing. The value and market risk of the Fund's investment portfolio will tend to vary with changes in its asset allocations among investment classes and changes in the municipal and equity markets. The Fund's investments in municipal bonds will be subject to interest rate and credit risk. In general, the market value of the Fund's investments in municipal bonds will increase when interest rates decline and decrease when interest rates rise. In addition, the Fund's investments in stocks will be subject to equity market risk, i.e. the risk that equity prices could decline over short or even extended periods. The equity markets tend to be cyclical, with periods of generally rising prices and periods of generally declining prices. Although the prices of fixed- income and equity securities often rise and fall at different times so that a fall in price of one will be offset by a rise in, or at least buffered by price stability in, the other, prices in the two markets often move in tandem. Accordingly, the Fund should be considered a long-term investment, designed to provide the best results
when held for a multi-year period. The Fund may not be suitable if you have a short-term investment horizon. In addition, investments by the Fund in American Depository Receipts ("ADRs") of foreign companies involve opportunities and risks not typically associated with investing in U.S. companies. There are special risks associated with options and futures transactions. See "What Are the Fund's Investment Objective and Policies?"
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the services and features offered by the Fund:
ORGANIZATION FUNCTION DUTIES
--------------------------------------------------------------
John Nuveen & Co. Fund Sponsor and Sponsors and manages
Incorporated Principal Underwriter the offering of Fund
("Nuveen") shares
Nuveen Institutional Fund Manager; Manages the Fund's
Advisory Corp. Municipal Portfolio municipal portfolio,
("NIAC") Manager; Administrator oversees the Fund's
equity portfolio
manager, manages the
Fund's business
affairs and provides
day-to-day
administrative
services to the Fund
Institutional Capital Equity Portfolio Manages the Fund's
Corporation ("ICAP") Manager equity investment
portfolio
Shareholder Services, Transfer Agent; Maintains shareholder
Inc. ("SSI") Shareholder Services accounts, handles
Agent; Dividend Paying share redemptions and
Agent exchanges and
dividend payments
The Chase Manhattan Custodian Maintains custody of
Bank, N.A. ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
|
WHAT ARE THE FUND'S INVESTMENT OBJECTIVE AND POLICIES?
INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive after-tax total return through a combination of federally tax-exempt income and capital appreciation, and preservation of capital in adverse markets. There is no assurance that this objective will be realized. The Fund's investment objective may not be changed without shareholder approval. Other investment restrictions that may not be changed without shareholder approval are contained in the Statement of Additional Information.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund invests in a conservative mix of Municipal
Obligations and Equity Securities. Although the income
generated by Municipal Obligations is exempt from federal
taxes, dividends earned on the Equity Securities are taxable
as ordinary income. Such taxable income will be distributed
annually.
The Fund will The Fund will invest the portion of its assets allocated to
invest in a municipal investments in a laddered portfolio of Municipal
laddered Obligations with effective maturities ranging from 5 to 25
portfolio of years and a weighted average effective maturity of
Municipal approximately 10 years. The effective remaining maturity of a
Obligations to Municipal Obligation may be shorter than its stated maturity
moderate as a result of the coupon, the actual or expected payment
interest rate schedule, and other terms or conditions of an issue, that
risk cause the security to trade and therefore have the risk of
price fluctuation similar to an otherwise comparable bond
that has a shorter-term maturity. By investing in a laddered
portfolio of Municipal Obligations, the Fund seeks to
prudently balance over economic cycles the portfolio's
income-producing potential and its exposure to adverse
changes in interest rates which could cause a decline in the
portfolio's market value.
The Fund As a fundamental policy, the Fund will invest substantially
purchases only all (in excess of 80%) of its assets allocated to municipal
investment investments in Municipal Obligations rated at the time of
grade quality purchase within the four highest grades (Baa or better by
Municipal Moody's or BBB or better by S&P), or in unrated Municipal
Obligations Obligations that, in the NIAC's opinion, have credit
characteristics equivalent to, and are of comparable quality
to, Municipal Obligations so rated, provided that not more
than 20% of the Fund's investments in Municipal Obligations
may be in such unrated Municipal Obligations. Bonds rated in
the lowest investment grade category may have speculative
characteristics, and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with
higher grade bonds. A general description of S&P's and
Moody's ratings is set forth in the Statement of Additional
Information.
|
The Fund NIAC will select Municipal Obligations primarily with a view
employs a toward current income exempt from regular income tax,
value-oriented consistent with the Fund's investment policies, and
strategy in secondarily with a view toward enhancement of the value of
selecting the Fund's portfolio of Municipal Obligations relative to the
Municipal municipal bond market through investments in Municipal
Obligations Obligations that, in NIAC's opinion, are underrated or
undervalued or that represent municipal market sectors that
are undervalued. Underrated Municipal Obligations are those
whose ratings do not, in NIAC's opinion, reflect their true
value. Municipal Obligations that are undervalued or that
represent undervalued municipal market sectors are those
that, in NIAC's opinion, are worth more than the value
assigned to them in the marketplace. The Fund's investment in
underrated or undervalued Municipal Obligations will be based
on NIAC's belief that their prices should ultimately reflect
their true value. Accordingly, "enhancement of the value of
the Fund's portfolio of Municipal Obligations relative to the
municipal bond market" refers to the Fund's objective of
attempting to realize above-average capital appreciation in a
rising municipal bond market, and to experience less than
average capital losses in a declining market. Thus, it is not
intended to suggest that capital appreciation is itself an
objective of the Fund's investments in Municipal Obligations.
Instead, the Fund will seek enhancement of the value of its
portfolio of Municipal Obligations relative to the municipal
bond market by prudent selection of Municipal Obligations,
regardless of which direction the market may move.
The Fund ICAP will select Equity Securities on the basis of its
employs a evaluation of each security's relative value in terms of
value-oriented projected relative price-earnings ratios and earnings
strategy when stability, with a clear catalyst for significant price
selecting appreciation over a defined time horizon. When making
Equity investment decisions, ICAP develops an economic framework
Securities (including an interest rate, inflation, and business cycle
outlook) and analyzes strategic economic and/or industry
themes to identify appropriate investments. ICAP uses a
variety of proprietary research techniques and computer
models to search for equity securities possessing best
relative value based on proprietary price/earnings
projections and analysis of earnings stability. Furthermore,
a clear catalyst, either stock-specific, industry or
economic, which ICAP believes will trigger significant price
appreciation within a definable period must exist. In order
to enhance its internal research, ICAP also utilizes a wide
variety of external sources for investment information
including recognized strategists, economists, technical and
fundamental analysts, corporate executives, and industry
sources.
For each investment, ICAP establishes an upside price target
and a downside risk potential. This strategy allows for
continuous monitoring of fundamental conditions
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and stock price performance. Although ICAP typically expects
the investment potential of each investment to be realized
over a nine to eighteen month time period, it is not unusual
for equities to be held for a longer period if the potential
is justified. Investments that underperform the market are
reviewed intensively. If the risk/reward of a particular
investment becomes unattractive or the reasons for owning the
security no longer appear valid, the investment is typically
sold expeditiously to avoid future underperformance.
The Fund The Fund's target investment mix is 60% Municipal Obligations
invests in a and 40% Equity Securities. Over time, the allocation of the
conservative Fund's investment portfolio will vary with the market prices
mix of of its investments. The Fund will rebalance its investment
municipal portfolio when necessary in order to prevent the Fund's
bonds and investment mix from moving outside defined ranges for each
stocks to help asset category under normal market conditions. The Fund from
preserve time to time in response to changing market conditions may
capital also shift the allocation of its investment portfolio within
these defined ranges when such changes are believed to
enhance the Fund's ability to meet its investment objectives.
The table below summarizes the Fund's target investment mix
and the allowable range for each asset category.
|
TARGET ALLOWABLE
ASSET CATEGORY INVESTMENT MIX RANGE
-----------------------------------------
Equity Securities 40% 35%-45%
Municipal Obligations 60% 55%-65%
|
The Fund's Board of Trustees from time to time may also adjust the Fund's target investment mix and the allowable range for each asset category if, after consultation with NIAC and ICAP, the Board determines that such a change is in the best interests of shareholders, provided, however, that the minimum allowable allocation for Municipal Obligations may not be set below 50%.
During temporary defensive periods, the Fund may invest any percentage of its assets in temporary investments, as described below under "Temporary Investments." During such periods, which may occur at a time when the Fund would otherwise rebalance its investment mix, the proportion of the Fund's assets invested in an asset category may fall outside the allowable range for that asset category.
DESCRIPTION OF THE FUND'S INVESTMENTS
Municipal
Obligations Municipal Obligations are debt obligations issued by states,
cities and local authorities, and certain possessions and
territories of the United States, to obtain funds for various
public purposes, including the construction and maintenance
of
11
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such public facilities as airports, bridges, highways,
housing, hospitals, mass transportation, schools, streets and
water and sewer works. Other public purposes for which
Municipal Obligations may be issued include the refinancing
of outstanding obligations and the obtaining of funds for
general operating expenses and for loans to other public
institutions and facilities. In addition, certain industrial
development, private activity and pollution control bonds may
be included within the term Municipal Obligations if the
interest paid thereon qualifies as exempt from regular
Federal income tax. Municipal Obligations in which the Fund
will invest bear interest that, in the opinion of bond
counsel to the issuer, is exempt from Federal income tax,
although such interest may be subject to the Federal
alternative minimum tax. The two principal classifications of
Municipal Obligations are "general obligation" and "revenue"
bonds. General obligation bonds are secured by the issuer's
pledge of its full faith, credit and taxing power for the
payment of principal and interest. Revenue bonds (e.g.,
industrial development bonds) are payable only from the
revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special
excise tax or other specific revenue source.
Municipal Obligations may also include participations in
lease obligations or installment purchase contract
obligations (collectively, "lease obligations") of municipal
authorities or entities. Certain "non-appropriation" lease
obligations may present special risks because the
municipality's obligation to make future lease or installment
payments depends on money being appropriated each year for
this purpose. The Fund will seek to minimize these risks by
not investing more than 5% of the assets allocated to
investments in Municipal Obligations in non-appropriation
lease obligations, and by only investing in those non-
appropriation lease obligations that meet certain criteria of
the Fund. See "Investment Policies and Techniques--Investment
in Municipal Obligations--Municipal Obligations" in the
Statement of Additional Information for further information
about lease obligations.
The yields on Municipal Obligations are dependent on a
variety of factors, including the condition of the financial
markets in general and the municipal bond market in
particular and the size, maturity and rating of a particular
issue. The market value of Municipal Obligations will vary
inversely with changes in prevailing interest rate levels and
as a result of changing evaluations of the ability of their
issuers to meet interest and principal payments.
Equity
Securities
Equity Securities are common stocks; preferred stocks;
warrants to purchase common stocks or preferred stocks; and
securities convertible into common or preferred stocks, such
as convertible bonds and debentures and other equity-type
securities.
12
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The Fund will invest the assets allocated to equity
investments primarily in Equity Securities of domestic
companies with market capitalizations of at least $500
million. Convertible bonds and debentures must be rated Baa
or higher by Moody's Investors Service ("Moody's") or BBB or
higher by Standard & Poor's ("S&P"), Duff & Phelps, Inc.
("D&P") or Fitch Investors Service, Inc. ("Fitch"). In
addition, the Fund may invest in equity securities of foreign
issuers through investments in American Depository Receipts
(ADRs).
Temporary During certain temporary periods, in order to keep cash on
Investments hand fully invested or as a defensive measure in response to
prevailing market conditions, the Fund may invest without
limitation in cash equivalent and short-term fixed income
securities ("temporary investments"). Temporary investments
are high quality, short-term securities which may be either
tax-exempt or taxable. The Fund intends to invest in taxable
temporary investments only in the event that suitable tax-
exempt temporary investments are not available at reasonable
prices and yields. Tax-exempt temporary investments include
various obligations issued by state and local governmental
issuers, such as tax-exempt notes (bond anticipation notes,
tax anticipation notes, and revenue anticipation notes or
other such Municipal Obligations maturing in three years or
less from the date of issuance) and municipal commercial
paper. The Fund will invest only in taxable temporary
investments which are U.S. Government securities or
securities rated within the highest grade by Moody's or S&P,
and which mature within one year from the date of purchase or
carry a variable or floating rate of interest, except that
the Fund may invest in certificates of deposit issued by U.S.
banks with assets of at least $1 billion. Taxable temporary
investments of the Fund may include commercial paper or
corporate notes, bonds or debentures with a remaining
maturity of one year or less, or repurchase agreements. See
the Statement of Additional Information under "Investment
Policies and Techniques--Short-Term Fixed Income Securities"
for additional information.
When-Issued The Fund may invest without limitation in securities
Securities purchased on a when-issued or delayed delivery basis ("When-
Issued Securities"). Although the payment and terms of these
securities are established at the time the purchaser enters
into the commitment, these securities may be delivered and
paid for at a future date, generally within 45 days.
Purchasing When-Issued Securities allows the Fund to lock in
a fixed price on a security it intends to purchase. The Fund
will segregate and maintain cash, cash equivalents, U.S.
government securities, or other high-quality, liquid debt
securities in an amount at least equal to the amount of
13
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outstanding commitments for When-Issued Securities at all
times. Such securities involve a risk of loss if the value of
the security to be purchased declines prior to the settlement
date.
ADRs The Fund may invest in ADRs or other instruments denominated
in U.S. dollars that permit indirect investment in foreign
securities. Foreign investments are limited to 20% of the
Fund's net assets. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the
underlying foreign security and denominated in U.S. dollars.
ADRs do not eliminate all the risk inherent in investing in
foreign issuers, such as changes in foreign currency exchange
rates. However, by investing in ADRs rather than directly in
foreign issuers' stock, the Fund avoids currency risks during
the settlement period.
Investments in securities of foreign issuers involve risks
that are in addition to the usual risks inherent in domestic
investment, including currency risks. The U.S. Dollar value
of a foreign security tends to decrease when the value of the
U.S. Dollar rises against the foreign currency in which the
security is denominated and tends to increase when the value
of the U.S. Dollar falls against such currency. Some ADRs may
not be sponsored by the issuer. Unsponsored ADRs are affected
by the fact that in many countries there is less publicly
available information about issuers than is available in the
reports and ratings published about companies in the U.S. and
companies may not be subject to uniform accounting, auditing
and financial reporting standards. Other risks inherent in
foreign investment include expropriation; confiscatory
taxation; withholding taxes on dividends and interest; less
extensive regulation of foreign brokers, securities markets
and issuers; diplomatic developments; and political or social
instability. Foreign economies may differ favorably or
unfavorably from the U.S. economy in various respects, and
many foreign securities are less liquid and their prices tend
to be more volatile than comparable U.S. securities. From
time to time, foreign securities may be difficult to
liquidate rapidly without adverse price effects.
CERTAIN INVESTMENT STRATEGIES AND LIMITATIONS
Options and The Fund may engage in options and futures transactions,
Futures which are sometimes referred to as derivative transactions.
Transactions The Fund's options and futures transactions may include
instruments such as stock index options and futures
contracts. Such transactions may be used for several reasons,
including hedging unrealized portfolio gains. The Fund will
only engage in futures and options transactions that,
pursuant to regulations promulgated by the Commodity Futures
Trading Commission (the
14
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"CFTC"), constitute bona fide hedging or other permissible
risk management transactions and will not enter into such
transactions if the sum of the initial margin deposits and
premiums paid for unexpired options exceeds 5% of the Fund's
total assets. In addition, the Fund will not enter into
options and futures transactions if more than 30% of the
Fund's net assets would be committed to such instruments. The
ability of the Fund to benefit from options and futures is
largely dependent upon NIAC's or ICAP's ability to correctly
use such instruments, which may involve skills different from
those associated with managing securities generally. The Fund
could lose money on a futures transaction or an option could
expire worthless, as well as the Fund suffering a loss on the
value of its portfolio assets. For a further discussion of
options and futures transactions, please see the Statement of
Additional Information.
Lending of The Fund may lend its portfolio securities, up to 33 1/3% of
Portfolio its total assets, to broker-dealers or institutional
Securities investors. The loans will be secured continuously by
collateral at least equal to the value of the securities lent
by "marking to market" daily. The Fund will continue to
receive the equivalent of the interest or dividends paid by
the issuer of the securities lent and will retain the right
to call, upon notice, the lent securities. The Fund may also
receive interest on the investment of the collateral or a fee
from the borrower as compensation for the loan. As with other
extensions of credit, there are risks of delay in recovery or
even loss of rights in the collateral should the borrower of
the securities fail financially. However, loans will be made
only to firms deemed by the portfolio manager to be of good
standing.
Illiquid The Fund may invest up to 10% of its net assets in illiquid
Securities securities, which include, but are not limited to, restricted
securities (securities the disposition of which is restricted
under the federal securities laws); securities which may be
resold pursuant to Rule 144A under the Securities Act of 1933
but that are deemed to be illiquid; and repurchase agreements
with maturities in excess of seven days.
Portfolio The Fund will attempt to achieve its investment objectives
Turnover with respect to its portfolio of Municipal Obligations by
prudent selection of Municipal Obligations with a view to
holding them for investment. The Fund may sell, however,
Municipal Obligations and reinvest the proceeds in other
Municipal Obligations in order to better achieve its
investment objectives in relation to actual and anticipated
movements in interest rates. The Fund may also engage to a
limited extent in short-term trading of Municipal Obligations
consistent with its investment objectives, but the Fund will
not engage in trading Municipal Obligations solely to
recognize a gain. While there can be no assurance thereof,
the Fund anticipates that the annual
15
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portfolio turnover rate of the Fund's Municipal Obligations
will generally be significantly less than 75%. However, the
rate of turnover will not be a limiting factor if it is
desirable to sell or purchase Municipal Obligations.
The Fund may sell Equity Securities, and reinvest the
proceeds in other Equity Securities, whenever such action is
deemed prudent in view of its investment objectives,
regardless of the holding period of an Equity Security sold.
While there can be no assurance thereof, the Fund anticipates
that the annual portfolio turnover rate of the Fund's Equity
Securities will be between 100% and 125%, and will generally
not exceed 150%. A turnover rate of 100% would occur, for
example, if all of the securities held by a Fund were
replaced within one year.
In addition to the foregoing, the Fund may be required to
purchase or sell Municipal Obligations and Equity Securities
pursuant to a required reallocation of assets as described
about under "How The Fund Pursues Its Objective" and the
anticipated portfolio turnover rates set forth above are made
without regard to such a required reallocation of assets.
Other The Fund will not invest more than 5% of its net assets in
Investment any one of the following types of investments: warrants;
Policies and unseasoned companies; and transactions in short sales against
Restrictions the box. In addition the Fund has adopted several
restrictions on the investments and other activities of the
Fund that may not be changed without shareholder approval.
For example, the Fund may not:
. With respect to 75% of its total assets, purchase the
securities of any issuer (except securities issued or
guaranteed by the U.S. government or any agency or
instrumentality thereof) if, as a result, (i) more than 5%
of the Fund's total assets would be invested in securities
of that issuer, or (ii) the Fund would hold more than 10%
of the outstanding voting securities of that issuer.
. Borrow money, except that the Fund may (i) borrow money
from banks for temporary or emergency purposes (but not for
leverage or the purchase of investments) and (ii) make
other investments or engage in other transactions
permissible under the Investment Company Act of 1940 that
may involve a borrowing, provided that the combination of
(i) and (ii) shall not exceed 33 1/3% of the value of the
Fund's total assets (including the amount borrowed), less
the Fund's liabilities (other than borrowings).
If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage beyond
the specified limit resulting from a change in values or
assets will not be considered a violation.
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Except as specifically noted above or in the Statement of Additional Information, the Fund's investment policies are not fundamental and may be changed without shareholder approval. For a more complete description of investment restrictions that may be changed without a shareholder vote, see the Statement of Additional Information.
FLEXIBLE PRICING PROGRAM
The Fund The Fund has adopted a Flexible Pricing Program that offers offers various you four alternative ways to purchase Fund shares (Classes A, methods of B, C and R), each with a different combination of sales purchasing charges, ongoing fees, eligibility requirements, and other shares which features. The Program is designed to permit you and your are designed financial adviser to choose the method of purchasing shares to meet your that you believe is most beneficial given the amount of your individual investment and current holdings of Fund shares, the length of investment time you expect to hold your investment, and other relevant needs and circumstances. A summary of the four alternatives is set |
preferences forth below:
CONTINGENT DEFERRED
UP-FRONT SALES SALES CHARGE ANNUAL 12B-1 ANNUAL 12B-1
CHARGE "CDSC" DISTRIBUTION FEE SERVICE FEE
-----------------------------------------------------------------
Class 5.25%(1) None(2) None .25%
A
Class None 5%(3) .75%(4) .25%
B
Class None 1%(5) .75% .25%
C
Class None None None None
R
|
(1) Maximum up-front sales charge, which is reduced for
purchases of $50,000 or more. Up-front sales charge may be
reduced or waived for certain purchases.
(2) Certain Class A purchases at net asset value of $1
million or more may be subject to a 1% CDSC if redeemed
within 18 months of purchase.
(3) CDSC in the first year. CDSC declines to 0% after six
years.
(4) Class B Shares convert to Class A Shares after eight
years, which reduces the ongoing expenses borne by an
investor.
(5) CDSC is applicable to shares redeemed within 12 months of
purchase.
For more information regarding features of each class, see
"How to Buy Fund Shares," "How to Redeem Fund Shares" and
"Distribution and Service Plan" below.
Which Option When you purchase Class A Shares, you will normally pay an
is Right For up-front sales charge. As a result, you will have less money
You? invested initially and you will own fewer Class A Shares than
you would in the absence of an up-front sales charge.
Alternatively, when you purchase Class B or Class C Shares,
you will not pay an up-front sales charge and all of your
monies will be fully invested at the time of purchase.
However, Class B and Class C Shares are subject to an annual
distribution fee, which constitutes an asset-based sales
charge whose purpose is the same as an up-front sales charge.
In addition, Class B Shares when redeemed are subject to a
CDSC, which will vary depending on the length of time you
owned your shares. Class B Shares automatically convert to
Class A Shares eight years after purchase, which reduces the
annual expenses borne by an investor. Class C Shares are
subject to a CDSC of 1% if redeemed within 12 months of
purchase. 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. Class A, Class B and Class C Shares
are
18
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subject to annual service fees, which are identical in amount
and are used to compensate Authorized Dealers for providing
you with ongoing account services. You may qualify for a
reduced sales charge or a sales charge waiver on a purchase
of Class A Shares, as described below under "How the Sales
Charge on Class A Shares May Be Reduced or Waived." Class R
Shares are available for purchase at a price equal to their
net asset value, but only under certain circumstances or for
certain categories of investors, as described below under
"How to Buy Fund Shares--Class R Shares."
In deciding whether to purchase Class A, Class B, Class C or
Class R Shares, you should consider all relevant factors,
including the dollar amount of your purchase, the length of
time you expect to hold the shares and whether a CDSC would
apply, the amount of any applicable up-front sales charge,
the amount of any applicable distribution or service fees
that may be incurred while you own the shares, whether or not
you will be reinvesting income or capital gain distributions
in additional shares, whether or not you meet applicable
eligibility requirements or qualify for a sales charge waiver
or reduction, and the relative level of services that your
financial adviser may provide to different classes.
Authorized Dealers and other persons distributing the Fund's
shares may receive different compensation for selling
different classes of shares.
Differences Each class of shares represents an interest in the same
Between the portfolio of investments. Each class of shares is identical
Classes of in all respects except that each class has its own sales
Shares charge structure, each class bears its own class expenses,
including distribution and service expenses, and each class
has exclusive voting rights with respect to any distribution
or service plan applicable to its shares. In addition, the
Class B Shares are subject to a conversion feature. As a
result of the differences in the expenses borne by each class
of shares, and differences in the purchase and redemption
activity for each class, net income per share, dividends per
share and net asset value per share will vary among the
Fund's classes of shares.
Dealer Upon notice to all Authorized Dealers, Nuveen may reallow to
Incentives Authorized Dealers electing to participate up to the full
applicable Class A Share sales charge during periods and for
transactions specified in the notice. The reallowances made
during these periods may be based upon attainment of minimum
sales levels. Further, Nuveen may from time to time make
additional reallowances only to certain Authorized Dealers
who sell or are expected to sell certain minimum amounts of
the Fund or other Nuveen Mutual Funds and Nuveen UITs during
specified time periods. Nuveen will reimburse the Authorized
Dealer for up to one-half of specified media costs incurred
in the placement of advertisements which jointly feature the
Authorized Dealer and Nuveen Funds and Nuveen unit trusts.
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Such reimbursement to the Authorized Dealer will be based on the number of its financial advisers who have sold Nuveen Fund shares and unit trust units during the prior calendar year according to an established schedule. The staff of the Securities and Exchange Commission takes the position that dealers who receive 90% or more of the applicable sales charge may be deemed underwriters under the Securities Act of 1933, as amended.
HOW TO BUY FUND SHARES
CLASS A SHARES
Class A Shares You may purchase Class A Shares at a public offering price
are offered at equal to the applicable net asset value per share plus an up-
their net front sales charge imposed at the time of purchase as set
asset value forth below. You may qualify for a reduced sales charge, or
plus an up- the sales charge may be waived in its entirety, as described
front sales below under "How the Up-Front Sales Charge on Class A Shares
charge May Be Reduced or Waived." Class A Shares are also subject to
an annual service fee of .25%. See "Flexible Pricing Program"
and "Distribution and Service Plan."
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The up-front sales charges for Class A Shares are as follows:
SALES CHARGE AS SALES CHARGE AS REALLOWANCE AS
% OF PUBLIC % OF NET % OF PUBLIC
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
----------------------------------------------------------------
Less than $50,000 5.25% 5.54% 5.00%
$50,000 but less than
$100,000 4.25% 4.44% 4.00%
$100,000 but less than
$250,000 3.50% 3.63% 3.25%
$250,000 but less than
$500,000 2.75% 2.83% 2.50%
$500,000 but less than
$1,000,000 2.00% 2.04% 1.75%
$1,000,000 and over 0.00% 0.00% 0.00%*
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*Authorized Dealers are eligible to receive commission from Nuveen as discussed below.
The Fund receives the entire net asset value of all Class A Shares that are sold. Nuveen retains the full applicable sales charge from which it pays the uniform reallowances shown above to Authorized Dealers. See "Flexible Sales Charge Program--Dealer Incentives" above for more information about reallowances and other compensation to Authorized Dealers.
Certain commercial banks may make Class A Shares of the Fund available to their customers on an agency basis. Pursuant to the agreements between Nuveen and
these banks, some or all of the sales charge paid by a bank
customer in connection with a purchase of Class A Shares may
be retained by or paid to the bank. Certain banks and other
financial institutions may be required to register as
securities dealers in certain states.
Class A Share Class A Share purchases of $1 million or more are sold at net
purchases of asset value without an up-front sales charge. Nuveen pays
$1 million and Authorized Dealers of record on such Class A Share purchases
over may be a commission of up to 1.00% of the amount of the purchase. If
subject to a such shares are redeemed within 18 months of purchase, a CDSC
CDSC of 1% of the lower of the purchase price or the redemption
proceeds may be imposed upon the redemption. Shares purchased
by investors investing $1 million or more who have made
arrangements with Nuveen and whose dealer of record waived
the commission are not subject to the CDSC.
[HOW THE UP-FRONT SALES CHARGE MAY BE REDUCED OR WAIVED]
There are There are several ways to reduce or eliminate the up-front
several ways sales charge:
to reduce or . cumulative discount;
eliminate the . letter of intent;
up-front sales . purchases with monies representing distributions from
charge Nuveen-sponsored UITs;
. group purchase programs;
. reinvestment of redemption proceeds from non-affiliated
funds; and
. special sales charge waivers for certain categories of
investors.
Cumulative You may qualify for a reduced sales charge as shown above on
Discount a purchase of Class A Shares if the amount of your purchase,
when added to the value that day of all of your prior
purchases of shares of the Fund or of another Nuveen Mutual
Fund, or units of a Nuveen UIT, on which an up-front sales
charge or ongoing distribution fee is imposed, falls within
the amounts stated in the table. You or your financial
adviser must notify Nuveen or SSI 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.
Letter of You may qualify for a reduced sales charge on a purchase of
Intent Class A Shares 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 above.
In order to take advantage of this option, you must complete
the applicable section of the Application Form or sign and
deliver either to an Authorized Dealer or to SSI a written
Letter of Intent in a
21
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form acceptable to Nuveen. A Letter of Intent states that you
intend, but are not obligated, over the next 13 months to
purchase a stated total amount of Class A Shares that would
qualify you for a reduced sales charge shown above. You may
count shares of a Nuveen Mutual Fund that you already own on
which you paid an up-front sales charge or an ongoing
distribution fee and any Class B and Class C 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 UIT, or otherwise.
By establishing a Letter of Intent, you agree that your first
purchase of Class A Shares 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, exceed the amount specified in
your Letter of Intent and thereby qualify for a lower sales
charge than the sales charge specified in your Letter of
Intent, you will receive this lower sales charge
retroactively, and the difference between it and the higher
sales charge paid will be used to purchase additional Class A
Shares on your behalf. If the total purchases, less
redemptions, are less than the amount specified, you must pay
Nuveen an amount equal to the difference between the amounts
paid for these purchases and the amounts that 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 Nuveen or your financial adviser, Nuveen 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 Nuveen 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 adviser must notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
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Reinvestment You may purchase Class A Shares without an up-front sales
of Nuveen UIT charge by reinvestment of distributions from any of the
Distributions various unit trusts sponsored by Nuveen. There is no initial
or subsequent minimum investment requirement for such
reinvestment purchases.
Group Purchase If you are a member of a qualified group, you may purchase
Programs Class A Shares of the Fund or of another Nuveen Mutual Fund
at the reduced sales charge applicable to the group's
purchases taken as a whole. A "qualified group" is one which
has been in existence for more than six months, has a purpose
other than investment, has five or more participating
members, has agreed to include Fund sales publications in
mailings to members and has agreed to comply with certain
administrative requirements relating to its group purchases.
Under any group purchase program, the minimum monthly
investment in Class A Shares of any particular fund or
portfolio by each participant is $25, and the minimum monthly
investment in Class A Shares of any particular fund or
portfolio for all participants in the program combined is
$1,000. No certificates will be issued for any participant's
account. All dividends and other distributions by the Fund
will be reinvested in additional Class A Shares of the Fund.
No participant may utilize a systematic withdrawal program.
To establish a group purchase program, both the group itself
and each participant must fill out special application
materials, which the group administrator may obtain from the
group's financial adviser, by checking the applicable box on
the enclosed Application Form or by calling Nuveen toll-free
at 800-621-7227. See the Statement of Additional Information
for more complete information about "qualified groups" and
group purchase programs.
Reinvestment You may also purchase Class A Shares at net asset value
of Redemption without a sales charge if the purchase takes place through a
Proceeds from broker-dealer and represents the reinvestment of the proceeds
Unaffiliated of the redemption of shares of one or more registered
Funds investment companies not affiliated with Nuveen. You must
provide appropriate documentation that the redemption
occurred not more than 60 days prior to the reinvestment of
the proceeds in Class A Shares, and that you either paid an
up-front sales charge or were subject to a contingent
deferred sales charge in respect of the redemption of such
shares of such other investment company.
Special Sales
Charge Waivers
Class A Shares of the Fund may be purchased at net asset
value without a sales charge and in any amount by officers,
trustees and retired trustees of the Trust; bona
23
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fide, full-time and retired employees of Nuveen or ICAP, any
parent company of Nuveen, and subsidiaries thereof, or their
immediate family members (as defined below); any person who,
for at least 90 days, has been an officer, director or bona
fide employee of any Authorized Dealer, or their immediate
family members; officers and directors of bank holding
companies that make Fund shares available directly or through
subsidiaries or bank affiliates; bank or broker-affiliated
trust departments; clients of broker-dealers that sponsor
mutual fund purchase programs on a periodic fee, asset-based
fee or no transaction fee basis; and clients of investment
advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for
their services. For further details about these special
categories and their eligibility requirements, please consult
your financial adviser or the Statement of Additional
Information, or call Nuveen at 800-621-7227.
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
adviser must notify Nuveen or SSI whenever you make a
purchase of Class A Shares that you wish to be covered under
these special sales charge waivers. All purchases under the
Special Sales Charge Waivers will be subject to minimum
purchase requirements as established by the Fund. All of the
above categories of investors are also eligible to purchase
Class R Shares, as described below under "Class R Shares."
Finally, Class A Shares may be issued at net asset value
without a sales charge in connection with the acquisition by
the Fund of another investment company.
In general In determining the amount of your purchases of Class A Shares
that may qualify for a reduced sales charge, the following
purchases may be combined: (1) all purchases by a trustee or
other fiduciary for a single trust estate or fiduciary
account; (2) all purchases by individuals and their immediate
family members (i.e., their spouses and their children under
21 years of age); or (3) all purchases made through a group
purchase program as described above.
The reduced sales charge programs may be modified or
discontinued by the Fund at any time upon prior written
notice to shareholders of the Fund.
FOR MORE INFORMATION ABOUT THE PURCHASE OF CLASS A SHARES OR
REDUCED SALES CHARGE PROGRAMS, OR TO OBTAIN THE REQUIRED
APPLICATION FORMS, CALL NUVEEN TOLL-FREE AT 800-621-7227.
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CLASS B SHARES
Class B Shares You may purchase Class B Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Since Class B Shares are sold without
their net an initial sales charge, the full amount of your purchase
asset value, payment will be invested in Class B Shares. Class B Shares
but are are subject to an annual distribution fee to compensate
subject to an Nuveen for its costs in connection with the sale of Class B
annual shares, and are also subject to an annual service fee to
distribution compensate Authorized Dealers for providing you with ongoing
fee and a CDSC financial advice and other account services.
You may be subject to a CDSC if you redeem your Class B
shares within a specified period after purchase, as shown in
the table below. See "Flexible Pricing Program" and
"Distribution and Service Plan." Nuveen compensates
Authorized Dealers for sales of Class B Shares at the time of
sale at the rate of 4.00% of the amount of Class B Shares
purchased, which represents a sales commission of 3.75% plus
an advance on the first year's annual service fee of .25%.
If redeemed prior to the end of the sixth year after
purchase, Class B Shares may be subject to a CDSC, as set
|
forth below:
YEARS
SINCE
PURCHASE CDSC
------
0-1 5%
1-2 4%
2-3 3%
3-4 3%
4-5 2%
5-6 1%
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Class B Shares acquired through the reinvestment of dividends
are not subject to a CDSC. Any CDSC will be imposed on the
lower of the redeemed shares' cost or net asset value at the
time of redemption. For more information regarding the
imposition of the CDSC, see "How to Redeem Fund Shares--Class
B Shares," below.
Class B Shares Class B Shares will automatically convert to Class A Shares
automatically eight years after purchase. All conversions will be done at
convert to net asset value without the imposition of any sales load,
Class A Shares fee, or other charge, so that the value of each shareholder's
eight years account immediately before conversion will be the same as the
after purchase value of the account immediately after conversion. Class B
Shares acquired through reinvestment of distributions will
convert into Class A Shares based on the date of the initial
purchase to which such shares relate. For this purpose, Class
B Shares acquired
25
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through reinvestment of distributions will be attributed to
particular purchases of Class B Shares in accordance with
such procedures as the Board of Trustees may determine from
time to time. Class B Shares that are converted to Class A
Shares will remain subject to an annual service fee that is
identical in amount for both Class B Shares and Class A
Shares. Since net asset value per share of the Class B Shares
and the Class A Shares may differ at the time of conversion,
a shareholder may receive more or fewer Class A Shares than
the number of Class B Shares converted. Any conversion of
Class B Shares into Class A Shares will be subject to the
continuing availability of an opinion of counsel or a private
letter ruling from the Internal Revenue Service to the effect
that the conversion of shares would not constitute a taxable
event under federal income tax law. Conversion of Class B
Shares into Class A Shares might be suspended if such an
opinion or ruling were no longer available.
CLASS C SHARES
Class C Shares You may purchase Class C Shares at a public offering price
may be equal to the applicable net asset value per share without any
purchased at up-front sales charge. Class C Shares are subject to an
their net annual distribution fee to compensate Nuveen for its costs in
asset value, connection with the sale of Class C Shares. Class C Shares
but are are also subject to an annual service fee of .25% to
subject to an compensate Authorized Dealers for providing you with ongoing
annual financial advice and other account services. Nuveen
distribution compensates Authorized Dealers for sales of Class C Shares at
fee the time of the sale at a rate of 1% of the amount of Class C
Shares purchased, which represents a sales commission of .75%
plus an advance on the first year's annual service fee of
.25%. See "Flexible Pricing Program" and "Distribution and
Service Plan."
Redemptions of Class C Shares within 12 months of purchase
may be subject to a CDSC of 1% of the lower of the purchase
price or redemption proceeds. See "How to Redeem Fund
Shares--Class C Shares."
CLASS R SHARES
Class R Shares If you are making a purchase of $1 million or more of Fund
are offered at Shares in a single transaction, you may purchase Class R
their net Shares at a public offering price equal to the applicable net
asset value asset value per share without any up-front sales charge or
only under ongoing distribution or service fees. You also may purchase
limited Class R Shares subject only to the Fund's minimum investment
circumstances requirement of $1,000 if you are within the following
or to specified categories of investors who are eligible to
specified purchase Class A Shares at net asset value without an up-
classes of front sales charge: officers, trustees and retired trustees
investors of the Fund; bona fide, full-time and retired employees of
Nuveen or
26
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ICAP, any parent company of Nuveen, and subsidiaries thereof,
or their immediate family members; any person who, for at
least 90 days, has been an officer, director or bona fide
employee of any Authorized Dealer, or their immediate family
members; officers and directors of bank holding companies
that make Fund shares available directly or through
subsidiaries or bank affiliates; and bank or broker-
affiliated trust departments; clients of broker-dealers that
sponsor mutual fund purchase programs on a periodic fee,
asset-based fee or no transaction fee basis; and clients of
investment advisers, financial planners or other financial
intermediaries that charge periodic or asset-based fees for
their services. For further details about these special
categories and their eligibility requirements, please consult
your financial adviser or the Statement of Additional
Information, or call Nuveen at 800-621-7227.
If you are eligible to purchase either Class R 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 Authorized Dealers for providing you with
ongoing account services. Class R Shares are not subject to a
distribution or service fee and, consequently, holders of
Class R Shares may not receive the same types or levels of
services from Authorized Dealers. In choosing between Class A
Shares and Class R Shares, you should weigh the benefits of
the services to be provided by Authorized Dealers against the
annual service fee imposed upon the Class A Shares.
INITIAL AND SUBSEQUENT PURCHASE OF SHARES
The Fund You may buy Fund shares through Authorized Dealers or by
offers a calling or directing your financial adviser to call Nuveen
number of toll-free at 800-843-6765. You may pay for your purchase by
convenient Federal Reserve draft or by check made payable to "Nuveen
ways to Income and Growth Fund, Class [A], [B], [C], [R]," delivered
purchase to the financial adviser through whom the investment is to be
shares made for forwarding to the Fund's shareholder services agent,
SSI. When making your initial investment, you must also
furnish the information necessary to establish your Fund
account by completing and enclosing with your payment the
attached Application Form. After your initial investment, you
may make subsequent purchases at any time by forwarding to
SSI a check in the amount of your purchase made payable to
"Nuveen Income and Growth Fund, Class [A], [B], [C], [R],"
and indicating on the check your account number. All payments
must be in U.S. dollars and should be sent directly to SSI at
its address listed on the back cover of this Prospectus. A
check drawn on a foreign bank or payable other than to the
order of the Fund generally will not be acceptable. You may
also wire Federal Funds directly to SSI, but you may be
charged a fee for this. For instructions on how to make Fund
purchases by wire transfer, call Nuveen toll-free at 800-621-
7227.
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PURCHASE PRICE
The price at which you purchase Fund shares is based on the next calculation of the Fund's net asset value after the order is placed. See "Net Asset Value," below for a description of how net asset value is calculated. The Fund's net asset value per share is determined as of the close of trading (currently 4:00 p.m. Eastern Time) on each day the New York Stock Exchange is open for business.
MINIMUM INVESTMENT REQUIREMENTS
Generally, your first purchase of any class of the Fund's shares must be for $1,000 or more. Additional purchases may be in amounts of $100 or more. These minimums may be changed at any time by the Fund. There are exceptions to these minimums for shareholders who qualify under one or more of the Fund's automatic deposit, group purchase or reinvestment programs.
SYSTEMATIC INVESTMENT PROGRAMS
The Fund The Fund offers you several opportunities to capture the
offers several benefits of "dollar cost averaging" through systematic
ways to make investment programs. In a regularly followed dollar cost
systematic averaging program, you would purchase more shares when Fund
investments share prices are lower and fewer shares when Fund share
prices are higher, so that the average price paid for Fund
shares is less than the average price of the Fund shares over
the same time period. Dollar cost averaging does not assure
profits or protect against losses in a steadily declining
market. Since dollar cost averaging involves continuous
investment regardless of fluctuating price levels, you should
consider your financial ability to continue investing in
declining as well as rising markets before deciding to invest
in this way. The Fund offers two different types of
systematic investment programs:
Automatic Once you have established a Fund account, you may make
Deposit Plan regular investments in an amount of $25 or more each month by
authorizing SSI to draw preauthorized checks on your bank
account. There is no obligation to continue payments and you
may terminate your participation at any time at your
discretion. No charge in addition to the applicable sales
charge is made in connection with this Plan, and there is no
cost to the Fund. To obtain an application form for the
Automatic Deposit Plan, check the applicable box on the
enclosed Application Form or call Nuveen toll-free at 800-
621-7227.
Payroll Direct Once you have established a Fund account, you may, with your
Deposit Plan employer's consent, make regular investments in Fund shares
of $25 or more per pay period by authorizing your employer to
deduct this amount automatically from your paycheck. There is
no obligation to continue payments and you may terminate your
participation at any time at your discretion. No charge in
addition to the applicable
28
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sales charge is made for this Plan, and there is no cost to
the Fund. To obtain an application form for the Payroll
Direct Deposit Plan, check the applicable box on the enclosed
Application Form or call Nuveen toll-free at 800-621-7227.
OTHER SHAREHOLDER PROGRAMS
Exchange You may exchange shares of a class of the Fund for shares of
Privilege the same class of any other Nuveen Mutual Fund with
reciprocal exchange privileges, at net asset value without a
sales charge, by sending a written request to the Fund, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330. Similarly, Class A, Class B, Class C and Class R Shares
of other Nuveen Mutual Funds may be exchanged for the same
class of shares of the Fund at net asset value without a
sales charge. Exchanges of shares from any Nuveen money
market fund will be made into Class A Shares, Class B Shares,
Class C Shares or Class R Shares of the Fund at the public
offering price. If, however, a sales charge has previously
been paid on the investment represented by the exchanged
shares (i.e., the shares to be exchanged were originally
issued in exchange for shares on which a sales charge was
paid), the exchange of shares from a Nuveen money market fund
will be made into shares of the Fund at net asset value.
Class A Shares, Class C Shares or Class R Shares may be
exchanged for shares of any Nuveen money market fund, but
Class B Shares may not be exchanged for shares of a Nuveen
money market fund.
Class A shares of Nuveen Mutual Funds sold with a maximum up-
front sales charge of less than the maximum charged by other
Nuveen Mutual Funds will be subject to the appropriate "sales
charge differential" upon the exchange of such shares for
Class A shares of a Fund sold with a higher up-front sales
charge. The "sales charge differential" is limited to a
percentage rate no greater than the excess of the sales
charge rate applicable to purchases of shares of the Nuveen
Mutual Fund being acquired in the exchange over the sales
charge rate(s) actually paid on the mutual fund shares
relinquished in the exchange and on any predecessor of those
shares. For purposes of the exchange privilege, shares
obtained through automatic reinvestment of dividends and
capital gain distributions are treated as having paid the
same sales charges applicable to the shares on which the
dividends or distributions were paid; however, if no sales
charge was imposed upon the initial purchase of the shares,
any shares obtained through automatic reinvestment will be
subject to a sales charge differential upon exchange.
If you exchange shares 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.
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The shares to be purchased must be offered in your state of
residence and you must have held the shares you are
exchanging for at least 15 days. The total value of exchanged
shares must at least equal the minimum investment requirement
of the Nuveen Mutual Fund being purchased. For federal income
tax purposes, any exchange 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 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 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 enclosed
Application Form or by calling Nuveen toll-free at 800-621-
7227 to obtain an authorization form. The exchange privilege
may be modified or discontinued by the Fund at any time upon
prior written notice to shareholders of the Fund.
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.
Fund Direct You can use Fund Direct to link your Fund account to your
account at a bank or other financial institution. Fund Direct
enables you to transfer money electronically between these
accounts and perform a variety of account transactions. These
include purchases of shares by telephone, investments under
Automatic Deposit Plan, and sending dividends and
distributions, redemption payments or Automatic Withdrawal
|
Plan payments directly to your bank account. Please refer to the Application for details, or call SSI for more information.
Fund Direct privileges must be requested via an Application you obtain by calling 800-621-7227. Fund Direct privileges will apply to each shareholder listed in the registration on your account as well as to your Authorized Dealer representative of record unless and until SSI receives written instructions terminating or changing those privileges. After you establish Fund Direct for your account, any change of bank account information must be made by signature-guaranteed instructions to SSI signed by all shareholders who own the account.
Purchases may be made by telephone only after your account
has been established. To purchase shares in amounts up to
$250,000 through a telephone representative, call SSI at 800-
621-7227. The purchase payment will be debited from your bank
account.
Reinstatement If you redeemed Class A, Class B or Class C Shares of the
Privilege 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 of the appropriate class of Fund shares, next
calculated at the time of reinstatement. If you reinstate
shares that were subject to a CDSC, your holding period as of
the redemption date will also be reinstated. The 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 and
amount of the reinvestment.
FOR MORE INFORMATION ABOUT THESE PURCHASE OPTIONS AND TO
OBTAIN THE APPLICATION FORMS REQUIRED FOR SOME OF THEM, CALL
NUVEEN TOLL-FREE AT 800-621-7227.
ADDITIONAL INFORMATION
If you choose to invest in the Fund, an account will be
opened and maintained for you by SSI, the Fund's shareholder
services agent. Share certificates will be issued to you only
upon written request to SSI, and no certificates will be
issued for fractional shares. The Fund reserves the right to
reject any purchase order and to waive or increase minimum
investment requirements. A change in registration or transfer
of shares held in the name of your financial adviser's firm
can only be made by an order in good form from the financial
adviser acting on your behalf.
Authorized Dealers are encouraged to open single master
accounts. However, some Authorized Dealers may wish to use
SSI's sub-accounting system to minimize their internal
recordkeeping requirements. An Authorized Dealer or other
investor requesting shareholder servicing or accounting other
than the master account or sub-accounting service offered by
SSI will be required to enter into a separate agreement with
another agent for these services for a fee that will depend
upon the level of services to be provided.
Subject to the rules and regulations of the Securities and
Exchange Commission, the Fund reserves the right to suspend
the continuous offering of its shares at any time, but no
suspension shall affect your right of redemption as described
below.
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DISTRIBUTION AND SERVICE PLAN
The Fund has adopted a plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, which
provides that Class B and Class C Shares will be subject to
an annual distribution fee and Class A, Class B and Class C
Shares will be subject to an annual service fee. Class R
Shares will not be subject to either distribution or service
fees.
The distribution fee applicable to Class B and Class C Shares under the Plan will be payable to reimburse Nuveen for services and expenses incurred in connection with the distribution of such Shares. The distribution fee primarily reimburses Nuveen for providing compensation to Authorized Dealers, including Nuveen, either at the time of sale or on an ongoing basis. The other expenses for which Nuveen may be reimbursed include, 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 such Shares, certain other expenses associated with the distribution of such 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, Class B and Class C Shares under the Plan will be payable to Nuveen, to be used to compensate Authorized Dealers, including Nuveen, 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.
The Fund may spend up to .25 of 1% per year of the average daily net assets of Class A Shares as a service fee under the Plan applicable to Class A Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class B Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class B Shares as a service fee under the Plan applicable to Class B Shares. The Fund may spend up to .75 of 1% per year of the average daily net assets of Class C Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of Class C Shares as a service fee under the Plan applicable to Class C Shares.
HOW TO REDEEM FUND SHARES
You may require the Fund at any time to redeem for cash your
shares of the Fund at the net asset value next computed after
instructions and required documents and certificates, if any,
are received in proper form, as described below. There is no
charge for the redemption of Class R Shares.
CLASS A SHARES
Class A Shares are normally redeemed at net asset value, without any contingent deferred sales charge. However, in the case of purchases at net asset value of Class A shares of $1 million or more, where the dealer of record has not waived the sales commission, a CDSC of 1% is imposed on any redemptions within 18 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS B SHARES
A CDSC may be imposed upon redemption of Class B Shares. The rate of the CDSC is determined by how long you have owned your shares, as described under "How to Buy Fund Shares-- Class B Shares," above. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any contingent deferred sales charge, except that a CDSC of 1% may be imposed upon redemption of Class C Shares that are redeemed within 12 months of purchase. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
OPERATION OF THE CDSC
In determining whether a CDSC is payable, a Fund will first redeem shares not subject to any charge, and then in the order in which the Class B Shares were purchased or in the reverse order in which the Class A or Class C Shares were purchased, except if another order of redemption would result in a lower charge or you specify 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 or money market fund. Your holding period is calculated on a monthly basis and begins the first day of the month in which the order for investment is received. The CDSC is calculated based on the lower of the redeemed shares' cost or net asset value at the time of the redemption and is deducted from the redemption proceeds. Nuveen receives the amount of any CDSC you pay.
By Written You may redeem shares by sending a written request for
Request redemption directly to the Fund, c/o Shareholder Services,
Inc., P.O. Box 5330, Denver, CO 80217-5330, accompanied by
duly endorsed certificates, if issued. Requests for
redemption and share certificates, if issued, must be signed
by each shareholder and, if the redemption proceeds exceed
$50,000 or are payable other than to the shareholder of
record at the address of record (which address may not have
changed in the preceding 60 days), the signature must be
guaranteed by a member of an approved Medallion Guarantee
Program or in such other manner as may be acceptable to the
Fund. You will receive payment based on the net asset value
per share next determined after receipt by the Fund of a
properly executed redemption request in proper form. A check
for the redemption proceeds will be mailed to you within
seven days after receipt of your redemption request. For
accounts registered in the name of a broker-dealer, payment
will be forwarded within three business days. However, if any
shares to be redeemed were purchased by check within 15 days
prior to the date the redemption request is received, the
Fund will not mail the redemption proceeds until the check
received for the purchase of shares has cleared, which may
take up to 15 days.
By TEL-A-CHECK If you have authorized telephone redemption and your account
address has not changed within the last 60 days, you can
redeem shares that are held in non-certificate form and that
are worth $50,000 or less by calling Nuveen at 800-621-7227.
While you or anyone authorized by you may make telephone
redemption requests, redemption checks will be issued only in
the name of the shareholder of record and will be mailed to
the address of record. If your telephone request is received
prior to 4:00 p.m. eastern time, the redemption check will
normally be mailed the next business day. For requests
received after 4:00 p.m. eastern time, the redemption will be
effected at 4:00 p.m. eastern time the following business day
and the check will normally be mailed on the second business
day after the request.
By TEL-A-WIRE If you have authorized TEL-A-WIRE redemption or established
or Fund Direct Fund Direct privileges, you can take advantage of the
following expedited redemption procedures to redeem shares
held in non-certificate form that are worth at least $1,000.
You may make TEL-A-WIRE redemption requests through a phone
representative or Fund Direct redemption requests by calling
Nuveen at 800-621-7227. If a redemption request is received
by 4:00 p.m. eastern time, the redemption will be made as of
4:00 p.m. that day. If the redemption request is received
after 4:00 p.m. eastern time, the redemption will be made as
of 4:00 p.m. the following business day. Proceeds of
redemptions through TEL-A-WIRE will normally be wired on the
second business day following the redemption, but may be
delayed one additional
34
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business day if the Federal Reserve Bank of Boston or the
Federal Reserve Bank of New York is closed on the day
redemption proceeds would ordinarily be wired. The Fund
reserves the right to charge a fee for TEL-A-WIRE. Proceeds
of redemptions through Fund Direct will normally be wired to
your Fund Direct bank account on the second or third business
day after the redemption.
Before you may redeem shares by TEL-A-CHECK, TEL-A-WIRE or
Fund Direct, you must complete the telephone redemption
authorization section of the enclosed Application Form or the
Fund Direct Application Form and return it to Nuveen or SSI.
If you did not authorize telephone redemption when you opened
your account, you may obtain a telephone redemption
authorization form by writing the Fund or by calling Nuveen
toll-free at 800-621-7227. Proceeds of share redemptions made
by TEL-A-WIRE will be transferred by Federal Reserve wire
only to the commercial bank account specified by the
shareholder on the application form. You must send a written
request to Nuveen or SSI in order to establish multiple
accounts, or to change the account or accounts designated to
receive redemption proceeds. These requests must be signed by
each account owner with signatures guaranteed by a member of
an approved Medallion Guarantee Program or in such other
manner as may be acceptable to the Fund. Further
documentation may be required from corporations, executors,
trustees or personal representatives.
For the convenience of shareholders, the Fund has authorized
Nuveen as its agent to accept orders from financial advisers
by wire or telephone for the redemption of Fund shares. The
redemption price is the first net asset value determined
following receipt of an order placed by the financial
adviser. The Fund makes payment for the redeemed shares to
the securities representatives who placed the order promptly
upon presentation of required documents with signatures
guaranteed as described above. Neither the Fund nor Nuveen
charges any redemption fees other than any CDSC as described
above. However, your financial adviser may charge you for
serving as agent in the redemption of shares.
The Fund reserves the right to refuse telephone redemptions
and, at its option, may limit the timing, amount or frequency
of these redemptions. Telephone redemption procedures may be
modified or terminated at any time, on 30 days' notice, by
the Fund. The Fund, SSI and Nuveen will not be liable for
following telephone instructions reasonably believed to be
genuine. The Fund employs procedures reasonably designed to
confirm that telephone instructions are genuine. These
procedures include recording all telephone instructions and
requiring up to three forms of identification prior to acting
upon a caller's instructions. If the Fund does
35
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not follow reasonable procedures for protecting shareholders
against loss on telephone transactions, it may be liable for
any losses due to unauthorized or fraudulent telephone
instructions.
Automatic If you own Fund shares currently worth at least $10,000, you
Withdrawal may establish an Automatic Withdrawal Plan by completing an
Plan application form for the Plan. You may obtain an application
form by checking the applicable box on the enclosed
Application Form or by calling Nuveen toll-free at 800-621-
7227.
The Plan permits you to request periodic withdrawals on a
monthly, quarterly, semi-annual or annual basis in an amount
of $50 or more. Depending upon the size of the withdrawals
requested under the Plan and fluctuations in the net asset
value of Fund shares, these withdrawals may reduce or even
exhaust your account.
The purchase of Class A Shares, other than through
reinvestment, while you are participating in the Automatic
Withdrawal Plan with respect to Class A Shares will usually
be disadvantageous because you will be paying a sales charge
on any Class A Shares you purchase at the same time you are
redeeming shares. Similarly, use of the Automatic Withdrawal
Plan for Class B Shares held for less than six years or Class
C Shares held for less than 12 months may be disadvantageous
because the newly-purchased Class B or Class C Shares will be
subject to the CDSC.
General 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 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 Securities and Exchange
Commission so that trading of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for any other periods that the Securities
and Exchange Commission by order may permit for protection of
Fund shareholders.
The Fund may, from time to time, establish a minimum total
investment for Fund shareholders, and the Fund reserves the
right to redeem your shares if your investment is less than
the minimum after giving you at least 30 days' notice. If any
minimum total investment is established, and if your account
is below the minimum, you will be allowed 30 days following
the notice in which to purchase sufficient shares to meet the
minimum. So long as the Fund continues to offer shares at net
asset value to holders of Nuveen UITs who are investing their
Nuveen UIT distributions, no minimum total investment will be
established for the Fund.
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MANAGEMENT OF THE FUND
Board of The management of the Fund, including general supervision of
Trustees the duties performed for the Fund by NIAC under the
Management Agreement, is the responsibility of the Board of
Trustees of the Trust.
NIAC oversees Overall management of the Fund is the responsibility of NIAC,
operation of which is located at 333 West Wacker Drive, Chicago, Illinois
the Fund 60606. NIAC oversees the management of the Fund's investment
portfolio and manages the day-to-day business affairs of the
Fund. NIAC has entered into a Sub-Advisory Agreement with
ICAP under which ICAP manages the Fund's equity investments.
NIAC manages NIAC manages the Fund's municipal investments and is
the Fund's responsible for the periodic rebalancing of the Fund's
municipal investment portfolio in order to achieve the Fund's target
investments investment mix. [ ] has general supervisory responsibility
for all investment company assets managed by NIAC. [Mr.] [ ]
has been employed by since .
The day to day management of the Fund's municipal investments
is currently the responsibility of [ ]. [Mr.]
[ ] has been employed by . NIAC places orders
for the purchase and sale of Municipal obligations and is
responsible for selecting the broker-dealers who execute the
portfolio transactions.
Consistent with the Fund's investment objective, NIAC's day-
to-day management of the Fund's Municipal Obligations is
characterized by an emphasis on value investing, a process
which involves the search for Municipal Obligations with
favorable characteristics that, in NIAC's judgment, have not
yet been recognized in the marketplace. The process of
searching for such undervalued or underrated securities is an
ongoing one that draws upon the resources of the portfolio
managers of the various Nuveen funds and senior management of
NIAC. All portfolio management decisions are subject to
weekly review by NIAC's management and to quarterly review by
the Board of Trustees.
NIAC is a wholly-owned subsidiary of Nuveen, the oldest and
largest investment banking firm (based on number of
employees) specializing in the underwriting and distribution
of tax-exempt securities. Nuveen, the principal underwriter
of the Fund's shares, is sponsor of the Nuveen Tax-Free Unit
Trust, a registered unit investment trust. It is also the
principal underwriter for the Nuveen Mutual Funds, and served
as co-managing underwriter for the shares of the Nuveen
Exchange-Traded Funds. Over 1,000,000 individuals have
invested to date in Nuveen's funds and trusts. Founded in
1898, Nuveen is a subsidiary of The John Nuveen Company
which, in turn, is approximately 80% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is located in St.
Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.
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For the fund management services and facilities furnished by NIAC, the Fund has agreed to pay an annual management fee as follows:
FUND
AVERAGE DAILY NET ASSET MANAGEMENT
VALUE FEE
---------------------------------
For the first $125 million .7500 of 1%
For the next $125 million .7375 of 1%
For the next $250 million .7250 of 1%
For the next $500 million .7125 of 1%
For the next $1 billion .7000 of 1%
For assets over $2 billion .6750 of 1%
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ICAP manages ICAP was founded in 1970 and is located at 225 West Wacker
the Fund's Drive, Suite 2400, Chicago, IL 60606. Under the Sub-Advisory
equity Agreement, NIAC pays ICAP a portfolio management fee on a
investments specified proportion of the Fund's average daily net asset
value, such proportion to be equal to the Fund's target
investment mix with respect to Equity Securities. The
portfolio management fee is paid at an annual rate as set
forth below, and is determined by reference to the average
daily market value of that portion of the assets of all
Nuveen-sponsored investment products for which ICAP serves as
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portfolio manager:
PORTION OF NUVEEN PORTFOLIO
AVERAGE DAILY NET ASSETS MANAGEMENT
MANAGED BY ICAP FEE
--------------------------------
For the first $500 million .35 of 1%
For the next $500 million .30 of 1%
For assets over $1 billion .25 of 1%
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The investment decisions made with respect to the Fund's equity investments are made through a team approach, with all of the ICAP investment professionals contributing to the process. Each of the investment officers and other investment professionals of ICAP has developed an expertise in at least one functional investment area, including equity research, strategy, fixed income analysis, quantitative research, technical research, and trading. A key element in the decision making process is a formal investment committee meeting generally held each business day and attended by all the investment professionals. These meetings also provide for the ongoing review of ICAP's investment position. Pertinent information from outside sources is shared and incorporated into the investment outlook. The investment strategy, asset sectors, and individual security holdings are reviewed to verify their continued appropriateness. Investment recommendations are presented to the committee for decisions.
ICAP provides continuous advice and recommendations
concerning the assets of the Fund allocated to Equity
Securities, and is responsible for selecting the broker-
dealers who execute the portfolio transactions. In executing
such transactions, ICAP seeks to obtain the best net results
for the Funds. ICAP also serves as investment adviser to the
ICAP Funds, Inc. and to pension and profit-sharing plans, and
other institutional and private investors. As of May 1, 1996,
ICAP had approximately $5 billion under management. Mr.
Robert H. Lyon, President of ICAP, owns shares representing
51% of the voting rights of ICAP. In addition, The John
Nuveen Company owns preferred shares of ICAP, which are
convertible after several years into a 20% common stock
interest of ICAP.
NIAC serves as NIAC serves as administrator for the Fund. In such capacity,
Fund it provides office facilities and equipment. As
Administrator administrator, NIAC also has agreed to provide or to obtain
at its expense for the Fund all other services including
custodial, transfer agent, accounting, legal and certain
clerical, bookkeeping and administrative services, and to pay
all other expenses of the Fund (other than investment
management fees, distribution fees and service fees,
brokerage costs, organizational costs, interest charges and
extraordinary expenses), including but not limited to share
registration expenses, printing and mailing expenses,
compensation and expenses of trustees not affiliated with
NIAC or ICAP, taxes and insurance. For these services, each
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class pays the Administrator an annual fee of %.
HOW THE FUND SHOWS PERFORMANCE
The Fund may from time to time compare its investment results
to various passive indices or other mutual funds and cite
such comparisons in reports to shareholders, sales
literature, and advertisements. The results may be calculated
on the basis of average annual total return, total return, or
cumulative total return.
All total return figures assume the reinvestment of all dividends and measure the net investment income generated by, and the effect of any realized and unrealized appreciation or depreciation of, the underlying investments in the Fund over a specified period of time. Average annual total return figures are annualized and therefore represent the average annual percentage change over the specified period. Cumulative total return figures are not annualized and represent the aggregate percentage or dollar value change over a stated period of time. Average annual total return and cumulative total return are based upon the historical results of the Fund and are not necessarily representative of the future performance of the Fund.
Through a tax-efficient, balanced strategy the Fund seeks to provide investors with regular tax-free income and long-term capital appreciation, while at the same time moderating the effect of equity market risk on total returns. The benefits of balancing stocks with municipal bonds in an investment portfolio can be seen in the chart below, which represents the returns and risk of a hypothetical balanced investment portfolio. As the chart illustrates, adding municipal bonds to a portfolio of stocks can enable you to pursue the capital appreciation potential of stocks with substantially lower risk.
Balancing Stock with Bonds January 1980--December 1995
Average Annual Total Return (%) Variability of Returns (%)
-------------------------------------------------------------------
Before Tax After Tax Before Tax After Tax
-------------------------------------------------------------------
100%
Municipal 8.67 8.38 9.64 9.65
- -------------------------------------------------------------------------------
40% Stocks
60% Municipals 11.76 9.73 9.53 9.65
- -------------------------------------------------------------------------------
100% Stocks 15.80 11.26 14.81 15.04
-------------------------------------------------------------------
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Graph depicting the average annualized returns and average risk (annualized standard deviation of returns) over the period from January 1980 through December 1995 of a portfolio comprised of stocks and municipal bonds, where the portfolio's stock allocation varies between 0% and 100%. Stocks are represented by the S&P 500 Index and municipal bonds by the Lehman Brothers 10 Year Municipal Bond Index.
Stocks are represented by the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500"), a widely-recognized, unmanaged index of common stock prices. S&P 500 returns assume reinvestment of all dividends paid by the stocks included in the index, but do not include brokerage commissions or other fees an investor would incur by investing in the portfolio of stocks comprising the index. Municipal bond returns are represented by the Lehman 10 Year Municipal Bond Index (the "Lehman 10 Year Index"), an unmanaged index of fixed-rate, investment grade municipal bonds with maturities from 8 to 12 years that reflect the overall municipal bond marketplace. Lehman 10 Year Index returns are available beginning in January 1980 and assume reinvestment of all coupon income on the bonds included in the index. For purposes of calculating after-tax returns, portfolio turnover in each asset class was assumed to equal the projected portfolio turnover rates of those classes in the Fund. Ordinary income was taxed at the highest marginal tax rate of 39.6% and realized capital gains were taxed at the long-term individual rate of 28%. All returns used in the chart above are quarterly returns.
The foregoing example depicts the performance of unmanaged indices and does not depict the performance of the Fund or of any investment product managed by NIAC or ICAP. There can be no assurance that the return and risk characteristics of the municipal and equity markets in the future will resemble those in the past; nor can there be assurance that the Fund's future performance will be comparable to that of these indices.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS
The Fund pays The Fund will pay monthly tax-exempt income dividends to
monthly tax- shareholders at a level rate that reflects the past and
free dividends projected net tax-exempt income of the Fund and that results,
over time, in the distribution of substantially all of the
Fund's net tax-exempt income. To maintain a more stable
monthly distribution, the Fund may from time to time
distribute less than the entire amount of net tax-exempt
income earned in a particular period. This undistributed net
tax-exempt income would be available to supplement future
distributions, which might otherwise have been reduced by a
decrease in the Fund's monthly net income due to fluctuations
in investment income or expenses. As a result, the tax-exempt
income distributions paid by the Fund for any particular
monthly period may be more or less than the amount of net
tax-exempt income actually earned by the Fund during such
period. Undistributed net tax-exempt income is included in
the Fund's net asset value and, correspondingly,
distributions from previously undistributed net tax-exempt
income are deducted from the Fund's net asset value. It is
not expected that this dividend policy will impact the
management of the Fund's portfolio.
Net ordinary taxable income, including dividends received on
the Fund's equity investments, and net realized capital
gains, if any, will be paid annually.
When a dividend or capital gain is distributed, the Fund's
net asset value decreases by the amount of the payment. ANY
DISTRIBUTION OF ORDINARY INCOME AND CAPITAL GAIN WILL BE
SUBJECT TO INCOME TAXES WHENEVER IT IS RECEIVED, EVEN IF THE
DISTRIBUTION OCCURS SHORTLY AFTER A PURCHASE OF FUND SHARES.
All dividends or capital gains distributions will
automatically be reinvested in additional shares of the Fund
at the then prevailing net asset value unless an investor
specifically requests that either dividends or capital gains
or both be paid in cash. The election to receive dividends or
reinvest them may be changed by writing to: Nuveen Funds, c/o
Shareholder Services, Inc., P.O. Box 5330, Denver, CO 80217-
5330. Such notice must be received at least 5 days prior to
the record date of any dividend or capital gain distribution.
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TAX MATTERS
FEDERAL INCOME TAX MATTERS
The Fund intends to qualify under Subchapter M of the Code as a regulated investment company and to satisfy conditions which will enable interest from Municipal Obligations, which is exempt from Federal income tax when received by the Fund, to qualify as "exempt-interest" dividends when distributed to the Shareholders of the Fund.
Each year the Fund intends to distribute substantially all of its net tax-exempt income from Municipal Obligations, any ordinary taxable income, including dividends from Equity Securities, recognized market discount and net realized short-term capital gains, and net realized long-term capital gains, if any.
Federal tax law imposes an alternative minimum tax with respect to both corporations and individuals based on certain items of tax preference. Interest on certain Municipal Obligations is included as an item of tax preference in determining the amount of a taxpayer's alternative minimum taxable income. To the extent that the Fund receives income from Municipal Obligations treated as a tax preference item for purposes of the Federal alternative minimum tax, a portion of the dividends paid by it, although otherwise exempt from Federal income tax, will be taxable to holders of Shares to the extent that their tax liability is determined under the alternative minimum tax. In addition, for corporations, the alternative minimum taxable income is increased by 75% of the difference between an alternative measure of income ("adjusted current earnings") and the amount otherwise determined to be the alternative minimum taxable income. The Fund will annually supply Shareholders with a report indicating the percentage of Fund income attributable to Municipal Obligations that is treated as a tax preference item for purposes of the Federal alternative minimum tax.
Under certain circumstances, a corporate Shareholder may be entitled to the dividends received deduction with respect to such Shareholder's taxable dividends which are attributable to dividends received by the Fund on its Equity Securities.
A more detailed summary of the provisions of the Code and regulations thereunder presently in effect as they directly govern the taxation of the Fund and its Shareholders appears in the Statement of Additional Information. These provisions are subject to change by legislative or administrative action, and any such change may be retroactive with respect to Fund transactions. Shareholders are advised to consult with their own tax advisers for more detailed information concerning Federal income tax matters.
STATE AND LOCAL TAX MATTERS
The exemption from Federal income tax for exempt-interest dividends does not necessarily result in exemption for such dividends under the income or other tax laws of any state or local taxing authority. Some states exempt from state income tax that portion of any exempt-interest dividend that is derived from interest received by a regulated investment company on its holdings of securities of that state and its political subdivisions and instrumentalities. Therefore, the Fund will report annually to its shareholders the percentage of interest income earned by the Fund during the preceding year on tax-exempt Municipal Obligations indicating, on a state-by-state basis, the source of such income.
Shareholders of the Fund are advised to consult with their own tax advisers about state and local tax matters.
GENERAL
If you do not furnish the Fund with your correct social security number or employer identification number, the Fund is required by federal law to withhold federal income tax from your distributions and redemption proceeds at a rate of 31%.
This section is not intended to be a full discussion of federal and state income tax laws and the effect of such laws on you. There may be other federal, state, or local tax considerations applicable to a particular investor. You are urged to consult your own tax advisor.
NET ASSET VALUE
Net asset The Fund's net asset value per share is determined as of the
value is close of trading (currently 4:00 p.m. eastern time) on each
calculated day the New York Stock Exchange is open for business. The
daily Fund's net asset value may not be calculated on days during
which the Fund receives no orders to purchase shares and no
shares are tendered for redemption. Net asset value is
calculated by taking the fair value of the Fund's 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. In
determining net asset value, expenses are accrued and applied
daily and securities and other assets for which market
quotations are available are valued at market value. Common
stocks and other equity-type securities are valued at the
last sales price on the national securities exchange or
Nasdaq on which such securities are primarily traded;
however, securities traded on a national securities exchange
or Nasdaq for which there were no transactions on a given day
or securities not listed on a national securities exchange or
Nasdaq are valued at the most recent bid prices. Municipal
obligations are valued by a pricing service that values
portfolio securities at the mean between the quoted bid and
asked prices or the yield equivalent when quotations are
readily available. Securities for which quotations are not
readily available (which are expected to constitute a
majority of the Municipal Obligations held by the Fund) are
valued at fair value as determined by the pricing service
using methods that include consideration of the following:
yields or prices of municipal bonds of comparable quality,
type of issue, coupon, maturity and rating; indications as to
value from securities dealers; and general market conditions.
The pricing service may employ electronic data processing
techniques and/or a matrix system to determine valuations.
Debt securities having remaining maturities of 60 days or
less when pruchased are valued by the amortized cost method
when the Board of Trustees determines that the fair market
value of such securities is their amortized cost. Under this
method of valuation, a security is initially valued at its
acquisition cost, and thereafter amortization of any discount
or premium is assumed each day, regardless of the impact of
fluctuating interest rates on the market value of the
security. Regardless of the method employed to value a
particular security, all valuations are subject to review by
the Fund's Board of Trustees or its delegate who may
determine the appropriate value of a security whenever the
value as calculated is significantly different from the
previous day's calculated value.
Fund expenses In addition to the Fund management fee and administrative fee
paid to NIAC and the distribution and service fees paid to
Nuveen, the Fund is responsible for its own expenses that are
not covered under such agreements, including, without
limitation: interest charges; brokerage commissions;
organizational expenses; and extraordinary expenses.
|
GENERAL INFORMATION
Custodian and The Custodian of the assets of the Fund is The Chase
Transfer and Manhattan Bank, N.A. ("Chase"), 770 Broadway, New York, New
Shareholder York 10003. Chase also provides certain accounting services
Service Agent to the Fund. The Fund's transfer, shareholder services and
dividend paying agent, Shareholder Services, Inc., P.O. Box
5330, Denver, CO 80217-5330, performs bookkeeping, data
processing and administrative services for the maintenance of
shareholder accounts.
Organization The Fund is a series of the Nuveen Investment Trust
("Trust"). The Trust is an open-end diversified management
investment company under the Investment Company Act of 1940.
The Trust was organized as a Massachusetts business trust on
May , 1996. The Board of Trustees is authorized to issue an
unlimited number of shares in one or more series or "Funds,"
which may be divided into classes of shares. Currently, there
are three series authorized and outstanding, each of which is
divided into four classes of shares designated as Class A
Shares, Class B Shares, Class C Shares and Class R 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 automatically convert into Class A Shares
of the same Fund, as described above. The Board of Trustees
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 owing more than 10% of
the outstanding shares of the Trust 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 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 Declaration of Trust further provides for
indemnification out of the assets and property of the Trust
for all loss and expense 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 itself was
unable to meet its obligations. The Trust believes the
likelihood of the occurrence of these circumstances is
remote.
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Statement of Additional Information
, 1996
Nuveen Investment Trust
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN SELECT STOCK FUND
NUVEEN BALANCED FUND
NUVEEN INCOME AND GROWTH FUND
This Statement of Additional Information is not a prospectus. A prospectus may be obtained from certain securities representatives, banks and other financial institutions that have entered into sales agreements with John Nuveen & Co. In- corporated, or from the Fund, c/o John Nuveen & Co. Incorporated, 333 West Wacker Drive, Chicago, Illinois 60606. This Statement of Additional Information relates to, and should be read in conjunction with, as to each Fund the Pro- spectus for that Fund dated , 1996.
Table of Contents Page - -------------------------------------------------------------------------- General Information B-2 - -------------------------------------------------------------------------- Investment Policies and Restrictions B-2 - -------------------------------------------------------------------------- Investment Policies and Techniques B-4 - -------------------------------------------------------------------------- Management B-19 - -------------------------------------------------------------------------- Fund Manager and Portfolio Manager B-21 - -------------------------------------------------------------------------- Portfolio Transactions B-22 - -------------------------------------------------------------------------- Net Asset Value B-24 - -------------------------------------------------------------------------- Tax Matters B-24 - -------------------------------------------------------------------------- Performance Information B-30 - -------------------------------------------------------------------------- Additional Information on the Purchase and Redemption of Fund Shares B-32 - -------------------------------------------------------------------------- Distribution and Service Plans B-36 - -------------------------------------------------------------------------- Independent Public Accountants and Custodian B-37 - -------------------------------------------------------------------------- Financial Statements B-37 - -------------------------------------------------------------------------- Appendix A--Ratings of Investments - -------------------------------------------------------------------------- |
GENERAL INFORMATION
Nuveen Select Stock Fund, Nuveen Balanced Fund and Nuveen Income and Growth Fund (individually a "Fund" and collectively the "Funds") are series of the Nuveen Investment Trust (the "Trust"), an open-end diversified management se- ries investment company. Each series of the Trust represents shares of benefi- cial interest in a separate portfolio of securities and other assets, with its own objectives and policies. Currently, three series of the Trust are autho- rized and outstanding.
Certain matters under the Investment Company Act of 1940 which must be submit- ted to a vote of the holders of the outstanding voting securities of a series company shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding voting securities of each se- ries affected by such matter.
INVESTMENT POLICIES AND RESTRICTIONS
INVESTMENT RESTRICTIONS
The investment objective and certain fundamental investment policies of each
Fund are described in the Prospectus for that Fund. A Fund, as a fundamental
policy, may not, without the approval of the holders of a majority of the
shares of the Fund:
(1) With respect to 75% of its total assets, purchase the securities of any is- suer (except securities issued or guaranteed by the United States government or any agency or instrumentality thereof) if, as a result, (i) more than 5% of the Fund's total assets would be invested in securities of that issuer, or (ii) the Fund would hold more than 10% of the outstanding voting securities of that is- suer;
(2) Borrow money, except that the Fund may (i) borrow money from banks for tem- porary or emergency purposes (but not for leverage or the purchase of invest- ments) and (ii) make other investments or engage in other transactions permis- sible under the Investment Company Act of 1940 that may involve a borrowing, provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the value of the Fund's total assets (including the amount borrowed), less the Fund's liabilities (other than borrowings).
(3) Act as an underwriter of another issuer's securities, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Se- curities Act of 1933 in connection with the purchase and sale of portfolio se- curities.
(4) Make loans to other persons, except through (i) the purchase of debt secu- rities permissible under the Fund's investment policies, (ii) repurchase agree- ments, or (iii) the lending of portfolio securities, provided that no such loan of portfolio securities may be made by the Fund if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of the Fund's total assets.
(5) Purchase or sell physical commodities unless acquired as a result of owner- ship of securities or other instruments (but this shall not prevent the Fund from purchasing or selling options, futures contracts, or other derivative in- struments, or from investing in securities or other instruments backed by phys- ical commodities).
(6) Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prohibit the Fund from pur- chasing or selling securities or other instruments backed by real estate or of issuers engaged in real estate activities).
(7) Issue senior securities, except as permitted under the Investment Company Act of 1940.
(8) Purchase the securities of any issuer if, as a result, more than 25% of the Fund's total assets would be invested in the securities of issuers whose prin- cipal business activities are in the same industry (except that this restric- tion shall not be applicable to securities issued or guaranteed by the U.S. government or any agency or instrumentality thereof and, in the case of the Nuveen Income and Growth Fund, to Municipal Obligations, other than those Mu- nicipal Obligations backed only by the assets and revenues of non-governmental users).
If a percentage restriction is adhered to at the time of investment, a later increase in percentage resulting from a change in market value of the invest- ment or the total assets will not constitute a violation of that restriction.
For the purpose of applying the limitation set forth in restriction (1) above to Municipal Obligations, an issuer shall be deemed the sole issuer of a secu- rity 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 hospital, if the security is backed only by the as- sets 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 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. 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. When a Municipal Obligation is insured by bond insurance, it shall not be considered a security that is issued or guaranteed by the insurer; instead, the issuer of such Municipal Obligation will be determined in accordance with the principles set forth above. The fore- going restrictions do not limit the percentage of the Nuveen Income and Growth Fund's assets that may be invested in Municipal Obligations insured by any given insurer.
The foregoing fundamental investment policies, together with the investment ob- jective of each of the Nuveen Select Stock Fund, the Nuveen Balanced Fund and the Nuveen Income and Growth Fund, and certain other policies specifically identified in the prospectus, cannot be changed without approval by holders of a "majority of the Fund's outstanding voting shares." As defined in the Invest- ment Company Act of 1940, this means the vote of (i) 67% or more of the Fund's shares present at a meeting, if the holders of more than 50% of the Fund's shares are present or represented by proxy, or (ii) more than 50% of the Fund's shares, whichever is less.
In addition to the foregoing fundamental investment policies, each Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Board of Trustees. A Fund may not:
(1) Sell securities short, unless the Fund owns or has the right to obtain se- curities equivalent in kind and amount to the securities sold short, and pro- vided that transactions in options, futures contracts, options on futures con- tracts, or other derivative instruments are not deemed to constitute selling securities short.
(2) Purchase securities on margin, except that the Fund may obtain such short- term credits as are necessary for the clearance of transactions; and provided that margin deposits in connection with futures contracts, options on futures contracts, or other derivative instruments shall not constitute purchasing se- curities on margin.
(3) Pledge, mortgage or hypothecate any assets owned by the Fund except as may be necessary in connection with permissible borrowings or investments and then such pledging, mortgaging, or hypothecating may not exceed 33 1/3% of the Fund's total assets at the time of the borrowing or investment.
(4) Purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions there- of) if, as a result, more than 5% of its total assets would be invested in the securities of issuers that, including predecessors or unconditional guarantors, have a record of less than three years of continuous operation. This policy does not apply to securities of pooled investment vehicles or mortgage or as- set-backed securities.
(5) Purchase securities of open-end or closed-end investment companies except in compliance with the Investment Company Act of 1940 and applicable state law.
(6) Enter into futures contracts or related options if more than 30% of the Fund's net assets would be represented by futures contracts or more than 5% of the Fund's net assets would be committed to initial margin deposits and premi- ums on futures contracts and related options.
(7) Invest in direct interests in oil, gas or other mineral exploration pro- grams or leases; however, the Fund may invest in the securities of issuers that engage in these activities.
(8) Purchase securities when borrowings exceed 5% of its total assets. [If due to market fluctuations or other reasons, the value of the Fund's assets falls below 300% of its borrowings, the Fund will reduce its borrowings within 3 business days. To do this, the Fund may have to sell a portion of its invest- ments at a time when it may be disadvantageous to do so].
(9) The Nuveen Select Stock Fund, the Nuveen Balanced Fund and the Nuveen In- come and Growth Fund may not invest in illiquid securities if, as a result of such investment, more than 10% of the Fund's net assets would be invested in illiquid securities.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the discussion of the Funds' investment objectives, policies, and techniques that are described in the Prospectus for each Fund.
Illiquid Securities
The Fund may invest in illiquid securities (i.e., securities that are not read-
ily 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 repur-
chase agreements with maturities in excess of seven days. However, the Nuveen
Select Stock Fund and the Nuveen Balanced Fund will not acquire illiquid secu-
rities if, as a result, such securities would comprise more than 5% of the
value of the Fund's net assets, and the
Nuveen Income and Growth Fund will not acquire illiquid securities if, as a re- sult, such securities would comprise more than 10% of the value of the Fund's net assets. The Board of Trustees or its delegate has the ultimate authority to determine, to the extent permissible under the federal securities laws, which securities are illiquid or illiquid for purposes of this 5% or 10% limitation. The Board of Trustees has delegated to Institutional Capital Corporation ("ICAP") the day-to-day determination of the illiquidity of any equity or tax- able fixed-income security and to Nuveen Institutional Advisory Corp. ("NIAC") as to any municipal security, although it has retained oversight and ultimate responsibility for such determinations. Although no definitive liquidity crite- ria are used, the Board of Trustees has directed ICAP and NIAC to look to such factors as (i) the nature of the market for a security (including the institu- tional private resale market); the frequency of trade and quotes for a securi- ty; 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 solic- iting offers and the mechanics of transfer, (ii) the terms of certain securi- ties 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 factors.
Restricted securities may be sold only in privately negotiated transactions or in a public offering with respect to which a registration statement is in ef- fect 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 state- ment. 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 de- cided 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 appre- ciation of illiquid securities or the depreciation of liquid securities, the Fund should be in a position where more than 5% (or 10% for Nuveen Income and Growth Fund) of the value of its net assets are invested in illiquid securi- ties, including restricted securities which are not readily marketable, the af- fected Fund will take such steps as is deemed advisable, if any, to protect li- quidity.
Short-Term Taxable Fixed Income Securities The Nuveen Select Stock Fund may invest up to 35% of its total assets and, for temporary defensive purposes up to 100% of its total assets, in cash and short- term taxable fixed income securities. The Nuveen Balanced Fund may invest up to 20% of its total assets and, for temporary defensive purposes up to 100% of its total assets, in cash and short-term taxable fixed income securities. For tem- porary defensive purposes the Nuveen Income and Growth Fund may invest up to 100% of its total assets in cash and short-term taxable fixed income securi- ties, although the Fund intends to invest in taxable temporary investments only in the event that suitable tax-exempt temporary investments are not available at reasonable prices and yields. Short-term taxable fixed income securities are defined to include, without limitation, the following:
(1) U.S. government securities, including bills, notes and bonds differing as to maturity and rates of interest, which are either issued or guaranteed by the U.S. Treasury or by U.S. government agencies or instrumentalities. U.S. govern- ment agency securities include securities issued by (a) the Federal Housing Ad- ministration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration, and the Government National Mortgage As- sociation, whose securities are supported by the full faith and credit of the United States; (b) the Federal Home Loan Banks, Federal
Intermediate Credit Banks, and the Tennessee Valley Authority, whose securities are supported by the right of the agency to borrow from the U.S. Treasury; (c) the Federal National Mortgage Association, whose securities are supported by the discretionary authority of the U.S. government to purchase certain obliga- tions of the agency or instrumentality; and (d) the Student Loan Marketing As- sociation, whose securities are supported only by its credit. While the U.S. government provides financial support to such U.S. government-sponsored agen- cies or instrumentalities, no assurance can be given that it always will do so since it is not so obligated by law. The U.S. government, its agencies, and in- strumentalities do not guarantee the market value of their securities, and con- sequently, the value of such securities may fluctuate.
(2) Certificates of Deposit issued against funds deposited in a bank or savings and loan association. Such certificates are for a definite period of time, earn a specified rate of return, and are normally negotiable. If such certificates of deposit are non-negotiable, they will be considered illiquid securities and be subject to the Fund's 5% restriction on investments in illiquid securities. Pursuant to the certificate of deposit, the issuer agrees to pay the amount de- posited plus interest to the bearer of the certificate on the dated specified thereon. Under current FDIC regulations, the maximum insurance payable as to any one certificate of deposit is $100,000; therefore, certificates of deposit purchased by the Fund may not be fully insured.
(3) Bankers' acceptances which are short-term credit instruments used to fi- nance commercial transactions. Generally, an acceptance is a time draft drawn on a bank by an exporter or an importer to obtain a stated amount of funds to pay for specific merchandise. The draft is then "accepted" by a bank that, in effect, unconditionally guarantees to pay the face value of the instrument on its maturity date. The acceptance may then be held by the accepting bank as an asset or it may be sold in the secondary market at the going rate of interest for a specific maturity.
(4) Repurchase agreements which involve purchases of debt securities. In such an action, at the time the Fund purchases the security, it simultaneously agrees to resell and redeliver the security to the seller, who also simultane- ously agrees to buy back the security at a fixed price and time. This assures a predetermined yield for the Fund during its holding period since the resale price is always greater than the purchase price and reflects an agreed-upon market rate. Such actions afford an opportunity for the Fund to invest tempo- rarily available cash. The Fund may enter into repurchase agreements only with respect to obligations of the U.S. government, its agencies or instrumentali- ties; certificates of deposit; or bankers acceptances in which the Fund may in- vest. Repurchase agreements may be considered loans to the seller, collateral- ized by the underlying securities. The risk to the Fund is limited to the abil- ity of the seller to pay the agreed-upon sum on the repurchase date; in the event of default, the repurchase agreement provides that the affected Fund is entitled to sell the underlying collateral. If the value of the collateral de- clines after the agreement is entered into, however, and if the seller defaults under a repurchase agreement when the value of the underlying collateral is less than the repurchase price, the Fund cold incur a loss of both principal and interest. ICAP monitors the value of the collateral at the time the action is entered into and at all times during the term of the repurchase agreement. ICAP does so in an effort to determine that the value of the collateral always equals or exceeds the agreed-upon repurchase price to be paid to the Fund. If the seller were to be subject to a federal bankruptcy proceeding, the ability of a Fund to liquidate the collateral could be delayed or impaired because of certain provisions of the bankruptcy laws.
(5) Bank time deposits, which are monies kept on deposit with banks or savings and loan associations for a stated period of time at a fixed rate of interest. There may be penalties for the early withdrawal of such time deposits, in which case the yields of these investments will be reduced.
(6) Commercial paper, which are short-term unsecured promissory notes, includ- ing variable rate master demand notes issued by corporations to finance their current operations. Master demand notes are direct lending arrangements between the Fund and a corporation. There is no secondary market for the notes. Howev- er, they are redeemable by the Fund at any time. ICAP will consider the finan- cial condition of the corporation (e.g., earning power, cash flow, and other liquidity ratios) and will continuously monitor the corporation's ability to meet all of its financial obligations, because the Fund's liquidity might be impaired if the corporation were unable to pay principal and interest on de- mand. Investments in commercial paper will be limited to commercial paper rated in the two highest categories by a major rating agency or unrated commercial paper which is, in the opinion of ICAP, of comparable quality.
Short-Term Tax-Exempt Fixed Income Securities During certain temporary periods, in order to keep cash on hand fully invested, the Nuveen Income and Growth Fund may invest up to 20% of its total assets as "temporary investments" in short-term tax-exempt fixed income securities, and as a defensive measure in response to prevailing market conditions up to 100% of its total assets in such securities. Short-term tax-exempt fixed income se- curities are defined to include, without limitation, the following:
Bond Anticipation Notes (BANs) are usually generally obligations of state and local governmental issuers which are sold to obtain interim financing for pro- jects that will eventually be funded through the sale of long-term debt obliga- tions or bonds. The ability of an issuer to meet its obligations on its BANs is primarily dependent on the issuer's access to the long-term municipal bond mar- ket and the likelihood that the proceeds of such bond sales will be used to pay the principal and interest on the BANs.
Tax Anticipation Notes (TANs) are issued by state and local governments to fi- nance the current operations of such governments. Repayment is generally to be derived from specific future tax revenues. Tax anticipation notes are usually general obligations of the issuer. A weakness in an issuer's capacity to raise taxes due to, among other things, a decline in its tax base or a rise in delin- quencies, could adversely affect the issuer's ability to meet its obligations on outstanding TANs.
Revenue Anticipation Notes (RANs) are issued by governments or governmental bodies with the expectation that future revenues from a designated source will be used to repay the notes. In general, they also constitute general obliga- tions of the issuer. A decline in the receipt of projected revenues, such as anticipated revenues from another level of government, could adversely affect an issuer's ability to meet its obligations on outstanding RANs. In addition, the possibility that the revenues would, when received, be used to meet other obligations could affect the ability of the issuer to pay the principal and in- terest on RANs.
Construction Loan Notes are issued to provide construction financing for spe- cific projects. Frequently, these notes are redeemed with funds obtained from the Federal Housing Administration.
Bank Notes are notes issued by local government bodies and agencies as those described above to commercial banks as evidence of borrowings. The purposes for which the notes are issued are varied but they are frequently issued to meet short-term working capital or capital-project needs. These notes may have risks similar to the risks associated with TANs and RANs.
Tax-Exempt Commercial Paper (Municipal Paper) represents very short-term unsecured, negotiable promissory notes, issued by states, municipalities and their agencies. Payment of principal and interest on issues of municipal paper may be made from various sources, to the extent the funds are available there- from. Maturities of municipal paper generally will be shorter than the maturi- ties of TANs, BANs or RANs. There is a limited secondary market for issues of municipal paper.
While these various types of notes as a group represent the major portion of the tax-exempt note market, other types of notes are occasionally available in the marketplace and the Fund may invest in such other types of notes to the ex- tent permitted under its investment objective, policies and limitations. Such notes may be issued for different purposes and may be secured differently from those mentioned above.
Short Sales Against the Box
When ICAP believes that the price of a particular security held by a Fund may
decline, it may make "short sales against the box" to hedge the unrealized gain
on such security. Selling short against the box involves selling a security
which the Fund owns for delivery at a specified date in the future. The Fund
will limit its transactions in short sales against the box to 5% of its net as-
sets. In addition, the Fund will limit its transactions such that the value of
the securities of any issuer in which it is short will not exceed the lesser of
2% of the value of the Fund's net assets or 2% of the securities of any class
of the issuer. If, for example, the Fund bought 100 shares of ABC at $40 per
share in January and the price appreciates to $50 in March, the Fund might
"sell short" the 100 shares at $50 for delivery the following July. Thereafter,
if the price of the stock declines to $45, it will realize the full $1,000 gain
rather than the $500 gain it would have received had it sold the stock in the
market. On the other hand, if the price appreciates to $55 per share, the Fund
would be required to sell at $50 and thus receive a $1,000 gain rather than the
$1,500 gain it would have received had it sold the stock in the market. The
Fund may also be required to pay a premium for short sales which would par-
tially offset any gain.
Warrants
Each Fund may invest in warrants if, after giving effect thereto, not more than
5% of its net assets will be invested in warrants other than warrants acquired
in units or attached to other securities. Of such 5%, not more than 2% of its
assets at the time of purchase may be invested in warrants that are not listed
on the New York Stock Exchange or the American Stock Exchange. Investing in
warrants is purely speculative in that they have no voting rights, pay no divi-
dends, and have no rights with respect to the assets of the corporation issuing
them. Warrants basically are options to purchase equity securities at a spe-
cific price for a specific period of time. They do not represent ownership of
the securities but only the right to buy them. Warrants are issued by the is-
suer of the security, which may be purchased on their exercise. The prices of
warrants do not necessarily parallel the prices of the underlying securities.
When-Issued Securities
Each Fund may from time to time purchase securities on a "when-issued" basis.
The price of securities purchased on a when-issued basis is fixed at the time
the commitment to purchase is made, but delivery and payment for the securities
take place at a later date. Normally, the settlement date occurs within 45 days
of the purchase. During the period between the purchase and settlement, no pay-
ment is made by the Fund to the issuer and no interest is accrued on debt secu-
rities or dividend income is earned on equity securities. Forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date, which risk is in addition to the risk of decline
in value of the Fund's other assets. While when-issued securities may be sold
prior to the settlement date, the Fund intends to purchase such securities with
the purpose of actually acquiring them. At the time the Fund makes the commit-
ment to purchase a security on a when-issued basis, it will record the transac-
tion and reflect the value of the security in determining its net asset value.
The Fund does not believe that net asset value will be adversely affected by
purchases of securities on a when-issued basis.
The Fund will maintain cash, U.S. government securities and high grade liquid debt securities equal in value to commitments for when-issued securities. Such segregated securities either will mature or, if necessary be sold on or before the settlement date. When the time comes to pay for when-issued securities, the Fund will meet its obligations from then available cash flow, sale of the secu- rities held in the separate account, described above, sale of other securities or, although it would not normally expect to do so, from the sale of the when- issued securities themselves (which may have a market value greater or less than the Fund's payment obligation).
Unseasoned Companies
Each Fund may not invest more than 5% of its net assets in unseasoned issuers.
While smaller companies generally have potential for rapid growth, they often
involve higher risks because they lack the management experience, financial re-
sources, product diversification, and competitive strengths of larger corpora-
tions. In addition, in many instances, the securities of smaller companies are
traded only over-the-counter or on regional securities exchanges, and the fre-
quency and volume of their trading is substantially less than is typical of
larger companies. Therefore, the securities of smaller companies may be subject
to wider price fluctuations. When making large sales, the Fund may have to sell
portfolio holdings of small companies at discounts from quoted prices or may
have to make a series of smaller sales over an extended period of time due to
the trading volume in smaller company securities.
INVESTMENT IN MUNICIPAL OBLIGATIONS
Portfolio Investments
Except to the extent the Nuveen Income and Growth Fund invests in temporary in- vestments as described below, substantially all (in excess of 80%) of the Fund's investments in Municipal Obligations will be comprised of tax-exempt Mu- nicipal Obligations rated at the time of purchase within the four highest grades (Baa or better by Moody's Investors Services, Inc. ("Moody's") or BBB or better by Standard & Poor's Ratings Group ("S&P")), or in unrated Municipal Ob- ligations which, in the opinion of the NIAC, have credit characteristics equiv- alent to, and will be of comparable quality to, Municipal Obligations so rated; provided, however, that not more than 20% of the Fund's investments in Munici- pal Obligations may be in such unrated Municipal Obligations. The foregoing policies are fundamental
policies of the Fund. Municipal Obligations rated Baa or BBB are considered "investment grade" securities; Municipal Obligations rated Baa are considered medium grade obligations which lack outstanding investment characteristics and in fact have speculative characteristics as well, while Municipal Obligations rated BBB are regarded as having an adequate capacity to pay principal and in- terest. Municipal Obligations rated AAA in which the Fund may invest may have been so rated on the basis of the existence of insurance guaranteeing the timely payment, when due, of all principal and interest. A general description of Moody's and S&P's ratings is set forth in Appendix A hereto. The ratings of Moody's and S&P represent their opinions as to the quality of the Municipal Ob- ligations they rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently, Municipal Obligations with the same maturity, coupon and rating may have different yields while obli- gations of the same maturity and coupon with different ratings may have the same yield.
The Fund intends to invest in a laddered portfolio of Municipal Obligations with effective maturities ranging from 5 to 25 years and a weighted average ef- fective maturity of approximately 10 years; but the effective average maturity may be shortened or lengthened from time to time depending upon market condi- tions. As a result, the Fund's portfolio of Municipal Obligations at any given time may include both long-term and intermediate-term Municipal Obligations.
The foregoing policies as to rating of investments in securities will apply only at the time of the purchase of a security, and the Fund will not be re- quired to dispose of securities in the event Moody's or S&P downgrades its as- sessment of the credit characteristics of a particular issuer.
Municipal Obligations
Underrated Municipal Obligations are those whose ratings do not, in NIAC's opinion, reflect their true value. Municipal Obligations may be underrated be- cause of the time that has elapsed since their rating was assigned or reviewed, or because of positive factors that may not have been fully taken into account by rating agencies, or for other similar reasons. Municipal Obligations that are undervalued or that represent undervalued municipal market sectors are Mu- nicipal Obligations that, in NIAC's opinion, are worth more than the value as- signed to them in the marketplace. Municipal Obligations of particular types or purposes (e.g., hospital bonds, industrial revenue bonds or bonds issued by a particular municipal issuer) may be undervalued because there is a temporary excess of supply in that market sector, or because of a general decline in the market price of Municipal Obligations of the market sector for reasons that do not apply to the particular Municipal Obligations that are considered underval- ued. The Fund's investment in underrated or undervalued Municipal Obligations will be based on NIAC's belief that their prices should ultimately reflect their true value. Accordingly, "enhancement of the value of the Fund's portfo- lio of Municipal Obligations relative to the municipal bond market" refers to the Fund's objective of attempting to realize above-average capital apprecia- tion in a rising market, and to experience less than average capital losses in a declining market. Thus, it is not intended to suggest that capital apprecia- tion of Municipal Obligations is itself an objective with respect to the Fund's investments in Municipal Obligations. Instead, the Fund will seek enhancement of the value of the Fund's portfolio of Municipal Obligations relative to the municipal bond market by prudent selection of Municipal Obligations, regardless of which direction the market may move. Any net long-term capital gains
or ordinary income realized by the Fund in respect of its investments in Munic- ipal Obligations will generally result in taxable income to the Fund, or its shareholders, or both. See "Tax Matters" herein and in the Prospectus.
The Fund has not established any limit on the percentage of its portfolio of investments in Municipal Obligations that may be invested in Municipal Obliga- tions subject to the alternative minimum tax provisions of Federal tax law. Consequently, a substantial portion of the current income produced by the Fund may be includable in alternative minimum taxable income. Special considerations apply to corporate investors. See "Tax Matters."
Also included within the general category of Municipal Obligations described in the Prospectus are participations in lease obligations or installment purchase contract obligations (hereinafter collectively called "Municipal Lease Obliga- tions") of municipal authorities or entities. Although a Municipal Lease Obli- gation does not constitute a general obligation of the municipality for which the municipality's taxing power is pledged, a Municipal Lease Obligation is or- dinarily backed by the municipality's covenant to budget for, appropriate and make the payments due under the Municipal Lease Obligation. However, certain Municipal Lease Obligations contain "non-appropriation" clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a "non-appropriation" lease, the Fund's ability to recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property, without recourse to the general credit of the lessee, and disposition or releasing of the property might prove difficult. The Fund will seek to minimize these risks by not in- vesting more than 5% of the assets allocated to investments in Municipal Obli- gations in Municipal Lease Obligations that contain "non-appropriation" clauses, and by only investing in those "non-appropriation" Municipal Lease Ob- ligations where (1) the nature of the leased equipment or property is such that its ownership or use is essential to a governmental function of the municipali- ty, (2) the lease payments will commence amortization of principal at an early date that results in an average life of seven years or less for the Municipal Lease Obligation, (3) appropriate covenants will be obtained from the municipal obligor prohibiting the substitution or purchase of similar equipment if lease payments are not appropriated, (4) the lease obligor has maintained good market acceptability in the past, (5) the investment is of a size that will be attrac- tive to institutional investors and (6) the underlying leased equipment has el- ements of portability or use, or both, that enhance its marketability in the event foreclosure on the underlying equipment were ever required.
Certain Municipal Obligations may carry variable or floating rates of interest whereby the rate of interest is not fixed but varies with changes in specified market rates or indices, such as a bank prime rate or a tax-exempt money market index. As used in the Prospectus and in this Statement of Additional Informa- tion, the term Municipal Obligations also includes obligations, such as tax-ex- empt notes, municipal commercial paper and municipal lease obligations, having relatively short-term maturities, although, as noted above, the Fund intends to invest primarily in Municipal Obligations with effective maturities ranging from 5 to 25 years, and except during temporary defensive periods, will nor- mally maintain a weighted average effective maturity of approximately 10 years.
During temporary defensive periods (e.g., times when, in NIAC's opinion, the ability of the Fund to meet its long-term investment objectives and preserve the asset value of the Fund may be adversely affected by significant adverse market, economic, political, or other circumstances), and in order to keep cash on hand fully invested, the Fund may invest any percentage of its assets in temporary investments. Temporary investments may be either tax-exempt or tax- able. To the extent the Fund invests in taxable temporary investments, the Fund will not at such times be in a position to achieve that portion of its invest- ment objective of seeking federally tax-exempt income.
Obligations of issuers of Municipal Obligations are subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors, such as the Bankruptcy Reform Act of 1978. In addition, the obliga- tions 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 or interest, or both, 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.
HEDGING STRATEGIES
General Description of Hedging Strategies
Each Fund may engage in hedging activities. NIAC or ICAP may cause a Fund to utilize a variety of financial instruments, including options, futures con- tracts (sometimes referred to as "futures") and options on futures contracts to attempt to hedge the Fund's holdings.
Hedging instruments on securities generally are used to hedge against price movements in one or more particular securities positions that the Fund owns or intends to acquire. Hedging instruments on stock indices, in contrast, gener- ally are used to hedge against price movements in broad equity market sectors in which the Fund has invested or expects to invest. The use of hedging instru- ments is subject to applicable regulations of the Securities and Exchange Com- mission (the "SEC"), the several options and futures exchanges upon which they are traded, the Commodity Futures Trading Commission (the "CFTC") and various state regulatory authorities. In addition, the Fund's ability to use hedging instruments will be limited by tax considerations.
General Limitations on Futures and Options Transactions The Trust has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the CFTC and the National Futures Association, which regulate trading in the futures markets. Pursuant to Section 4.5 of the regulations under the Commodity Exchange Act (the "CEA"), the notice of eligibility for a Fund includes the representation that the Fund will use futures contracts and related options solely for bona fide hedging purposes within the meaning of CFTC regulations, provided that the Fund may hold other positions in futures contracts and related options that do not fall within the definition of bona fide hedging transactions (i.e., for speculative purposes) if aggregate initial margins and premiums paid do not exceed 5% of the net as- set value of the Fund. In addition, the Fund will enter into futures contracts and options transactions if more than 30% of its net assets would be committed to such instruments.
The foregoing limitations are not fundamental policies of a Fund and may be changed without shareholder approval as regulatory agencies permit. Various ex- changes and regulatory authorities have undertaken reviews of options and futures trading in light of market volatility. Among the possible actions that have been presented are proposals to adopt new or more stringent daily price fluctuation limits for futures and options transactions and proposals to in- crease the margin requirements for various types of futures transactions.
Asset Coverage for Futures and Options Positions Each Fund will comply with the regulatory requirements of the SEC and the CFTC with respect to coverage of options and futures positions by registered invest- ment companies and, if the guidelines so require, will set aside cash, U.S. government securities, high grade liquid debt securities and/or other liquid assets permitted by the SEC and CFTC in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or options position is outstanding, unless replaced with other per- missible assets, and will be marked-to-market daily.
Stock Index Options
Each Fund may (i) purchase stock index options for any purpose, (ii) sell stock
index options in order to close out existing positions, and/or (iii) write cov-
ered options on stock indexes for hedging purposes. Stock index options are put
options and call options on various stock indexes. In most respects, they are
identical to listed options on common stocks. The primary difference between
stock options and index options occurs when index options are exercised. In the
case of stock options, the underlying security, common stock, is delivered.
However, upon the exercise of an index option, settlement does not occur by de-
livery of the securities comprising the index. The option holder who exercises
the index option receives an amount of cash if the closing level of the stock
index upon which the option is based is greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the option. This amount
of cash is equal to the difference between the closing price of the stock index
and the exercise price of the option expressed in dollars times a specified
multiple.
A stock index fluctuates with changes in the market values of the stock in- cluded in the index. For example, some stock index options are based on a broad market index, such as the Standard & Poor's 500 or the Value Line Composite In- dex or a narrower market index, such as the Standard & Poor's 100. Indexes may also be based on an industry or market segment, such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index. Options on stock indexes are currently traded on the following exchanges: the Chicago Board of Options Exchange, the New York Stock Exchange, the American Stock Exchange, the Pacific Stock Exchange, and the Philadelphia Stock Exchange.
A Fund's use of stock index options is subject to certain risks. Successful use by the Funds of options on stock indexes will be subject to the ability of ICAP to correctly predict movements in the directions of the stock market. This re- quires different skills and techniques than predicting changes in the prices of individual securities. In addition, a Fund's ability to effectively hedge all or a portion of the securities in its portfolio, in anticipation of or during a market decline through transactions in put options on stock indexes, depends on the degree to which price movements in the underlying index correlate with the price movements of the securities held by a Fund. Inasmuch as a Fund's securi- ties will not duplicate the components of an index, the correlation will not be perfect. Consequently, each Fund will bear the risk
that the prices of its securities being hedged will not move in the same amount as the prices of its put options on the stock indexes. It is also possible that there may be a negative correlation between the index and a Fund's securities which would result in a loss on both such securities and the options on stock indexes acquired by the Fund.
The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the options markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying markets that cannot be reflected in the options markets. The purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The purchase of stock index options involves the risk that the premium and transaction costs paid by a Fund in purchasing an option will be lost as a result of unanticipated movements in prices of the securities comprising the stock index on which the option is based.
Certain Considerations Regarding Options There is no assurance that a liquid secondary market on an options exchange will exist for any particular option, or at any particular time, and for some options no secondary market on an exchange or elsewhere may exist. If a Fund is unable to close out a call option on securities that it has written before the option is exercised, the Fund may be required to purchase the optioned securi- ties in order to satisfy its obligation under the option to deliver such secu- rities. If a Fund is unable to effect a closing sale transaction with respect to options on securities that it has purchased, it would have to exercise the option in order to realize any profit and would incur transaction costs upon the purchase and sale of the underlying securities.
The writing and purchasing of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. Imperfect correlation between the options and securities markets may detract from the effectiveness of attempted hedging. Options transactions may result in significantly higher transaction costs and portfolio turnover for the Funds.
Federal Tax Treatment of Options
Certain option transactions have special tax results from the Funds. Expiration
of a call option written by a Fund will result in short-term capital gain. If
the call option is exercised, the Fund will realize a gain or loss from the
sale of the security covering the call option and, in determining such gain or
loss, the option premium will be included in the proceeds of the sale.
If a Fund writes options other than "qualified covered call options," as de- fined in Section 1092 of the Internal Revenue Code of 1986, as amended (the "Code"), or purchases puts, any losses on such options transactions, to the ex- tent they do not exceed the unrealized gains on the securities covering the op- tions, may be subject to deferral until the securities covering the options have been sold.
In the case of transactions involving "nonequity options," as defined in Code
Section 1256, the Funds will treat any gain or loss arising from the lapse,
closing out or exercise of such positions as 60% long-term and 40% short-term
capital gain or loss as required by Section 1256 of the Code. In addition, such
positions must be marked-to-market as of the last business day of the year, and
gain or loss must be
recognized for federal income tax purposes in accordance with the 60%/40% rule discussed above even though the position has not been terminated. A "nonequity option" includes an option with respect to any group of stocks or a stock index if there is in effect a designation by the CFTC of a contract market for a con- tract based on such group of stocks or indexes. For example, options involving stock indexes such as the Standard & Poor's 500 and 100 indexes would be "nonequity options" within the meaning of Code Section 1256.
Futures Contracts
Each Fund may enter into futures contracts (hereinafter referred to as
"Futures" or "Futures Contracts"), including index Futures as a hedge against
movements in the equity markets, in order to establish more definitely the ef-
fective return on securities held or intended to be acquired by the Funds or
for other purposes permissible under the CEA. Each Fund's hedging may include
sales of Futures as an offset against the effect of expected declines in stock
prices and purchases of Futures as an offset against the effect of expected in-
creases in stock prices. The Funds will not enter into Futures Contracts which
are prohibited under the CEA and will, to the extent required by regulatory au-
thorities, enter only into Futures Contracts that are traded on national
futures exchanges and are standardized as to maturity date and underlying fi-
nancial instrument. The principal interest rate Futures exchanges in the United
States are the Board of Trade of the City of Chicago and the Chicago Mercantile
Exchange. Futures exchanges and trading are regulated under the CEA by the
CFTC.
An index Futures Contract is an agreement pursuant to which the parties agree to take or more delivery of an amount of cash equal to the difference between the value of the index at the close of the last trading day of the contract and the price at which the index Futures Contract was originally written. Transac- tion costs are incurred when a Futures Contract is bought or sold and margin deposits must be maintained. A Futures Contract may be satisfied by delivery or purchase, as the case may be, of the instrument or by payment of the change in the cash value of the index. More commonly, Futures Contracts are closed out prior to delivery by entering into an offsetting transaction in a matching Futures Contract. Although the value of an index might be a function of the value of certain specified securities, no physical delivery of those securities is made. If the offsetting purchase price is less than the original sale price, a gain will be realized; if it is more, a loss will be realized. Conversely, if the offsetting sale price is more than the original purchase price, a gain will be realized; if it is less, a loss will be realized. The transaction costs must also be included in these calculations. There can be no assurance, however, that the Funds will be able to enter into an offsetting transaction with re- spect to a particular Futures Contract at a particular time. If the Funds are not able to enter into an offsetting transaction, the Funds will continue to be required to maintain the margin deposits on the Futures Contract.
Margin is the amount of funds that must be deposited by each Fund with its cus- todian in a segregated account in the name of the futures commission merchant in order to initiate Futures trading and to maintain the Fund's open positions in Futures Contracts. A margin deposit is intended to ensure the Fund's perfor- mance of the Futures Contract. The margin required for a particular Futures Contract is set by the exchange on which the Futures Contract is traded and may be significantly modified from time to time by the exchange during the term of the Futures Contract. Futures Contracts are customarily
purchased and sold on margins that may range upward from less than 5% of the value of the Futures Contract being traded.
If the price of an open Futures Contract changes (by increase in the case of a sale or by decrease in the case of a purchase) so that the loss on the Futures Contract reaches a point at which the margin on deposit does not satisfy margin requirements, the broker will require an increase in the margin. However, if the value of a position increases because of favorable price changes in the Futures Contract so that the margin deposit exceeds the required margin, the broker will pay the excess to the Fund. In computing daily net asset value, each Fund will mark to market the current value of its open Futures Contracts. The Funds expect to earn interest income on their margin deposits.
Because of the low margin deposits required, Futures trading involves an ex- tremely high degree of leverage. As a result, a relatively small price movement in a Futures Contract may result in immediate and substantial loss, as well as gain, to the investor. For example, if at the time of purchase, 10% of the value of the Futures Contract is deposited as margin, a subsequent 10% decrease in the value of the Futures Contract would result in a total loss of the margin deposit, before any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, if the Futures Contract were closed out. Thus, a pur- chase or sale of a Futures Contract may result in losses in excess of the amount initially invested in the Futures Contract. However, a Fund would pre- sumably have sustained comparable losses if, instead of the Futures Contract, it had invested in the underlying financial instrument and sold it after the decline.
Most United States Futures exchanged limit the amount of fluctuation permitted in Futures Contract prices during a single trading day. The day limit estab- lishes the maximum amount that the price of a Futures Contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of Futures Contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions., Futures Contract prices have occasion- ally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of Futures positions and subjecting some Futures traders to substantial losses.
There can be no assurance that a liquid market will exist at a time when the Funds seek to close out a Futures position. The Funds would continue to be re- quired to meet margin requirements until the position is closed, possibly re- sulting in a decline in the Funds' net asset value. In addition, many of the contracts discussed above are relatively new instruments without a significant trading history. As a result, there can be no assurance that an active second- ary market will develop or continue to exist.
A public market exists in Futures Contracts covering a number of indexes, in- cluding, but not limited to, the Standard & Poor's 500 Index, the Standard & Poor's 100 Index, the NASDAQ 100 Index, the Value Line Composite Index and the New York Stock Exchange Composite Index.
Options on Futures
Each Fund may also purchase or write put and call options on Futures Contracts
and enter into closing transactions with respect to such options to terminate
an existing position. A futures option given the holder the right, in return of
the premium paid, to assume a long position (call) or short position (put) in a
Futures Contract at a specified exercise price prior to the expiration of the
option. Upon exercise of a call option, the holder acquires a long position in
the Futures Contract and the writer is assigned the opposite short position. In
the case of a put option, the opposite is true. Prior to exercise or expira-
tion, a futures option may be closed out by an offsetting purchase or sale of a
futures option of the same series.
The Funds may use options on Futures Contracts in connection with hedging strategies. Generally, these strategies would be complied under the same market and market sector conditions in which the Funds use put and call options on se- curities or indexes. The purchase of put options on Futures Contracts is analo- gous to the purchase of puts on securities or indexes so as to hedge the Funds' securities holdings against the risk of declining market prices. The writing of a call option or the purchasing of a put option on a Futures Contract consti- tutes a partial hedge against declining prices of the securities which are de- liverable upon exercise of the Futures Contract. If the futures price at expi- ration of a written call option is below the exercise price, the Fund will re- tain the full amount of the option premium which provides a partial hedge against any decline that may have occurred in the Fund's holdings of securi- ties. If the futures price when the option is exercised is above the exercise price, however, the Fund will incur a loss, which may be offset, in whole or in part, by the increase in the value of the securities held by the Fund that were being hedged. Writing a put option or purchasing a call option on a Futures Contract serves as a partial hedge against an increase in the value of the se- curities the Fund intends to acquire.
As with investments in Futures Contracts, each Fund is required to deposit and maintain margin with respect to put and call options on Futures Contracts writ- ten by it. Such margin deposits will vary depending on the nature of the under- lying Futures Contract (and the related initial margin requirements), the cur- rent market value of the option, and other futures positions held by the Fund. The Funds will set aside in a segregated account at the Funds' custodian liquid assets, such as cash, U.S. government securities or other high grade liquid debt obligations equal in value to the amount due on the underlying obligation. Such segregated assets will be market to market daily, and additional assets will be placed in the segregated account whenever the total value of the segre- gated account falls below the amount due on the underlying obligation.
The risks associated with the use of options on Futures Contracts include the risk that a Fund may close out its position as a writer of an option only if a liquid secondary market exists for such options, which cannot be assured. The Funds' successful use of options on Futures Contracts depends on ICAP's ability to correctly predict the movement in prices of Futures Contracts and the under- lying instruments, which may prove to be incorrect. In addition, there may be imperfect correlation between the instruments being hedged and the Futures Con- tract subject to the option. For additional information, see "Futures Con- tracts."
Federal Tax Treatment of Futures Contracts For federal income tax purposes, each Fund is required to recognize as income for each taxable year its net unrealized gains and losses on Futures Contracts as of the end of the year, as well as gains and losses
actually realized during the year. Except for transactions in Futures Contracts that are classified as part of a "mixed straddle" under Code Section 1256, any gain or loss recognized with respect to a Futures Contract is considered to be 60% long-term capital gain or loss and 40% short-term capital gain or loss, without regard to the holding period of the Futures Contract. In the case of a Futures transaction not classified as a "mixed straddle," the recognition of losses may be deferred to a later taxable year.
Sales of Futures Contracts that are intended to hedge against a change in the value of securities held by a Fund may affect the holding period of such secu- rities and, consequently, the nature of the gain or loss on such securities upon disposition.
Each Fund intends to operate as a "Regulated Investment Company" under Subchapter M of the Code, and therefore will not be liable for federal income taxes to the extent earnings are timely distributed. In addition, as a result of being a Regulated Investment Company, net capital gain that the Funds dis- tribute to shareholders will retain their original capital gain character in the shareholders' individual tax returns.
In order for each Fund to qualify for federal income tax treatment as a Regu- lated Investment Company, at least 90% of the gross income of each Fund for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities and gains from the sale of securities, and other income (including gains on options and futures contracts) derived with respect to the Fund's business of investing in stock or securities. In ad- dition, gains realized on the sale or other disposition of securities or Futures Contracts held for less than three months must be limited to less than 30% of the Fund's annual gross income. It is anticipated that any net gain re- alized from the closing out of Futures Contracts will be considered gain from the sale of securities and therefore be qualifying income for purposes of the 90% requirement. For purposes of applying these tests, any increase in value on a position that is part of a designated hedge will be offset by any decrease in value (whether or not realized) on any other position that is part of such hedge. It is anticipated that unrealized gains on Futures Contracts which have been open for less than three months as of the end of a Fund's fiscal year and which are recognized for tax purposes will not be considered gains on securi- ties held less than three months for purposes of the 30% test.
The Funds will distribute to shareholders annually any net capital gains which have been recognized for federal income tax purposes (including unrealized gains at the end of the Fund's fiscal year) on Futures transactions. Such dis- tributions will be combined with distributions of capital gains realized on the Funds' other investments and shareholders will be advised of the nature of the payments.
MANAGEMENT
The management of the Trust, including general supervision of the duties per- formed for the Fund under the Management Agreement, is the responsibility of its Board of Trustees. The number of trustees of the Trust is fixed at [7], [3] of whom are "interested persons" (as the term "interested persons" is defined in the Investment Company Act of 1940) and [4] of whom are "disinterested per- sons." The names and business addresses of the trustees and officers of the Trust and their principal occupations and other affiliations during the past five years are set forth below, with those trustees who are "interested per- sons" of the Trust indicated by an asterisk.
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POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
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Timothy R. Schwertfeger* 47 Chairman Executive Vice President
333 West Wacker Drive and Trustee and Director of The John
Chicago, IL 60606 Nuveen Company (since March
1992) and John Nuveen & Co.
Incorporated; Director of
Nuveen Advisory Corp.
(since 1992) and
Nuveen Institutional
Advisory Corp. (since
1992).
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Anthony T. Dean* 51 President and Trustee Executive Vice President
333 West Wacker Drive and Director of The John
Chicago, IL 60606 Nuveen Company (since March
1992) and John Nuveen & Co.
Incorporated; Director of
Nuveen Advisory Corp.
(since 1992) and
Nuveen Institutional
Advisory Corp. (since
1992).
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[ ]* Trustee [ ]
- ----------------------------------------------------------------------------------------------------
[ ] Trustee [ ]
- ----------------------------------------------------------------------------------------------------
[ ] Trustee [ ]
- ----------------------------------------------------------------------------------------------------
[ ] Trustee [ ]
- ----------------------------------------------------------------------------------------------------
[ ] Trustee [ ]
- ----------------------------------------------------------------------------------------------------
Kathleen M. Flanagan 49 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co. Incorporated.
Chicago, IL 60606
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Anna R. Kucinskis 50 Vice President Vice President of John
333 West Wacker Drive Nuveen & Co. Incorporated.
Chicago, IL 60606
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POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
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Larry W. Martin 44 Vice President and Vice President (since September
333 West Wacker Drive Assistant Secretary 1992), Assistant Secretary and
Chicago, IL 60606 Assistant General Counsel of
John Nuveen & Co. Incorporated;
Vice President (since May 1993)
and Assistant Secretary of
Nuveen Advisory Corp; Vice
President (since May 1993) and
Assistant Secretary (since
January 1992) of Nuveen
Institutional Advisory Corp.;
Assistant Secretary of The John
Nuveen Company (since February
1993).
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O. Walter Renfftlen 56 Vice President and Vice President and Controller of
333 West Wacker Drive Controller The John Nuveen Company (since
Chicago, IL 60606 March 1992), John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp. (since April
1990).
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H. William Stabenow 61 Vice President and Vice President and Treasurer of
333 West Wacker Drive Treasurer The John Nuveen Company (since
Chicago, IL 60606 March 1992), John Nuveen & Co.
Incorporated, Nuveen Advisory
Corp. and Nuveen Institutional
Advisory Corp, (since January
1992).
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James J. Wesolowski 45 Vice President and Vice President, General Counsel
333 West Wacker Drive Secretary and Secretary of The John Nuveen
Chicago, IL 60606 Company (since March 1992), John
Nuveen & Co. Incorporated,
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
(since April 1990).
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Gifford R. Zimmerman 39 Vice President and Vice President (since September
333 West Wacker Drive Assistant Secretary 1992), Assistant Secretary and
Chicago, IL 60606 Assistant General Counsel of
John Nuveen & Co. Incorporated;
Vice President (since May 1993)
and Assistant Secretary of
Nuveen Advisory Corp.; Vice
President (since May 1993) and
Assistant Secretary (since
January 1992) of Nuveen
Institutional Advisory Corp.
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Timothy R. Schwertfeger and [ ] serve as members of the Execu- tive Committee of the Board of Trustees. The Executive Committee, which meets between regular meetings of the Board of Trustees, is authorized to exercise all of the powers of the Board of Trustees.
The trustees of the Trust (other than Mr. ) are also directors or trustees, as the case may be, of [ ] other Nuveen open-end fund portfolios and Nuveen closed-end funds.
The following table sets forth estimated compensation to be paid by the Trust to each of the trustees who are not designated "interested persons" during the Trust's first full fiscal year and the total compensation that the Nuveen Funds paid or accrued to such trustees during calendar year 1995. The Trust has no retirement or pension plans. The officers and trustees affiliated with Nuveen serve without any compensation from the Trust.
TOTAL
COMPENSATION
ESTIMATED FROM TRUST
AGGREGATE AND FUND
COMPENSATION COMPLEX
NAME OF FROM THE PAID TO
TRUSTEE TRUST TRUSTEES
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[
]
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Each trustee who is not affiliated with NIAC or ICAP receives a [$45,000] an-
nual retainer for serving as a director or trustee of all funds for which NIAC
serves as investment adviser or manager and a [$1,000] fee per day plus ex-
penses for attendance at all meetings held on a day on which a regularly
scheduled Board meeting is held, a [$1,000] fee per day plus expenses for at-
tendance in person or a [$500] fee per day plus expenses for attendance by
telephone at a meeting held on a day on which no regular Board meeting is held
[and a $250 fee per day plus expenses for attendance in person or by telephone
at a meeting of the Executive Committee held solely to declare dividends.] The
annual retainer, fees and expenses are allocated among the funds for which
NIAC serves as investment adviser or manager on the basis of relative net as-
set sizes. The Trust requires no employees other than its officers, all of
whom are compensated by NIAC.
As of May , 1996, owned all the shares of each class of the Fund {with shares outstanding (Class A, Class B, Class C and Class R)}.
FUND MANAGER AND PORTFOLIO MANAGER
Fund Manager. NIAC acts as the manager of each Fund, with responsibility for the overall management of each Fund. Its address is 333 West Wacker Drive, Chicago, Illinois 60606. For the Nuveen Select Stock Fund and the Nuveen Bal- anced Fund, NIAC has entered into a Sub-Advisory Agreement with ICAP under which ICAP, subject to NIAC's supervision, manages the Fund's investment port- folio. For the Nuveen Growth and Income Fund, NIAC has entered into a Sub-Ad- visory Agreement with ICAP under which ICAP, subject to NIAC's supervision, manages the Fund's equity investments. NIAC is also responsible for managing the day-to-day business affairs of the Fund.
NIAC is a wholly-owned subsidiary of Nuveen, the oldest and largest investment banking firm (based on number of employees) specializing in the underwriting and distribution of tax-exempt securities. Nuveen, the principal underwriter of the Fund's shares, is sponsor of the Nuveen Tax-Free Unit Trust, a regis- tered unit investment trust. It is also the principal underwriter for the Nuveen Mutual Funds, and
served as co-managing underwriter for the shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals have invested to date in Nuveen's funds and trusts. Founded in 1898, Nuveen is a subsidiary of The John Nuveen Company which, in turn, is approximately 75% owned by The St. Paul Companies, Inc. ("St. Paul"). St. Paul is located in St. Paul, Minnesota, and is principally engaged in providing property-liability insurance through subsidiaries.
Sub-Adviser. ICAP was founded in 1970 and is located at 225 West Wacker Drive, Suite 2400, Chicago, IL 60606. Under the Sub-Advisory Agreement for each Fund, ICAP is compensated by NIAC for its investment advisory services with respect to all or a portion of each Fund's assets.
The investment decisions for the Funds made by ICAP are made through a team approach, with all of the ICAP investment professionals contributing to the process. Each of the officers and other investment professionals of ICAP has developed an expertise in at least one functional investment area, including equity research, strategy, fixed income analysis, quantitative research, tech- nical research, and trading. A key element in the decision making process is a formal investment committee meeting generally held each business day and at- tended by all the investment professionals. At this meeting, a comprehensive review of ICAP's investment position is undertaken. Pertinent information from outside sources is shared and incorporated into the investment outlook. The investment strategy, each asset sector, and each individual security holding are reviewed to verify their continued appropriateness. Investment recommenda- tions are presented to the committee for decisions.
With regard to Fund assets subject to the Sub-Advisory Agreement, ICAP pro- vides continuous advice and recommendations concerning the Fund's investments, and is responsible for selecting the broker-dealers who execute the portfolio transactions. ICAP also serves as investment adviser to the ICAP Funds, Inc. and to pension and profit-sharing plans, and other institutional and private investors. As of May 1, 1996, ICAP had approximately $5 billion under manage- ment. Mr. Robert H. Lyon, President of ICAP, owns shares representing 51% of the voting rights of ICAP.
Administrator. NIAC also serves as administrator for each Fund. As administra- tor, NIAC agrees to provide or to obtain at its expense for the Fund all other services including custodial, transfer agent, accounting and legal services, equipment and certain clerical, bookkeeping and administrative services; and to pay all other expenses of the Fund (other than investment management fees, distribution fees and service fees, brokerage costs and extraordinary ex- penses), including but not limited to share registration expenses, printing and mailing expenses, compensation and expenses of trustees not affiliated with NIAC or ICAP, taxes and insurance. In such capacity, it provides office facilities and equipment and certain clerical, bookkeeping and administrative services, and permits any of its officers or employees without compensation as trustees or officers of the Fund if elected to such positions. For these serv- ices, each class pays the Administrator an annual fee of .10%.
PORTFOLIO TRANSACTIONS
NIAC (with respect to transactions in Municipal Obligations) and ICAP (with respect to other transactions) are responsible for decisions to buy and sell securities for the Funds and for the placement of the
Funds' securities business, the negotiation of the commissions to be paid on brokered transactions, the prices for principal trades in securities, and the allocation of portfolio brokerage and principal business. It is the policy of both NIAC and ICAP to seek the best execution at the best security price available with respect to each transaction, in light of the overall quality of brokerage and research services provided to the respective adviser and its advisees. The best price to the Funds means the best net price without regard to the mix between purchase or sale price and commission, if any. Purchases may be made from underwriters, dealers, and, on occasion, the issuers. Commis- sions will be paid on the Funds' futures and options transactions, if any. The purchase price of portfolio securities purchased from an underwriter or dealer may include underwriting commissions and dealer spreads. The Funds may pay mark-ups on principal transactions. In selecting broker-dealers and in negoti- ating commissions, the portfolio manager considers the firm's reliability, the quality of its execution services on a continuing basis and its financial con- dition. Brokerage will not be allocated based on the sale of a Fund's shares. NIAC expects that all transactions in Municipal Obligations will be effected on a principal (as opposed to an agency) basis and, accordingly, does not ex- pect to pay any brokerage commissions on such transactions.
Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)") permits an investment adviser, under certain circumstances, to cause an account to pay a broker or dealer who supplies brokerage and research services a commission for effecting a transaction in excess of the amount of commission another bro- ker or dealer would have charged for effecting the transaction. Brokerage and research services include (a) furnishing advice as to the value of securities, the advisability of investing, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; (b) fur- nishing analyses and reports concerning issuers, industries, securities, eco- nomic factors and trends, portfolio strategy, and the performance of accounts; and (c) effecting securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody).
In selecting brokers, ICAP considers investment and market information and other research, such as economic, securities and performance measurement re- search, provided by such brokers, and the quality and reliability of brokerage services, including execution capability, performance, and financial responsi- bility. Accordingly, the commissions charged by any such broker may be greater than the amount another firm might charge if ICAP determines in good faith that the amount of such commissions is reasonable in relation to the value of the research information and brokerage services provided by such broker to ICAP or the Funds. ICAP believes that the research information received in this manner provides the Funds with benefits by supplementing the research otherwise available to the Funds. The Management Agreement and the Sub-Advi- sory Agreement provide that such higher commissions will not be paid by the Funds unless the applicable adviser determines in good faith that the amount is reasonable in relation to the services provided. The investment advisory fees paid by the Funds to NIAC under the Management Agreement or the subadvisory fees paid by NIAC to ICAP under the Sub-Advisory Agreement are not reduced as a result of receipt by either NIAC or ICAP of research services.
NIAC and ICAP each place portfolio transactions for other advisory accounts managed by them. Research services furnished by firms through which the Funds effect their securities transactions may be used by NIAC and/or ICAP in ser- vicing all of its accounts; not all of such services may be used by NIAC and/or ICAP in connection with the Funds. NIAC and ICAP believe it is not pos- sible to measure
separately the benefits from research services to each of the accounts (includ- ing the Funds) managed by them. Because the volume and nature of the trading activities of the accounts are not uniform, the amount of commissions in excess of those charged by another broker paid by each account for brokerage and re- search services will vary. However, NIAC and ICAP believe such costs to the Funds will not be disproportionate to the benefits received by the Funds on a continuing basis. NIAC and ICAP seek to allocate portfolio transactions equita- bly whenever concurrent decisions are made to purchase or sell securities by the Funds and another advisory account. In some cases, this procedure could have an adverse effect on the price or the amount of securities available to the Funds. In making such allocations between the Fund and other advisory ac- counts, the main factors considered by NIAC and ICAP are the respective invest- ment objectives, the relative size of portfolio holdings of the same or compa- rable securities, the availability of cash for investment and the size of in- vestment commitments generally held.
Under the Investment Company Act of 1940, a Fund may not purchase portfolio se- curities from any underwriting syndicate of which Nuveen is a member except un- der certain limited conditions set forth in Rule 10f-3. The Rule sets forth re- quirements relating to, among other things, the terms of a security purchased by the Fund, the amount of securities that may be purchased in any one issue and the assets of the Fund that may be invested in a particular issue. In addi- tion, purchases of securities made pursuant to the terms of the Rule must be approved at least quarterly by the Board of Trustees, including a majority of the trustees who are not interested persons of the Trust.
NET ASSET VALUE
As stated in the Prospectuses, the net asset value of the shares of each Fund will be determined separately for each class of a Fund's shares by Chase Man- hattan Bank, N.A., the Trust's custodian, as of 4:00 p.m. eastern time on each day on which the New York Stock Exchange (the "Exchange") is normally open for trading. The Exchange is not open for trading on New Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of a class of shares of a Fund will be computed by dividing the value of the Fund's assets attributable to the class, less the liabilities attributable to the class, by the number of shares of the class outstanding.
TAX MATTERS
FEDERAL INCOME TAX MATTERS
The following discussion of federal income tax matters is based upon the advice
of Vedder, Price,
Kaufman & Kammholz, counsel to the Trust.
As described in the Prospectuses, the Funds intend to qualify under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") for tax treat- ment as a regulated investment company. In order to qualify as a regulated in- vestment company, a Fund must satisfy certain requirements relating to the source of its income, diversification of its assets, and distributions of its income to shareholders. First, the Fund must derive at least 90% of its annual gross income (including tax-exempt interest) from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of
stock or securities, foreign currencies or other income (including but not lim- ited to gains from options and futures) derived with respect to its business of investing in such stock or securities (the "90% gross income test"). Second, a Fund must derive less than 30% of its annual gross income from the sale or other disposition of any of the following which was held for less than three months: (i) stock or securities and (ii) certain options, futures, or forward contracts (the "short-short test"). Third, the Fund must diversify its holdings so that, at the close of each quarter of its taxable year, (i) at least 50% of the value of its total assets is comprised of cash, cash items, United States Government securities, securities of other regulated investment companies and other securities limited in respect of any one issuer to an amount not greater in value than 5% of the value of the Fund's total assets and to not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the total assets is invested in the securities of any one issuer (other than United States Government securities and securities of other regulated investment companies) or two or more issuers controlled by a Fund and engaged in the same, similar or related trades or businesses.
As a regulated investment company, the Fund will not be subject to federal in- come tax in any taxable year for which it distributes at least 90% of its "in- vestment company taxable income" (which includes dividends, taxable interest, income from securities lending, net short-term capital gain in excess of long- term capital loss, and any other taxable income other than "net capital gain" (as defined below) and is reduced by deductible expenses). The Fund may retain for investment its net capital gain (which consists of the excess of its net long-term capital gain over its short-term capital loss). However, if the Fund retains any net capital gain or any investment company taxable income, it will be subject to tax at regular corporate rates on the amount retained. If the Fund retains any capital gain, such Fund may designate the retained amount as undistributed capital gains in a notice to its shareholders who, if subject to federal income tax purposes on long-term capital gains, (i) will be required to include in income for federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) will be entitled to credit their proportionate shares of the tax paid by such Fund against their federal income tax liabilities if any, and to claim refunds to the extent the credit exceeds such liabilities. For federal income tax purposes, the tax basis of shares owned by a shareholder of the fund will be increased by an amount equal under current law to 65% of the amount of undistributed capital gains included in the shareholder's gross income. Each Fund intends to distribute at least an- nually to its shareholders all or substantially all of its taxable income in- vestment company taxable income and net capital gain.
Treasury regulations permit a regulated investment company, in determining its investment company taxable income and net capital gain, i.e., the excess of net long-term capital gain over net short-term capital loss for any taxable year, to elect (unless it has made a taxable year election for excise tax purposes as discussed below) to treat all or part of any net capital loss, any net long- term capital loss or any net foreign currency loss incurred after October 31 as if they had been incurred in the succeeding year.
If any of the Funds engages in hedging transactions involving financial futures and options, these transactions will be subject to special tax rules, the ef- fect of which may be to accelerate income to a Fund, defer a Fund's losses, cause adjustments in the holding periods of a Fund's securities, convert long- term capital gains into short-term capital gains and convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders.
Prior to purchasing shares in one of the Funds, the impact of dividends or dis- tributions which are expected to be or have been declared, but not paid, should be carefully considered. Any dividend or distribution declared shortly after a purchase of such shares prior to the record date will have the effect of reduc- ing the per share net asset value by the per share amount of the dividend or distribution.
Although dividends generally will be treated as distributed when paid, divi- dends declared in October, November or December, payable to shareholders of record on a specified date in one of those months and paid during the following January, will be treated as having been distributed by each Fund (and received by the shareholders) on December 31.
The redemption or exchange of the shares of a Fund normally will result in cap- ital gain or loss to the shareholders. Generally, a shareholder's gain or loss will be long-term gain or loss if the shares have been held for more than one year. Present law taxes both long- and short-term capital gains of corporations at the rates applicable to ordinary income. For non-corporate taxpayers, howev- er, net capital gains (i.e., the excess of net long-term capital gain over net short-term capital loss) will be taxed at a maximum marginal rate of 28%, while short-term capital gains and other ordinary income will be taxed at a maximum marginal rate of 39.6%. Because of the limitations on itemized deductions and the deduction for personal exemptions applicable to higher income taxpayers, the effective tax rate may be higher in certain circumstances.
All or a portion of a sales load paid in purchasing shares of a Fund cannot be taken into account for purposes of determining gain or loss on the redemption or exchange of such shares within 90 days after their purchase to the extent shares of a Fund or another fund are subsequently acquired without payment of a sales load pursuant to the reinvestment or exchange privilege. Any disregarded portion of such load will result in an increase in the shareholder's tax basis in the shares subsequently acquired. Moreover, losses recognized by a share- holder on the redemption or exchange of shares of a Fund held for six months or less are disallowed to the extent of any distribution of exempt-interest divi- dends received with respect to such shares and, if not disallowed, such losses are treated as long-term capital losses to the extent of any distributions of long-term capital gains made with respect to such shares. In addition, no loss will be allowed on the redemption or exchange of shares of a Fund if the share- holder purchases other shares of such Fund (whether through reinvestment of distributions or otherwise) or the shareholder acquires or enters into a con- tract or option to acquire securities that are substantially identical to shares of a Fund within a period of 61 days beginning 30 days before and ending 30 days after such redemption or exchange. If disallowed, the loss will be re- flected in an adjustment to the basis of the shares acquired.
In order to avoid a 4% federal excise tax, each Fund must distribute or be deemed to have distributed by December 31 of each calendar year at least 98% of its taxable ordinary income for such year, at least 98% of the excess of its realized capital gains over its realized capital losses (generally computed on the basis of the one-year period ending on October 31 of such year) and 100% of any taxable ordinary income and the excess of realized capital gains over real- ized capital losses for the prior year that was not distributed during such year and on which such Fund paid no federal income tax. For purposes of the ex- cise tax, a regulated investment company may reduce its capital gain net income (but not below its net capital gain) by the amount of any net ordinary loss for the calendar year. The Funds intend to make
timely distributions in compliance with these requirements and consequently it is anticipated that they generally will not be required to pay the excise tax.
If in any year a Fund should fail to qualify under Subchapter M for tax treat- ment as a regulated investment company, the Fund would incur a regular corpo- rate federal income tax upon its income for that year (other than interest in- come from Municipal Obligations), and distributions to its shareholders would be taxable to shareholders as ordinary dividend income for federal income tax purposes to the extent of the Fund's available earnings and profits.
Among the requirements that a Fund must meet in order to qualify under Subchapter M in any year is that less than 30% of its gross income must be de- rived from the sale or other disposition of securities and certain other assets held for less than three months.
The Funds are required in certain circumstances to withhold 31% of taxable div- idends and certain other payments paid to non-corporate holders of shares who have not furnished to the Funds their correct taxpayer identification number (in the case of individuals, their social security number) and certain certifi- cations, or who are otherwise subject to backup withholding.
A corporate Shareholder will generally be entitled to a 70% dividends received deduction with respect to any portion of such Shareholder's taxable dividends which are attributable to dividends received by the Fund on Equity Securities (other than corporate Shareholders, such as "S" corporations, which are not el- igible for the deduction because of their special characteristics and other than for purposes of special taxes such as the accumulated earnings tax and the personal holding corporation tax). The Fund will designate the portion of any taxable dividend which is eligible for this deduction. However, a corporate Shareholder should be aware that Sections 246 and 246A of the Code impose addi- tional limitations on the eligibility of dividends for the 70% dividends re- ceived deduction. These limitations include a requirement that stock (and therefore Shares of the Fund) must generally be held at least 46 days (as de- termined under Section 246(c) of the Code). Proposed regulations have been is- sued which address special rules that must be considered in determining whether the 46 day holding requirement is met. Moreover, the allowable percentage of the deduction will generally be reduced from 70% if a corporate Shareholder owns Shares of the Fund the financing of which is directly attributable to in- debtedness incurred by such corporation. It should be noted that various legis- lative proposals that would affect the dividends received deduction have been introduced. To the extent dividends received by the Fund are attributable to foreign corporations, a corporate Shareholder will not be entitled to the divi- dends received deduction with respect to its share of such foreign dividends since the dividends received deduction is generally available only with respect to dividends paid by domestic corporations. It should be noted that payments to the Fund of dividends on Equity Securities that are attributable to foreign corporations may be subject to foreign withholding taxes. Corporate Sharehold- ers should consult with their tax advisers with respect to the limitations on and possible modifications to the dividends received deduction.
The Code provides that interest on indebtedness incurred or continued to pur- chase or carry Shares of the Fund is not deductible. Under rules used by the IRS for determining when borrowed funds are considered used for the purpose of purchasing or carrying particular assets, the purchase or ownership of Shares
may be considered to have been made with borrowed funds even though such funds are not directly traceable to the purchase or ownership of Shares.
Nuveen Income and Growth Fund Tax Matters
In addition to the matters discussed above, the Nuveen Income and Growth Fund intends to qualify to pay "exempt-interest" dividends on Shares as defined un- der the Code. Under the Code, at the close of each quarter of its taxable year, if at least 50% of the value of its total assets consists of Municipal Obliga- tions, the Fund shall be qualified to pay exempt-interest dividends to its Shareholders. Exempt-interest dividends are dividends or any part thereof (other than a capital gain dividend) paid by the Fund which are attributable to interest on Municipal Obligations (net of expenses and any bond premium amorti- zation with respect to Municipal Obligations) and are so designated by the Fund. Exempt-interest dividends will be exempt from Federal income tax, subject to the possible application of the Federal alternative minimum tax. Insurance proceeds received by the Fund under any insurance policies in respect of sched- uled interest payments on defaulted Municipal Obligations, as described herein, will be excludable from Federal gross income under Section 103(a) of the Code provided that, at the time such policies are purchased, the amounts paid for such policies are reasonable, customary and consistent with the reasonable ex- pectation that the respective issuer of the Municipal Obligations, rather than the insurer, will pay debt service on the Municipal Obligations; in the case of non-appropriation by a political subdivision, however, there can be no assur- ance that payments made by the insurer representing interest on such "non-ap- propriation" Municipal Lease Obligations will be excludable from gross income for Federal income tax purposes. If the Fund purchases a Municipal Obligation at a market discount, any gain realized by the Fund upon sale or redemption of the Municipal Obligation will be treated as taxable interest income to the ex- tent such gain does not exceed the market discount, and any gain realized in excess of the market discount generally will be treated as capital gain. The Fund will be required by the Code to allocate its expenses proportionately be- tween its tax-exempt income and taxable income (excluding net realized long- term capital gains). Distributions to Shareholders by the Fund of net income received, if any, from taxable dividends, temporary or defensive investments, or market discount on Municipal Obligations treated as interest and net short- term capital gains, if any, realized by the Fund will be taxable to Sharehold- ers as ordinary income. Distributions of net realized long-term capital gains, if any, are taxable as long-term capital gains, regardless of the length of time the Shareholder has owned Shares of the Fund and regardless of whether the distribution is received in additional Shares or in cash.
The Revenue Reconciliation Act of 1993 (the "Tax Act") subjects tax-exempt bonds to the market discount rules of the Code effective for bonds purchased after April 30, 1993. In general, market discount is the amount (if any) by which the stated redemption price at maturity exceeds the Fund's purchase price (except to the extent that such difference, if any, is attributable to original issue discount not yet accrued). Under the Tax Act, accretion of market dis- count is taxable as ordinary income; under prior law the accretion had been treated as capital gain. Market discount that accretes while the Fund holds a Municipal Obligation would be recognized as ordinary income by the Fund when principal payments are received on the Municipal Obligation, upon sale or at redemption (including early redemption), at the Fund's election, as such market discount accrues. Market discount income recognized by the Fund will result in taxable dividends to the Shareholders.
For purposes of computing the alternative minimum tax for individuals and cor- porations and the Superfund tax for corporations, interest on certain private activity bonds (which includes most industrial and housing bonds) issued on or after August 8, 1986 is included as a preference item. The Fund will annually supply Shareholders with a report indicating the percentage of Fund income at- tributable to Municipal Obligations that is treated as a tax preference item for purposes of the Federal alternative minimum tax. Moreover, for corpora- tions, the alternative minimum taxable income is increased by 75% of the dif- ference between an alternative measure of income ("adjusted current earnings") and the amount otherwise determined to be the alternative minimum taxable in- come. Interest on all Municipal Obligations, and therefore all exempt-interest dividends received from the Fund, are included in calculating adjusted current earnings. In addition, a corporate Shareholder cannot take into account the dividends received deductions in determining its adjusted current earnings.
For taxable years beginning before 1996, the Code imposes a separate tax on corporations at a rate of 0.12% of the excess of such corporation's "modified alternative minimum taxable income" over $2,000,000. A portion of the tax-ex- empt interest, including exempt-interest dividends from the Fund, and taxable dividends are includable in modified alternative minimum taxable income. This tax will be imposed even if the corporation is not required to pay an alterna- tive minimum tax because the corporation's regular income tax liability exceeds its minimum tax liability.
Individuals whose "modified income" exceeds a base amount will be subject to Federal income tax on up to one-half of their social security benefits. Modi- fied income currently includes adjusted gross income, one-half of social secu- rity benefits and tax-exempt interest, including exempt-interest dividends from the Fund. In addition, individuals whose modified income exceeds certain base amounts are required to include in gross income up to 85% of their social security benefits.
The interest on private activity bonds in most instances is not Federally tax- exempt to a person who is a "substantial user" of a facility financed by such bonds or a "related person" of such "substantial user." As a result, the Fund may not be an appropriate investment for Shareholders who are considered either a "substantial user" or a "related person" within the meaning of the Code. In general, a "substantial user" of a facility includes a "non-exempt person who regularly uses a part of such facility in his trade or business." "Related per- sons" are in general defined to include persons among whom there exists a rela- tionship, either by family or business, which would result in a disallowance of losses in transactions among them under various provisions of the Code (or if they are members of the same controlled group of corporations under the Code), including a partnership and each of its partners (and their spouses and minor children), an S corporation and each of its shareholders (and their spouses and minor children) and various combinations of these relationships. The foregoing is not a complete statement of all of the provisions of the Code relating to the definitions of "substantial user" and "related person." For additional in- formation, investors should consult their tax advisers before investing in the Fund.
The foregoing is a general and abbreviated summary of the provisions of the Code and Treasury Regulations presently in effect as they directly govern the taxation of the Funds and their shareholders. For complete provisions, refer- ence should be made to the pertinent Code sections and Treasury Regulations. The Code and Treasury Regulations are subject to change by legislative or ad- ministrative action, and any such change may be retroactive with respect to Fund transactions. Shareholders are advised to con-
sult their own tax advisers for more detailed information concerning the fed- eral taxation of the Funds and the income tax consequences to their sharehold- ers.
PERFORMANCE INFORMATION
As explained in the Prospectuses, the historical investment performance of the Funds may be shown in the form of "average annual total return," and "cumula- tive total return" each of which will be calculated separately for each class of shares.
The average annual total return quotation is computed in accordance with a standardized method prescribed by SEC rules. The average annual total return for a specific period is found by taking a hypothetical, $1,000 investment ("initial investment") in Fund shares on the first day of the period, reducing the amount to reflect the maximum sales charge, and computing the "redeemable value" of that investment at the end of the period. The redeemable value is then divided by the initial investment, and this quotient is taken to the Nth root (N representing the number of years in the period) and 1 is subtracted from the result, which is then expressed as a percentage. The calculation as- sumes that all income and capital gains distributions have been reinvested in Fund shares at net asset value on the reinvestment dates during the period.
Calculation of cumulative total return is not subject to a prescribed formula.
Cumulative total return for a specific period is calculated by first taking a
hypothetical initial investment in Fund shares on the first day of the period,
deducting (in some cases) the maximum sales charge, and computing the "redeem-
able
value" of that investment at the end of the period. The cumulative total return
percentage is then determined by subtracting the initial investment from the
redeemable value and dividing the remainder by the initial investment and ex-
pressing the result as a percentage. The calculation assumes that all income
and capital gains distributions by a Fund have been reinvested at net asset
value on the reinvestment dates during the period. Cumulative total return may
also be shown as the increased dollar value of the hypothetical investment over
the period. Cumulative total return calculations that do not include the effect
of the sales charge would be reduced if such charge were included.
From time to time, each Fund may compare its risk-adjusted performance with other investments that may provide different levels of risk and return. For ex- ample, a Fund may compare its risk level, as measured by the variability of its periodic returns, or its RISK-ADJUSTED TOTAL RETURN, with those of other funds or groups of funds. Risk-adjusted total return would be calculated by adjusting each investment's total return to account for the risk level of the investment.
The risk level for a class of shares of a Fund, and any of the other invest- ments used for comparison, would be evaluated by measuring the variability of the investment's return, as indicated by the standard deviation of the invest- ment's monthly returns over a specified measurement period (e.g., two years). An investment with a higher standard deviation of monthly returns would indi- cate that a fund had greater price variability, and therefore greater risk, than an investment with a lower standard deviation.
THE RISK-ADJUSTED TOTAL RETURN for a class of shares of a Fund and for other investments over a specified period would be evaluated by dividing (a) the re- mainder of the investment's annualized two-year total
return minus the annualized total return of an investment in securi- ties (essentially a risk-free return) over that period, by (b) the standard de- viation of the investment's monthly returns for the period. This ratio is some- times referred to as the "Sharpe measure" of return. An investment with a higher Sharpe measure would be regarded as producing a higher return for the amount of risk assumed during the measurement period than an investment with a lower Sharpe measure.
Class A Shares of each Fund are sold at net asset value plus a current maximum sales charge of 5.25% of the offering price. This current maximum sales charge will typically be used for purposes of calculating performance figures. Returns and net asset value of each class of shares of the Funds will fluctuate. Fac- tors affecting the performance of the Funds include general market conditions, operating expenses and investment management. Any additional fees charged by a securities representative or other financial services firm would reduce returns described in this section. Shares of the Funds are redeemable at net asset val- ue, which may be more or less than original cost.
In reports or other communications to shareholders or in advertising and sales literature, a Fund may also compare its performance with that of: (1) the Con- sumer Price Index and (2) equity mutual funds or mutual fund indexes as re- ported by Lipper Analytical Services, Inc. ("Lipper"), Morningstar, Inc. ("Morningstar"), Wiesenberger Investment Companies Service ("Wiesenberger") and CDA Investment Technologies, Inc. ("CDA") or similar independent services which monitor the performance of mutual funds, or other industry or financial publi- cations such as Barron's, Changing Times, Forbes and Money Magazine. Perfor- mance comparisons by these indexes, services or publications may rank mutual funds over different periods of time by means of aggregate, average, year-by- year, or other types of total return and perfor mance figures. Any given performance quotation or performance comparison should not be considered as representative of the performance of the Funds for any fu- ture period.
There are differences and similarities between the investments which the Funds may purchase and the investments measured by the indexes and reporting services which are described herein. The Consumer Price Index is generally considered to be a measure of inflation. Lipper, Morningstar, Wiesenberger and CDA are widely recognized mutual fund reporting services whose performance calculations are based upon changes in net asset value with all dividends reinvested and which do not include the effect of any sales charges.
NUVEEN SELECT STOCK FUND
THE FUND DOES NOT HAVE ANY PRIOR OPERATING HISTORY. THE TABLE BELOW PRESENTS
ANNUAL INVESTMENT RETURNS FOR THE ICAP DISCRETIONARY EQUITY COMPOSITE BETWEEN
DECEMBER 31, 1985 AND DECEMBER 31, 1995. THE ICAP DISCRETIONARY EQUITY COMPOS-
ITE REPRESENTS THE COMPOSITE PERFORMANCE OF THE [X] MANAGED ACCOUNTS TOTALLING
[$2] BILLION FOR WHICH ICAP SERVES AS INVESTMENT ADVISER AND THAT HAVE THE SAME
INVESTMENT OBJECTIVES AND POLICIES AS THE FUND.
ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -------------------------------------------------------------------------------------
ICAP Discretionary Eq-
uity Composite (Gross). 38.16 1.95 16.58 7.38 33.63 1.47 33.54 9.37 29.08 16.09
ICAP Discretionary Eq-
uity Composite (Net)... 36.63 0.74 15.24 6.12 32.15 0.26 32.05 8.09 27.63 14.75
S&P 500................. 37.43 1.31 9.99 7.67 30.55 (3.17) 31.49 16.81 5.23 18.47
Morningstar Growth and
Income Average......... 31.34 1.81 15.37 11.14 25.81 (3.91) 22.65 19.94 6.11 18.23
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NUVEEN BALANCED FUND
THE FUND DOES NOT HAVE ANY PRIOR OPERATING HISTORY. THE TABLE BELOW PRESENTS ANNUAL INVESTMENT RETURNS FOR THE ICAP BALANCED COMPOSITE BETWEEN DECEMBER 31, 1985 AND DECEMBER 31, 1995. THE ICAP BALANCED COMPOSITE REPRESENTS THE COMPOS- ITE PERFORMANCE OF THE [X] MANAGED ACCOUNTS TOTALLING [$500] MILLION FOR WHICH ICAP SERVES AS INVESTMENT ADVISER AND THAT HAVE THE SAME INVESTMENT OBJECTIVES AND POLICIES AS THE FUND.
ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- --------------------------------------------------------------------------------------
ICAP Balanced Composite
(Gross)................ 29.09 0.21 13.81 7.34 31.04 2.69 31.14 8.57 27.52 15.75
ICAP Balanced Composite
(Net).................. 27.76 (0.89) 12.61 6.18 29.70 1.57 29.80 7.40 26.20 14.52
Balanced Index.......... 26.60 (0.22) 9.11 7.34 22.27 3.34 21.93 11.48 6.15 15.97
Morningstar Balanced Av-
erage.................. 26.35 2.53 15.44 9.57 28.92 (0.71) 21.09 13.52 4.07 20.02
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The gross performance results of the ICAP Discretionary Equity Composite and
the ICAP Balanced Composite reflect the investment performance of the respec-
tive composites before deduction of any investment advisory fees or other ex-
penses. The net performance results of the ICAP Discretionary Equity Composite
and the ICAP Balanced Composite reflect the deduction of the projected annual
operating expenses for Class A shares of the Nuveen Select Stock Fund and the
Nuveen Balanced Fund, respectively, as summarized in the Summary of Fund Ex-
penses section of each Fund's prospectus. The Standard & Poor's 500 Composite
Stock Price Index (the "S&P 500") is a widely-recognized, unmanaged index of
common stock prices. S&P 500 returns assume reinvestment of all dividends paid
by the stocks included
in the index, but do not include brokerage commissions or other fees an in-
vestor would incur by investing in the portfolio of stocks comprising the in-
dex. The Morningstar Growth and Income Average represents the composite returns
of the [491] funds comprising the Morningstar Growth and Income category and
assumes reinvestment of all fund dividends and distributions. The Balanced Fund
Index represents the investment performance of an unmanaged index comprised 50%
of the S&P 500 and 50% of the Lehman Brothers Intermediate Government Index
(the "Lehman Index"). The Lehman Index is an unmanaged index of all public ob-
ligations of the U.S. Treasury, U.S. Government agencies, quasi-federal corpo-
rations and corporate debt guaranteed by the U.S. Government with maturities
between one and ten years and an outstanding par value of at least $100 mil-
lion.
TOTAL RETURNS REFLECT PAST PERFORMANCE AND ARE NOT PREDICTIVE OF FUTURE RE- SULTS.
ADDITIONAL INFORMATION ON THE PURCHASE AND
REDEMPTION OF FUND SHARES
As described in the Prospectuses, each Fund has adopted a Flexible Sales Charge Program which provides you with alternative ways of purchasing Fund shares based upon your individual investment needs and preferences. You may purchase Class A Shares at a price equal to their net asset value plus an up-front sales charge. For information regarding the up-front sales charge on Class A shares, see the table under "How to Buy Fund Shares" of the Prospectus. Set forth is an example of the method of computing the offering price of the Class A shares of each of the Funds. The example assumes a purchase on , 1996 of Class A shares from a Fund aggregating less than $50,000 subject to the schedule
of sales charges set forth in the Prospectus at a price based upon the net as- set value of the Class A shares.
Net Asset Value per share.............................................. $10.000 Per Share Sales Charge--5.25% of public offering price (5.54% of net asset value per share)................................................ $ 0.554 Per Share Offering Price to the Public................................. $10.554 |
You may purchase Class B Shares without any up-front sales charge at a price
equal to their net asset value, but subject to a contingent deferred sales
charge ("CDSC") if you redeem shares within six years of purchase. The CDSC
will be waived (a) in the event of the total disability (as evidenced by a de-
termination by the federal Social Security Administration) of the shareholder
(including a registered joint owner) occurring after the purchase of the shares
being redeemed, (b) in the event of the death of the shareholder (including a
registered joint owner), (c) for redemptions made pursuant to a systematic
withdrawal plan, (d) for redemptions made pursuant to an IRA systematic with-
drawal based on the shareholder's life expectancy including, but not limited
to, substantially equal periodic payments described in Internal Revenue Code
Section 72(t)(2)(A)(iv) prior to age 59 and (e) for redemptions to satisfy re-
quired minimum distributions after age 70 from an IRA account (with the maximum
amount subject to this waiver being based only upon the shareholder's Nuveen
IRA accounts). The CDSC will also be waived in connection with the following
redemptions of shares held by employer sponsored employee benefit plans main-
tained on the subaccount recordkeeping system made available by the Shareholder
Service Agent: (a) redemptions to satisfy participant loan advances (note than
loan repayments constitute new purchases for purposes of the contingent de-
ferred sales charge and the conversation privilege), (b) redemptions in connec-
tion with retirement distributions (limited at any one time to 10% of
the total value of plan assets invested in a Fund), (c) redemptions in connec-
tion with distributions qualifying under the hardship provisions of the Inter-
nal Revenue Code and (d) redemptions representing returns of excess contribu-
tions to such plans. Class B Shares are also subject to an annual distribution
fee designed to compensate Authorized Dealers over time for the sale of Fund
shares. Class B Shares automatically convert to Class A Shares eight years af-
ter purchase.
You may purchase Class C Shares without any up-front sales charge at a price equal to their net asset value, but subject to an annual distribution fee de- signed to compensate Authorized Dealers over time for the sale of Fund shares. Class C Shares are subject to a contingent deferred sales charge for redemption within 12 months of purchase. The CDSC will be waived for redemption following the disability (as determined in writing by the Social Security Administration) or death of the shareholder. Class A Shares, Class B Shares and Class C Shares are all subject to annual service fees, which are used to compensate Authorized Dealers for providing you with ongoing financial advice and other services.
Each class of shares of a 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 administration and distribution expenses, and each class has exclusive voting rights with respect to any dis- tribution or service plan applicable to its shares. In addition, the Class B Shares are subject to a conversion feature, as described below. 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 a Fund's classes of shares.
The expenses to be borne by specific classes of shares may include (i) trans- fer 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) Securities and Exchange Commission ("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, (vi) litigation or other legal expenses relating to a specific class of shares, (vi) directors' 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 de- termined to be properly allocated to one or more classes of shares.
Each Fund has special purchase programs under which certain persons may pur- chase Class A Shares at reduced sales charges. One such program is available to members of a "qualified group."
An individual who is a member of a "qualified group" may purchase Class A
Shares of a Fund (or any other Nuveen Fund with respect to which a sales
charge is imposed), at the reduced sales charge applicable to the group taken
as a whole. A "qualified group" is one which (i) has been in existence for
more than six months; (ii) has a purpose other than investment; (iii) has five
or more participating members; (iv) has agreed to include sales literature and
other materials related to the Fund in publications and mailings to members;
(v) has agreed to have its group administrator submit a single bulk order and
make payment with a single remittance for all investments in a Fund during
each investment period by all participants who choose to invest in the Fund;
and (vi) has agreed to provide the Funds' transfer
agent with appropriate backup data for each participant of the group in a for-
mat fully compatible with the transfer agent's processing system.
The "amount" of a share purchase by a participant in a group purchase program for purposes of determining the applicable sales charge is (i) the aggregate value of all shares of the Funds (and all other Nuveen Funds with respect to which a sales charge is imposed) currently held by participants of the group, plus (ii) the amount of shares currently being purchased.
Special Sales Charge Waivers. Class A Shares of the Funds may be purchased at net asset value without a sales charge, and Class R Shares may be purchased, by the following categories of investors:
. officers, trustees and retired trustees of the Trust;
. bona fide, full-time and retired employees of Nuveen or ICAP, any parent company of Nuveen, and subsidiaries thereof, or their immediate family mem- bers (as defined below);
. any person who, for at least 90 days, has been an officer, director or bona fide employee of any Authorized Dealer, or their immediate family members;
. officers and directors of bank holding companies that make Fund shares available directly or through subsidiaries or bank affiliates;
. 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;
. investors purchasing through a mutual fund purchase program sponsored by a broker-dealer that offers a selected group of mutual funds either without a transaction fee or with an asset-based fee or a fixed fee that does not vary with the amount of the purchase. In order to qualify, such purchase program must offer a full range of mutual fund related services and shareholder ac- count servicing capabilities, including establishment and maintenance of shareholder accounts, addressing investor inquiries regarding account activ- ity and investment performances, processing of trading and dividend activity and generation of monthly account statements and year-end tax reporting; and
. registered investment advisers, certified financial planners and registered broker-dealers who in each case either charge periodic fees to their custom- ers for financial planning, investment advisory or asset management servic- es, or provide such services in connection with the establishment of an in- vestment account for which a comprehensive "wrap fee" charge is imposed.
To help advisers and investors better understand and most efficiently use the Funds to reach their investment goals, the Funds may advertise and create spe- cific investment programs and systems. For example, this may include informa- tion on how to use the Funds to accumulate assets for future education needs or periodic payments such as insurance premiums. The Funds may produce software or additional sales literature to promote the advantages of using the Funds to meet these and other specific investor needs.
Exchanges of shares of a Fund for shares of a Nuveen money market fund may be made on days when both funds calculate a net asset value and make shares avail- able for public purchase. Shares of the Nuveen money market funds may be pur- chased on days on which the Federal Reserve Bank of Boston is normally open for business. In addition to the holidays observed by the Fund, the Nuveen money market funds observe and will not make fund shares available for purchase on the following holidays: Martin Luther King's Birthday, Columbus Day and Veter- ans Day.
For more information on the procedure for purchasing shares of the Funds and on the special purchase programs available thereunder, see "How to Buy Fund Shares" in the Prospectus.
Nuveen serves as the principal underwriter of the shares of the Funds pursuant to a "best efforts" arrangement as provided by a distribution agreement with the Trust, dated [] ("Distribution Agreement"). Pursuant to the Distribution Agreement, the Trust appointed Nuveen to be its agent for the distribution of the Funds' shares on a continuous offering basis. Nuveen 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 Distri- bution Agreement, Nuveen, at its own expense, finances certain activities inci- dent 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. Nuveen receives for its services the excess, if any, of the sales price of a Fund's 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; Nuveen may act as such a Dealer. Nuveen also receives compensation pursuant to a distribution plan adopted by the Trust pursuant to Rule 12b-1 and described herein under "Distribution and Service Plans." Nuveen receives any CDSCs imposed on redemp- tions of Shares, but any amounts as to which a
reinstatement privilege is not exercised are set off against and reduce amounts otherwise payable to Nuveen pursuant to the distribution plan.
DISTRIBUTION AND SERVICE PLANS
Each Fund has adopted a plan (the "Plan") pursuant to Rule 12b-1 under the In- vestment Company Act of 1940, which provides that Class B Shares and Class C Shares will be subject to an annual distribution fee, and that Class A Shares, Class B Shares and Class C Shares will all be subject to an annual service fee. Class R Shares will not be subject to either distribution or service fees.
The distribution fee applicable to Class B Shares, and Class C Shares under each Fund's Plan will be payable to reimburse Nuveen for services and expenses incurred in connection with the distribution of such Shares. These expenses in- clude payments to Authorized Dealers, including Nuveen, who are brokers of rec- ord with respect to the 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 such Shares, certain other expenses associated with the distribution of such Shares, and any distribution-related expenses that may be authorized from time to time by the Board of Trustees.
The service fee applicable to Class A Shares, Class B Shares and Class C Shares under each Fund's Plan will be payable to Authorized Dealers in connection with the provision of ongoing account services to shareholders. These services may include establishing and maintaining shareholder accounts, answering share- holder inquiries and providing other personal services to shareholders.
Each Fund may spend up to .25 of 1% 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. Each Fund may spend up to .75 of 1% per year of the average daily net assets of each of the Class B Shares and Class C Shares as a distribution fee and up to .25 of 1% per year of the average daily net assets of each of the Class B Shares and Class C Shares as a service fee under the Plan as applicable to such classes.
Under each Fund's 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 Trustees who are not "interested persons" and 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 non-interested 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 rea- sonable business judgment and in light of their fiduciary duties under applica- ble 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 non-interested 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 non-in- terested trustees of the Trust will be committed to the discretion of the non- interested trustees then in office.
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
[], independent public accountants, [address] have been selected as auditors for the Trust. In addition to audit services, [] will provide consultation and assistance on accounting, internal control, tax and related matters. The finan- cial statements included in this Statement of Additional Information have been audited by [] as indicated in their report with respect thereto, and are in- cluded in reliance upon the authority of said firm as experts in giving said report.
The custodian of the assets of the Funds is The Chase Manhattan Bank, N.A., 770 Broadway, New York, New York 10003. The custodian performs custodial, fund ac- counting and portfolio accounting services.
FINANCIAL STATEMENTS
To be filed by Pre-Effective Amendment.
APPENDIX A--RATINGS OF INVESTMENTS
STANDARD & POOR'S RATINGS GROUP--A brief description of the applicable Standard & Poor's Ratings Group ("S&P") rating symbols and their meanings (as published by S&P) follows:
LONG TERM DEBT
An S&P corporate or municipal debt rating is a current assessment of the cred- itworthiness of an obligor with respect to a specific obligation. This assess- ment may take into consideration obligors such as guarantors, insurers, or lessees.
The debt rating is not a recommendation to purchase, sell, or hold a security, inasmuch as it does not comment as to market price or suitability for a partic- ular investor.
The ratings are based on current information furnished by the issuer or ob- tained by S&P from other sources it considers reliable. S&P does not perform an audit in connection with any rating and may, on occasion, rely on unaudited fi- nancial information. The ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of, such information, or based on other circumstances.
The ratings are based, in varying degrees, on the following considerations:
1. Likelihood of default--capacity and willingness of the obligor as to the timely payment of interest and repayment of principal 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.
INVESTMENT GRADE
AAA Debt rated "AAA' has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rated "AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small de-
gree.
A Debt rated "A' has a strong capacity to pay interest and repay princi-
pal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher
rated categories.
BBB Debt rated "BBB' is regarded as having an adequate capacity to pay in-
terest and repay principal. Whereas it normally exhibits adequate pro-
tection parameters, adverse economic conditions or changing circum-
stances are more likely to lead to a weakened capacity to pay interest
and repay principal for debt in this category than in higher rated
categories.
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SPECULATIVE GRADE RATING
Debt rated "BB', "B', "CCC', "CC' and "C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. "BB' indicates the least degree of speculation and "C' the highest.
While such debt will likely have some quality and protective characteristics
these are outweighed by major uncertainties or major exposures to adverse con-
ditions.
BB Debt rated "BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to inadequate capacity to meet timely interest and princi-
pal payments. The "BB' rating category is also used for debt subordi-
nated to senior debt that is assigned an actual or implied "BBB-' rat-
ing.
B Debt rated "B' has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal.
The "B' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "BB' or "BB-' rating.
CCC Debt rated "CCC' has a currently identifiable vulnerability to de-
fault, and is dependent upon favorable business, financial, and eco-
nomic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal.
The "CCC' rating category is also used for debt subordinated to senior
debt that is assigned an actual or implied "B' or "B-' rating.
CC The rating "CC' typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC' debt rating.
C The rating "C' typically is applied to debt subordinated to senior
debt which is assigned an actual or implied "CCC-' debt rating. The
"C' rating may be used to cover a situation where a bankruptcy peti-
tion has been filed, but debt service payments are continued.
CI The rating "CI' is reserved for income bonds on which no interest is
being paid.
D Debt rated "D' is in payment default. The "D' rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
"D' rating also will be used upon the filing of a bankruptcy petition
if debt service payments are jeopardized.
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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.
PROVISIONAL RATINGS: The letter "p" indicates that the rating is provisional. A provisional rating assumes the successful completion of the project financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely dependent upon the successful and timely completion of the project. This rating, however, while addressing credit quality subsequent to comple-
tion of the project, makes no comment on the likelihood of, or the risk of de- fault upon failure of, such completion. The investor should exercise judgment with respect to such likelihood and risk.
L The letter "L' indicates that the rating pertains to the principal amount of those bonds to the extent that the underlying deposit col- lateral is federally insured by the Federal Savings & Loan Insurance Corp. or the Federal Deposit Insurance Corp.* and interest is ade- quately collateralized. In the case of certificates of deposit the letter "L' indicates that the deposit, combined with other deposits being held in the same right and capacity will be honored for princi- pal and accrued pre-default interest up to the federal insurance lim- its within 30 days after closing of the insured institution or, in the event that the deposit is assumed by a successor insured institution, upon maturity.
NR Indicates no rating has been requested, that there is insufficient in- formation on which to base a rating, or that S&P does not rate a par- ticular type of obligation as a matter of policy.
MUNICIPAL NOTES
An S&P note rating reflects the liquidity concerns and market access risks unique to notes. Notes due in 3 years or less will likely receive a note rat- ing. Notes maturing beyond 3 years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment:
--Amortization schedule (the larger the final maturity relative to other maturities, the more likely it will be treated as a note).
--Source of payment (the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note).
NOTE RATING SYMBOLS ARE AS FOLLOWS:
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 vulnera- bility to adverse financial and economic changes over the term of the notes.
SP-3 Speculative capacity to pay principal and interest.
A note rating is not a recommendation to purchase, sell, or hold a security in- asmuch as it does not comment as to market price or suitability for a particu- lar investor. The ratings are based on current information furnished to S&P by the issuer or obtained by S&P from other sources it considers reliable. S&P does not perform an audit in connection with any rating and may, on occasion, rely on unaudited financial information. The ratings may be changed, suspended, or withdrawn as a result of changes in or unavailability of such information or based on other circumstances.
*Continuance of the rating is contingent upon S&P's receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flow.
COMMERCIAL PAPER
An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days.
Ratings are graded into several categories, ranging from "A-1" for the highest quality obligations to "D" for the lowest. These categories are as follows:
A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.
A-2 Capacity for timely payment on issues with this designation is satis-
factory. However, the relative degree of safety is not as high as for
issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the
higher designations.
B Issues rated "B" are regarded as having only speculative capacity for
timely payment.
C This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
D Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date
due, even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period.
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A commercial rating is not a recommendation to purchase, sell, or hold a secu- rity inasmuch as it does not comment as to market price or suitability for a particular investor. The ratings are based on current information furnished to S&P by the issuer or obtained by S&P from other sources it considers reliable. S&P does not perform an audit in connection with any rating and may, on occa- sion, rely on unaudited financial information. The ratings may be changed, sus- pended, or withdrawn as a result of changes in or unavailability of such infor- mation or based on other circumstances.
MOODY'S INVESTORS SERVICE, INC.--A brief description of the applicable Moody's Investors Service, Inc. ("Moody's") rating symbols and their meanings (as pub- lished by Moody's) follows:
LONG TERM DEBT
AAA Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally re-
ferred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
AA Bonds which are rated Aa are judged to be of high quality by all stan-
dards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated
A-4
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lower than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements present which
make the long-term risks appear somewhat larger than in Aaa securi-
ties.
A Bonds which are rated A possess may favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
BAA Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristi-
cally unrealiable over any great length of time. Such bonds lack out-
standing investment characteristics and in fact have speculative char-
acteristics as well.
BA Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protec-
tion of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desir-
able investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of
time may be small.
CAA Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
CA Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other
marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and is-
sues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
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CON( . . . )
Bonds for which the security depends upon the completion of some act
or the fulfillment of some condition are rated conditionally. These
are bonds secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operation experience, (c) rentals
which begin when facilities are completed, or (d) payments to which
some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination
of basis of condition.
NOTE:Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believes possess the strongest investment attributes are designated by the sym- bols Aa1, A1, Baa1, Ba1, and B1.
MUNICIPAL SHORT-TERM LOANS
MIG 1/VMIG 1 This designation denotes best quality. There is present
strong protection by established cash flows, superior liquid-
ity support or demonstrated broadbased access to the market
for refinancing.
A-5
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MIG 2/VMIG 2 This designation denotes high quality. Margins or protection
are ample although not so large as in the preceding group.
MIG 3/VMIG 3 This designation denotes favorable quality. All security ele-
ments are accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow
protection may be narrow and market access for refinancing is
likely to be less well-established.
MIG 4/VMIG 4 This designation denotes adequate quality. Protection com-
monly regarded as required of an investment security is pres-
ent and although not distinctly or predominantly speculative,
there is specific risk.
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COMMERCIAL PAPER
Issuers rated PRIME-1 (or related supporting institutions) have a superior ca- pacity for repayment of senior short-term promissory obligations. Prime-1 re- payment capacity will often be evidenced by many of the following characteris- tics:
--Leading market positions in well-established industries.
--High rates of return on funds employed.
--Conservative capitalization structure with moderate reliance on debt and ample asset protection.
--Broad margins in earnings coverage of fixed financial charges and high internal cash generation.
--Well-established access to a range of financial markets and assured sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong capac- ity for repayment of senior short-term promissory obligations. This will nor- mally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.
Issuers rated PRIME-3 (or related supporting institutions) have an acceptable capacity for repayment of senior short-term promissory obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial lever- age. Adequate alternate liquidity is maintained.
Issuers rated NOT PRIME do not fall within any of the Prime rating categories.
DUFF & PHELPS, INC.--A brief description of the applicable Duff & Phelps, Inc. ("D&P") ratings symbols and their meanings (as published by D&P) follows:
LONG TERM DEBT
These ratings represent a summary opinion of the issuer's long-term fundamental
quality. Rating determination is based on qualitative and quantitative factors
which may vary according to the basic economic and financial characteristics of
each industry and each issuer. Important considerations are vulnerability to
economic cycles as well as risks related to such factors as competition, gov-
ernment action, regulation, technological obsolescence, demand shifts, cost
structure, and management depth and expertise. The projected viability of the
obligor at the trough of the cycle is a critical determination.
Each rating also takes into account the legal form of the security, (e.g.,
first mortgage bonds, subordinated debt, preferred stock, etc.). The extent of
rating dispersion among the various classes of securities is determined by sev-
eral factors including relative weightings of the different security classes in
the capital structure, the overall credit strength of the issuer, and the na-
ture of covenant protection.
The Credit Rating Committee formally reviews all ratings once per quarter (more
frequently, if nec- essary). Ratings of "BBB-' and higher fall within the defi-
nition of investment grade securities, as defined by bank and insurance super-
visory authorities. Structured finance issues, including real estate, asset-
backed and mortgage-backed financings, use this same rating scale. Duff &
Phelps Credit Rating claims paying ability ratings of insurance companies use
the same scale with minor modification in the definitions. Thus, an investor
can compare the credit quality of investment alternatives across industries and
structural types. A "Cash Flow Rating" (as noted for specific ratings) ad-
dresses the likelihood that aggregate principal and interest will equal or ex-
ceed the rated amount under appropriate stress conditions.
RATING SCALEDEFINITION
- --------------------------------------------------------------------------------
AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.
- --------------------------------------------------------------------------------
AA+ High credit quality. Protection factors are strong. Risk is mod-
AA est, but may vary slightly from time to time because of economic
AA- conditions.
- --------------------------------------------------------------------------------
A+ Protection factors are average but adequate. However, risk factors
A are more variable and greater in periods of economic stress.
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A-
- --------------------------------------------------------------------------------
BBB+ Below average protection factors but still considered sufficient
BBB for prudent investment. Considerable variability in risk during
BBB- economic cycles.
- --------------------------------------------------------------------------------
A-7
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BB+ Below investment grade but deemed likely to meet obligations when
BB due. Present or prospective financial protection factors fluctuate
BB- according to industry conditions or company fortunes. Overall
quality may move up or down frequently within this category.
- -------------------------------------------------------------------------------
B+ Below investment grade and possessing risk that obligations will
B not be met when due. Financial protection factors will fluctuate
B- widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in the
rating within this category or into a higher or lower rating
grade.
- -------------------------------------------------------------------------------
CCC Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred
dividends. Protection factors are narrow and risk can be substan-
tial with unfavorable economic/industry conditions, and/or with
unfavorable company developments.
- -------------------------------------------------------------------------------
DD Defaulted debt obligations. Issuer failed to meet scheduled prin-
cipal and/or interest payments.
DP Preferred stock with dividend arrearages.
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SHORT-TERM DEBT RATINGS
Duff & Phelps' short-term ratings are consistent with the rating criteria used by money market participants. The ratings apply to all obligations with matu- rities of under one year, including commercial paper, the uninsured portion of certificates of deposit, unsecured bank loans, master notes, bankers accept- ances, irrevocable letters of credit, and current maturities of long-term debt. Asset-backed commercial paper is also rated according to this scale.
Emphasis is placed on liquidity which is defined as not only cash from opera- tions, but also access to alternative sources of funds including trade credit, bank lines, and the capital markets. An important consideration is the level of an obligor's reliance on short-term funds on an ongoing basis.
The distinguishing feature of Duff & Phelps Credit Ratings' short-term ratings is the refinement of the traditional "1' category. The majority of short-term debt issuers carry the highest rating, yet quality differences exist within that tier. As a consequence, Duff & Phelps Credit Rating has incorporated gra- dations of "1+' (one plus) and "1-' (one minus) to assist investors in recog- nizing those differences.
These ratings are recognized by the SEC for broker-dealer requirements, spe- cifically capital computation guidelines. These ratings meet Department of La- bor ERISA guidelines governing pension and profit sharing investments. State regulators also recognize the ratings of Duff & Phelps Credit Rating for in- surance company investment portfolios.
RATING SCALE:
DEFINITION
HIGH GRADE
D-1+ Highest certainty of timely payment. Short-term liquidity, includ-
ing internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are ex-
cellent and supported by good fundamental protection factors. Risk
factors are minor.
D-1- High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.
GOOD GRADE
D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financing requirements, access to capital markets is good.
Risk factors are small.
SATISFACTORY GRADE
D-3 Satisfactory liquidity and other protection factors qualify issue
as to investment grade. Risk factors are larger and subject to
more variation. Nevertheless, timely payment is expected.
NON-INVESTMENT GRADE
D-4 Speculative investment characteristics. Liquidity is not suffi-
cient to insured against disruption in debt service. Operating
factors and market access may be subject to a high degree of vari-
ation.
DEFAULT
D-5 Issuer failed to meet scheduled principal and/or interest pay-
ments.
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FITCH INVESTORS SERVICE, INC.--A brief description of the applicable Fitch In- vestors Service, Inc. ("Fitch") ratings symbols and meanings (as published by Fitch) follows:
LONG TERM DEBT
Fitch investment grade bond ratings provide a guide to investors in determining the credit risk associated with a particular security. The ratings represent Fitch's assessment of the issuer's ability to meet the obligations of a spe- cific debt issue or class of debt in a timely manner.
The rating takes into consideration special features of the issue, its rela- tionship to other obligations of the issuer, the current and prospective finan- cial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength and credit quality.
Fitch ratings do not reflect any credit enhancement that may be provided by in- surance policies or financial guaranties unless otherwise indicated.
Bonds that have the same rating are of similar but not necessarily identical credit quality since the rating categories do not fully reflect small differ- ences in the degrees of credit risk.
Fitch ratings are not recommendations to buy, sell, or hold any security. Rat- ings do not comment on the adequacy of market price, the suitability of any se- curity for a particular investor, or the tax-exempt nature or taxability of payments made in respect of any security.
Fitch ratings are based on information obtained from issuers, other obligors, underwriters, their experts, and other sources Fitch believes to be reliable. Fitch does not audit or verify the truth or accuracy of such information. Rat- ings may be changed, suspended, or withdrawn as a result of changes in, or the unavailability of, information or for other reasons.
AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay inter-
est and repay principal, which is unlikely to be affected by reasona-
bly foreseeable events.
AA Bonds considered to be investment grade and of very high credit quali-
ty. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA'. Because
bonds rated in the "AAA' and "AA' categories are not significantly
vulnerable to foreseeable future developments, short-term debt of the
issuers is generally rated "F-1+'.
A Bonds considered to be investment grade and of high credit quality.
The obligor's ability to pay interest and repay principal is consid-
ered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on
these bonds and, therefore, impair timely payment. The likelihood that
the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
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Fitch speculative grade bond ratings provide a guide to investors in determin- ing the credit risk associated with a particular security. The ratings ("BB' to "C') represent Fitch's assessment of the likelihood of timely payment of prin- cipal and interest in accordance with the terms of obligation for bond issues not in default. For defaulted bonds, the rating ("DDD' to "D') is an assessment of the ultimate recovery value through reorganization or liquidation.
The rating takes into consideration special features of the issue, its rela- tionship to other obligations of the issuer, the current and prospective finan- cial condition and operating performance of the issuer and any guarantor, as well as the economic and political environment that might affect the issuer's future financial strength.
Bonds that have the same rating are of similar but not necessarily identical credit quality since the rating categories cannot fully reflect the differ- ences in the degrees of credit risk.
BB Bonds are considered speculative. The obligor's ability to pay inter-
est and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identi-
fied which could assist the obligor in satisfying its debt service re-
quirements.
B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of con-
tinued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and eco-
nomic activity throughout the life of the issue.
CCC Bonds have certain identifiable characteristics which, if not reme-
died, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C Bonds are in imminent default in payment of interest or principal.
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DDD, Bonds are in default on interest and/or principal payments. Such bonds DD are extremely speculative and should be valued on the basis of their AND Dultimate recovery value in liquidation or reorganization of the obli- gor. "DDD' represents the highest potential for recovery of these bonds, and "D' represents the lowest potential for recovery.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on de- mand or have original maturities of generally up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes.
The short-term rating places greater emphasis than a long-term rating on the existence of liquidity necessary to meet the issuer's obligations in a timely manner.
F-1+ EXCEPTIONALLY STRONG CREDIT QUALITY Issues assigned this rating are
regarded as having the strongest degree of assurance for timely pay-
ment.
F-1 VERY STRONG CREDIT QUALITY Issues assigned this rating reflect an as-
surance of timely payment only slightly less in degree than issues
rated "F-1+'.
F-2 GOOD CREDIT QUALITY Issues assigned this rating have a satisfactory
degree of assurance for timely payment but the margin of safety is not
as great as for issues assigned "F-1+' and "F-1' ratings.
F-3 FAIR CREDIT QUALITY Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is ade-
quate; however, near-term adverse changes could cause these securities
to be rated below investment grade.
A-11
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F-S WEAK CREDIT QUALITY Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are
vulnerable to near-term adverse changes in financial and economic con-
ditions.
D DEFAULT Issues assigned this rating are in actual or imminent payment
default.
LOC The symbol LOC indicates that the rating is based on a letter of
credit issued by a commercial bank.
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PART C--OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements:
Included in the Prospectus:
Not Applicable
Included in the Statement of Additional Information:
Statement of Net Assets, , 1996, for each of the Nuveen Select Stock Fund, Nuveen Balanced Fund and Nuveen Income and Growth Fund
Report of Independent Public Accountants dated , 1996
(b) Exhibits
1(a). Declaration of Trust of Registrant.
1(b). Certificate for the Establishment and Designation of
Series and Classes, dated , 1996.
2. By-Laws of Registrant.
3. Not applicable.
4(a). Specimen certificates of Class A Shares of each Fund.*
4(b). Specimen certificates of Class B Shares of each Fund.*
4(c). Specimen certificates of Class C Shares of each Fund.*
4(d). Specimen certificates of Class R Shares of each Fund.*
5(a). Form of Management Agreement between Registrant and Nuveen
Institutional Advisory Corp.*
5(b). Form of Sub-Advisory Agreement between Nuveen
Institutional Advisory Corp and Institutional Capital
Corporation.*
6(a). Form of Distribution Agreement between Registrant and John
Nuveen & Co. Incorporated.*
7. Not applicable.
8. Form of Custodian Agreement among Registrant, Nuveen
Institutional Advisory Corp. and Chase Manhattan Bank,
N.A.*
9(a). Form of Administration Agreement between Registrant and
Nuveen Institutional Advisory Corp.*
9(b). Form of Transfer Agency Agreement among Registrant, Nuveen
Institutional Advisory Corp. and Shareholder Services,
Inc.*
10(a). Opinion and consent of Vedder, Price, Kaufman & Kammholz,
dated , 1996.*
10(b). Opinion and consent of Bingham, Dana & Gould, dated
, 1996.*
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11. Consent of Independent Public Accountants.*
12. Not applicable.
13. Subscription Agreement with .*
14. Not applicable.
15. Plan of Distribution and Service Pursuant to Rule 12b-1
for the Class A Shares, Class B Shares and Class C Shares
of each Fund.*
16. Not applicable.
17. Financial Data Schedule.*
18. Multi-Class Plan.*
99(a). Original Powers of Attorney for Messrs. Schwertfeger and
Dean, Trustees, authorizing, among others, James J.
Wesolowski and Gifford R. Zimmerman to execute the
Registration Statement.
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ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
At , 1996:
NUMBER OF
TITLE OF SERIES RECORD HOLDERS
--------------- --------------
Nuveen Select Stock Fund................................... 0
Nuveen Income and Growth Fund.............................. 0
Nuveen Balanced Fund....................................... 0
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ITEM 27: INDEMNIFICATION
Section 4 of Article XII of Registrant's Amended and Restated Declaration of
Trust 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 per- mitted 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 negli- gence 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 adju- dicated 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 pay- ment 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.
The rights of indemnification herein provided may be insured against by poli- cies 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 con- tinue 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 oth- erwise 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 ul- timately 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, any- one who has been exempted from being an Interested Person by any rule, regula- tion 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, admin- istrative or other, including appeals), actual or threatened; and the word "li- ability" and "expenses" shall include without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other lia- bilities.
The trustees and officers of the Registrant are covered by an Investment Trust Errors and Omission policy in the aggregate amount of $20,000,000 (with a maxi- mum deductible of $350,000) against liability and expenses of claims of wrong- ful 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 Registrant or where he or she shall have had reasonable cause to believe this conduct was unlawful).
Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Ex- change Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indem- nification 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 Act and will be governed by the final adjudication of such issue.
ITEM 28: BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Nuveen Institutional Advisory Corp. serves as investment adviser or manager
to the following closed-end management type investment companies: Nuveen Select
Tax-Free Income Portfolio; Nuveen Select Tax-Free Income Portfolio 2; Nuveen
Insured California Select Tax-Free Income Portfolio; Nuveen Insured New York
Select Tax-Free Income Portfolio; Nuveen Select Tax-Free Income Portfolio 3 and
the Registrant. The principal business address for all of these investment com-
panies is 333 West Wacker Drive, Chicago, Illinois 60606. In addition, Nuveen
Institutional Advisory Corp. serves as investment adviser to separately managed
accounts.
For a description of other business, profession, vocation or employment of a substantial nature in which any director or officer of the investment adviser has engaged during the last two years for his account or
in the capacity of director, officer, employee, partner or trustee, see the de- scriptions under "Management" in the Statement of Additional Information.
(b) Institutional Capital Corporation (ICAP) acts as investment adviser to the ICAP Funds, Inc. and as sub-investment adviser to the Registrant. In addition, ICAP serves as investment adviser to separately managed accounts.
The following is a listing of each director and officer of ICAP. The principal business address for each person is 225 W. Wacker Drive, Chicago, IL 60606.
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH ICAP WITH REGISTRANT
---- --------------------- ---------------------
Robert H. Lyon........ President, Chief Investment Trustee
Officer and Director
Pamela H. Conroy...... Senior Vice President None
Donald D. Niemann..... Executive Vice President and None
Director
Gary S. Maurer........ Executive Vice President and None
Director
Barbara A. Chiesa..... Vice President and Director None
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ITEM 29: PRINCIPAL UNDERWRITERS
(a) John Nuveen & Co. Incorporated ("Nuveen") acts as principal underwriter to
the following open-end management type investment companies: Nuveen Municipal
Bond Fund, Inc., Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Re-
serves, Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund,
Inc., Nuveen Insured Tax-Free Bond Fund, Inc. and Nuveen Tax-Free Money Market
Fund, Inc. Nuveen also acts as depositor and principal underwriter of the
Nuveen Tax-Free Unit Trust, a registered unit investment trust. Nuveen has also
served or is serving as co-managing underwriter to the following closed-end
management type investment companies: Nuveen Municipal Value Fund, Inc., Nuveen
California Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund,
Inc., Nuveen Municipal Income Fund, Inc., Nuveen California Municipal Income
Fund, Inc., Nuveen New York Municipal Income Fund, Inc., Nuveen Premium Income
Municipal Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen Cal-
ifornia Performance Plus Municipal Fund, Inc., Nuveen New York Performance Plus
Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal
Market Opportunity Fund, Inc., Nuveen California Municipal Market Opportunity
Fund, Inc., Nuveen Investment Quality Municipal Fund, Inc., Nuveen California
Investment Quality Municipal Fund, Inc., Nuveen New York Investment Quality Mu-
nicipal Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida
Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality Munici-
pal Fund, Inc., Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen
Select Quality Municipal Fund, Inc., Nuveen California Select Quality Municipal
Fund, Inc., Nuveen New York Select Quality Municipal Fund, Inc., Nuveen Quality
Income Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc.,
Nuveen Florida Quality Income Municipal Fund,
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund, Nuveen Cali- fornia Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Mu- nicipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Select Tax-Free Income Portfolio, Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen Select Maturities Municipal Fund, Nuveen Arizona Premium In- come Municipal Fund, Inc., Nuveen Insured Florida Premium Income Municipal Fund, Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen Insured Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured Cali- fornia Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium In- come Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Virginia Premium Income Mu- nicipal Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen Connecti- cut Premium Income Municipal Fund, Nuveen Georgia Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen North Carolina Pre- mium Income Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured Premium Income Municipal Fund 2, Nuveen Select Tax-Free Income Portfolio 2, Nuveen Insured California Select Tax-Free Income Portfolio, Nuveen Insured New York Select Tax-Free Income Portfolio, Nuveen Select Tax-Free In- come Portfolio 3 and the Registrant.
(b)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT - -------------------------------------------------------------------------------- Anthony T. Dean Executive Vice President President and Trustee 333 West Wacker Drive and Director Chicago, IL 60606 Timothy R. Schwertfeger Executive Vice President Chairman and Trustee 333 West Wacker Drive and Director Chicago, IL 60606 John P. Amboian Executive Vice President None 333 West Wacker Drive Chicago, IL 60606 William Adams IV Vice President None 333 West Wacker Drive Chicago, IL 60606 Kathleen M. Flanagan Vice President Vice President 333 West Wacker Drive Chicago, IL 60606 Stephen D. Foy Vice President None 333 West Wacker Drive Chicago, IL 60606 |
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT - ---------------------------------------------------------------------------------- Robert D. Freeland Vice President None 333 West Wacker Drive Chicago, IL 60606 Michael G. Gaffney Vice President None 333 West Wacker Drive Chicago, IL 60606 James W. Gratehouse Vice President None 333 West Wacker Drive Chicago, IL 60606 Anna R. Kucinskis Vice President Vice President 333 West Wacker Drive Chicago, IL 60606 Robert B. Kuppenheimer Vice President None 333 West Wacker Drive Chicago, IL 60606 Larry W. Martin Vice President and Vice President and 333 West Wacker Drive Assistant Secretary Assistant Secretary Chicago, IL 60606 Thomas C. Muntz Vice President None 333 West Wacker Drive Chicago, IL 60606 O. Walter Renfftlen Vice President Vice President and 333 West Wacker Drive and Controller Controller Chicago, IL 60606 Stuart W. Rogers Vice President None 333 West Wacker Drive Chicago, IL 60606 Bradford W. Shaw, Jr. Vice President None 333 West Wacker Drive Chicago, IL 60606 H. William Stabenow Vice President Vice President and 333 West Wacker Drive and Treasurer Treasurer Chicago, IL 60606 James J. Wesolowski Vice President, Vice President and 333 West Wacker Drive General Counsel Secretary Chicago, IL 60606 and Secretary |
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT - ----------------------------------------------------------------------------------- Paul C. Williams Vice President None 333 West Wacker Drive Chicago, IL 60606 Gifford R. Zimmerman Vice President Vice President and 333 West Wacker Drive and Assistant Secretary Assistant Secretary Chicago, IL 60606 |
(c) Not applicable.
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois 60606, main-
tains the Declaration of Trust, By-Laws, minutes of trustees and shareholder
meetings and contracts of the Registrant and all advisory material of the in-
vestment adviser.
Chase Manhattan Bank, N.A., 770 Broadway, New York, New York 10003, 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 Advisory Corp., or Shareholder Services, Inc.
Shareholder Services, Inc., P.O. Box 5330, Denver, Colorado 80217-5330, main- tains all the required records in its capacity as transfer, dividend paying, and shareholder service agent for the Registrant.
ITEM 31: MANAGEMENT SERVICES
Not applicable.
ITEM 32: UNDERTAKINGS
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment to its regis- tration statement, using financial statements which need not be certified, within four to six months from the effective date of Registrant's 1933 Act registration statement.
(c) The Registrant undertakes to furnish each person to whom a prospectus is delivered with a copy of the Registrant's latest Annual Report to Share- holders upon request and without charge.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940, THE REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, AND STATE OF ILLINOIS, ON THE DAY OF , 1996.
NUVEEN INVESTMENT TRUST
/s/ Gifford R. Zimmerman
---------------------------------------
Gifford R. Zimmerman, Vice President
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PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ O. Walter Renfftlen
- -------------------------------
O. Walter Renfftlen Vice President and
Controller (Principal
Financial and
Accounting Officer)
Trustee
Anthony T. Dean President and Trustee
Trustee
Trustee
Trustee
Trustee
Timothy R. Schwertfeger Chairman and Trustee
(Principal Executive /s/ Gifford R.
Officer) Zimmerman
|
By_________________________ Gifford R. Zimmerman Attorney-in-Fact
, 1996
AN ORIGINAL POWER OF ATTORNEY AUTHORIZING, AMONG OTHERS, JAMES J. WESOLOWSKI AND GIFFORD R. ZIMMERMAN TO EXECUTE THIS REGISTRATION STATEMENT, AND AMENDMENTS THERETO, FOR EACH OF THE OFFICERS AND TRUSTEES OF REGISTRANT ON WHOSE BEHALF THIS REGISTRATION STATEMENT IS FILED, HAS BEEN EXECUTED AND FILED WITH THE SE- CURITIES AND EXCHANGE COMMISSION.
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
(b) Exhibits
1(a). Declaration of Trust of Registrant.
1(b). Certificate for the Establishment and Designation of
Series and Classes, dated , 1996.
2. By-Laws of Registrant.
3. Not applicable.
4(a). Specimen certificates of Class A Shares of each
Fund.*
4(b). Specimen certificates of Class B Shares of each
Fund.*
4(c). Specimen certificates of Class C Shares of each
Fund.*
4(d). Specimen certificates of Class R Shares of each
Fund.*
5(a). Form of Management Agreement between Registrant and
Nuveen Institutional Advisory Corp.*
5(b). Form of Sub-Advisory Agreement between Nuveen
Institutional Advisory Corp and Institutional Capital
Corporation.*
6(a). Form of Distribution Agreement between Registrant and
John Nuveen & Co. Incorporated.*
7. Not applicable.
8. Form of Custodian Agreement among Registrant, Nuveen
Institutional Advisory Corp. and Chase Manhattan
Bank, N.A.*
9(a). Form of Administration Agreement between Registrant
and Nuveen Institutional Advisory Corp.*
9(b). Form of Transfer Agency Agreement among Registrant,
Nuveen Institutional Advisory Corp. and Shareholder
Services, Inc.*
10(a). Opinion and consent of Vedder, Price, Kaufman &
Kammholz, dated , 1996.*
10(b). Opinion and consent of Bingham, Dana & Gould, dated
, 1996.*
11. Consent of Independent Public Accountants.*
12. Not applicable.
13. Subscription Agreement with .*
14. Not applicable.
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
15. Plan of Distribution and Service Pursuant to Rule
12b-1 for the Class A Shares, Class B Shares and
Class C Shares of each Fund.*
16. Not applicable.
17. Financial Data Schedule.*
18. Multi-Class Plan.*
99(a). Original Powers of Attorney for Messrs. Schwertfeger
and Dean, Trustees, authorizing, among others, James
J. Wesolowski and Gifford R. Zimmerman to execute the
Registration Statement.
|
*To be filed by pre-effective amendment.
EXHIBIT 1(a)
DECLARATION OF TRUST
OF
NUVEEN INVESTMENT TRUST
DECLARATION OF TRUST made as of this 6th day of May, 1996 by the Trustees hereunder.
WHEREAS, the Trustees desire to establish a trust fund for the purposes of carrying on the business of a management investment company; and
WHEREAS, in furtherance of such purpose, the Trustees and any successor Trustees elected in accordance with Article V hereof are acquiring and may hereafter acquire assets and properties which they will hold and manage as trustees of a Massachusetts business trust with transferable shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees and any successor Trustees elected or appointed in accordance with Article V hereof hereby declare that they will hold all cash, securities and other assets and properties, which they may from time to time acquire in any manner as Trustees hereunder, IN TRUST, and that they will manage and dispose of the same upon the following terms and conditions for the benefit of the holders from time to time of shares of beneficial interest in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as the "Nuveen Investment Trust" and the Trustees shall conduct the business of the Trust under that name or any other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary association established by this Declaration of Trust, as amended from time to time;
(b) "Trustee" or "Trustees" refers to each signatory to this Declaration of Trust so long as such signatory shall continue in office in accordance with the terms hereof, and all other individuals who at the time in question have been duly elected or appointed and qualified in accordance with Article V hereof and are then in office;
(c) "Shares" mean the shares of beneficial interest described in Article IV hereof and include fractions of Shares as well as whole Shares;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 (and any successor statute) and the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Commission," "Interested Person," "Principal Underwriter" and "vote of a majority of the outstanding voting securities" shall have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" or "Declaration" shall mean this Declaration of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time to time.
ARTICLE II
NATURE AND PURPOSE OF TRUST
The Trust is a voluntary association with transferable shares (commonly known as a business trust) of the type referred to in Chapter 182 of the General Laws of the Commonwealth of Massachusetts. The Trust is not intended to be, shall not be deemed to be, and shall not be treated as, a general or a limited partnership, joint venture, corporation or joint stock company, nor shall the Trustees or Shareholders or any of them for any purpose be deemed to be, or be treated in any way whatsoever as though they were, liable or responsible hereunder as
partners or joint venturers. The purpose of the Trust is to engage in, operate and carry on the business of an open-end management investment company and to do any and all acts or things as are necessary, convenient, appropriate, incidental or customary in connection therewith.
The Trust set forth in this instrument shall be deemed made in the Commonwealth of Massachusetts, and it is created under and is to be governed by and construed and administered according to the laws of said Commonwealth. The Trust shall be of the type commonly called a business trust, and without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust. No provision of this Declaration shall be effective to require a waiver of compliance with any provision of the Securities Act of 1933, as amended, or the 1940 Act, or of any valid rule, regulation or order of the Commission thereunder.
ARTICLE III
REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS
The name of the registered agent of the Trust is CT Corporation System at 2 Oliver Street, Boston, Massachusetts. The principal place of business of the Trust is 333 West Wacker Drive, Chicago, Illinois 60606. The Trustees may, without the approval of Shareholders, change the registered agent of the Trust and the principal place of business of the Trust.
ARTICLE IV
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial interest in the Trust shall be divided into such transferable Shares of beneficial interest, of such series or classes, and of such designations and par values (if any) and with such rights, preferences, privileges and restrictions as shall be determined by the Trustees in their sole discretion, without Shareholder approval, from time to time and shall initially consist of one class of transferable shares, par value $.01 per share. The number of Shares is unlimited and each Share shall be fully paid and nonassessable. The Trustees shall have full power and authority, in their sole discretion and without obtaining any prior authorization or vote of the Shareholders of the Trust or of the Shareholders of any series or class of Shares, to
create and establish (and to change in any manner) Shares or any series or classes thereof with such preferences, voting powers, rights and privileges as the Trustees may from time to time determine; to divide or combine the Shares or the Shares of any series or classes thereof into a greater or lesser number; to classify or reclassify any issued Shares into one or more series or classes of Shares; to abolish any one or more series or classes of Shares; and to take such other action with respect to the Shares as the Trustees may deem desirable. Except as may be specifically set forth in Section 2 of this Article IV or in an instrument establishing and designating classes or series of Shares, the Shares shall have the powers, preferences, rights, qualifications, limitations and restrictions described below:
(i) In the event of the termination of the Trust the holders of the Shares shall be entitled to receive pro rata the net distributable assets of the Trust.
(ii) Each holder of Shares shall be entitled to one vote for each Share held on each matter submitted to a vote of Shareholders, and the holders of outstanding Shares shall vote together as a single class.
(iii) Dividends or other distributions to Shareholders, when, as and if declared or made by the Trustees, shall be shared equally by the holders of Shares on a share for share basis, such dividends or other distributions or any portion thereof to be paid in cash or to be reinvested in full and fractional Shares of the Trust as the Trustees shall direct.
(iv) Any Shares purchased, redeemed or otherwise reacquired by the Trust shall be retired automatically and such retired Shares shall have the status of authorized but unissued Shares.
(v) Shares may be issued from time to time, without the vote of the Shareholders (or, if the Trustees in their sole discretion deem advisable, with a vote of Shareholders), either for cash or for such other consideration (which may be in any one or more instances a certain specified consideration or certain specified considerations) and on such terms as the Trustees, from time to time, may deem advisable, and the Trust may in such manner acquire other assets (including the acquisition of assets subject to, and in connection with the assumption of liabilities).
(vi) The Trust may issue Shares in fractional denominations to the same extent as its whole Shares, and Shares in fractional denominations shall be Shares having proportionately to the respective fractions represented thereby all the rights of whole Shares, including, without limitation, the right to vote, the right to receive dividends and distributions and the right to participate upon termination of the Trust. The Trustees may from time to time, without the vote of Shareholders, divide or combine Shares into a greater or lesser number without thereby changing their proportionate beneficial interest in the Trust.
Section 2. Establishment of Series and Classes of Shares.
(a) Series. The Trustees, in their sole discretion, without obtaining any prior authorization or vote of the Shareholders of the Trust or of the Shareholders of any series or class of Shares, from time to time may authorize the division of Shares into two or more series, the number and relative rights, privileges and preferences of which shall be established and designated by the Trustees, in their discretion, upon and subject to the following provisions:
(i) All Shares shall be identical except that there may be such variations as shall be fixed and determined by the Trustees between different series as to purchase price, right of redemption, and the price, terms and manner or redemption, and special and relative rights as to dividends and on liquidation.
(ii) The number of authorized Shares and the number of Shares of each series that may be issued shall be unlimited. The Trustees may classify or reclassify any unissued Shares or any Shares previously issued and reacquired of any series into one or more series that may be established and designated from time to time. The Trustees may hold as treasury shares (of the same or some other series), reissue for such consideration and on such terms as they may determine, or cancel any Shares of any series reacquired by the Trust at their discretion from time to time.
(iii) The power of the Trustees to invest and reinvest the assets of
the Trust allocated or belonging to any particular series shall be governed by
Section 1, Article VI hereof unless otherwise provided in the instrument of the
Trustees establishing such series which is hereinafter described.
(iv) Each Share of a series shall represent a beneficial interest in the net assets allocated or belonging to such series only, and such interest shall not extend to the assets of the Trust generally. Dividends and distributions on Shares of a particular series may be paid with such frequency as the Trustees may determine, which may be monthly or otherwise, pursuant to a standing vote or votes adopted only once or with such frequency as the Trustees may determine, to the Shareholders of that series only, from such of the income and capital gains, accrued or realized, from the assets belonging to that series. All dividends and distributions on Shares of a particular series shall be distributed pro rata to the Shareholders of that series in proportion to the number of Shares of that series held by such Shareholders at the date and time of record established for the payment of such dividends or distributions. Shares of any particular series of the Trust may be redeemed solely out of the assets of the Trust allocated or belonging to that series. Upon liquidation or termination of a series of the Trust, Shareholders of such series shall be entitled to receive a pro rata share of the net assets of such series only.
(v) Notwithstanding any provision hereof to the contrary, on any matter submitted to a vote of the Shareholders of the Trust, all Shares then entitled to vote shall be voted by individual series, except that (i) when required by the 1940 Act to be voted in the aggregate, Shares shall not be voted by individual series, (ii) when the Trustees have determined that the matter affects only the interests of Shareholders of one or more series, only Shareholders of such series shall be entitled to vote thereon, and (iii) all series shall vote together on the election of Trustees.
(vi) The establishment and designation of any series of Shares shall be effective upon the execution by a majority of the Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of such series or as otherwise provided in such instrument.
(b) Classes. Notwithstanding anything in this Declaration to the contrary, the Trustees may, in their discretion, without obtaining any prior authorization or vote of the Shareholders of the Trust or of the Shareholders of any series or class of Shares, from time to time authorize the division of Shares of the Trust or any series thereof into Shares of one or more classes upon the execution by a majority of the Trustees of an instrument setting forth such establishment and designation and the relative rights and preferences of such class or clases. All Shares of a class shall be identical with each other and with the Shares of each other
class of the same series except for such variations between classes as may be approved by the Board of Trustees and set forth in such instrument of establishment and designation and be permitted under the 1940 Act or pursuant to any exemptive order issued by the Commission.
Section 3. Ownership of Shares. The ownership and transfer of Shares shall be recorded on the books of the Trust or its transfer or similar agent. No certificates certifying the ownership of Shares shall be issued except as the Trustees may otherwise determine from time to time. The Trustees may make such rules as they consider appropriate for the issuance of Share certificates, transfer of Shares and similar matters. The record books of the Trust, as kept by the Trust or any transfer or similar agent of the Trust, shall be conclusive as to who are the holders of Shares and as to the number of Shares held from time to time by each Shareholder.
Section 4. No Preemptive Rights, Etc. The holders of Shares shall not, as such holders, have any right to acquire, purchase or subscribe for any Shares or securities of the Trust which it may hereafter issue or sell, other than such right, if any, as the Trustees in their discretion may determine. The holders of Shares shall have no appraisal rights with respect to their Shares and, except as otherwise determined by resolution of the Trustees in their sole discretion, shall have no exchange or conversion rights with respect to their Shares.
Section 5. Assets and Liabilities of Series. In the event that the Trust, pursuant to Section 2(a) of this Article IV, shall authorize the division of Shares into two or more series, the following provisions shall apply:
(a) All consideration received by the Trust for the issue or sale of Shares of a particular series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to that series for all purposes, subject only to the rights of creditors, and shall be so recorded upon the books of the Trust. Such consideration, assets, income, earnings, profits and proceeds, including any proceeds derived from the sale, exchange or liquidation of such assets and any funds or payments derived from any reinvestment of such proceeds, in whatever form the same may be, together with any General Items (as hereinafter defined) allocated to that series as provided in the following sentence, are herein referred to as "Assets belonging to" that
series. In the event that there are any assets, income, earnings, profits or proceeds thereof, funds or payments which are not readily identifiable as belonging to any particular series (collectively "General Items"), the Trustees shall allocate such General Items to and among any one or more of the series created from time to time in such manner and on such basis as they, in their sole discretion, deem fair and equitable; and any General Items allocated to a particular series shall belong to that series. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all series for all purposes.
(b) The assets belonging to a particular series shall be charged with the liabilities of the Trust in respect of that series and with all expenses, costs, charges and reserves attributable to that series and shall be so recorded upon the books of the Trust. Liabilities, expenses, costs, charges and reserves charged to a particular series, together with any General Items (as hereinafter defined) allocated to that series as provided in the following sentence, are herein referred to as "liabilities belonging to" that series. In the event there are any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular series (collectively "General Items"), the Trustees shall allocate and charge such General Items to and among any one or more of the series created from time to time in such manner and on such basis as the Trustees in their sole discretion deem fair and equitable; and any General Items so allocated and charges to a particular series shall belong to that series. Each such allocation by the Trustees shall be conclusive and binding upon the Shareholders of all series for all purposes.
Section 6. Status of Shares and Limitation of Personal Liability. Shares shall be deemed to be personal property giving only the rights provided in this instrument. Every Shareholder by virtue of having become a Shareholder shall be held to have expressly assented and agreed to the terms of this Declaration of Trust and to have become a party thereto. The death of a Shareholder during the continuance of the Trust shall not operate to terminate the same nor entitle the representative of any deceased Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but only to the rights of said decedent under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust property or right to call for a partition or division of the same or for an accounting. Neither the Trustees, nor any officer, employee or agent of the Trust shall have any power to bind any Shareholder personally or to call upon any Shareholder for the payment of any sum of money or assessment whatsoever other than such as the Shareholder may at any
time personally agree to pay by way of subscription for any Shares or otherwise.
ARTICLE V
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the Trust shall be managed by the Trustees, and they shall have all powers necessary and desirable to carry out that responsibility.
Section 2. Qualification and Number. Each Trustee shall be a natural person. A Trustee need not be a Shareholder, a citizen of the United States, or a resident of the Commonwealth of Massachusetts. By the vote or consent of a majority of the Trustees then in office, the Trustees may fix the number of Trustees at a number not less than two (2) nor more than twelve (12) and may fill the vacancies created by any such increase in the number of Trustees. Except as determined from time to time by resolution of the Trustees, no decrease in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his term, but the number of Trustees may be decreased in conjunction with the removal of a Trustee pursuant to Section 4 of Article V.
Section 3. Term and Election. Each Trustee shall hold office until the next meeting of Shareholders called for the purpose of considering the election or re-election of such Trustee or of a successor to such Trustee, and until his successor is elected and qualified, and any Trustee who is appointed by the Trustees in the interim to fill a vacancy as provided hereunder shall have the same remaining term as that of his predecessor, if any, or such term as the Trustees may determine. Any vacancy resulting from a newly created Trusteeship or the death, resignation, retirement, removal, or incapacity of a Trustee may be filled by the affirmative vote or consent of a majority of the Trustees then in office.
Section 4. Resignation and Removal. Any Trustee may resign his trust or retire as a Trustee (without need for prior or subsequent accounting except in the event of removal) by an instrument in writing signed by him and delivered or mailed to the Chairman, if any, the President or the Secretary, and such resignation or retirement shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any Trustee who has become incapacitated by illness or injury as determined by a majority of the other Trustees, may be retired
by written instrument signed by a majority of the other Trustees. Except as aforesaid, any Trustee may be removed from office only for "Cause" (as hereinafter defined) and only (i) by action of at least sixty-six and two-thirds percent (66-2/3%) of the outstanding Shares, or (ii) by written instrument, signed by at least sixty-six and two-thirds percent (66-2/3%) of the remaining Trustees, specifying the date when such removal shall become effective. "Cause" shall require willful misconduct, dishonesty, fraud or a felony conviction.
Section 5. Vacancies. The death, declination, resignation, retirement, removal, or incapacity, of the Trustees, or any one of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided herein, or the number of Trustees as fixed is reduced, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees, and during the period during which any such vacancy shall occur, only the Trustees then in office shall be counted for the purposes of the existence of a quorum or any action to be taken by such Trustees.
Section 6. Ownership of Assets of the Trust. The assets of the Trust shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. All of the assets of the Trust shall at all times be considered as automatically vested in the Trustees as shall be from time to time in office. Upon the resignation, retirement, removal, incapacity or death of a Trustee, such Trustee shall automatically cease to have any right, title or interest in any of the Trust property, and the right, title and interest of such Trustee in the Trust property shall vest automatically in the remaining Trustees. Such vesting and cessation of title shall be effective without the execution or delivery of any conveyancing or other instruments. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or any right of partition or possession thereof.
Section 7. Voting Requirements. In addition to the voting requirements imposed by law or by any other provision of this Declaration of Trust, the provisions set forth in this Article V may not be amended, altered or repealed in any respect, nor may any provision inconsistent with this Article V be adopted, without the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the outstanding Shares. In the event the holders of the outstanding shares of any series or class are required by law or any other provision of this Declaration of
Trust to approve such an action by a class vote of such holders, such action must be approved by the holders of at least sixty-six and two-thirds percent (66-2/3%) of the outstanding Shares of such series or class or such lower percentage as may be required by law or any other provision of this Declaration of Trust.
ARTICLE VI
POWERS OF TRUSTEES
Section 1. Powers. The Trustees in all instances shall have full, absolute and exclusive power, control and authority over the Trust assets and the business and affairs of the Trust to the same extent as if the Trustees were the sole and absolute owners thereof in their own right. The Trustees shall have full power and authority to do any and all acts and to make and execute any and all contracts and instruments that they may consider necessary or appropriate in connection with the management of the Trust. The enumeration of any specific power herein shall not be construed as limiting the aforesaid powers. In construing the provisions of this Declaration of Trust, there shall be a presumption in favor of the grant of power and authority to the Trustees. Subject to any applicable limitation in this Declaration, the Trustees shall have power and authority:
(a) To invest and reinvest in, to buy or otherwise acquire, to hold, for investment or otherwise, to sell or otherwise dispose of, to lend or to pledge, to trade in or deal in securities or interests of all kinds, however evidenced, or obligations of all kinds, however evidenced, or rights, warrants, or contracts to acquire such securities, interests, or obligations, of any private or public company, corporation, association, general or limited partnership, trust or other enterprise or organisation foreign or domestic, or issued or guaranteed by any national or state government, foreign or domestic, or their agencies, instrumentalities or subdivisions (including but not limited to, bonds, debentures, bills, time notes and all other evidences or indebtedness); negotiable or non- negotiable instruments; any and all options and futures contracts, derivatives or structured securities; government securities and money market instruments (including but not limited to, bank certificates of deposit, finance paper, commercial paper, bankers acceptances, and all kinds of repurchase agreements) and, without limitation, all other kinds and types of financial instruments;
(b) To adopt By-Laws not inconsistent with this Declaration of Trust providing for the conduct of the business of the Trust and to amend and repeal them to the extent that they do not reserve that right to the Shareholders;
(c) To elect and remove such officers and appoint and terminate such agents as they consider appropriate;
(d) To set record dates for any purpose;
(e) To delegate such authority as they consider desirable to any officers of the Trust and to any investment adviser, investment subadviser, transfer agent, custodian, underwriter or other independent contractor or agent;
(f) Subject to Article IX, Section 1 hereof, to merge, or consolidate the Trust with any other corporation, association, trust or other organisation; or to sell, convey, transfer, or lease all or substantially all of the assets of the Trust;
(g) To vote or give assent, or exercise any rights of ownership, with respect to stock or other securities or property; and to execute and deliver proxies or powers of attorney to such person or persons as the Trustees shall deem proper, granting to such person or persons such power and discretion with relation to securities or property as the Trustees shall deem proper;
(h) To exercise powers and rights of subscription or otherwise which in any manner arise out of ownership of securities;
(i) To hold any security or property in a form not indicating any trust, whether in bearer, unregistered or other negotiable form; or either in their or the Trust's name or in the name of a custodian or a nominee or nominees;
(j) To issue, sell, repurchase, retire, cancel, acquire, hold, resell, reissue, dispose of, transfer and otherwise deal in Shares and in any options, warrants or other rights to purchase Shares or any other interests in the Trust other than Shares;
(k) To set apart, from time to time, out of any funds of the Trust a reserve or reserves for any proper purpose, and to abolish any such reserve;
(l) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or issuer, any security or property of which is held in the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or issuer, and to pay calls or subscriptions with respect to any security held in the Trust;
(m) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes;
(n) To make distributions to Shareholders;
(o) To borrow money and to pledge, mortgage, or hypothecate the assets of the Trust;
(p) To establish, from time to time, a minimum total investment for Shareholders, and to require the redemption of the Shares of any Shareholders whose investment is less than such minimum upon such terms as shall be established by the Trustees;
(q) To join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such committee, depositary or trustee as the Trustees shall deem proper;
(r) To purchase and pay for out of Trust property such insurance as they may deem necessary or appropriate for the conduct of the business of the Trust, including, without limitation, insurance policies insuring the assets of the Trust and payment of distributions and principal on its portfolio investments, and insurance policies insuring the Shareholders, Trustees, officers, employees, agents, investment advisers, investment subadvisers or managers, principal underwriters, or independent contractors of the Trust individually against all claims and liabilities of every nature arising by reason of holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such person as Shareholder, Trustee, officer, employee, agent, investment adviser, subadviser or manager,
principal underwriter, or independent contractor, whether or not any such action may be determined to constitute negligence, and whether or not the Trust would have the power to indemnify such person against such liability; and
(s) To pay pensions for faithful service, as deemed appropriate by the Trustees, and to adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans, trusts and provisions, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees and agents of the Trust.
Any determination made by or pursuant to the direction of the Trustees in good faith and consistent with the provisions of this Declaration of Trust shall be final and conclusive and shall be binding upon the Trust and every holder at any time of Shares, including, but not limited to the following matters: the amount of the assets, obligations, liabilities and expenses of the Trust; the amount of the net income of the Trust from dividends, capital gains, interest or other sources for any period and the amount of assets at any time legally available for the payment of dividends or distributions; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges were created shall have been paid or discharged); the market value, or any quoted price to be applied in determining the market value, of any security or other asset owned or held by the Trust; the fair value of any security for which quoted prices are not readily available, or of any other asset owned or held by the Trust; the number of Shares of the Trust issued or issuable; the net asset value per Share; any matter relating to the acquisition, holding and depositing of securities and other assets by the Trust; any question as to whether any transaction constitutes a purchase of securities on margin, a short sale of securities, a borrowing, or an underwriting of the sale of, or participation in any underwriting or selling group in connection with the public distribution of, any securities, and any matter relating to the issue, sale, redemption, repurchase, and/or other acquisition or disposition of Shares of the Trust. No provision of this Declaration of Trust shall be effective to protect or purport to protect any Trustee or officer of the Trust against any liability to the Trust or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
Section 2. Manner of Acting, By-Laws. The By-Laws shall make provision from time to time for the manner in which the Trustees may take action, including, without limitation, at meetings within or without Massachusetts, including meetings held by means of a conference telephone or other communications equipment, or by written consents, the quorum and notice, if any, that shall be required for any meeting or other action, and the delegation of some or all of the power and authority of the Trustees to any one or more committees which they may appoint from their own number, and terminate, from time to time.
ARTICLE VII
EXPENSES OF THE TRUST
The Trustees shall have the power to reimburse themselves from the Trust property for their expenses and disbursements, to pay reasonable compensation to themselves from the Trust property, and to incur and pay out of the Trust property any other expenses which in the opinion of the Trustees are necessary or incidental to carry out any of the purposes of this Declaration of Trust, or to exercise any of the powers of the Trustees hereunder.
ARTICLE VIII
INVESTMENT ADVISER, UNDERWRITER
AND TRANSFER AGENT
Section 1. Investment Adviser. The Trust may enter into written contracts with one or more persons (which term shall include any firm, corporation, trust or association), to act as investment adviser or investment subadviser to the Trust, and as such to perform such functions as the Trustees may deem reasonable and proper, including, without limitation, investment advisory, management, research, valuation of assets, clerical and administrative functions, under such terms and conditions, and for such compensation, as the Trustees may in their discretion deem advisable.
Upon the termination of any contract with Nuveen Institutional Advisory Corp., or any corporation affiliated with John Nuveen & co. Incorporated, acting as investment adviser or manager, the Trustees are hereby required to promptly change the name of the Trust to a name which does not include "Nuveen" or any approximation or abbreviation thereof.
Section 2. Underwriter; Transfer Agent. The Trust may enter into a written contract or contracts with an underwriter or underwriters or distributor or distributors whereby the Trust may either agree to sell Shares to the other party or parties to the contract or appoint such other party or parties its sales agent or agents for such Shares and with such other provisions as the Trustees may deem reasonable and proper, and the Trustees may in their discretion from time to time enter into transfer agency and/or shareholder service contract(s), in each case with such terms and conditions, and providing for such compensation, as the Trustees may in their discretion deem advisable.
Section 3. Parties to Contract. Any contract of the character described in Sections 1 and 2 of this Article VIII or in Article X hereof may be entered into with any corporation, firm, partnership, trust or association, including, without limitation, the investment adviser, any investment subadviser or an affiliate of the investment adviser or investment subadviser, although one or more of the Trustees or officers of the Trust may be an officer, director, trustee, shareholder, or member of such other party to the contract, or otherwise interested in such contract and no such contract shall be invalidated or rendered voidable by reason of the existence of any such relationship, nor shall any person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for any profit realized directly or indirectly therefrom, provided that the contract when entered into was not inconsistent with the provisions of this Article VIII, Article X, or the By-Laws. The same person (including a firm, corporation, partnership, trust or association) may be the other party to contracts entered into pursuant to Sections 1 and 2 above or Article X, and any individual may be financially interested or otherwise affiliated with persons who are parties to any or all of the contracts mentioned in this Section 3.
ARTICLE IX
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote only:
(a) for the election or removal of Trustees as provided in Article V, (b) with
respect to any investment advisory or management contract to the extent required
by the 1940 Act, (c) with respect to any termination of the Trust or a series
thereof to the extent and as provided in this Article IX, Section 1, (d) with
respect to any amendment of this Declaration of
Trust to the extent and as provided in Article XIII, Section 4, (e) with respect to a merger or consolidation of the Trust or any series thereof with any corporation, association, trust or other organization or a reorganization or recapitalization of the Trust or series thereof, or a sale, lease or transfer of all or substantially all of the assets of the Trust or any series thereof (other than in the regular course of the Trust's investment activities) to the extent and as provided in this Article IX, Section 1, (f) to the same extent as the shareholders of a Massachusetts business corporation as to whether or not a court action, proceeding or claim should be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders, and (g) with respect to such additional matters relating to the Trust as may be required by law, the 1940 Act, this Declaration of Trust, the By-Laws of the Trust, or any registration of the Trust with the Commission or any State, or as the Trustees may consider necessary or desirable.
An affirmative vote of the holders of at least sixty-six and two thirds
percent (66-2/3%) of the outstanding Shares of the Trust (or, in the event of
any action set forth below affecting only one or more series or classes of the
Trust, an affirmative vote of the holders of at least sixty-six and two-thirds
percent of the outstanding Shares of such affected series or class) shall be
required to approve, adopt or authorize (i) a merger or consolidation of the
Trust or a series of the Trust with any corporation, association, trust or other
organization or a reorganization or recapitalization of the Trust or a series of
the Trust, (ii) a sale, lease or transfer of all or substantially all of the
assets of the Trust or series of the Trust (other than in the regular course of
the Trust's investment activities), or (iii) a termination of the Trust or a
series of the Trust (other than a termination by the Trustees as provided for in
Section 1 of Article XIII hereof), unless in any case such action is
recommended by the Trustees, in which case the affirmative vote of a majority of
the outstanding voting securities of the Trust or the affected series or class
shall be required. Nothing contained herein shall be construed as requiring
approval of Shareholders for any transaction, whether deemed a merger,
consolidation, reorganization or otherwise whereby the Trust issues Shares in
connection with the acquisition of assets (including those subject to
liabilities) from any other investment company or similar entity).
Section 2. Meetings. Meetings of the Shareholders of the Trust or any one or more series thereof may be called and held from time to time for the purpose of taking action upon any matter requiring the vote or, authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Meetings of the Shareholders shall be held at such place within the United States as shall be fixed by the Trustees, and stated in the notice of the meeting. Meetings of the Shareholders may be called by the Trustees and shall be called by the Trustees upon the written request of Shareholders owning at least one-tenth of the outstanding Shares entitled to vote. Shareholders shall be entitled to at least ten days' written notice of any meeting, except where the meeting is an adjourned meeting and the date, time and place of the meeting were announced at the time of the adjournment.
Section 3. Quorum and Action. (a) The Trustees shall set in the By-Laws the quorum required for the transaction of business by the Shareholders at a meeting, which quorum shall in no event be less than thirty percent (30%) of the Shares entitled to vote at such meeting. If a quorum is present when a duly called or held meeting is convened, the Shareholders present may continue to transact business until adjournment, even though the withdrawal of a number of Shareholders originally present leaves less than the proportion or number otherwise required for a quorum.
(b) The Shareholders shall take action by the affirmative vote of the holders of a majority, except in the case of the election of Trustees which shall only require a plurality, of the Shares present in person or by proxy and entitled to vote at a meeting of Shareholders at which a quorum is present, except as may be otherwise required by any provision of this Declaration of Trust or the By-Laws.
Section 4. Voting. Each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote, except that Shares held in the treasury of the Trust shall not be voted. In the event that there is more than one series of the Shares, Shares shall be voted by individual series on any matter submitted to a vote of the Shareholders of the Trust except as provided in Sections 2(a)(v) and 2(b) of Article IV. There shall be no cumulative voting in the election of Trustees or on any other matter submitted to a vote of the Shareholders. Shares may be voted in person or by proxy. Until Shares are issued, the Trustees may exercise all rights of Shareholders and may take any action required or permitted by law, this Declaration of Trust or the By-Laws of the Trust to be taken by Shareholders.
Section 5. Action by Written Consent in Lieu of Meeting of Shareholders. Any action required or permitted to be taken at a meeting of the Shareholders may be taken without a meeting by written action
signed by all of the Shareholders entitled to vote on that action. The written action is effective when it has been signed by all of those Shareholders, unless a different effective time is provided in the written action.
ARTICLE X
CUSTODIAN
All securities and cash of the Trust shall be held by one or more custodians and subcustodians, each meeting the requirements for a custodian contained in the 1940 Act, or shall otherwise be held in accordance with the 1940 Act.
ARTICLE XI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees may in their sole discretion from time to time declare and pay, or may prescribe and set forth in a duly adopted vote or votes of the Trustees, the bases and time for the declaration and payment of, such dividends and distributions to Shareholders as they may deem necessary or desirable, after providing for actual and accrued expenses and liabilities (including such reserves as the Trustees may establish) determined in accordance with good accounting practices.
Section 2. Redemption of Shares. All shares of the Trust shall be redeemable, at the redemption price determined in the manner set out in this Declaration. The Trust shall redeem the Shares of the Trust or any series or class thereof at the price determined as hereinafter set forth, upon the appropriately verified application of the record holder thereof (or upon such other form of request as the Trustees may determine) at such office or agency as may be designated from time to time for that purpose by the Trustees. The Trustees may from time to time specify additional conditions, not inconsistent with the 1940 Act, regarding the redemption of Shares in the Trust's then effective prospectus under the Securities Act of 1933.
Section 3. Redemption Price. Shares shall be redeemed at their net asset value (less any applicable redemption fee or sales charge) determined as set forth in Section 7 of this Article XI as of such time as the Trustees shall have theretofore prescribed by resolution. In the
absence of such resolution, the redemption price of Shares deposited shall be the net asset value of such Shares next determined as set forth in such Section hereof after receipt of such application.
Section 4. Payment. Payment of the redemption price of Shares of the Trust or any series or class thereof shall be made in cash or in property or partly in cash and partly in property to the Shareholder at such time and in the manner, not inconsistent with the 1940 Act or other applicable laws, as may be specified from time to time in the Trust's then effective prospectus under the Securities Act of 1933.
Section 5. Redemption of Shareholder's Interest. The Trustees, in their sole discretion, may cause the Trust to redeem all of the Shares of the Trust or one or more series of the Trust held by any Shareholder if the value of such Shares held by such Shareholder is less than the minimum amount established from time to time by the Trustees.
Section 6. Suspension of Right of Redemption. Notwithstanding the
foregoing, the Trust may postpone payment of the redemption price and may
suspend the right of the holders of Shares to require the Trust to redeem Shares
(a) during any period when the New York Stock Exchange (the "Exchange") is
closed (other than customary weekend and holiday closings), (b) when trading in
the markets the Trust normally utilizes is restricted, or an emergency exists as
determined by the Commission so that disposal of the Trust's investments or
determination of its net asset value is not reasonably practicable, or (c) for
such other periods as the Commission may by order, rule or otherwise permit.
Section 7. Determination of Net Asset Value and Valuation of Portfolio Assets. The Trustees may in their sole discretion from time to time prescribe and shall set forth in the By-Laws or in a duly adopted vote or votes of the Trustees such bases and times for determining the per Share net asset value of the Shares and the valuation of portfolio assets as they may deem necessary or desirable.
The Trust may suspend the determination of net asset value during any period when it may suspend the right of the holders of Shares to require the Trust to redeem Shares.
ARTICLE XII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Liability. No personal liability for any debt or obligation of the Trust shall attach to any Trustee of the Trust. Without limiting the foregoing, a Trustee shall not be responsible for or liable in any event for any neglect or wrongdoing of any officer, agent, employee, investment adviser, subadviser, principal underwriter or custodian of the Trust, nor shall any Trustee be responsible or liable for the act or omission of any other Trustee. Nothing contained herein shall protect any Trustee against any liability to which such Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
Every note, bond, contract, instrument, certificate, Share or undertaking and every other act or thing whatsoever executed or done by or on behalf of the Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only in or with respect to their or his capacity as Trustees or Trustee and neither such Trustees or Trustee nor the Shareholders shall be personally liable thereon.
Every note, bond, contract, instrument, certificate or undertaking made or issued by the Trustees or by any officers or officer shall give notice that this Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts, shall recite that the same was executed or made by or on behalf of the Trust by them as Trustees or Trustee or as officers or officer and not individually and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, and may contain such further recitals as they or he may deem appropriate, but the omission thereof shall not operate to bind any Trustees or Trustee or officers or officer or Shareholders or Shareholder individually.
All persons extending credit to, contracting with or having any claim against the Trust shall look only to the assets of the Trust for payment under such credit, contract or claim; and neither the Shareholders nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, shall be personally liable therefor.
Section 2. Trustees' Good Faith Action, Expert Advice, No Bond or Surety. The exercise by the Trustees of their powers and discretions thereunder shall be binding upon everyone interested. A Trustee shall be liable only for his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Declaration of Trust and their duties as Trustees hereunder, and shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice. In discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any independent public accountant and (with respect to the subject matter of the contract involved) any officer, partner or responsible employee of any other party to any contract entered into hereunder. The Trustees shall not be required to give any bond as such, nor any surety if a bond is required.
Section 3. Liability of Third Persons Dealing with Trustees. No person dealing with the Trustees shall be bound to make any inquiry concerning the validity of any transaction made or to be made by the Trustees or to see to the application of any payments made or property transferred to the Trust or upon its order.
Section 4. Indemnification. 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.
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 anyone, as such Disinterested Trustee, 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 words "liability" and "expenses" shall include without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.
Section 5. Shareholders. No personal liability for any debt or obligation of the Trust shall attach to any Shareholder or former Shareholder of the Trust. In case any Shareholder or former Shareholder of the Trust shall be held to be personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets of the Trust to be held harmless from and indemnified against all loss and expense arising from such liability; provided, however, there shall be no liability or obligation of the Trust arising hereunder to reimburse any Shareholder for taxes paid by reason of such Shareholder's ownership of any Share or for losses suffered by reason of any changes in value of any Trust assets. The Trust shall, upon request by the Shareholder or former Shareholder, assume the defense of any claim made against the Shareholder for any act or obligation of the Trust and satisfy any judgment thereon.
ARTICLE XIII
MISCELLANEOUS
Section 1. Termination of Trust. Unless terminated as provided herein, the Trust shall continue without limitation of time. The Trust or any series of the Trust may be terminated at any time by the Trustees by written notice to the Shareholders of the Trust, or such Series as the case may be, without a vote of the Shareholders of the Trust, or of such series, or the Trust or any series of the Trust may be terminated by the affirmative vote of the Shareholders in accordance with Section 1 of Article IX hereof.
Upon termination of the Trust or any series thereof, after paying or otherwise providing for all charges, taxes, expenses and liabilities, whether due or accrued or anticipated, as may be determined by the Trustees, the Trust shall, in accordance with such procedures as the Trustees consider appropriate, reduce the remaining assets of the Trust or of the particular series thereof to distributable form in cash or other securities, or any combination thereof, and distribute the proceeds to the holders of the Shares of the Trust or such series in the manner set forth by resolution of the Trustees.
Section 2. Filing of Copies, References, Headings. The original or a copy of this instrument and of each amendment hereto shall be kept in the office of the Trust where it may be inspected by any Shareholder. A copy of this instrument and of each amendment shall be filed by the Trustees with the Secretary of State of the Commonwealth of Massachusetts, as well as any other governmental office where such filing may from time to time be required, provided, however, that the failure to so file will not invalidate this instrument or any properly authorized amendment hereto. Anyone dealing with the Trust may rely on a certificate by an officer or Trustee of the Trust as to whether or not any such amendments have been made and as to any matters in connection with the Trust hereunder, and with the same effect as if it were the original, may rely on a copy certified by an officer or Trustee of the Trust to be a copy of this instrument or of any such amendments. In this instrument or in any such amendment, references to this instrument, and all expressions like "herein," "hereof" and "hereunder," shall be deemed to refer to this instrument as a whole and as amended or affected by any such amendment, and masculine pronouns shall be deemed to include the feminine and the neuter, as the context shall require. Headings are placed herein for convenience of reference only, and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be executed in any number of counterparts, each of which shall be deemed an original.
Section 3. Trustees May Resolve Ambiguities. The Trustees may construe any of the provisions of this Declaration insofar as the same may appear to be ambiguous or inconsistent with any other provisions hereof, and any such construction hereof by the Trustees in good faith shall be conclusive as to the meaning to be given to such provisions.
Section 4. Amendments. Except as otherwise specifically provided in this Declaration of Trust, this Declaration of Trust may be amended at any time by an instrument in writing signed by a majority of the then Trustees with the consent of Shareholders holding more than fifty percent (50%) of Shares entitled to vote except that an amendment which in the determination of the Trustees shall affect the holders of one or more series or classes of Shares but not the holders of all outstanding series or classes shall be authorized by vote of the Shareholders holding a majority of the Shares entitled to vote of each series and class affected and no vote of Shareholders of a series or class not affected shall be required. In addition, notwithstanding any other provision to the contrary contained in this Declaration of Trust, the Trustees may amend this Declaration of Trust without the vote or consent of Shareholders (i) at any time if the Trustees deem it necessary in order for the Trust or any series or class thereby to meet the requirements of applicable Federal or State laws or regulations, or the requirements of the regulated investment company provisions of the Internal Revenue Code, (ii) to designate series or classes or exercise other powers with respect thereto in accordance with Section 1 and 2 or Article IV hereof, (iii) change the name of the Trust or to supply any omission, cure any ambiguity or cure, correct or supplement any defective or inconsistent provision contained herein, or (iv) for any reason at any time before a registration statement under the Securities Act of 1933, as amended, covering the initial public offering of Shares has become effective.
IN WITNESS WHEREOF, the undersigned, being the sole Trustee(s) of the Trust, have executed this instrument as of the date first written above.
/s/ Anthony T. Dean /s/ Timothy R. Schwertfeger - ----------------------------- ------------------------------- Anthony T. Dean, Timothy R. Schwertfeger, as Trustee as Trustee 333 West Wacker Drive 333 West Wacker Drive Chicago, Illinois 60606 Chicago, Illinois 60606 |
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
|
Then personally appeared the above-named person(s) who are known to me to be Trustee(s) of the Trust whose name(s) and signature(s) are affixed to the foregoing Declaration of Trust and who acknowledged the same to be his/her free act and deed, before me this 6th day of May, 1996.
/s/ Olivia Rubio
-------------------------------
Notary Public
My Commission Expires: 2/25/97
--------
|
Exhibit 1(b)
NUVEEN INVESTMENT TRUST
ESTABLISHMENT AND DESIGNATION OF SERIES OF
SHARES OF BENEFICIAL INTEREST
Pursuant to Section 2 of Article IV of the Declaration of Trust dated May __, 1996 (the "Declaration"), of Nuveen Investment Trust, a Massachusetts business trust (the "Trust"), the Trustees of the Trust, this __ day of May, 1996, hereby establish and designate three series of Shares (as defined in the Declaration) (each a "Fund") to have the special and relative rights described below.
1. The following three Funds are established and designated:
Nuveen Select Stock Fund
Nuveen Income and Growth Fund
Nuveen Balanced Fund
2. Each Fund shall be authorized to hold cash, invest in securities, instruments and other property and use investment techniques as from time to time described in the Trust's then currently effective registration statement under the Securities Act of 1933 to the extent pertaining to the offering of Shares of such Fund. Each Share of each Fund shall be redeemable, shall be entitled to one vote (or fraction thereof in respect of a fractional share) on matters on which Shareholders of that Fund may vote in accordance with the Declaration, shall represent a pro rata beneficial interest in the assets allocated or belonging to such Fund, and shall be entitled to receive its pro rata share of the net assets of such Fund upon liquidation of such Fund, all as provided in Article IV, Sections 2 and 5 of the Declaration. The proceeds of the sale of Shares of each Fund, together with any income and gain thereon, less any diminution or expenses thereof, shall irrevocably belong to such Fund, unless otherwise required by law.
3. Shareholders of each Fund shall vote either separately as a class on any matter to the extent required by, and any matter shall be deemed to have been effectively acted upon with respect to such Fund as provided in, Rule 18f- 2, as from time to time in effect, under the Investment Company Act of 1940, as amended, or any successor rules, and by the Declaration.
4. The assets and liabilities of the Trust shall be allocated among each Fund as set forth in Article IV, Section 5 of the Declaration.
5. The designation of the three Funds hereby shall not impair the power of the Trustees from time to time to designate additional series of Shares of the Trust.
6. Subject to the applicable provisions of the 1940 Act and the provisions of Article IV, Sections 2 and 5 of the Declaration, the Trustees shall have the right at any time and from time to time to reallocate assets and expenses or to change the designation of each Fund now or hereafter created, or to otherwise change the special relative rights of each Fund designated hereby without any action or consent of the Shareholders.
IN WITNESS WHEREOF, the undersigned, being the sole Trustee(s) of the Trust, have executed this instrument as of this ___ day of May, 1996.
- ---------------- ------------------------
Anthony T. Dean, Timothy R. Schwertfeger,
as Trustee as Trustee
333 West Wacker Drive 333 West Wacker Drive
Chicago, Illinois 60606 Chicago, Illinois 60606
STATE OF ILLINOlS )
) SS.
COUNTY OF COOK )
|
Then personally appeared the above-named person(s) who are known to me to be Trustee(s) of the Trust whose name(s) and signature(s) are affixed to the foregoing Declaration of Trust and who acknowledged the same to be his/her free act and deed, before me this ____ day of _____________, 1996.
.....................................
Notary Public
My Commission Expires: ..............
EXHIBIT 1(b)
NUVEEN INVESTMENT TRUST
ESTABLISHMENT AND DESIGNATION OF CLASSES
The undersigned, being the sole Trustees of Nuveen Investment Trust, a Massachusetts business trust (the "Trust"), acting pursuant to Sections 1 and 2 of Article IV of the Declaration of Trust dated May __, 1996, (the "Declaration"), do hereby divide the Shares of its series, whether currently existing or created in the future, into four Classes of Shares effective as of the date hereof, as follows:
1. The four Classes of Shares are designated "Class A Shares", "Class B Shares", "Class C Shares" and "Class R Shares".
2. Class A Shares, Class B Shares, Class C Shares and Class R Shares shall be entitled to all the rights and preferences accorded to Shares under the Declaration.
3. The number of Shares of each Class designated hereby shall be unlimited.
4. The purchase price of Class A Shares, Class B Shares, Class C Shares and Class R Shares, the method of determination of the net asset value of Class A Shares, Class B Shares, Class C Shares and Class R Shares, the price, terms and manner of redemption of Class A Shares, Class B Shares, Class C Shares and Class R Shares, any conversion or exchange feature or privilege of the Class A Shares, Class B Shares, Class C Shares and Class R Shares, and the relative dividend rights of the holders of Class A Shares, Class B Shares, Class C Shares and Class R Shares shall be established by the Trustees of the Trust in accordance with the Declaration and shall be set forth in the current prospectus and statement of additional information of the Trust or any series thereof, as amended from time to time, contained in the Trust's registration statement under the Securities Act of 1933, as amended (the "Prospectus").
5. Each of the Class A Shares, Class B Shares, Class C Shares and Class R Shares shall bear the expenses of payments under any distribution and service agreements entered into by or on behalf of the Trust with respect to that Class, and any other expenses that are properly allocated to such Class in accordance with the Investment Company Act of 1940, or any rule or order issued thereunder and applicable to the Trust (the "1940 Act").
6. As to any matter on which shareholders are entitled to vote, Class A Shares, Class B Shares, Class C Shares and Class R Shares of a series shall vote together as a single class; provided however, that notwithstanding the provisions of Section 4 of Article IX of the Declaration to the contrary, (a) as to any matter with respect to which a separate vote of any Class is required by the 1940 Act or is required by a separate agreement applicable to such Class, such requirements as to
a separate vote by the Class shall apply, (b) except as required by (a) above, to the extent that a matter affects more than one Class and the interests of two or more Classes in the matter are not materially different, then the Shares of such Classes whose interests in the matter are not materially different shall vote together as a single Class, but to the extent that a matter affects more than one Class and the interests of a Class in the matter are materially different from that of each other Class, then the Shares of such Class shall vote as a separate class; and (c) except as required by (a) above or as otherwise required by the 1940 Act, as to any matter which does not affect the interests of a particular Class, only the holders of Shares of the one or more affected Classes shall be entitled to vote.
7. The designation of Class A Shares, Class B Shares, Class C Shares and Class R Shares hereby shall not impair the power of the Trustees from time to time to designate additional classes of Shares of the Trust.
8. Subject to the applicable provisions of the 1940 Act, the Trustees may from time to time modify the preferences, voting powers, rights and privileges of any of the Classes designated hereby or redesignate any of the Classes designated hereby without any action or consent of the Shareholders.
IN WITNESS WHEREOF, the undersigned, being the sole Trustee(s) of the Trust, have executed this instrument as of this ___ day of May, 1996.
______________________ _________________________
Anthony T. Dean, Timothy R. Schwertfeger,
as Trustee as Trustee
333 West Wacker Drive 333 West Wacker Drive
Chicago, Illinois 60606 Chicago, Illinois 60606
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
|
Then personally appeared the above-named person(s) who are known to me to be Trustee(s) of the Trust whose name(s) and signature(s) are affixed to the foregoing Declaration of Trust and who acknowledged the same to be his/her free act and deed, before me this ____ day of _____________, 1996.
.........................................
Notary Public
My Commission Expires: ..................
Exhibit 2
BY-LAWS
OF
NUVEEN INVESTMENT TRUST
ARTICLE I
DECLARATION OF TRUST
AND
OFFICES
Section 1.1. Declaration of Trust. These By-Laws shall be subject to the Declaration of Trust, as from time to time in effect (the "Declaration of Trust"), of Nuveen Investment Trust, the Massachusetts business trust established by the Declaration of Trust (the "Trust").
Section 1.2. Other Offices. The Trust may have such other offices and places of business within or without the Commonwealth of Massachusetts as the Board of Trustees shall determine.
ARTICLE II
SHAREHOLDERS
Section 2.1. Place of Meetings. Meetings of the Shareholders may be held at such place or places within or without the Commonwealth of Massachusetts as shall be fixed by the Board of Trustees and stated in the notice of the meeting.
Section 2.2. Regular Meeting. Regular meetings of the Shareholders for the election of Trustees and the transaction of such other business as may properly come before the meeting shall be held on an annual or other less frequent periodic basis at such date and time as the Board of Trustees by resolution shall designate, except as otherwise required by applicable law.
Section 2.3. Special Meeting. Special meetings of the Shareholders for any purpose or purposes may be called by the Chairman of the Board, the President or two or more Trustees, and must be called at the written request stating the purpose or purposes of the meeting, of Shareholders entitled to cast at least 10 percent of all the votes entitled to be cast at the meeting.
Section 2.4. Notice of Meetings. Notice stating the time and place of the meeting and in the case of a special meeting the purpose or purposes thereof and by whom called, shall be delivered to each Shareholder not less than ten nor more than sixty days prior to the meeting, except where the meeting is an adjourned meeting and the date, time and place of the meeting were announced at the time of the adjournment.
Section 2.5. Quorum and Action. (a) The holders of thirty percent (30%) of the voting power of the shares of beneficial interest of the Trust (the "Shares") entitled to vote at a meeting are a quorum for the transaction of business. If a quorum is present when a duly called or held meeting is convened, the Shareholders present may continue to transact business until adjournment, even though the withdrawal of a number of Shareholders originally present leaves less than the proportion or number otherwise required for a quorum.
(b) The Shareholders shall take action by the affirmative vote of the holders of a majority, except in the case of the election of Trustees which shall only require a plurality, of the voting power of the Shares present and entitled to vote at a meeting of Shareholders at which a quorum is present, except as may be otherwise required by the Investment Company Act of 1940, as amended (the "1940 Act"), or the Declaration of Trust.
Section 2.6. Voting. At each meeting of the Shareholders, every holder of Shares then entitled to vote may vote in person or by proxy and shall have one vote for each Share registered in his name.
Section 2.7. Proxy Representation. A Shareholder may cast or authorize the casting of a vote by filing a written appointment of a proxy with an officer of the Trust at or before the meeting at which the appointment is to be effective. The appointment of a proxy is valid for eleven months, unless a longer period is expressly provided in the appointment. No appointment is irrevocable unless the appointment is coupled with an interest in the Shares or in the Trust.
Section 2.8. Adjourned Meetings. Any meeting of Shareholders may be adjourned to a designated time and place by the vote of the holders of a majority of the Shares present and entitled to vote thereat even though less than a quorum is so present without any further notice except by announcement at the meeting. An adjourned meeting may reconvene as designed, and when a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.
ARTICLE III
TRUSTEES
Section 3.1. Qualifications and Number: Vacancies. Each Trustee shall be a natural person. A Trustee need not be a Shareholder, a citizen of the United States, or a resident of the Commonwealth of Massachusetts. The number of Trustees of the Trust, their term and election and the filling of vacancies, shall be as provided in the Declaration of Trust.
Section 3.2. Powers. The business and affairs of the Trust shall be managed under the direction of the Board of Trustees. All powers of the Trust may be exercised by or under the authority of the Board of Trustees, except those conferred on or reserved to the Shareholders by statute, the Declaration of Trust or these By-Laws.
Section 3.3. Investment Policies. It shall be the duty of the Board of Trustees to ensure that the purchase, sale, retention and disposal of portfolio securities and the other investment practices of the Trust are at all times consistent with the investment objectives, policies and restrictions with respect to securities investments and otherwise of the Trust filed from time to time with the Securities and Exchange Commission and as required by the 1940 Act, unless such duty is delegated to an investment adviser pursuant to a written contract, as provided in the Declaration of Trust. The Trustees, however, may delegate the duty of management of the assets of the Trust to an individual or corporate investment adviser or subadviser to act as investment adviser or subadviser pursuant to a written contract.
Section 3.4. Meetings. Regular meetings of the Trustees may be held without notice at such times as the Trustees shall fix. Special meetings of the Trustees may be called by the Chairman of the Board or the President, and shall be called at the written request of two or more Trustees. Unless waived by each Trustee, three days' notice of special meetings shall be given to each Trustee in person, by mail, by telephone, or by telegram or cable, or by any other means that reasonably may be expected to provide similar notice. Notice of special meetings need not state the purpose or purposes thereof. Meetings of the Trustees may be held at any place within or outside the Commonwealth of Massachusetts. A conference among Trustees by any means of communication through which the Trustees may simultaneously hear each other during the conference constitutes a meeting of the Trustees or of a committee of the
Trustees, if the notice requirements have been met (or waived) and if the number of Trustees participating in the conference would be sufficient to constitute a quorum at such meeting. Participation in such meeting by that means constitutes presence in person at the meeting.
Section 3.5. Quorum and Action. A majority of the Trustees currently holding office, or in the case of a meeting of a committee of the Trustees, a majority of the members of such committee, shall constitute a quorum for the trancaction of business at any meeting. If a quorum is present when a duly called or held meeting is convened, the Trustees present may continue to transact business until adjournment, even though the withdrawal of a number of Trustees originally present leaves less than the proportion or number otherwise required for a quorum. At any duly held meeting at which a quorum is present, the affirmative vote of the majority of the Trustees present shall be the act of the Trustees or the committee, as the case may be, on any question, except where the act of a greater number is required by these By-Laws or by the Declaration of Trust.
Section 3.6. Action by Written Consent in Lieu of Meetings of Trustees. An action which is required or permitted to be taken at a meeting of the Trustees or a committee of the Trustees may be taken by written action signed by the number of Trustees that would be required to take the same action at a meeting of the Trustees or committee, as the case may be, at which all Trustees were present. The written action is effective when signed by the required number of Trustees, unless a different effective time is provided in the written action. When written action is taken by less than all Trustees, all Trustees shall be notified immediately of its text and effective date.
Section 3.7. Committees. The Trustees, by resolution adopted by the affirmative vote of a majority of the Trustees, may designate from their members an Executive Committee, an Audit Committee and any other committee or committees, each such committee to consist of two or more Trustees and to have such powers and authority (to the extent permitted by law) as may be provided in such resolution. Any such committee may be terminated at any time by the affirmative vote of a majority of the Trustees.
ARTICLE IV
OFFICERS
Section 4.1. Number and Qualifications. The officers of the Trust shall include a Chairman of the Board, a President, a Controller, one or more Vice Presidents (one of whom may be designated an Executive Vice President), a Treasurer, and a Secretary. Any two or more offices may be held by the same person. Unless otherwise determined by the Trustees, each officer shall be appointed by the Trustees for a term which shall continue until the meeting of the Trustees following the next regular meeting of Shareholders and until his successor shall have been duly elected and qualified, or until his death, or until he shall have resigned or have been removed, as hereinafter provided in these By-Laws. The Trustees may from time to time elect, or delegate to the Chairman of the Board or the President, or both, the power to appoint, such officers (including one or more Assistant Vice Presidents, one or more Assistant Treasurers and one or more Assistant Secretaries) and such agents as may be necessary or desirable for the business of the Trust. Such other officers shall hold office for such terms as may be prescribed by the Trustees or by the appointing authority.
Section 4.2. Resignations. Any officer of the Trust may resign at any time by giving written notice of his resignation to the Trustees, the Chairman of the Board, the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 4.3. Removal. An officer may be removed at any time, with or without cause, by a resolution approved by the affirmative vote of a majority of the Trustees present at a duly convened meeting of the Trustees.
Section 4.4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or any other cause, may be filled for the unexpired portion of the term by the Trustees, or in the manner determined by the Trustees.
Section 4.5. The Chairman of the Board. The Chairman of the Board shall be elected from among the Trustees. He shall be the chief executive officer of the Trust and shall:
(a) have general active management of the business of the Trust;
(b) when present, preside at all meetings of the Trustees and of the Shareholders;
(c) see that all orders and resolutions of the Trustees are carried into effect;
(d) sign and deliver in the name of the Trust any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the Trust, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Declaration of Trust or By-Laws or by the Trustees to some other officer or agent of the Trust; and
(e) maintain records of and, whenever necessary, certify all proceedings of the Trustees and the Shareholders.
The Chairman of the Board shall be authorized to do or cause to be done all things necessary or appropriate, including preparation, execution and filing of any documents, to effectuate the registration from time to time of the Shares of the Trust with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. He shall perform all duties incident to the office of Chairman of the Board and such other duties as from time to time may be assigned to him by the Trustees or by these By-Laws.
Section 4.6. The President. The President shall be the chief operating officer of the Trust and, subject to the Chairman of the Board, he shall have general authority over and general management and control of the business and affairs of the Trust. In general, he shall discharge all duties incident to the office of the chief operating officer of the Trust and such other duties as may be prescribed by the Trustees and the Chairman of the Board from time to time. In the absence of the Chairman of the Board or in the event of his disability, or inability to act or to continue to act, the President shall perform the duties of the Chairman of the Board and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chairman of the Board.
Section 4.7. Executive Vice-President. In the case of the absence or inability to act of the President and the Chairman of the Board, any Executive Vice-President shall perform the duties of the President and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President. Any Executive Vice-President shall perform all duties incident to the office of Executive Vice-President and
such other duties as from time to time may be assigned to him by the Trustees, the President or these By-Laws,
Section 4.8. Vice Presidents. Each Vice-President shall perform all such duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the President.
Section 4.9. Controller. The Controller shall:
(a) keep accurate financial records for the Trust;
(b) render to the Chairman of the Board, the President and the Trustees, whenever requested, an account of all transactions by and of the financial condition of the Trust; and
(c) in general, perform all the duties incident to the office of Controller and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the President.
Section 4.10. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds and securities of the Trust, except those which the Trust has placed in the custody of a bank or trust company pursuant to a written agreement designating such bank: or trust company as custodian of the property of the Trust, as required by Section 6.5 of these By-Laws;
(b) deposit all money, drafts, and checks in the name of and to the credit of the Trust in the banks and depositories designated by the Trustees;
(c) endorse for deposit all notes, checks, and drafts received by the Trust making proper vouchers therefor:
(d) disburse corporate funds and issue checks and drafts in the name of the Trust, as ordered by the Trustees; and
(e) in general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the President.
Section 4.11. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Trustees, the committees of the Trustees and the Shareholders;
(b) see that all notices are duly given in accordance with the provisions of these By-Laws and as required by statute;
(c) be custodian of the records of the Trust;
(d) see that the books, reports, statements, certificates and other documents and records required by statute to be kept and filed are properly kept and filed; and
(e) in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Trustees, the Chairman of the Board or the President.
Section 4.12. Salaries. The salaries of all officers shall be fixed by the Trustees.
ARTICLE V
SHARES
Section 5.1. Share Certificates. Each owner of Shares of the Trust shall be entitled upon request to have a certificate, in such form as shall be approved by the Trustees, representing the number of whole Shares of the Trust owned by him. Certificates representing fractional Shares shall not be issued. The certificates representing whole Shares shall be signed in the name of the Trust by the Chairman of the Board, the President, the Executive Vice President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer (which signatures may be either manual or facsimile, engraved or printed). In case any officer who shall have signed such certificate shall have ceased to be such officer before such certificates shall be issued, they may nevertheless be issued by the Trust with the same effect as if such officer were still in office at the date of their issuance.
Section 5.2. Books and Records; Inspection. The Trust shall keep at its principal executive office, or at another place or places within the United States determined by the Trustees, a share register not more than
one year old, containing the names and addresses of the shareholders and the number of Shares held by each Shareholder. The Trust shall also keep, at its principal executive office, or at another place or places within the United States determined by the Trustees, a record of the dates on which certificates representing Shares were issued.
Section 5.3. Share Transfers. Upon compliance with any provisions restricting the transferability of Shares that may be set forth in the Declaration of Trust, these By-Laws, or any resolution or written agreement in respect thereof, transfers of Shares of the Trust shall be made only on the books of the Trust by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with an officer of the Trust, or with a transfer agent or a registrar and on surrender of any certificate or certificates for such Shares properly endorsed and the payment of all taxes thereon. Except as may be otherwise provided by law or these By-Laws, the person in whose name Shares stand on the books of the Trust shall be deemed the owner thereof for all purposes as regards the Trust; provided that whenever any transfer of Shares shall be made for collateral security, and not absolutely, such fact, if known to an officer of the Trust, shall be so expressed in the entry of transfer.
Section 5.4. Regulations. The Trustees may make such additional rules and regulations, not inconsistent with these By-Laws, as they may deem expedient concerning the issue, certification, transfer and registration of Shares of the Trust. They may appoint, or authorize any officer or officers to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates for Shares to bear the signature or signatures of any of them.
Section 5.5. Lost, Destroyed or Mutilated Certificates. The holder of any certificate representing Shares of the Trust shall immediately notify the Trust of any loss, destruction or mutilation of such certificate, and the Trust may issue a new certificate in the place of any certificate theretofore issued by it which the owner thereof shall allege to have been lost or destroyed or which shall have been mutilated, and the Trustees may, in their discretion, require such owner or his legal representatives to give to the Trust a bond in such sum, limited or unlimited, and in such form and with such surety or sureties as the Trustees in their absolute discretion shall determine, to indemnify the Trust against any claim that may be made against it on account of the alleged loss or destruction of any such certificate, or the issuance of a new certificate. Anything herein to the contrary notwithstanding, the Trustees, in their absolute discretion, may
refuse to issue any such new certificate, except as otherwise required by law.
Section 5.6. Record Date: Certification of Beneficial Owner. (a) The Trustees may fix a date not more than ninety days before the date of a meeting of Shareholders as the date for the determination of the holders of Shares entitled to notice of and entitled to vote at the meeting or any adjournment thereof.
(b) The Trustees may fix a date for determining Shareholders entitled to receive payment of any dividend or distribution or allotment of any rights or entitled to exercise any rights in respect of any change, conversion or exchange of Shares.
(c) In the absence of such fixed record date, (i) the date for determination of Shareholders entitled to notice of and entitled to vote at a meeting of Shareholders shall be the later of the close of business on the day on which notice of the meeting is mailed or the thirtieth day before the meeting, and (ii) the date for determining Shareholders entitled to receive payment of any dividend or distribution or an allotment of any rights or entitled to exercise any rights in respect of any change, conversion or exchange of Shares shall be the close of business on the day on which the resolution of the Trustees is adopted.
(c) A resolution approved by the affirmative vote of a majority of the Trustees present may establish a procedure whereby a Shareholder may certify in writing to the Trust that all or a portion of the Shares registered in the name of the Shareholder are held for the account of one or more beneficial owners. Upon receipt by the Trust of the writing, the persons specified as beneficial owners, rather than the actual Shareholders, are deemed the Shareholders for the purposes specified in the writing.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Fiscal Year. The fiscal year of the Trust shall be as fixed by the Trustees of the Trust.
Section 6.2. Notice and Waiver of Notice. (a) Any notice of a meeting required to be given under these By-Laws to Shareholders or Trustees, or both, may be waived by any such person (i) orally or in writing signed by such person before, at or after the meeting or (ii) by
attendance at the meeting in person or, in the case of a Shareholder, by proxy.
(b) Except as otherwise specifically provided herein, all notices required by these By-Laws shall be printed or written, and shall be delivered either personally, by telecopy, telegraph or cable, or by mail or courier or delivery service, and, if mailed, shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the Shareholder or Trustee at his address as it appears on the records of the Trust.
ARTICLE VII
AMENDMENTS
Section 7.1. These By-Laws may be amended or repealed, or new By-Laws may be adopted, by the Trustees at any meeting thereof or by action of the Trustees by written consent in lieu of a meeting.
Exhibit 99(a)
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above referenced organization, hereby constitutes and appoints ANTHONY T. DEAN, JAMES J. WESOLOWSKI, LARRY W. MARTIN AND GIFFORD R. ZIMMERMAN, and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, for him on his behalf and in his name, place and stead, in any and all capacities, to sign, execute and affix his seal thereto and file one or more Registration Statements on Form N-1A, under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, including any amendment or amendments thereto, with all exhibits, and any and all other documents required to be filed with any regulatory authority, federal or state, relating to the reorganization, without limitation, granting unto said attorneys, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization has hereunto set his hand this 13th of May, 1996.
/s/ Timothy R. Schwertfeger ---------------------------- Timothy R. Schwertfeger |
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
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On this 13th of May, 1996, personally appeared before me, a Notary Public in and for said County and State, the person named above who is known to me to be the person whose name and signature is affixed to the foregoing Power of Attorney and who acknowledged the same to be his voluntary act and deed for the intent and purposes therein set forth.
/s/ Karen L. Healy
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My Commission Expires: 12/30/99
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KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the above
referenced organization, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JAMES J. WESOLOWSKI, LARRY W. MARTIN AND GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him on his behalf and in his name, place and
stead, in any and all capacities, to sign, execute and affix his seal thereto
and file one or more Registration Statements on Form N-1A, under the Securities
Act of 1933, as amended, and the Investment Company Act of 1940, as amended,
including any amendment or amendments thereto, with all exhibits, and any and
all other documents required to be filed with any regulatory authority, federal
or state, relating to the reorganization, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned trustee of the above-referenced organization has hereunto set his hand this 13th of May, 1996.
/s/ Anthony T. Dean -------------------- Anthony T. Dean |
STATE OF ILLINOIS )
)SS
COUNTY OF COOK )
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On this 13th of May, 1996, personally appeared before me, a Notary Public in and for said County and State, the person named above who is known to me to be the person whose name and signature is affixed to the foregoing Power of Attorney and who acknowledged the same to be his voluntary act and deed for the intent and purposes therein set forth.
/s/ Karen L. Healy
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My Commission Expires: 12/30/99
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