SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[X]
Registration No. 333-03715
Pre-Effective Amendment No. 2
--- [X]
Post-Effective Amendment No.
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REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
[X]
Registration No. 811-07619
Amendment No. 2
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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 Eric F. Fess, Esq.
President and Secretary Chapman and Cutler
333 West Wacker Drive 111 West Monroe Street
Chicago, Illinois 60606 Chicago, Illinois 60603
(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 paragraph (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 HAS BEEN PAID.
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 Growth and Income Stock Fund
Prospectus for Nuveen Balanced Stock and Bond Fund
Prospectus for Nuveen Balanced Municipal and Stock 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; Summary Information
about the Fund
3 Condensed Financial Not Applicable
Information
4 General Description of General Information; Additional Information about
Registrant the Fund's Investments
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 Not Applicable
of Fund
Performance
6 Capital Stock and Other General Information; Distributions and Taxes
Securities
7 Purchase of Securities Flexible Purchase Options; 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 Not Applicable
Proceedings
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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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LOGO
NUVEEN
GROWTH AND
INCOME STOCK FUND
PROSPECTUS/AUGUST 1, 1996
NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen offers individual investors a broad range of mutual funds to meet their investment needs:
GROWTH AND INCOME FUNDS
Nuveen Growth and Income Stock Fund
BALANCED FUNDS
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock Fund
NATIONAL TAX-FREE INCOME FUNDS
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
STATE TAX-FREE INCOME FUNDS
Arizona
Nuveen Arizona Tax-Free Value Fund
California
Nuveen California Tax-Free Value Fund
Nuveen California Insured Tax-Free Value Fund
Florida
Nuveen Florida Tax-Free Value Fund
Maryland
Nuveen Maryland Tax-Free Value Fund
Massachusetts
Nuveen Massachusetts Tax-Free Value Fund
Nuveen Massachusetts Insured Tax-Free Value Fund
Michigan
Nuveen Michigan Tax-Free Value Fund
New Jersey
Nuveen New Jersey Tax-Free Value Fund
New York
Nuveen New York Tax-Free Value Fund
Nuveen New York Insured Tax-Free Value Fund
Ohio
Nuveen Ohio Tax-Free Value Fund
Pennsylvania
Nuveen Pennsylvania Tax-Free Value Fund
Virginia
Nuveen Virginia Tax-Free Value Fund
NUVEEN GROWTH AND INCOME STOCK FUND
Prospectus
August 1, 1996
The NUVEEN GROWTH AND INCOME STOCK FUND (the "Fund") is a mutual fund that
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 conditions of normal market
variability, in seeking to enhance returns and to preserve capital, the Fund
may also invest up to 35% of its total assets in cash equivalents and short-
term fixed income securities. This strategy seeks to provide you with higher
returns over time than the Standard & Poor's 500 Stock Index (the "S&P 500")
with an equal or lower level of risk.
The Fund offers you Flexible Purchase Options, which provide the flexibility
to purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial
adviser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "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 August 1, 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 SUMMARY INFORMATION ABOUT THE FUND |
5 INVESTMENT OBJECTIVE 5 HOW THE FUND PURSUES ITS OBJECTIVE 6 PERFORMANCE OF THE PORTFOLIO MANAGER 8 HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU 8 FUND FEATURES AND BENEFITS 11 RISKS AND SPECIAL CONSIDERATIONS 11 WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND? |
12 ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS 17 FLEXIBLE PURCHASE OPTIONS 19 HOW TO BUY FUND SHARES 31 DISTRIBUTION AND SERVICE PLAN 32 HOW TO REDEEM FUND SHARES 36 MANAGEMENT OF THE FUND 38 HOW THE FUND SHOWS PERFORMANCE 39 DISTRIBUTIONS AND TAXES 41 NET ASSET VALUE 42 GENERAL INFORMATION |
SUMMARY OF FUND EXPENSES
The purpose of the tables below 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. An example of how the expenses work is on the next page.
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) 5%(5) 1%(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
(after
reimbursement)(8) .10% .10% .10% .10%
------
------
------
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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. See "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) Certain 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 and third years, 3% during the fourth year, 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 the 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% of the average daily net assets to reimburse Nuveen for costs in connection with the sale of Fund shares. See "Distribution and Service Plan." Long-term holders of 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.
(8) The investment adviser has agreed to waive fees and reimburse expenses through July 31, 1997 in order to prevent Total Expenses (excluding any distribution or service fees and extraordinary expenses) from exceeding .95% of the average daily net asset value of any class of Fund shares. Absent expense reimbursement, "Other Operating Expenses" are estimated to be .25%.
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
----------------------------------------------------------
Class A $64 $89
Class B** $59 $93
Class C*** $20 $67
Class R $10 $30
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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%). If instead
the shareholder had redeemed on the last day of the prior
year, the expenses would have been as follows: 1 year $69 and
3 years $103. See "How to Buy Fund 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. If instead the
shareholder had redeemed on the last day of the first year,
the expenses in the first year would have been $30. See "How
to Buy Fund Shares--Class C Shares."
SUMMARY INFORMATION ABOUT THE FUND
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. The investment objective may not be changed without shareholder approval. There is no assurance that this objective will be realized.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund The Fund invests primarily in a diversified portfolio of
invests large- and mid-cap equities as a source of capital growth.
primarily in The Fund, however, may shift a portion of its investment
large- and portfolio into cash equivalents and short-term securities
mid-cap stocks during adverse markets in order to reduce risk and preserve
capital. This strategy seeks to provide you with higher
returns over time than the S&P 500 with an equal or lower
level of risk. Please see "Additional Information About the
Fund's Investments," starting on page 12 for a more detailed
discussion.
The Fund The Fund's portfolio manager, Institutional Capital
employs a Corporation ("ICAP"), employs a value-oriented approach to
value-oriented select securities for the Fund's investment portfolio. Equity
strategy and securities are initially screened using proprietary valuation
fundamental models on the basis of each security's relative price-
company earnings ratio and earnings stability. ICAP then conducts
research to extensive company research on the securities that pass this
choose initial screen in order to identify those securities with a
equities clear company-specific or thematic catalyst which ICAP
believes will trigger significant price appreciation over a
defined nine to eighteen month period. The most attractive
40-45 securities identified are purchased by ICAP for the
Fund's investment portfolio. ICAP then monitors the
performance of its investments closely; if an investment
underperforms expectations and ICAP's expectations of the
investment's future performance potential no longer meet its
original purchase criteria, ICAP will quickly replace the
security in order to prevent continued underperformance. For
additional information regarding the Fund's portfolio
investments, see "Additional Information About the Fund's
Investments."
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PERFORMANCE OF THE PORTFOLIO MANAGER
The Fund does not have any prior operating history. ICAP, the Fund's portfolio manager, has managed separate private accounts since 1971. The following chart illustrates the growth of a hypothetical $10,000 investment based upon the investment performance of the ICAP Discretionary Equity Composite between June 30, 1976 and June 30, 1996. The ICAP Discretionary Equity Composite represents the composite performance of the managed accounts, presently totalling approximately $2.4 billion, for which ICAP has served as investment adviser and that have substantially the same investment objectives and policies as the Fund. The ICAP Discretionary Equity Composite performance represents past performance and should not be interpreted as indicative of future performance of the Fund.
Growth of a $10,000 Investment
July 1976-July 1996
[Graph Appears Here]
1976 1996
ICAP with Dividends Reinvested $10,000 $154,243
S&P with Dividends Reinvested $10,000 $142,457
Morningstar Growth & Income Index
with Dividends Reinvested $10,000 $122,572
Consumer Price Index (inflation) $10,000 $27,638
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Average Annual Total Returns
ICAP 1 Year 5 Year 10 Year 20 Year
- ----------------------------------------------
Offer Price 15.42% 15.08% 15.26% 14.66%
NAV 21.81% 16.33% 15.88% 14.97%
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THE ABOVE ILLUSTRATION IS NOT INDICATIVE OF THE FUND'S PERFORMANCE.
ICAP's performance results presented above and below 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. The chart above illustrating the growth of a hypothetical
$10,000 investment also assumes payment of the maximum Class A
sales charge of 5.25%. These performance results would be
different for a comparable Class B, C or R investment,
reflecting the different sales charge and ongoing operating
expenses of each respective class. The 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 Morningstar returns represent
the average of the annualized returns with dividends
reinvested of all the funds in Morningstar's Growth and Income
Fund category for the periods measured, but do not include the
effect of any sales charges that an investor will incur by
purchasing the funds comprising the Morningstar Index
directly. All returns and comparisons of returns are
calculated on a quarterly basis. See "How the Fund Shows
Performance" for additional information.
For the 10-year period ending June 30, 1996, the annualized total returns of the ICAP Discretionary Equity Composite exceeded those of the S&P 500 by more than 2% annually with significantly less risk. Over the same investment period, the ICAP Composite's annualized total returns exceeded those of the Morningstar Growth and Income average by more than 4% annually with comparable risk. Only 10 funds in the Morningstar Growth and Income category provided annualized returns over this 10-year period in excess of the S&P 500 and only two funds provided annualized returns in excess of the ICAP Composite. For all 1-, 3-, 5- and 10-year holding periods between June 30, 1976 and June 30, 1996, the ICAP Composite's annualized total returns on average exceeded those of the S&P 500 by 0.46%, 0.67%, 0.74% and 0.76%, respectively, and exceeded those of the Morningstar Growth and Income average by 1.59%, 1.72%, 1.97% and 2.39%, respectively. Of the 511 funds currently in the Morningstar Growth and Income category, there are 473, 291, 199 and 114 funds, respectively, with 1-, 3-, 5- and 10-year performance records.
The track record of the ICAP's Discretionary Equity Composite is particularly strong in adverse markets. Over the past 20 years, there have been four periods over which the S&P 500 declined by more than 10% over consecutive quarters. As illustrated in the table below, in each of these market downturns the ICAP Composite's cumulative performance significantly exceeded that of the S&P 500 as well as the Morningstar Growth and Income average:
MARKET S&P ICAP/S&P ICAP/MS
DOWNTURN ICAP 500 MORNINGSTAR DIFFERENTIAL DIFFERENTIAL
----------------------------------------------------------
01/77-03/78 -1.6% -11.8% -4.9% 10.2% 3.4%
04/81-06/82 1.0% -13.5% -7.8% 14.5% 8.8%
10/87-12/87 -10.1% -22.6% -19.1% 12.5% 9.0%
07/90-09/90 -7.8% -13.8% -13.2% 6.0% 5.4%
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HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are seeking a conservative, value-oriented stock fund
as the core of a balanced investment plan
. you wish to preserve and build wealth through prudent
capital management
. you have a long-term investment horizon
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are unwilling to accept moderate fluctuations in share
price
. you have a short-term investment horizon
FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
$3,000 minimum You can start your investment with a low initial purchase of
initial $3,000 ($1,000 for an Individual Retirement Account) in a
investment particular share class. Additional investments can be made
for as little as $50. Exceptions to these minimums are made
for participants in the Fund's automatic deposit, group
purchase or reinvestment programs. See "How to Buy Fund
Shares" for more details.
FLEXIBLE PURCHASE OPTIONS
Choose from
Class A, B, C The Fund offers four classes of shares--Classes A, B, C and
or R shares R. Each class offers a different combination of sales
charges, ongoing fees, eligibility requirements and other
features. This permits you and your financial adviser to
choose the share class
8
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which best meets your investment needs. You and your adviser
will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
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See "Flexible Purchase Options", "How to Buy Fund Shares" and "How to Redeem Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Exchange Shares of the Fund may be quickly and easily exchanged by
shares at no telephone, without a sales charge, for shares of the same or
charge equivalent class of any other Nuveen Mutual Fund or for
shares of certain Nuveen money market funds.
9
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DIVIDEND REINVESTMENT
Dividends All income dividends or capital gains paid with respect to
automatically each class of shares will be reinvested automatically into
reinvested at additional shares of the same class without a sales charge,
no charge unless you elect to receive them in cash.
Invest INVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
distributions Distributions from any Nuveen Unit Trust may be used to buy
from Nuveen Class A Shares of the Fund without a sales charge.
Unit Trusts at
no charge
AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
The Fund offers a number of options to help you manage
Easy-to-use additions to, and withdrawals from, your account. These
systematic include automatic deposit, direct deposit and payroll
investment and deduction plans for adding to your account on a regular
withdrawal basis. If you need periodic withdrawals, and own shares
options totaling $10,000 or more, you can arrange to have $50 or more
sent directly from your account monthly or quarterly.
ELECTRONIC FUND TRANSFERS
Transfer funds Nuveen's Fund Direct lets you link your Fund account to your
electronically account at a bank or other financial institution. You may use
Fund Direct to transfer money electronically between
accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your
bank account.
TELEPHONE REDEMPTION
Free telephone You may establish free telephone redemption privileges for
redemption your account.
EASY LIQUIDITY
Redemption on You may redeem all or some of your Fund shares on any
any business business day at the then net asset value. Class B and Class C
day 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 upon redemption. See "How to Redeem
Fund Shares".
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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 "Additional Information About the Fund's Investments."
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. 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 ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
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ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
HOW THE FUND SELECTS INVESTMENTS
The Fund As portfolio manager, ICAP selects equity securities on the
employs a basis of its evaluation of each security's relative value in
value-oriented terms of projected relative price/earnings ratios and
strategy and earnings stability. When making investment decisions, ICAP
fundamental develops an economic framework (including an interest rate,
company inflation, and business cycle outlook) and analyzes strategic
research to economic and/or industry themes to identify appropriate
choose investments. ICAP uses a variety of proprietary research
equities techniques and computer models to search for equity
securities believed to possess the best relative value based
on proprietary price/earnings projections and an analysis of
earnings stability. Furthermore, a clear catalyst must exist,
either stock-specific, industry or economic, which ICAP
believes will trigger significant price appreciation within a
definable period. 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 justified by their
potential future performance. Investments that underperform
expectations are reviewed intensively. If the risk/reward
profile of a particular investment becomes unattractive or
the reasons for owning the security no longer appear valid,
the investment typically is sold expeditiously to avoid
continued underperformance.
The Fund may In addition to investments in equity securities, in order to
also invest in preserve capital and to enhance returns, under normal market
short-term conditions the Fund may invest up to 35% of its total assets
fixed-income in cash equivalents and short-term fixed income securities,
securities in and may invest up to 100% of its assets in such instruments
order to as a temporary defensive measure. See "Fixed Income
reduce risk Securities" below. This strategy seeks to provide you with
higher returns than the S&P 500 with an equal or lower level
of risk.
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EQUITY SECURITIES
The Fund Under normal market conditions, the Fund will invest
invests primarily in equity securities of domestic companies with
primarily in market capitalizations of at least $500 million ("Equity
domestic Securities"). Equity Securities include common stocks;
companies with preferred stocks; warrants to purchase common stocks or
capitalizations preferred stocks; securities convertible into common or
of at least preferred stocks, such as convertible bonds and debentures;
$500 million and other securities with equity characteristics. The Fund
will invest at least 65% of its total assets in Equity
Securities which do not include warrants or rights to
purchase common stock.
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. A general description of
ratings may be found in the Statement of Additional
Information.
In addition, the Fund may invest indirectly in equity
securities of foreign issuers through investments in American
Depository Receipts ("ADRs"), described later in this
section.
FIXED-INCOME SECURITIES
The Fund may
invest in The Fund may invest up to 35% of its total assets in cash
fixed-income equivalents and short-term fixed income securities. In
securities addition, when ICAP believes that market conditions warrant,
maturing in the Fund may invest up to 100% of its assets in such
one year or instruments for temporary defensive purposes. Cash
less equivalents and short-term fixed income securities must be
from 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
having a maturity of one year or less. 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,
certificates of deposit and bankers acceptances.
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.
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WHEN-ISSUED SECURITIES
The Fund may In order to lock in a fixed price on a security it intends to
purchase When- purchase, the Fund may invest without limitation in
Issued securities purchased on a when-issued or delayed delivery
Securities 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. 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.
AMERICAN DEPOSITORY RECEIPTS ("ADRs")
The Fund may ADRs are receipts typically issued by a U.S. bank or trust
invest up to company evidencing ownership of the underlying foreign
20% of its security and denominated in U.S. dollars. The Fund may invest
assets in up to 20% of its net assets in ADRs or other instruments
foreign denominated in U.S. dollars that permit indirect investment
securities in foreign securities. 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 in
addition to the usual risks inherent in domestic investments,
including currency risks. The value of a foreign security in
U.S. dollars 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. 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 investments
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
14
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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 "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, in addition to 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 15% 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
15
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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 TURNOVER
The Fund anticipates that its annual portfolio turnover rate
will be between 100% and 125% under normal market conditions,
and will generally not exceed 150%. A turnover rate of 100%
would occur, for example, if the Fund sold and replaced
securities valued at 100% of its net assets within one year.
In the event the Fund were to have a turnover rate of 100% or
more in any year, it would result in the payment by the Fund
of increased brokerage costs and could result in the payment
by shareholders of increased taxes on realized investment
gains.
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund The Fund will not invest more than 5% of its net assets in
employs other any one of the following types of investments: warrants;
restrictions unseasoned companies; and transactions in short sales against
to protect the box. In addition, the Fund has adopted several
shareholders 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 the value of
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 PURCHASE OPTIONS
The Fund The Fund has adopted Flexible Purchase Options that offer you offers various four alternative classes of Fund shares (Classes A, B, C and methods of R), each with a different combination of sales charges, purchasing ongoing fees, eligibility requirements, and other features. shares which The Fund's Flexible Purchase Options are designed to permit are designed you and your financial adviser to choose the method of to meet your purchasing shares that you believe is most beneficial given individual the amount of your investment, any current holdings of Fund investment shares, the length of time you expect to hold your investment needs and and other relevant circumstances. A summary of the four |
preferences classes of Fund shares is set 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 in order to limit
the distribution fees you pay over the life of your
investment. 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
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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 on page 20 under
"How the Class A Sales Charge 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, any current
holdings of Fund shares, 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 fees, and each class has
exclusive voting rights with respect to any distribution or
service plan applicable to its shares. In addition, 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 up-front 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. Furthermore, Nuveen may
from time to time provide additional promotional support and
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
Unit Trusts during specified time periods. Promotional
support may include providing sales literature to and holding
informational or educational programs for the benefit of such
Authorized Dealers' representatives,
18
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seminars for the public, and advertising and sales campaigns.
Nuveen may reimburse a participating 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.
Such reimbursement will be based on the number of its
financial advisers who have sold Nuveen Fund shares and
Nuveen Unit Trust units during the prior calendar year
according to an established schedule. Any such support or
reimbursement would be provided by Nuveen out of its own
assets, and not out of the assets of the Funds, and will not
change the price an investor pays for shares or the amount
that a Fund will receive from such a sale. 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 Class A Sales Charge May Be Reduced or
charge Waived." Class A Shares are also subject to an annual service
fee of .25%. See "Flexible Purchase Options" and
"Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as
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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 Purchase
Options-- Dealer Incentives" on page 18 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
purchases of Class A Share purchases of $1 million or more are sold at net
$1 million or asset value without an up-front sales charge. Nuveen pays
more at net Authorized Dealers of record on such Class A Share purchases
asset value a sales commission equal to the sum of 1.00% of the first
are subject to $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
a CDSC of purchases over $5.0 million. If such shares are redeemed
within 18 months of purchase, a 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 CLASS A 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 Unit Trusts;
. 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 Unit Trust, 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 need to notify Nuveen or SSI of any cumulative
discount level you have achieved at the time you purchase
your shares.
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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 need to
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, to purchase over the next 13 months a stated total
amount of Class A Shares that would qualify you for a reduced
sales charge shown above. You may count shares of 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 over that
period. You cannot count Class A Shares that you purchase
without a sales charge through investment of distributions
from a Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise,
towards completion of your Letter of Intent program.
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.
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You or your financial adviser need to notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
Investment of You may purchase Class A Shares without an up-front sales
Nuveen Unit charge if you are investing distributions from a Nuveen Unit
Trust Trust. There is no initial or subsequent minimum investment
Distributions requirement for such 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
$3,000. 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 SSI toll-free at
800-621-7227. See the Statement of Additional Information for
more complete information about "qualified groups" and group
purchase programs.
Reinvestment
of Redemption You may also purchase Class A Shares at net asset value
Proceeds from without a sales charge if the purchase takes place through an
Unaffiliated Authorized Dealer and represents the reinvestment of the
Funds proceeds of the redemption of shares of one or more
registered investment companies not affiliated with Nuveen.
You need to provide appropriate documentation that the
redemption occurred not more than 360 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 upon the redemption of the
shares of the other investment company.
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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; investors purchasing on a
periodic, asset-based fee or no transaction fee basis through
a broker-dealer sponsored mutual fund purchase program; 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 need to 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 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.
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
net asset an initial sales charge, the full amount of your purchase
value, but are payment will be invested in Class B Shares. Class B Shares
subject to an are subject to an annual distribution fee to compensate
annual Nuveen for its costs in connection with the sale of Class B
distribution shares, and are also subject to an annual service fee to
fee and a CDSC compensate Authorized Dealers for providing you with ongoing
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 Purchase Options" 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
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forth below:
YEARS SINCE
PURCHASE CDSC
------------------------------------------------------
0-1 5%
1-2 4%
2-3 4%
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. The purpose of the conversion is
convert to to limit the distribution fees you pay over the life of your
Class A Shares investment. All conversions will be done at net asset value
eight years without the imposition of any sales load, fee, or other
after purchase charge, so that the value of each shareholder's account
immediately before conversion will be the same as the 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
24
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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.
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
net asset annual distribution fee to compensate Nuveen for its costs in
value, but are connection with the sale of Class C Shares. Class C Shares
subject to an are also subject to an annual service fee of .25% to
annual compensate Authorized Dealers for providing you with ongoing
distribution financial advice and other account services. Nuveen
fee and a CDSC compensates Authorized Dealers for sales of Class C Shares at
if redeemed the time of the sale at a rate of 1% of the amount of Class C
within 12 Shares purchased, which represents a sales commission of .75%
months of plus an advance on the first year's annual service fee of
purchase .25%. See "Flexible Purchase Options" 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 an initial purchase of $1 million or more
are offered at of Fund shares in a single transaction, you may purchase
net asset Class R shares at a public offering price equal to the
value only applicable net asset value per share without any up-front
under limited sales charge or ongoing distribution or service fees. You
circumstances also may purchase Class R Shares subject only to the Fund's
or to minimum investment requirement of $3,000 if you are within
specified the following specified categories of investors who are
classes of eligible to purchase Class A Shares at net asset value
investors without an up-front sales charge: officers, trustees and
retired trustees of the Trust; bona fide, full-time and
retired employees of Nuveen or
25
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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; bank or broker-affiliated
trust departments; investors purchasing on a periodic fee,
asset-based fee or no transaction fee basis through a broker-
dealer sponsored mutual fund purchase program; 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 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
payment Growth and Income Stock Fund, Class [A], [B], [C], [R],"
methods delivered to the financial adviser through whom the
investment is to be 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 your financial adviser or SSI a check
in the amount of your purchase made payable to "Nuveen Growth
and Income Stock Fund, Class [A], [B], [C], [R]," and
indicating on the check your account number. All payments
need to 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 a class of Fund shares is based on the next calculation of the net asset value for that share class after the order is placed. The net asset value per share of each share class is determined as of the close of trading (normally 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 needs to be for $3,000 or more ($1,000 or more for an Individual Retirement Account). Additional purchases may be in amounts of $50 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 investment, 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.
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 (if eligible) 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.
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
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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.
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 next calculated after reinstatement of the appropriate
class of Fund shares. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption
date also will be reinstated for purposes of calculating a
CDSC. The federal income tax consequences of any capital gain
realized on a redemption will not be affected by
reinstatement, but a capital loss may be disallowed in whole
or in part depending on the timing, the amount of the
reinvestment and the fund from which the redemption occurred.
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 purchasing shares by telephone, investing through an
Automatic Deposit Plan, and sending dividends, distributions,
redemption payments or Automatic Withdrawal Plan payments
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directly to your bank account. Please refer to the Application for details, or call SSI at 800-621-7227 for more information.
Fund Direct privileges may 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.
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.
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 paid to Nuveen 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 redeem your Fund shares at any time for cash at the
net asset value next computed after the redemption
instructions and any required documents and certificates 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 CDSC. However, in the case of Class A purchases of $1 million or more at net asset value, 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.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC. The level 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.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of purchase.
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. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
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
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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 need to 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 need to 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 of the
appropriate share class 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
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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 Unit Trusts who are
investing their Nuveen Unit Trust 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, manages the Fund's business affairs and provides
certain day-to-day administrative services to 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, which has
sponsored or underwritten more than $60 billion of investment
company 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 investment products. 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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All fees and expenses are accrued daily and deducted before payment of dividends to investors. In addition to the fee paid to NIAC, the Fund pays all its other costs and expenses and a portion of the Nuveen Investment Trust's general administrative expenses allocated in proportion to the net assets of each Fund. In order to prevent total operating expenses (excluding any distribution or service fee, and extraordinary expenses) from exceeding .95% of 1% of the average daily net asset value of any class of shares of the Fund for the fiscal year ended July 31, 1997, NIAC has agreed to waive all or a portion of its management fees or reimburse certain expenses of the Fund.
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 is
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designated as equity 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. ICAP currently maintains a staff of 12 investment professionals. 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 positions. 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's 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.
HOW THE FUND SHOWS PERFORMANCE
The Fund may quote its yield or total return in reports to shareholders, sales literature and advertisements. The Fund may also from time to time compare its investment results to various passive indices or other mutual funds with similar investment objectives. Comparative performance information may include data from Lipper Analytical Services, Inc., Morningstar, Inc. and other industry publications. See the Statement of Additional Information for a more detailed discussion.
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.
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 THAT ARE DERIVED FROM NET INVESTMENT INCOME AND NET SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET LONG-TERM CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES. The capital gain holding period for this purpose 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. Long-term capital gain distributions received by individual shareholders are taxed at a maximum rate of 28%. 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 FEDERAL INCOME TAX, 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 same class 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 needs to be received at least 5 days prior to the record date of any dividend or capital gain distribution.
Under certain circumstances, a corporate shareholder may be entitled to a dividends received deduction with respect to such shareholder's taxable dividends which are attributable to dividends received by the Fund on its equity securities.
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. A more detailed summary appears in the Statement of Additional Information. 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
value is The Fund's net asset value per share is determined as of the
calculated close of trading (normally 4:00 p.m. eastern time) on each
daily day the New York Stock Exchange is open for business. The
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 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: custodial,
transfer agent, accounting and legal fees; interest charges;
brokerage commissions; organizational expenses; and
extraordinary expenses.
|
GENERAL INFORMATION
Custodian and
Transfer and The Custodian of the assets of the Fund is The Chase
Shareholder Manhattan Bank ("Chase"), 770 Broadway, New York, New York
Service Agent 10003. Chase also provides certain accounting services 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 6, 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 owning more than 10%
of the outstanding shares of the Fund have the right to call
a special meeting to remove Trustees or for any other
purpose.
Under Massachusetts law applicable to Massachusetts business
trusts, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for its
obligations. However, the Declaration of Trust of the Trust
contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and requires that notice of
this disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Trust or the
Trustees. The 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
42
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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.
43
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PRINCIPAL UNDERWRITER
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
FUND MANAGER
Nuveen Institutional Advisory
Corp.
Subsidiary of John Nuveen & Co.
Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
PORTFOLIO MANAGER
Institutional Capital Corporation
225 West Wacker Drive
Chicago, Illinois 60606
CUSTODIAN
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
TRANSFER AND SHAREHOLDER SERVICES
AGENT
Shareholder Services, Inc.
P.O. Box 5330
Denver, Colorado 80217
800-627-7227
INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FUND
Arthur Andersen LLP
33 West Monroe Street
Chicago, Illinois 60603
EPR-GROWTH 8.96
LOGO
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John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286 RECYCLED PAPER LOGO
LOGO
NUVEEN BALANCED
STOCK AND BOND FUND
PROSPECTUS/AUGUST 1, 1996
NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen offers individual investors a broad range of mutual funds to meet their investment needs:
GROWTH AND INCOME FUNDS
Nuveen Growth and Income Stock Fund
BALANCED FUNDS
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock Fund
NATIONAL TAX-FREE INCOME FUNDS
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
STATE TAX-FREE INCOME FUNDS
Arizona
Nuveen Arizona Tax-Free Value Fund
California
Nuveen California Tax-Free Value Fund
Nuveen California Insured Tax-Free Value Fund
Florida
Nuveen Florida Tax-Free Value Fund
Maryland
Nuveen Maryland Tax-Free Value Fund
Massachusetts
Nuveen Massachusetts Tax-Free Value Fund
Nuveen Massachusetts Insured Tax-Free Value Fund
Michigan
Nuveen Michigan Tax-Free Value Fund
New Jersey
Nuveen New Jersey Tax-Free Value Fund
New York
Nuveen New York Tax-Free Value Fund
Nuveen New York Insured Tax-Free Value Fund
Ohio
Nuveen Ohio Tax-Free Value Fund
Pennsylvania
Nuveen Pennsylvania Tax-Free Value Fund
Virginia
Nuveen Virginia Tax-Free Value Fund
NUVEEN BALANCED STOCK AND BOND FUND
Prospectus
August 1, 1996
The NUVEEN BALANCED STOCK AND BOND FUND (the "Fund") is a mutual fund that
seeks to provide over time an attractive total return from a diversified
portfolio of equity securities, taxable fixed-income securities and cash
equivalents. The Fund emphasizes capital appreciation in favorable market
environments and capital preservation in adverse market environments by
gradually shifting the allocation of the Fund's portfolio between equity
securities, taxable fixed-income securities and cash equivalents, depending
upon the relative risk/reward characteristics of these asset categories, within
defined ranges for each asset category.
The Fund offers you Flexible Purchase Options, which provide the flexibility
to purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial
adviser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "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 August 1, 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 SUMMARY INFORMATION ABOUT THE FUND |
5 INVESTMENT OBJECTIVE 5 HOW THE FUND PURSUES ITS OBJECTIVE 7 PERFORMANCE OF THE PORTFOLIO MANAGER 9 HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU 9 FUND FEATURES AND BENEFITS 11 RISKS AND SPECIAL CONSIDERATIONS 12 WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND? |
13 ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS 19 FLEXIBLE PURCHASE OPTIONS 22 HOW TO BUY FUND SHARES 34 DISTRIBUTION AND SERVICE PLAN 35 HOW TO REDEEM FUND SHARES 39 MANAGEMENT OF THE FUND 42 HOW THE FUND SHOWS PERFORMANCE 43 DISTRIBUTIONS AND TAXES 45 NET ASSET VALUE 46 GENERAL INFORMATION |
SUMMARY OF FUND EXPENSES
The purpose of the tables below 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. An example of how the expenses work is on the next page.
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) 5%(5) 1%(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 (after
reimbursement)(8) .10% .10% .10% .10%
----- ----- ----- ----
Total Expenses 1.10% 1.85% 1.85% .85%
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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. See "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) Certain 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 and third years, 3% during the fourth year, 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 the 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% of the average daily net assets to reimburse Nuveen for costs in connection with the sale of Fund shares. See "Distribution and Service Plan." Long-term holders of 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.
(8) The investment adviser has agreed to waive fees and reimbursement expenses through July 31, 1997 in order to prevent Total Expenses (excluding any distribution or service fees and extraordinary expenses) from exceeding .85% of the average daily net asset value of any class of Fund shares. Absent reimbursement, "Other Operating Expenses" are estimated to be .25%.
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
----------------------------------------------------------
Class A $63 $86
Class B** $58 $90
Class C*** $19 $58
Class R $ 9 $27
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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%). If instead
the shareholder had redeemed on the last day of the prior
year, the expenses would have been as follows: 1 year $68 and
3 years $100. See "How to Buy Fund 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. If instead the
shareholder had redeemed on the last day of the first year,
the expenses in the first year would have been $29. See "How
to Buy Fund Shares--Class C Shares."
SUMMARY INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive total return from a diversified portfolio of equity securities, taxable fixed income securities and cash equivalents by emphasizing capital appreciation in favorable markets and capital preservation in adverse markets. The investment objective may not be changed without shareholder approval. There is no assurance that this objective will be realized.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund The Fund invests in a conservative mix of equities, taxable
invests across bonds and cash equivalents. The Fund will seek capital growth
different primarily through its equity investments. The Fund invests in
asset classes taxable fixed-income securities and cash equivalents in order
to reduce to reduce risk and preserve capital and to provide current
investment income. Please see "Additional Information About the Fund's
risk Investments", starting on page 13 for a more detailed
discussion.
The Fund The Fund's portfolio manager, Institutional Capital
employs a Corporation ("ICAP"), employs a value-oriented approach to
value-oriented select equity securities for the equity portion of the Fund's
strategy and investment portfolio. Equity securities are initially
fundamental screened using proprietary valuation models on the basis of
company each security's relative price-earnings ratio and earnings
research to stability. ICAP then conducts extensive company research on
choose the securities that pass this initial screen in order to
equities identify those securities with a clear company-specific or
thematic catalyst which ICAP believes will trigger
significant price appreciation over a defined nine to
eighteen month period. The most attractive 40-45 securities
identified are purchased by ICAP for the Fund's investment
portfolio. ICAP then monitors the performance of its
investments closely; if an investment underperforms
expectations and ICAP's expectations of the investment's
future performance potential no longer meet its original
purchase criteria, ICAP will quickly replace the security in
order to prevent continued underperformance.
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The Fund may Over time, the Fund may gradually shift the mix of its
shift its investment portfolio in order to emphasize capital
asset mix over appreciation in favorable markets and capital preservation in
time to adverse markets. The Fund may shift its asset mix within the
enhance ranges defined below for each category in response to
returns and changing market conditions, and will rebalance when necessary
reduce risk in order to prevent the portfolio's investment mix from
moving outside these ranges under normal market conditions.
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TARGET INVESTMENT
MIX OVER FULL ALLOWABLE
MARKET CYCLE RANGE
----------------------------------------------
Equity Securities 55% 40-70%
Fixed-Income Securities 40% 25-55%
Cash Equivalents 5% 0-20%
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PERFORMANCE OF THE PORTFOLIO MANAGER
The Fund does not have any prior operating history. ICAP, the Fund's portfolio manager, has managed separate private accounts since 1971. The following chart illustrates the growth of a hypothetical $10,000 investment based upon the investment performance of the ICAP Balanced Composite between June 30, 1976 and June 30, 1996. The ICAP Balanced Composite represents the composite performance of the managed accounts, presently totalling approximately $370 million, for which ICAP has served as investment adviser and that have substantially the same investment objectives and policies as the Fund. The ICAP Balanced Composite performance represents past performance and should not be interpreted as indicative of future performance of the Fund.
Growth of a $10,000 Investment
July 1976 - June 1996
[Chart Appears Here]
1976 1996
ICAP with Dividends Reinvested $10,000 $123,336
Morningstar Balanced Index with Dividends Reinvested $10,000 $106,491
Balanced Index with Dividends Reinvested $10,000 $105,827
Consumer Price Index (inflation) $10,000 $27,638
|
Average Annual Total Returns
ICAP 1 Year 5 Year 10 Year 20 Year - ------------------------------------------------ Offer Price 8.39% 11.59% 13.11% 13.38% NAV 14.40% 12.80% 13.73% 13.69% |
THE ABOVE ILLUSTRATION IS NOT INDICATIVE OF THE FUND'S FUTURE PERFORMANCE.
ICAP's performance results presented above and below 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. The chart above illustrating the growth of a hypothetical $10,000 investment also assumes payment of the maximum Class A sales charge of 5.25%. 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 Balanced Index represents the investment performance of an unmanaged index comprised 60% of Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and 40% of the Lehman Brothers Intermediate Treasury Index (the "Lehman Index"). The Balanced Index returns assume reinvestment of all dividends paid by the stocks and interest paid by the bonds included in the index, but do not include brokerage commissions or other fees an investor would incur by investing in the portfolio of stocks and bonds comprising the index. The Morningstar returns represent the average of the annualized returns with dividends reinvested of all the funds in the Morningstar Balanced Fund category for the periods measured, but do not include the effect of any sales charges that an investor would incur by purchasing the funds comprising the Morningstar Index directly. All returns and comparisons of returns are calculated on a quarterly basis. See "How the Fund Shows Performance" for additional information.
For the 10-year period ending June 30, 1996, the annualized total returns of the ICAP Balanced Composite exceeded those of the Balanced Index by approximately 2% annually. Over the same investment period, the ICAP Composite's annualized total returns exceeded those of the Morningstar Balanced Fund average by more than 3.5% annually. Only 6 funds in the Morningstar Balanced Fund category provided annualized returns over this 10-year period in excess of the Balanced Index, and no fund provided annualized returns in excess of the ICAP Composite. For all 1-, 3-, 5- and 10-year holding periods between June 30, 1976 and June 30, 1996, the ICAP Composite's annualized total returns on average exceeded those of the Balanced Index by 1.42%, 1.44%, 1.52% and 1.74%, respectively, and exceeded those of the Morningstar Balanced Fund average by 1.40%, 1.50%, 1.63% and 2.06%, respectively. Of the 309 funds in the Morningstar Balanced Fund category, there are 293, 160, 83 and 40 funds, respectively, with 1-, 3-, 5- and 10-year performance records.
The track record of the ICAP's Balanced Composite is particularly strong in adverse markets. Over the past 20 years, there have been 4 periods over which the S&P 500 declined by more than 10% over consecutive quarters. As illustrated in the table below, in each of these market downturns the ICAP Composite's cumulative
performance significantly exceeded that of the Balanced Index or the Morningstar Balanced Fund average:
ICAP/BALANCED
MARKET BALANCED INDEX ICAP/MS
DOWNTURN ICAP INDEX MORNINGSTAR DIFFERENTIAL DIFFERENTIAL
------------------------------------------------------------
01/77-03/78 -2.1% -5.8% -0.7% 3.7% -1.4%
04/81-06/82 4.1% -2.7% 0.5% 6.8% 3.6%
10/87-12/87 -9.3% -11.8% -11.1% 2.5% 1.8%
07/90-09/90 -6.8% -7.5% -8.2% 0.7% 1.4%
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HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are seeking the growth potential of stocks but are
concerned about the higher risks of mutual funds investing
only in stocks.
. you are seeking the growth potential of stocks yet also
desire both capital preservation and current income
. you are looking for a balanced approach to achieving your
financial objectives in a single investment
. you have a long-term investment horizon
. you are seeking a balanced mutual fund for use in a tax-
deferred account
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are unwilling to accept some fluctuations in share
price
. you have a short-term investment horizon
FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
$3,000 minimum
initial You can start your investment with a low initial purchase of
investment $3,000 ($1,000 for an Individual Retirement Account) in a
particular share class. Additional investments can be made
for as little as $50. Exceptions to these minimums are made
for
9
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participants in the Fund's automatic deposit, group purchase
or reinvestment programs. See "How to Buy Fund Shares" for
more details.
FLEXIBLE PURCHASE OPTIONS
Choose from The Fund offers four classes of shares--Classes A, B, C and
Class A, B, C R. Each class offers a different combination of sales
or R shares charges, ongoing fees, eligibility requirements and other
features. This permits you and your financial adviser to
choose the share class which best meets your investment
needs. You and your adviser will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
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See "Flexible Purchase Options", "How to Buy Fund Shares" and "How to Redeem Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Exchange Shares of the Fund may be quickly and easily exchanged by
shares at no telephone, without a sales charge, for shares of the same or
charge equivalent class of any other Nuveen Mutual Fund or for
shares of certain Nuveen money market funds.
DIVIDEND REINVESTMENT
Dividends All income dividends or capital gains paid with respect to
automatically each class of shares will be reinvested automatically into
reinvested at additional shares of the same class without a sales charge,
no charge unless you elect to receive them in cash.
INVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
Invest Distributions from any Nuveen Unit Trust may be used to buy
distributions Class A Shares of the Fund without a sales charge.
from Nuveen
Unit Trusts at
no charge
AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
Easy-to-use The Fund offers a number of options to help you manage
systematic additions to, and withdrawals from, your account. These
investment and include automatic deposit, direct deposit and payroll
withdrawal deduction plans for adding to your account on a regular
options basis. If you need periodic withdrawals, and own shares
totaling $10,000 or more, you can arrange to have $50 or more
sent directly from your account monthly or quarterly.
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ELECTRONIC FUND TRANSFERS
Transfer funds Nuveen's Fund Direct lets you link your Fund account to your
electronically account at a bank or other financial institution. You may use
Fund Direct to transfer money electronically between
accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your
bank account.
TELEPHONE REDEMPTION
Free telephone You may establish free telephone redemption privileges for
redemption your account.
EASY LIQUIDITY
Redemption on You may redeem all or some of your Fund shares on any
any business business day at the then net asset value. Class B and Class C
day 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 upon redemption. See "How to Redeem
Fund Shares".
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 "Additional Information About the Fund's
Investments."
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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. 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 ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
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ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
HOW THE FUND DIVERSIFIES ITS INVESTMENT PORTFOLIO
The Fund The Fund's investment portfolio will be invested in a
invests in a diversified portfolio of equity securities, taxable fixed-
conservative income securities and cash equivalents. The Fund's target
mix of stocks, investment mix is 55% equity securities, 40% fixed-income
bonds and cash securities and 5% cash equivalents, reflecting the Fund's
anticipated average allocation of its investment portfolio
over a full market cycle. The Fund may gradually 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.
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TARGET
INVESTMENT ALLOWABLE
MIX RANGE
---------------------------------------
Equity Securities 55% 40-70%
Fixed-Income Securities 40% 25-55%
Cash Equivalents 5% 0-20%
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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.
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.
HOW THE FUND SELECTS INVESTMENTS
As portfolio manager, ICAP selects equity securities on the
The Fund basis of its evaluation of each security's relative value in
employs a terms of projected price-earnings ratios and earnings
value-oriented stability. When making investment decisions, ICAP develops an
strategy and economic framework (including an interest rate, inflation,
fundamental and business cycle outlook) and analyzes strategic economic
company and/or industry themes to identify appropriate investments.
research to ICAP uses a variety of proprietary research techniques and
choose computer
equities
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models to search for equity securities believed to possess
the best relative value based on proprietary price/earnings
projections and an analysis of earnings stability.
Furthermore, a clear catalyst must exist, either stock-
specific, industry or economic, which ICAP believes will
trigger significant price appreciation in a definable period.
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 equity 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 justified by their
potential future performance. Investments that underperform
expectations are reviewed intensively. If the risk/reward
profile of a particular investment becomes unattractive or
the reasons for owning the security no longer appear valid,
the investment typically is sold expeditiously to avoid
continued underperformance.
EQUITY SECURITIES
The Fund Under normal market conditions, the Fund will invest the
invests assets allocated to equity investments primarily in equity
primarily in securities of domestic companies with market capitalizations
domestic of at least $500 million ("Equity Securities"). Equity
companies with Securities include, but are not limited to, common stocks;
capitalizations preferred stocks; warrants to purchase common stocks or
of at least preferred stocks; securities convertible into common or
$500 million preferred stocks, such as convertible bonds and debentures;
and other securities with equity characteristics.
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"). 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. A general description of
ratings may be found in the Statement of Additional
Information.
In addition, the Fund may invest indirectly in equity
securities of foreign issuers through investments in American
Depository Receipts ("ADRs"), described later in this
section.
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FIXED-INCOME SECURITIES AND CASH EQUIVALENTS
The Fund The Fund invests in taxable fixed-income securities and cash
invests in equivalents in order to reduce risk and preserve capital, and
taxable bonds to provide current income.
and cash to
reduce the
risks of
stocks and to
provide income
The Fund will invest the portion of its net assets allocated
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. See the discussion above on bonds rated BBB or Baa.
The Fund will invest the portion of its net assets allocated
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 having 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 D&P or Fitch 2 or higher by
Fitch, and repurchase agreements entered into only with
respect to obligations of the U.S. government, its agencies
or instrumentalities, certificates of deposit and bankers
acceptances.
TEMPORARY INVESTMENTS
The Fund may During certain temporary periods, in order to keep cash on
make temporary hand fully invested or, as a defensive measure in response to
investments prevailing market conditions, the Fund may invest without
from time to limitation in cash equivalents and short-term fixed-income
time securities as described above. See the Statement of
Additional Information under "Investment Policies and
Techniques--Short-Term Taxable Fixed Income Securities" for
additional information.
WHEN-ISSUED SECURITIES
The Fund may In order to lock in a fixed price on a security it intends to
purchase When- purchase, the Fund may invest without limitation in
Issued securities purchased on a when-issued or delayed delivery
Securities 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. 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.
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AMERICAN DEPOSITORY RECEIPTS ("ADRs")
The Fund may ADRs are receipts typically issued by a U.S. bank or trust
invest up to company evidencing ownership of the underlying foreign
20% of its security and denominated in U.S. dollars. The Fund may invest
assets in up to 20% of its net assets in ADRs or other instruments
foreign denominated in U.S. dollars that permit indirect investment
securities in foreign securities. 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 in
addition to the usual risks inherent in domestic investments,
including currency risks. The value of a foreign security in
U.S. dollars 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. 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 investments
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 "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
16
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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, in addition to 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 15% 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 TURNOVER
The Fund anticipates that its annual portfolio turnover rate
will be between 75% and 100% under normal market conditions,
and will generally not exceed 125%. A turnover rate of 100%
would occur, for example, if the Fund sold and replaced
securities valued at 100% of its net assets within one year.
The Fund anticipates that the annual portfolio turnover rate
for the equity portion of the portfolio will be between 100%
and 125% under normal market conditions, and will generally
not exceed 150%.
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OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund The Fund will not invest more than 5% of its net assets in
employs other any one of the following types of investments: warrants;
restrictions unseasoned companies; and transactions in short sales against
to protect the box. In addition the Fund has adopted several
shareholders 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 the value of
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 PURCHASE OPTIONS
The Fund The Fund has adopted Flexible Purchase Options that offers offers various you four alternative classes of Fund shares (Classes A, B, C methods of and R), each with a different combination of sales charges, purchasing ongoing fees, eligibility requirements, and other features. shares which The Fund's Flexible Purchase Options are designed to permit are designed you and your financial adviser to choose the method of to meet your purchasing shares that you believe is most beneficial given individual the amount of your investment, any current holdings of Fund investment shares, the length of time you expect to hold your investment needs and and other relevant circumstances. A summary of the four |
preferences classes of Fund shares is set 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 in order to limit the distribution fees you pay over
the life of your investment. 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,
19
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Class B and Class C Shares are 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 on page 23 under "How the Class A Sales Charge 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, any current
holdings of Fund shares, 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 fees, and each class has
exclusive voting rights with respect to any distribution or
service plan applicable to its shares. In addition, 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 up-front 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. Furthermore, Nuveen may
from time to time provide additional promotional support and
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
Unit Trusts during specified time periods. Promotional
20
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support may include providing sales literature to and holding
informational or educational programs for the benefit of such
Authorized Dealers' representatives, seminars for the public,
and advertising and sales campaigns. Nuveen may reimburse a
participating 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.
Such reimbursement will be based on the number of its
financial advisers who have sold Nuveen Fund shares and
Nuveen Unit Trust units during the prior calendar year
according to an established schedule. Any such support or
reimbursement would be provided by Nuveen out of its own
assets, and not out of the assets of the Funds, and will not
change the price an investor pays for shares or the amount
that a Fund will receive from such a sale. 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 Class A Sales Charge May Be Reduced or
charge Waived." Class A Shares are also subject to an annual service
fee of .25%. See "Flexible Purchase Options" and
"Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as
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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 Purchase
Options
--Dealer Incentives" on page 20 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
purchases of Class A purchases of $1 million or more are sold at net asset
$1 million or value without an up-front sales charge. Nuveen pays
more at net Authorized Dealers of record on such Class A Share purchases
asset value a sales commission equal to the sum of 1.00% of the first
are subject to $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
a CDSC of purchases over $5.0 million. If such shares are redeemed
within 18 months of purchase, a CDSC of 1% of the lower of
the purchase price or the redemption proceeds may be imposed
upon the
22
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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 CLASS A 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 Unit Trusts;
. 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 Unit Trust, 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 need to notify Nuveen or SSI of any cumulative
discount level you have achieved at the time you purchase
your shares.
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 need to
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, to purchase over the next 13 months a stated total
amount of Class A Shares that would qualify you for a reduced
sales charge shown above. You may count shares of 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 over that
period. You cannot count Class A Shares that you purchase
without a sales charge through investment of distributions
from a Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise,
towards completion of your Letter of Intent program.
|
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 need to notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
Investment of You may purchase Class A Shares without an up-front sales
Nuveen Unit charge if you are investing distributions from a Nuveen Unit
Trust Trust. There is no initial or subsequent minimum investment
Distributions requirement for such 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
$3,000. 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 SSI toll-free at
800-621-7227. See the Statement of Additional Information for
more complete information about "qualified groups" and group
purchase programs.
Reinvestment
of Redemption You may also purchase Class A Shares at net asset value
Proceeds from without a sales charge if the purchase takes place through an
Unaffiliated Authorized Dealer and represents the reinvestment of the
Funds proceeds of the redemption of shares of one or more
registered investment companies not affiliated with Nuveen.
You need to provide appropriate documentation that the
redemption occurred not more than 360 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 upon the redemption of the
shares of the 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; investors purchasing on a periodic fee,
asset-based fee or no transaction fee basis through a broker-
dealer sponsored mutual fund purchase program; 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 need to 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 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.
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
net asset an initial sales charge, the full amount of your purchase
value, but are payment will be invested in Class B Shares. Class B Shares
subject to an are subject to an annual distribution fee to compensate
annual Nuveen for its costs in connection with the sale of Class B
distribution shares, and are also subject to an annual service fee to
fee and a CDSC compensate Authorized Dealers for providing you with ongoing
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 Purchase Options" 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 4%
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. The purpose of the conversion is
convert to to limit the distribution fees you pay over the life of your
Class A Shares investment. All conversions will be done at net asset value
eight years without the imposition of any sales load, fee, or other
after purchase charge, so that the value of each shareholder's account
immediately before conversion will be the same as the 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
You may purchase Class C Shares at a public offering price
Class C Shares equal to the applicable net asset value per share without any
may be up-front sales charge. Class C Shares are subject to an
purchased at annual distribution fee to compensate Nuveen for its costs in
net asset connection with the sale of Class C Shares. Class C Shares
value, 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 and a CDSC the sale at a rate of 1% of the amount of Class C Shares
if redeemed purchased, which represents a sales commission of .75% plus
within 12 an advance on the first year's annual service fee of .25%.
months of See "Flexible Purchase Options" and "Distribution and Service
purchase 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 an initial purchase of $1 million or more
are offered at of Fund shares in a single transaction, you may purchase
net asset Class R shares at a public offering price equal to the
value only applicable net asset value per share without any up-front
under limited sales charge or ongoing distribution or service fees. You
circumstances also may purchase Class R Shares subject only to the Fund's
or to minimum investment requirement of $3,000 if you are within
specified the following specified categories of investors who are
classes of eligible to purchase Class A Shares at net asset value
investors without an up-front sales charge: 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; 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; investors purchasing on a
periodic fee, asset based fee or no transaction fee basis
through a broker-dealer sponsored mutual fund purchase
program; 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
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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
payment Balanced Stock and Bond Fund, Class [A], [B], [C], [R],"
methods delivered to the financial adviser through whom the
investment is to be 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 your financial adviser or SSI a check
in the amount of your purchase made payable to "Nuveen
Balanced Stock and Bond Fund, Class [A], [B], [C], [R]," and
indicating on the check your account number. All payments
need to 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 a class of Fund shares is
based on the next calculation of the net asset value for that
share class after the order is placed. The net asset value
per share of each share class is determined as of the close
of trading (normally 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 needs to be for $3,000 or more ($1,000 or more for an
Individual Retirement Account). Additional purchases may be
in amounts of $50 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 investment, 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,
30
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Class B Shares, Class C Shares or Class R Shares (if
eligible) 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.
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 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
31
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or number of exchanges or reject any exchange. Shareholders
would be notified of any such action to the extent required
by law.
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 next calculated after reinstatement of the appropriate
class of Fund shares. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption
date also will be reinstated for purposes of calculating a
CDSC. The federal income tax consequences of any capital gain
realized on a redemption will not be affected by
reinstatement, but a capital loss may be disallowed in whole
or in part depending on the timing, the amount of the
reinvestment and the fund from which the redemption occurred.
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 purchasing shares by telephone, investing through an
Automatic Deposit Plan, and sending dividends, distributions,
redemption payments or Automatic Withdrawal Plan payments
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directly to your bank account. Please refer to the Application for details, or call SSI at 800-621-7227 for more information.
Fund Direct privileges may 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.
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.
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 paid to Nuveen 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 redeem your Fund shares at any time for cash at the
net asset value next computed after the redemption
instructions and any required documents and certificates 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 CDSC. However, in the case of Class A purchases of $1 million or more at net asset value, 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.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC. The level 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.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of purchase.
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. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
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
36
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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 need to 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 need to 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 of the
appropriate share class 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
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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 Unit Trusts who are
investing their Nuveen Unit Trust 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, manages the Fund's business affairs and provides
certain day-to-day administrative services to 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, which has
sponsored or underwritten more than $60 billion of investment
company 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 investment products. 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
|
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%
|
All fees and expenses are accrued daily and deducted before payment of dividends to investors. In addition to the fee paid to NIAC, the Fund pays all of its other costs and expenses and a portion of the Nuveen Investment Trust's general administrative expenses allocated in proportion to the net assets of each Fund. In order to prevent total operating expenses (excluding any distribution or service fees, and extraordinary expenses) from exceeding .85% of the average daily net asset value of any class of shares of the Fund for the fiscal year ended July 31, 1997, NIAC has agreed to waive all or a portion of its management fee or reimburse certain expenses of the Fund.
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 the annual rates as
set forth below, which are determined by reference to the
average daily market value of the equity and fixed-income
assets, respectively, of all Nuveen-sponsored investment
products for which ICAP is designated as portfolio manager,
based on the proportions set forth in the Sub-Advisory
Agreement. For these purposes, the equity management fee is
paid on a specified proportion of the Fund's average daily
net assets equal to the Fund's target investment mix with
respect to Equity Securities and the fixed income management
fee is paid on a specified proportion of the Fund's average
daily net assets equal to the Fund's target investment mix
with respect to the fixed income securities and cash
equivalents.
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ASSETS OF NUVEEN-SPONSORED FIXED-INCOME
INVESTMENT PRODUCTS EQUITY PORTFOLIO PORTFOLIO
MANAGED BY ICAP MANAGEMENT FEE MANAGEMENT FEE
---------------------------------------------------------------
For the first $500 million .35 of 1% .20 of 1%
For the next $500 million .30 of 1% .15 of 1%
For assets over $1 billion .25 of 1% .12 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. ICAP currently maintains a staff of 12 investment professionals. 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. These meetings also provide for the review of ICAP's investment positions. 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's 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.
HOW THE FUND SHOWS PERFORMANCE
The Fund may quote its yield or total return in reports to shareholders, sales literature and advertisements. The Fund may also from time to time compare its investment results to various passive indices or other mutual funds with similar investment objectives. Comparative performance information may include data from Lipper Analytical Services, Inc., Morningstar, Inc. and other industry publications. See the Statement of Additional Information for a more detailed discussion.
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.
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 THAT ARE DERIVED FROM NET INVESTMENT INCOME AND NET SHORT-TERM CAPITAL GAINS ARE TAXABLE AS ORDINARY INCOME, AND DISTRIBUTIONS PAID BY THE FUND FROM NET LONG-TERM CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL GAIN, WHETHER RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES. The capital gain holding period for this purpose 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. Long-term capital gain distributions received by individual shareholders are taxed at a maximum rate of 28%. 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 FEDERAL INCOME TAX, 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 same class 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 needs to be received at least 5 days prior to the record date of any dividend or capital gain distribution.
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.
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. A more detailed summary appears in the Statement of Additional Information. 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
value is The Fund's net asset value per share is determined as of the
calculated close of trading (normally 4:00 p.m. eastern time) on each
daily day the New York Stock Exchange is open for business. The
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 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: custodial,
transfer agent, accounting and legal fees; interest charges;
brokerage commissions; organizational expenses; and
extraordinary expenses.
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GENERAL INFORMATION
Custodian and
Transfer and The Custodian of the assets of the Fund is The Chase
Shareholder Manhattan Bank ("Chase"), 770 Broadway, New York, New York
Service Agent 10003. Chase also provides certain accounting services 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 6, 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 owning 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.
46
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PRINCIPAL UNDERWRITER
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
FUND MANAGER
Nuveen Institutional Advisory
Corp.
Subsidiary of John Nuveen & Co.
Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
PORTFOLIO MANAGER
Institutional Capital Corporation
225 West Wacker Drive
Chicago, Illinois 60606
CUSTODIAN
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
TRANSFER AND SHAREHOLDER SERVICES
AGENT
Shareholder Services, Inc.
P.O. Box 5330
Denver, Colorado 80217
800-627-7227
INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FUND
Arthur Andersen LLP
33 West Monroe Street
Chicago, Illinois 60603
LOGO
EPR-STK-BOND 8.96
LOGO
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John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
[LOGO]
NUVEEN
EQUITY
MUTUAL FUNDS
NUVEEN BALANCED
MUNICIPIAL AND STOCK FUND
PROSPECTUS/AUGUST 1, 1996
NUVEEN FAMILY OF MUTUAL FUNDS
Nuveen offers individual investors a broad range of mutual funds to meet their investment needs:
GROWTH AND INCOME FUNDS
Nuveen Growth and Income Stock Fund
BALANCED FUNDS
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock Fund
NATIONAL TAX-FREE INCOME FUNDS
Nuveen Municipal Bond Fund
Nuveen Insured Municipal Bond Fund
STATE TAX-FREE INCOME FUNDS
Arizona
Nuveen Arizona Tax-Free Value Fund
California
Nuveen California Tax-Free Value Fund
Nuveen California Insured Tax-Free Value Fund
Florida
Nuveen Florida Tax-Free Value Fund
Maryland
Nuveen Maryland Tax-Free Value Fund
Massachusetts
Nuveen Massachusetts Tax-Free Value Fund
Nuveen Massachusetts Insured Tax-Free Value Fund
Michigan
Nuveen Michigan Tax-Free Value Fund
New Jersey
Nuveen New Jersey Tax-Free Value Fund
New York
Nuveen New York Tax-Free Value Fund
Nuveen New York Insured Tax-Free Value Fund
Ohio
Nuveen Ohio Tax-Free Value Fund
Pennsylvania
Nuveen Pennsylvania Tax-Free Value Fund
Virginia
Nuveen Virginia Tax-Free Value Fund
NUVEEN BALANCED MUNICIPAL AND STOCK FUND
Prospectus
August 1, 1996
The NUVEEN BALANCED MUNICIPAL AND STOCK FUND (the "Fund") is a mutual fund
that 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-conscious investment strategy that reduces taxable
distributions and offers a balance between after-tax total returns and capital
preservation.
The Fund offers you Flexible Purchase Options, which provide the flexibility
to purchase Fund shares in the same manner you typically make other mutual fund
investments. You may choose from one of four alternative classes of Fund shares
(Classes A, B, C and R), each with a different combination of sales charges,
ongoing fees, eligibility requirements, and other features. Your financial
adviser will be able to assist you in determining which share class is best for
you. See "Flexible Purchase Options," "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 August 1, 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 SUMMARY INFORMATION ABOUT THE FUND |
5 INVESTMENT OBJECTIVE
5 HOW THE FUND PURSUES ITS OBJECTIVE
7 THE BENEFITS OF BALANCING STOCKS
WITH MUNICIPAL BONDS
8 HOW TO DETERMINE IF THE FUND IS
RIGHT FOR YOU
9 FUND FEATURES AND BENEFITS
10 RISKS AND SPECIAL CONSIDERATIONS
11 WHO IS RESPONSIBLE FOR THE
OPERATION OF THE FUND?
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12 ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS 21 FLEXIBLE PURCHASE OPTIONS 23 HOW TO BUY FUND SHARES 35 DISTRIBUTION AND SERVICE PLAN 36 HOW TO REDEEM FUND SHARES 40 MANAGEMENT OF THE FUND 43 HOW THE FUND SHOWS PERFORMANCE 44 DISTRIBUTIONS AND TAXES 45 TAX MATTERS 48 NET ASSET VALUE 49 GENERAL INFORMATION |
SUMMARY OF FUND EXPENSES
The purpose of the tables below 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. An example of how the
expenses work is on the next page.
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) 5%(5) 1%(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 (af- .10% .10% .10% .10%
ter reimbursement)(8)
---- ---- ---- ----
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. See "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) Certain 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 and third years, 3% during the fourth year, 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 the 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% of the average daily net assets to reimburse Nuveen for costs in connection with the sale of Fund shares. See "Distribution and Service Plan." Long-term holders of 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.
(8) The investment adviser has agreed to waive fees and reimburse expenses through July 31, 1997 in order to prevent Total Expenses (excluding any distribution or service fees and extraordinary expenses) from exceeding .85% of the average daily net asset value of any class of Fund shares. Absent reimbursement, "Other Operating Expenses" are estimated to be .25%.
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
-------------------------------
Class A $63 $86
Class B** $58 $90
Class C*** $19 $58
Class R $ 9 $27
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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%). If instead
the shareholder had redeemed on the last day of the prior
year, the expenses would have been as follows: 1 year $68 and
3 years $100. See "How to Buy Fund 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. If instead the
shareholder had redeemed on the last day of the first year,
the expenses in the first year would have been $29. See "How
to Buy Fund Shares--Class C Shares."
SUMMARY INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
The Fund seeks to provide over time an attractive after-tax total return through a combination of capital appreciation and federally tax-exempt income and capital preservation in adverse markets. The investment objective may not be changed without shareholder approval. There is no assurance that this objective will be realized.
HOW THE FUND PURSUES ITS OBJECTIVE
The Fund
invests across The Fund invests in a conservative mix of equities and tax-
different exempt securities. The Fund will seek capital growth
asset classes primarily through its equity investments. The Fund invests in
to reduce tax-exempt securities in order to reduce risk and preserve
investment capital, and to provide monthly current income exempt from
risk regular federal income tax. Dividends earned on the Fund's
equity investments are distributed annually and are taxable
as ordinary income. Please see "Additional Information About
the Fund's Investments," starting on page 12 for a more
detailed discussion.
The Fund The Fund's equity portfolio manager, Institutional Capital
employs a Corporation ("ICAP"), pursues a value-oriented approach to
value-oriented select equity securities for the equity portion of the Fund's
strategy and investment portfolio. Equity securities are initially
fundamental screened using proprietary valuation models on the basis of
company each security's relative price-earnings ratio and earnings
research to stability. ICAP then conducts extensive company research on
choose the securities that pass this initial screen in order to
equities identify those securities with a clear company-specific or
thematic catalyst which ICAP believes will trigger
significant price appreciation over a defined nine to
eighteen month period. The most attractive 40-45 securities
identified are purchased by ICAP for the Fund's investment
portfolio. ICAP then monitors the performance of its
investments closely; if an investment underperforms
expectations and ICAP's expectations of the investment's
future performance potential no longer meet its original
purchase criteria, ICAP will quickly replace the security in
order to prevent continued underperformance.
The Fund's municipal portfolio manager, Nuveen Institutional
Advisory Corp. ("NIAC"), pursues a value-oriented approach to
select municipal securities for the fixed-income portion of
the Fund's investment portfolio. The Fund invests only in
investment-grade quality municipal securities, and
diversifies geographically and across different municipal
sectors in order to further reduce risk. The Fund seeks to
moderate its exposure to interest rates by purchasing
municipal securities having a broad range of effective
maturities in order to create and maintain a diversified
portfolio with intermediate characteristics. In so doing, the
Fund seeks to
5
|
prudently balance over economic cycles the Fund's exposure to
interest rates and its ability to provide stable current
income exempt from regular federal income tax.
NIAC selects municipal securities on the basis of its
evaluation of each security's relative value in terms of
current yield, price, credit quality and future prospects.
When making investment decisions, NIAC utilizes the resources
of Nuveen's award-winning research team of more than 30
professionals dedicated exclusively to following the
municipal markets. On a daily basis, Nuveen's research
analysts prepare credit reviews of individual municipal
securities available for purchase, monitor the continued
creditworthiness of the Fund's current municipal portfolio,
and analyze economic, political and demographic trends
affecting the municipal markets. By emphasizing fundamental
research and continuous monitoring of investments, NIAC seeks
to identify those municipal securities that over time offer
the best value consistent with the Fund's investment
objective.
The Fund Over time, the Fund may gradually shift the mix of its
adjusts its investment portfolio in order to emphasize capital
asset mix over appreciation in favorable markets and capital preservation in
time to adverse markets. The Fund will shift its asset mix within the
enhance ranges defined below for each investment category in response
returns and to changing market conditions, and will rebalance when
reduce risk necessary in order to prevent the portfolio's investment mix
from moving outside these defined ranges under normal market
conditions.
|
TARGET
INVESTMENT MIX ALLOWABLE
ASSET CATEGORY OVER FULL MARKET CYCLE RANGE
-------------------------------------------------
Equity Securities 35% 30%-50%
Municipal Obligations 60% 50%-70%
Cash Equivalents 5% 0%-10%
|
THE BENEFITS OF BALANCING STOCKS WITH MUNICIPAL BONDS
Through a tax-conscious, balanced strategy the Fund seeks to provide the growth potential of stocks with less risk than an all-stock fund, as well as the benefits of stable current income exempt from regular federal income tax. 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.
Balancing Stocks with Municipal Bonds January 1980 - December 1995
Before Tax After Tax
- -------------------------------------------------------------------------------
Average Annual Variability Average Annual Variability
Total Return % of Returns % Total Return % of Returns %
- -------------------------------------------------------------------------------
0.158 0.1481 0.1126 0.1504
- -------------------------------------------------------------------------------
0.155 0.1423 0.1115 0.1445
- -------------------------------------------------------------------------------
0.1518 0.1367 0.1104 0.1389
- -------------------------------------------------------------------------------
0.1487 0.1312 0.1092 0.1334
- -------------------------------------------------------------------------------
0.1454 0.126 0.108 0.1281
- -------------------------------------------------------------------------------
0.1421 0.121 0.1067 0.123
- -------------------------------------------------------------------------------
0.1388 0.1163 0.1054 0.1182
- -------------------------------------------------------------------------------
0.1353 0.1118 0.1041 0.1136
- -------------------------------------------------------------------------------
0.1319 0.1077 0.1028 0.1094
- -------------------------------------------------------------------------------
0.1284 0.104 0.1014 0.1056
- -------------------------------------------------------------------------------
0.0867 0.0964 0.0838 0.0965
- -------------------------------------------------------------------------------
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THE ABOVE ILLUSTRATION IS NOT INDICATIVE OF THE FUND'S FUTURE PERFORMANCE.
Stock returns 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.
HOW TO DETERMINE IF THE FUND IS RIGHT FOR YOU
WHO SHOULD INVEST
The Fund may be a suitable investment if:
. you are a tax-conscious investor seeking to reduce the
impact of taxes on your investment returns
. you are seeking the growth potential of stocks but are
concerned about the higher risks of mutual funds investing
only in stocks
. you are seeking the growth potential of stocks yet also
desire capital preservation and current tax-free income
. you are looking for a balanced approach to achieving your
financial goals in a single investment
. you have a long-term investment horizon
WHO SHOULD NOT INVEST
The Fund may not be a suitable investment if:
. you are looking for a balanced mutual fund for a tax-
deferred account
. you are unwilling to accept some fluctuations in share
price
. you have a short-term investment horizon
FUND FEATURES AND BENEFITS
LOW MINIMUM INVESTMENT
$3,000 minimum You can start your investment with a low initial purchase of
initial $3,000 ($1,000 for an Individual Retirement Account) in a
investment particular share class. Additional investments can be made
for as little as $50. Exceptions to these minimums are made
for participants in the Fund's automatic deposit, group
purchase or reinvestment programs. See "How to Buy Fund
Shares" for more details.
FLEXIBLE PURCHASE OPTIONS
Choose from The Fund offers four classes of shares--Classes A, B, C and
Class A, B, C R. Each class offers a different combination of sales
or R shares charges, ongoing fees, eligibility requirements and other
features. This permits you and your financial adviser to
choose the share class which best meets your investment
needs. You and your adviser will want to consider:
. the amount of your current investment
. current holdings in the Fund
. length of time you expect to hold the shares
. timing and amount of any future Fund investments
. other relevant information
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See "Flexible Purchase Options", "How to Buy Fund Shares" and "How to Redeem Fund Shares" for further discussion of the Fund's flexible purchase options.
EXCHANGE PRIVILEGE
Exchange Shares of the Fund may be quickly and easily exchanged by
shares at no telephone, without a sales charge, for shares of the same or
charge equivalent class of any other Nuveen Mutual Fund or for
shares of certain Nuveen money market funds.
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DIVIDEND REINVESTMENT
Dividends All income dividends or capital gains paid with respect to
automatically each class of shares will be reinvested automatically into
reinvested at additional shares of the same class without a sales charge,
no charge unless you elect to receive them in cash.
INVESTMENT OF NUVEEN UNIT TRUST DISTRIBUTIONS
Invest Distributions from any Nuveen Unit Trust may be used to buy
distributions Class A Shares of the Fund without a sales charge.
from Nuveen
Unit Trusts at
no charge
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AUTOMATIC DEPOSIT AND WITHDRAWAL PLANS
The Fund offers a number of options to help you manage additions to, and withdrawals from, your account. These include automatic deposit, direct deposit and payroll deduction plans for adding to your account on a regular basis. If you need periodic withdrawals, and own shares totaling $10,000 or more, you can arrange to have $50 or more sent directly from your account monthly or quarterly.
Easy-to-use
systematic
investment and
withdrawal
options
ELECTRONIC FUND TRANSFERS
Transfer funds Nuveen's Fund Direct lets you link your Fund account to your
electronically account at a bank or other financial institution. You may use
Fund Direct to transfer money electronically between
accounts, to purchase shares by phone, to invest through an
automatic deposit plan, or to send payments directly to your
bank account.
TELEPHONE REDEMPTION
Free telephone You may establish free telephone redemption privileges for
redemption your account.
EASY LIQUIDITY
Redemption on You may redeem all or some of your Fund shares on any
any business business day at the then net asset value. Class B and Class C
day 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 upon redemption. See "How to Redeem
Fund Shares".
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
10
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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 "Additional Information About the Fund's
Investments."
WHO IS RESPONSIBLE FOR THE OPERATION OF THE FUND?
The following organizations work together to provide the
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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 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 ("Chase") the Fund's
investments and
provides certain
accounting services
to the Fund
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ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
HOW THE FUND DIVERSIFIES ITS INVESTMENT PORTFOLIO
The Fund
invests in a The Fund's investment portfolio will be invested in a
conservative diversified portfolio of Equity Securities and Municipal
mix of Obligations. The Fund's target investment mix is 60%
municipal Municipal Obligations, 35% Equity Securities and 5% cash
bonds and equivalents, reflecting the Fund's anticipated average
stocks allocation of its investment portfolio over a full market
cycle. The Fund may gradually shift the allocation of the
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 Fund's
investment mix from moving outside defined ranges for each
asset category under normal market conditions. The table
below summarizes the Fund's target investment mix and the
allowable range for each asset category.
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TARGET ALLOWABLE
ASSET CATEGORY INVESTMENT MIX RANGE
-----------------------------------------
Equity Securities 35% 30%-50%
Municipal Obligations 60% 50%-70%
Cash Equivalents 5% 0%-10%
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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.
HOW THE FUND SELECTS INVESTMENTS
The Fund As equity portfolio manager, ICAP selects equity securities
employs a on the basis of its evaluation of each security's relative
value-oriented value in terms of projected relative price-earnings ratios
strategy and and earnings stability. When making investment decisions,
fundamental ICAP develops an economic framework (including an interest
company rate, inflation, and business cycle outlook) and analyzes
research to strategic economic and/or industry themes to identify
choose appropriate investments. ICAP uses a variety of proprietary
equities research techniques and
12
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computer models to search for equity securities believed to
possess the best relative value based on proprietary
price/earnings projections and an analysis of earnings
stability. Furthermore, a clear catalyst must exist, either
stock-specific, industry or economic, which ICAP believes
will trigger significant price appreciation within a
definable period. 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 justified by their
potential future performance. Investments that underperform
expectations are reviewed intensively. If the risk/reward
profile of a particular investment becomes unattractive or
the reasons for owning the security no longer appear valid,
the investment typically is sold expeditiously to avoid
continued underperformance.
The Fund The Fund's municipal portfolio manager, Nuveen Institutional
employs a Advisory Corp. ("NIAC"), pursues a value-oriented approach
value-oriented for selecting municipal securities for the Fund's investment
strategy and portfolio. The Fund invests only in investment-grade quality
fundamental Municipal Obligations, and diversifies geographically and
credit across different municipal sectors in order to further reduce
research to risk. The Fund seeks to moderate its exposure to interest
choose rates by purchasing Municipal Obligations having a range of
municipal effective remaining maturities in order to create and
securities maintain a diversified portfolio with overall performance
characteristics similar to an otherwise comparable portfolio
of intermediate-term municipal securities. In so doing, the
Fund seeks to prudently balance over economic cycles the
Fund's exposure to interest rates and its ability to provide
stable current income exempt from regular federal income tax.
The Fund will invest substantially all (in excess of 80%) of
its assets allocated to municipal investments in a portfolio
of Municipal Obligations with effective remaining maturities
of no more than 15 years. The Fund will actively manage the
effective remaining maturities of the Municipal Obligations
in the Fund's investment portfolio, and will adjust its
holdings of Municipal Obligations in response to prevailing
market conditions in order to preserve the portfolio's
intermediate characteristics and insure that at all times
substantially all of the Municipal Obligations in which the
Fund invests continue to have a remaining effective maturity
of no more than 15 years.
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The Fund's foregoing policy of investing in Municipal
Obligations with effective remaining maturities of no more
than 15 years will not limit the stated or nominal maturities
of the Municipal Obligations in which the Fund invests. The
effective remaining maturity of a Municipal Obligation may be
shorter than its stated maturity as a result of the coupon,
the actual or expected payment schedule, or other terms or
conditions of an issue that cause the security to trade and
therefore have the risk of price fluctuation similar to an
otherwise comparable, but shorter-maturity, security. For
example, a Municipal Obligation with an above-market coupon
having a stated maturity of 25 years and a par call in 12
years will have volatility characteristics similar to an
otherwise comparable 12-year Municipal Obligation; a housing
revenue Municipal Obligation with a stated maturity of 30
years structured to have an expected maturity of five years
will have volatility characteristics similar to a five-year
Municipal Obligation; and a 20-year Municipal Obligation
advance refunded to a premium call in ten years will have
volatility characteristics similar to a ten-year Municipal
Obligation.
NIAC selects municipal securities on the basis of its
evaluation of each security's relative value in terms of
current yield, price, credit quality and future prospects.
When making investment decisions, NIAC utilizes the resources
of Nuveen's award-winning research team of more than 30
professionals dedicated exclusively to following the
municipal markets. On a daily basis, Nuveen's research
analysts prepare credit reviews of individual municipal
securities available for purchase, monitor the continued
creditworthiness of the Fund's current municipal portfolio,
and analyze economic, political and demographic trends
affecting the municipal markets. By emphasizing fundamental
research and continuous monitoring of investments, NIAC seeks
to identify those municipal securities that over time offer
the best value consistent with the Fund's investment
objective.
The Fund As a fundamental policy, the Fund will invest all of its
purchases only assets allocated to municipal investments in Municipal
investment- Obligations that are either (1) rated at the time of purchase
grade quality within the four highest grades (Baa or better by Moody's
Municipal Investors Service ("Moody's") or BBB or better by Standard &
Obligations Poor's ("S&P")), or (2) unrated but 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.
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EQUITY SECURITIES
The Fund Under normal market conditions, the Fund will invest the
invests assets allocated to equity investments primarily in equity
primarily in securities of domestic companies with market capitalizations
domestic of at least $500 million ("Equity Securities"). Equity
companies with Securities include, but are not limited to, common stocks;
capitalizations preferred stocks; warrants to purchase common stocks or
of at least preferred stocks; securities convertible into common or
$500 million. preferred stocks, such as convertible bonds and debentures;
and other securities with equity characteristics.
Convertible bonds and debentures must be rated Baa or higher
by Moody's or BBB or higher by 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. A general
description of ratings may be found in the Statement of
Additional Information.
In addition, the Fund may invest indirectly in equity
securities of foreign issuers through investments in American
Depository Receipts ("ADRs"), described later in this
section.
MUNICIPAL OBLIGATIONS
Municipal Municipal Obligations are debt obligations issued by states,
Obligations cities and local authorities, and certain possessions and
are issued by territories of the United States, to obtain funds for various
municipalities public purposes. These purposes include the construction and
to support maintenance of public facilities such as airports, bridges,
various highways, housing, hospitals, mass transportation, schools,
essential streets and water and sewer works. Other public purposes for
public which Municipal Obligations may be issued include the
purposes refinancing of outstanding obligations and the obtaining of
funds for general operating expenses and for loans to other
public institutions and facilities. Certain industrial
development, private activity and pollution control bonds
also may be included within the term Municipal Obligations if
the interest paid thereon qualifies as exempt from regular
federal income 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.
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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 20% 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" in the Statement of Additional Information for further information about lease obligations.
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 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.
TEMPORARY INVESTMENTS
The Fund may During certain temporary periods, in order to keep cash on
make temporary hand fully invested or as a defensive measure in response to
investments prevailing market conditions, the Fund may invest without
from time to limitation in cash equivalent and short-term fixed income
time 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 Municipal
Obligations maturing in three years or less from the date of
issuance such as tax-exempt notes (including bond
anticipation notes, tax anticipation notes, and revenue
anticipation notes) and municipal commercial paper. Taxable
temporary investments in which the Fund may invest include:
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; certificates of deposit issued by
U.S. banks with assets of at least $1 billion; commercial
paper or corporate
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notes, bonds or debentures with a remaining maturity of one year or less; and repurchase agreements entered into only with respect to obligations of the U.S. government, its agencies or instrumentalities, certificates of deposit and bankers acceptances. See the Statement of Additional Information under "Investment Policies and Techniques--Short- Term Taxable Fixed Income Securities and Short-Term Tax- Exempt Fixed Income Securities" for additional information.
WHEN-ISSUED SECURITIES
The Fund may In order to lock in a fixed price on a security it intends to
purchase When- purchase, the Fund may invest without limitation in
Issued securities purchased on a when-issued or delayed delivery
Securities 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. 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.
AMERICAN DEPOSITORY RECEIPTS ("ADRs")
The Fund may ADRs are receipts typically issued by a U.S. bank or trust
invest up to company evidencing ownership of the underlying foreign
20% of its security and denominated in U.S. dollars. The Fund may invest
assets in up to 20% of its net assets in ADRs or other instruments
foreign denominated in U.S. dollars that permit indirect investment
securities in foreign securities. 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 in
addition to the usual risks inherent in domestic investments,
including currency risks. The value of a foreign security in
U.S. dollars 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. 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 investments
include
17
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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 "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, in addition to 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.
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Illiquid The Fund may invest up to 15% 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 TURNOVER
Under normal market conditions, the Fund expects annual
portfolio turnover for the municipal portion of the portfolio
to be significantly less than 75%, as the Fund will attempt
to achieve its municipal investment objectives by prudent
selection of Municipal Obligations with a view to holding
them for investment. However, the rate of municipal turnover
will not be a limiting factor if it is desirable to sell or
purchase Municipal Obligations.
The Fund anticipates that its annual equity portfolio
turnover rate will be between 100% and 125% under normal
market conditions, and will generally not exceed 150%. A
turnover rate of 100% would occur, for example, if the Fund
sold and replaced securities valued at 100% of its net assets
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
under "How The Fund Diversifies its Investment Portfolio" and
the anticipated portfolio turnover rates set forth above are
made without regard to such a required reallocation of
assets.
OTHER INVESTMENT POLICIES AND RESTRICTIONS
The Fund The Fund will not invest more than 5% of its net assets in
employs other any one of the following types of investments: warrants;
restrictions unseasoned companies; and transactions in short sales against
to protect the box. In addition the Fund has adopted several
shareholders 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
19
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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 the value of
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 PURCHASE OPTIONS
The Fund The Fund has adopted Flexible Purchase Options that offers offers various you four alternative classes of Fund shares (Classes A, B, C methods of and R), each with a different combination of sales charges, purchasing ongoing fees, eligibility requirements, and other features. shares which The Fund's Flexible Purchase Options are designed to permit are designed you and your financial adviser to choose the method of to meet your purchasing shares that you believe is most beneficial given individual the amount of your investment, any current holdings of Fund investment shares, the length of time you expect to hold your investment needs and and other relevant circumstances. A summary of the four |
preferences classes of Fund shares is set 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
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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 in order to limit
the distribution fees you pay over the life of your
investment. 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,
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Class B and Class C Shares are 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 on page 24 under "How the Class A Sales Charge 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, any current
holdings of Fund shares, 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 fees, and each class has
exclusive voting rights with respect to any distribution or
service plan applicable to its shares. In addition, 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 up-front 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. Furthermore, Nuveen may
from time to time provide additional promotional support and
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
Unit Trusts during specified time periods. Promotional
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support may include providing sales literature to and holding
informational or educational programs for the benefit of such
Authorized Dealers' representatives, seminars for the public,
and advertising and sales campaigns. Nuveen may reimburse a
participating 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.
Such reimbursement will be based on the number of its
financial advisers who have sold Nuveen Fund shares and
Nuveen Unit Trust units during the prior calendar year
according to an established schedule. Any such support or
reimbursement would be provided by Nuveen out of its own
assets, and not out of the assets of the Funds, and will not
change the price an investor pays for shares or the amount
that a Fund will receive from such a sale. 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 Class A Sales Charge May Be Reduced or
charge Waived." Class A Shares are also subject to an annual service
fee of .25%. See "Flexible Purchase Options" and
"Distribution and Service Plan."
The up-front sales charge schedule for Class A Shares is as
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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 Purchase
Options--Dealer Incentives" on page 22 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
purchases of Class A purchases of $1 million or more are sold at net asset
$1 million or value without an up-front sales charge. Nuveen pays
more at net Authorized Dealers of record on such Class A Share purchases
asset value a sales commission equal to the sum of 1.00% of the first
are subject to $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
a CDSC of purchases over $5.0 million amount of the purchase. If
such shares are redeemed within 18 months of purchase, a 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 CLASS A 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 Unit Trusts;
. 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 Unit Trust, 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 need to notify Nuveen or SSI of any cumulative
discount level you have achieved at the time you purchase
your shares.
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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 need to
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, to purchase over the next 13 months a stated total
amount of Class A Shares that would qualify you for a reduced
sales charge shown above. You may count shares of 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 over that
period. You cannot count Class A Shares that you purchase
without a sales charge through investment of distributions
from a Nuveen Mutual Fund, a Nuveen Unit Trust or otherwise,
towards completion of your Letter of Intent program.
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.
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You or your financial adviser need to notify Nuveen or SSI
whenever you make a purchase of Fund shares that you wish to
be covered under the Letter of Intent option.
Investment of You may purchase Class A Shares without an up-front sales
Nuveen Unit charge if you are investing distributions from a Nuveen Unit
Trust Trust. There is no initial or subsequent minimum investment
Distributions requirement for such 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
$3,000. 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 SSI toll-free at
800-621-7227. See the Statement of Additional Information for
more complete information about "qualified groups" and group
purchase programs.
Reinvestment
of Redemption You may also purchase Class A Shares at net asset value
Proceeds from without a sales charge if the purchase takes place through an
Unaffiliated Authorized Dealer and represents the reinvestment of the
Funds proceeds of the redemption of shares of one or more
registered investment companies not affiliated with Nuveen.
You need to provide appropriate documentation that the
redemption occurred not more than 360 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 upon the redemption of the
shares of the other investment company.
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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; investors purchasing on a periodic fee,
asset-based fee or no transaction fee basis through a broker-
dealer sponsored mutual fund purchase program; 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 need to 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 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.
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
net asset an initial sales charge, the full amount of your purchase
value, but are payment will be invested in Class B Shares. Class B Shares
subject to an are subject to an annual distribution fee to compensate
annual Nuveen for its costs in connection with the sale of Class B
distribution shares, and are also subject to an annual service fee to
fee and a CDSC compensate Authorized Dealers for providing you with ongoing
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 Purchase Options" 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
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forth below:
YEARS
SINCE
PURCHASE CDSC
------
0-1 5%
1-2 4%
2-3 4%
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. The purpose of the conversion is
convert to to limit the distribution fees you pay over the life of your
Class A Shares investment. All conversions will be done at net asset value
eight years without the imposition of any sales load, fee, or other
after purchase charge, so that the value of each shareholder's account
immediately before conversion will be the same as the 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
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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.
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
net asset annual distribution fee to compensate Nuveen for its costs in
value, but are connection with the sale of Class C Shares. Class C Shares
subject to an are also subject to an annual service fee of .25% to
annual compensate Authorized Dealers for providing you with ongoing
distribution financial advice and other account services. Nuveen
fee and a CDSC compensates Authorized Dealers for sales of Class C Shares at
if redeemed the time of the sale at a rate of 1% of the amount of Class C
within 12 Shares purchased, which represents a sales commission of .75%
months of plus an advance on the first year's annual service fee of
purchase .25%. See "Flexible Purchase Options" 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 an initial purchase of $1 million or more
are offered at of Fund Shares in a single transaction, you may purchase
net asset Class R Shares at a public offering price equal to the
value only applicable net asset value per share without any up-front
under limited sales charge or ongoing distribution or service fees. You
circumstances also may purchase Class R Shares subject only to the Fund's
or to minimum investment requirement of $3,000 if you are within
specified the following specified categories of investors who are
classes of eligible to purchase Class A Shares at net asset value
investors without an up-front sales charge: officers, trustees and
retired trustees of the Fund; bona fide, full-time and
retired employees of Nuveen or
29
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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; investors purchasing on a
periodic fee, asset-based fee or no transaction fee basis
through a broker-dealer sponsored mutual fund purchase
program; 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
payment Balanced Municipal and Stock Fund, Class [A], [B], [C], [R],"
methods delivered to the financial adviser through whom the
investment is to be 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 your financial adviser or SSI a check
in the amount of your purchase made payable to "Nuveen
Balanced Municipal and Stock Fund, Class [A], [B], [C], [R],"
and indicating on the check your account number. All payments
need to 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
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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 a class of Fund shares is
based on the next calculation of the net asset value for that
share class after the order is placed. The net asset value
per share of each share class is determined as of the close
of trading (normally 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 needs to be for $3,000 or more ($1,000 or more for an
Individual Retirement Account). Additional purchases may be
in amounts of $50 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 investment, 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.
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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, Class B Shares,
Class C Shares or Class R Shares (if eligible) 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.
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
32
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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.
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 next calculated after reinstatement of the appropriate
class of Fund shares. If you reinstate shares that were
subject to a CDSC, your holding period as of the redemption
date also will be reinstated for purposes of calculating a
CDSC. The federal income tax consequences of any capital gain
realized on a redemption will not be affected by
reinstatement, but a capital loss may be disallowed in whole
or in part depending on the timing, the amount of the
reinvestment and the fund from which the redemption occurred.
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 purchasing shares by telephone, investing through an
Automatic Deposit Plan, and sending dividends, distributions,
redemption payments or Automatic Withdrawal Plan payments
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directly to your bank account. Please refer to the Application for details, or call SSI at 800-621-7227 for more information.
Fund Direct privileges may 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.
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.
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 paid to Nuveen 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 redeem your Fund shares at any time for cash at the
net asset value next computed after the redemption
instructions and any required documents and certificates 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 CDSC. However, in the case of Class A purchases of $1 million or more at net asset value, 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.
CLASS B SHARES
Class B Shares redeemed within 6 years of purchase may be subject to a CDSC. The level 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.
CLASS C SHARES
Class C Shares are redeemed at net asset value, without any CDSC, except that a CDSC of 1% is imposed upon redemptions of Class C Shares within 12 months of purchase.
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. The CDSC may be waived under certain special circumstances, as described in the Statement of Additional Information.
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
37
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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 need to 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 need to 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 of the
appropriate share class 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
38
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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 Unit Trusts who are
investing their Nuveen Unit Trust 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, manages the Fund's business affairs and provides
certain day-to-day administrative services to the Fund. NIAC
has entered into a Sub-Advisory Agreement with ICAP under
which ICAP manages the Fund's equity investments.
NIAC manages
the Fund's NIAC manages the Fund's municipal investments and is
municipal responsible for the periodic rebalancing of the Fund's
investments investment portfolio in order to achieve the Fund's target
investment mix. Anthony T. Dean, a Trustee and Chairman of
the Board, has general supervisory responsibility for all
investment company assets managed by NIAC. The day to day
management of the Fund's municipal portfolio is the
responsibility of Daniel F. Solender, an Assistant Portfolio
Manager of NIAC since July 1996 and portfolio manager of the
municipal portfolio since the Fund's inception. Mr. Solender
is also an Assistant Portfolio Manager of Nuveen Advisory
Corp., another investment subsidiary of Nuveen. Prior to
joining Nuveen Advisory Corp., he attended the University of
Chicago (from September 1990 to June 1992) where he received
his MBA and worked part-time in Nuveen's research department.
Mr. Solender currently manages nine Nuveen-sponsored
investment companies. 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, which has
sponsored or underwritten more than $60 billion of investment
company 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
40
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in Nuveen investment products. 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:
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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All fees and expenses are accrued daily and deducted before
payment of dividends to investors. In addition to the fee
paid to NIAC, the Fund pays all its other costs and expenses
and a portion of the Nuveen Investment Trust's general
administrative expenses allocated in proportion to the net
assets of each Fund. In order to prevent total operating
expenses (excluding any distribution or service fees and
extraordinary expenses) from exceeding .85 of 1% of the
average daily net asset value of any class of shares of the
Fund for the fiscal year ended July 31, 1997, NIAC has agreed
to waive all or a portion of its management fees or reimburse
certain expenses of the Fund.
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 the equity assets of all Nuveen-
sponsored investment products for which ICAP is designated 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. ICAP currently maintains a staff of 12 investment professionals. 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 positions. 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's 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.
HOW THE FUND SHOWS PERFORMANCE
The Fund may quote its yield or total return in reports to
shareholders, sales literature and advertisements. The Fund
may also from time to time compare its investment results to
various passive indices or other mutual funds with similar
investment objectives. Comparative performance information
may include data from Lipper Analytical Services, Inc.,
Morningstar, Inc. and other industry publications. See the
Statement of Additional Information for a more detailed
discussion.
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.
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 TAXABLE INCOME AND CAPITAL GAIN WILL
BE SUBJECT TO FEDERAL INCOME TAX, 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 same class 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 needs to 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 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. In addition the Fund intends 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.
Exempt-interest dividends are not subject to the regular federal income tax, but may be subject to the federal alternative minimum tax as set forth below. For federal income tax purposes, all dividends paid by the Fund that are derived from taxable net investment income and net short-term capital gains are taxable as ordinary income whether reinvested or received in cash unless you are exempt from taxation or entitled to tax deferral. Distributions paid by the Fund from net long-term capital gains, whether received in cash or reinvested in additional shares, are taxable as long-term capital gain. The capital gain holding period for this purpose 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. Long-term capital gain distributions received by individual shareholders are taxed at a maximum rate of 28%.
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, 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.
Shareholders will be required to disclose on their federal income tax returns the amount of tax-exempt interest earned during the year, including exempt-interest dividends from the Fund.
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. A more detailed summary appears in the Statement of Additional Information. 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
value is The Fund's net asset value per share is determined as of the
calculated close of trading (normally 4:00 p.m. eastern time) on each
daily day the New York Stock Exchange is open for business. The
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 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: custodial,
transfer agent, accounting and legal fees; interest charges;
brokerage commissions; organizational expenses; and
extraordinary expenses.
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GENERAL INFORMATION
Custodian and
Transfer and The Custodian of the assets of the Fund is The Chase
Shareholder Manhattan Bank ("Chase"), 770 Broadway, New York, New York
Service Agent 10003. Chase also provides certain accounting services 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 6, 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 owning 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.
49
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PRINCIPAL UNDERWRITER
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
FUND MANAGER
Nuveen Institutional Advisory
Corp.
Subsidiary of John Nuveen & Co.
Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
EQUITY PORTFOLIO MANAGER
Institutional Capital Corporation
225 West Wacker Drive
Chicago, Illinois 60606
CUSTODIAN
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
TRANSFER AND SHAREHOLDER SERVICES
AGENT
Shareholder Services, Inc.
P.O. Box 5330
Denver, Colorado 80217
800-627-7227
INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FUND
Arthur Andersen LLP
33 West Monroe Street
Chicago, Illinois 60603
LOGO
EPR-MUNI-STK 8.96
LOGO
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John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
Statement of Additional Information
August 1, 1996
Nuveen Investment Trust
333 West Wacker Drive
Chicago, Illinois 60606
NUVEEN GROWTH AND INCOME STOCK FUND
NUVEEN BALANCED STOCK AND BOND FUND
NUVEEN BALANCED MUNICIPAL AND STOCK 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 August 1, 1996.
Table of Contents Page - -------------------------------------------------------------------------- General Information B-2 - -------------------------------------------------------------------------- Investment Policies and Restrictions B-2 - -------------------------------------------------------------------------- Investment Policies and Techniques B-4 - -------------------------------------------------------------------------- Management B-18 - -------------------------------------------------------------------------- Fund Manager and Portfolio Manager B-20 - -------------------------------------------------------------------------- Portfolio Transactions B-21 - -------------------------------------------------------------------------- Net Asset Value B-23 - -------------------------------------------------------------------------- Tax Matters B-23 - -------------------------------------------------------------------------- Performance Information B-28 - -------------------------------------------------------------------------- Additional Information on the Purchase and Redemption of Fund Shares B-31 - -------------------------------------------------------------------------- Distribution and Service Plans B-34 - -------------------------------------------------------------------------- Independent Public Accountants and Custodian B-35 - -------------------------------------------------------------------------- Financial Statements B-36 - -------------------------------------------------------------------------- Report of Independent Public Accountants B-37 - -------------------------------------------------------------------------- Appendix A--Ratings of Investments - -------------------------------------------------------------------------- |
GENERAL INFORMATION
Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund (individually a "Fund" and collec- tively the "Funds") are series of the Nuveen Investment Trust (the "Trust"), an open-end diversified management series investment company. Each series of the Trust represents shares of beneficial interest in a separate portfolio of secu- rities and other assets, with its own objectives and policies. Currently, three series of the Trust are authorized 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, 25% or more 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 Balanced Municipal and Stock Fund, to Municipal Obligations, other than those Municipal Obligations backed only by the assets and revenues of non-gov- ernmental 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 Balanced Municipal and Stock 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 Growth and Income Stock Fund, the Nuveen Balanced Stock and Bond Fund and the Nuveen Balanced Municipal and Stock Fund, and cer- tain 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 Investment 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 at no added cost, and provided that transactions in options, futures contracts, options on futures contracts, 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 Growth and Income Stock Fund, the Nuveen Balanced Stock and Bond Fund and the Nuveen Balanced Municipal and Stock Fund may not invest in illiq- uid securities if, as a result of such investment, more than 15% 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.
INVESTMENT IN MUNICIPAL OBLIGATIONS
Portfolio Investments
Except to the extent the Nuveen Balanced Municipal and Stock Fund invests in
temporary investments as described below, all of the Fund's investments in Mu-
nicipal Obligations will be comprised of tax- exempt Municipal Obligations that
are either (1) 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 (2) unrated but which, in the opinion of the NIAC, have credit characteristics equivalent 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 Municipal 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 interest. Munici- pal 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 Obligations 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 obligations of the same maturity and coupon with different ratings may have the same yield.
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.
The Fund's municipal portfolio manager pursues a value oriented approach for selecting municipal securities by seeking to identify underrated or undervalued Municipal Obligations. Underrated Municipal Obligations are those whose ratings do not, in NIAC's opinion, reflect their true value. Municipal Obligations may be underrated because of the time that has elapsed since their rating was as- signed 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 Municipal Obligations that, in NIAC's opinion, are worth more than the value assigned to them in the marketplace. Municipal Obligations of partic- ular 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 de- cline in the market price of Municipal Obligations of the market sector for reasons that do not apply to the particular Municipal Obligations that are con- sidered undervalued. The Fund's investment in underrated or undervalued Munici- pal Obligations will be based on NIAC's belief that their prices should ulti- mately reflect their true value.
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
Obligation does not constitute a general obligation of the municipality for which the municipality's taxing power is pledged, a Municipal Lease Obligation is ordinarily backed by the municipality's covenant to budget for, appropriate and make the payments due under the Municipal Lease Obligation. However, cer- tain 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 pur- pose 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 de- fault will be limited solely to the repossession of the leased property, with- out 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 investing more than 20% of the assets allocated to investments in Municipal Obligations in Municipal Lease Obligations that contain "non-appro- priation" clauses, and by only investing in those "non-appropriation" Munici- pal Lease Obligations 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 municipality, (2) appropriate covenants will be obtained from the munici- pal obligor prohibiting the substitution or purchase of similar equipment if lease payments are not appropriated, (3) the lease obligor has maintained good market acceptability in the past, and (4) the investment is of a size that will be attractive to institutional investors.
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 taxable. To the extent the Nuveen Balanced Municipal and Stock Fund invests in taxable temporary investments, the Fund will not at such times be in a posi- tion to achieve that portion of its investment objective of seeking federally tax-exempt income. For further information, see "Short-Term Tax-Exempt Fixed Income Securities" and "Short-Term Taxable Fixed Income Securities."
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.
Short-Term Tax-Exempt Fixed Income Securities During certain temporary periods, in order to keep cash on hand fully invest- ed, the Nuveen Balanced Municipal and Stock 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 condi- tions up to 100% of its total assets in such securities. Short-term tax-exempt fixed income securities are defined to include, without limitation, the fol- lowing:
Bond Anticipation Notes (BANs) are usually general 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 obligations or bonds. The ability of an issuer to meet its obli- gations on its BANs is primarily dependent on the issuer's access to the long- term municipal bond market 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.
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.
While the various types of notes described above 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 extent permitted under its investment objective, policies and lim- itations. Such notes may be issued for different purposes and may be secured differently from those mentioned above.
SHORT-TERM INVESTMENTS
Short-Term Taxable Fixed Income Securities The Nuveen Growth and Income Stock Fund may invest up to 35% of its total as- sets and, for temporary defensive purposes up to 100% of its total assets, in cash equivalents and short-term taxable fixed income securities. The Nuveen Balanced Stock and Bond Fund may invest up to 20% of its total assets and, for temporary defensive purposes up to 100% of its total assets, in cash equiva- lents and short-term taxable fixed income securities. For temporary defensive purposes the Nuveen Balanced Municipal and Stock Fund may invest up to 100% of its total assets in cash equivalents and short-term taxable fixed income secu- rities, although the Fund intends to invest in taxable temporary investments only in the event that suitable tax-exempt temporary investments are not avail- able at reasonable prices and yields. Short-term taxable fixed income securi- ties 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 Na- tional Mortgage Association, whose securities are supported by the discretion- ary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and (d) the Student Loan Marketing Association, whose securities are supported only by its credit. While the U.S. government provides financial support to such U.S. government-sponsored agencies or in- strumentalities, 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 instrumen- talities do not guarantee the market value of their securities, and consequent- ly, 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 could 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 For a discussion regarding these instruments, see the above-named section set forth under Investments in Municipal Obligations.
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.The Fund will not enter into futures and options transactions if the sum of the initial margin deposits and premiums paid for unexpired options exceeds 5% of the Fund's total assets. In addition, the Fund will not enter into futures contracts and options transactions if more than 30% of its net assets would be committed to such instruments.
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 se- curities 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 Income Tax Treatment of Options
Certain option transactions have special federal income tax results for 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 contract 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 make 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.
Transaction costs are incurred when a Futures Contract is bought or sold and margin deposits must be maintained. A Futures Contract may be satisfied by de- livery 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 se- curities 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 respect 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 exchanges 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 Con- tract prices have occasionally 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 gives 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 applied 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 require-
ments), the current 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 marked to market dai- ly, and additional assets will be placed in the segregated account whenever the total value of the segregated account falls below the amount due on the under- lying 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 Income 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. In order for each Fund to qualify for federal income tax treatment as a Regulated Investment Company, 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 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 securities 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.
OTHER INVESTMENT POLICIES AND TECHNIQUES
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 Fund will not acquire illiquid securities if, as a result, such securities would comprise more than 15% 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 liquid or illiquid for purposes of this 15% limitation. The Board of Trustees has dele- gated to Institutional Capital Corporation ("ICAP") the day-to-day determina- tion of the illiquidity of any equity or taxable fixed-income security and to Nuveen Institutional Advisory Corp. ("NIAC") as to any municipal security, al- though it has retained oversight and ultimate responsibility for such determi- nations. Although no definitive liquidity criteria 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 institutional private resale mar- ket; the frequency of trades and quotes for the security; the number of dealers willing to purchase or sell the security; and the amount of time normally needed to dispose of the security, the method of soliciting offers and the me- chanics of transfer), (ii) the terms of certain securities or other instruments allowing for the disposition to a third party or the issuer thereof (e.g., cer- tain repurchase obligations and demand instruments), and (iii) other permissi- ble 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 15% of the value of its net assets are invested in illiquid securities, including restricted securities which are not readily marketable, the affected Fund will take such steps as is deemed ad- visable, if any, to protect liquidity.
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 follow-
ing July. Thereafter, if the price of the stock declines to $45, it will real- ize 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 partially 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
corporations. In addition, in many instances, the securities of smaller compa- nies are traded only over-the-counter or on regional securities exchanges, and the frequency and volume of their trading is substantially less than is typical of larger companies. Therefore, the securities of smaller companies may be sub- ject 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.
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 seven, three of whom are "interested persons" (as the term "interested persons" is de- fined in the Investment Company Act of 1940) and four of whom are "disinter- ested persons." 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 persons" of the Trust indicated by an asterisk.
- ----------------------------------------------------------------------------------------------------------
POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------
Anthony T. Dean* 51 Chairman and Trustee President (since July 1996)
and Director, formerly
Executive Vice President,
of The John Nuveen Company
(from March 1992 to July
1996) and of John Nuveen &
Co. Incorporated; Director
(since October 1992) and
President (since July
1996), formerly Executive
Vice President (from May
1994 to July 1996) of
Nuveen Institutional
Advisory Corp. and Nuveen
Advisory Corp.
- ----------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger* 47 President and Trustee Chairman (since July 1996)
and Director, formerly
Executive Vice President,
of The John Nuveen Company
(from March 1992 to July
1996) and of John Nuveen &
Co. Incorporated; Director
(since October 1992) and
Chairman (since July 1996),
formerly Executive Vice
President (from May 1994 to
July 1996) of Nuveen
Institutional Advisory Corp
and Nuveen Advisory Corp.
- ----------------------------------------------------------------------------------------------------------
Robert H. Lyon* 47 Trustee President and a Director of
the ICAP Funds Inc. (since
its inception in December
1994); President, Chief
Investment Officer, and a
Director of ICAP (since
1992) and prior thereto a
Vice President of ICAP.
- ----------------------------------------------------------------------------------------------------------
James E. Bacon 65 Trustee Business consultant;
Director of Lone Star
Industries, Inc. (cement)
(since February 1992) and
Accuhealth, Inc. (home
health care) (since May
1994); retired (since April
1990); previously, Director
and Executive Vice
President of U.S. Trust
Corporation and Trustee of
United States Trust Company
of New York.
- ----------------------------------------------------------------------------------------------------------
William L. Kissick 64 Trustee Professor, School of
Medicine and the Wharton
School of Management and
Chairman, Leonard Davis
Institute of Health
Economics, University of
Pennsylvania.
|
- ------------------------------------------------------------------------------------------------------------
POSITION AND PRINCIPAL OCCUPATIONS
NAME AND ADDRESS AGE OFFICES WITH TRUST DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------
Thomas E. Leafstrand 64 Trustee Retired (since 1990), previously
Vice President in charge of
Municipal Underwriting and
Dealer Sales at The Northern
Trust Company.
- ------------------------------------------------------------------------------------------------------------
Sheila W. Wellington 64 Trustee President (since 1993) of
Catalyst (a not-for-profit
organization focusing on women's
leadership development in
business and the professions);
prior thereto (from July 1987 to
July 1993), Secretary of Yale
University.
- ------------------------------------------------------------------------------------------------------------
Anna R. Kucinskis 50 Vice President Vice President of John Nuveen &
333 West Wacker Drive Co. Incorporated.
Chicago, IL 60606
- ------------------------------------------------------------------------------------------------------------
Larry W. Martin 45 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).
- ------------------------------------------------------------------------------------------------------------
O. Walter Renfftlen 57 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).
- ------------------------------------------------------------------------------------------------------------
Robert E. Toupin, Jr. 38 Vice President Vice President of Nuveen
Institutional Advisory Corp.
(since January 1992); prior
thereto, Vice President (from
December 1991 to January 1992),
formerly Assistant Vice
President of John Nuveen Co.
Incorporated.
- ------------------------------------------------------------------------------------------------------------
H. William Stabenow 62 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).
- ------------------------------------------------------------------------------------------------------------
James J. Wesolowski 46 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).
- ------------------------------------------------------------------------------------------------------------
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.
|
Anthony T. Dean, Thomas E. Leafstrand and Timothy R. Schwertfeger serve as mem- bers of the Executive Committee of the Board of Trustees. The Executive Commit- tee, which meets between regular meetings of the Board of Trustees, is autho- rized to exercise all of the powers of the Board of Trustees.
Mr. Dean and Mr. Schwertfeger are also directors or trustees, as the case may be, of 74 Nuveen open-end funds and closed-end funds advised by Nuveen Advisory Corp.
The other trustees of the Trust (other than Mr. Lyon) are also trustees of five closed-end funds advised by NIAC. Mr. Lyon is also a director of ICAP and ICAP Funds, Inc.
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 fiscal 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
FROM THE PAID TO
NAME OF TRUSTEE TRUST TRUSTEES
- -----------------------------------------------
James E. Bacon $7,725 $25,000
William L. Kissick $7,880 $25,000
Thomas E. Leafstrand $8,189 $26,500
Sheila W. Wellington $7,725 $25,000
|
*The estimated compensation to be paid by the Trust to the independent trust- ees for the current fiscal year is a pro rata portion of the total compen- sation to be paid by the Trust and Fund Complex to the independent trustees based upon the estimated relative net asset value of the Trust as compared to the Fund Complex.
**Based on the compensation paid to the independent trustees for the fiscal
year ended March 31, 1995 for services to five closed-end funds advised by
NIAC.
Each trustee who is not affiliated with NIAC or ICAP receives a $20,000 annual
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 expenses
for attendance at all meetings held on a day on which a regularly scheduled
Board meeting is held, a $500 fee per day plus expenses for attendance in per-
son or a $500 fee per day plus expenses for attendance by telephone at a meet-
ing held on a day on which no regular Board meeting is held and a $100 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 in-
vestment adviser or manager on the basis of relative net asset sizes. The
Trust requires no employees other than its officers, all of whom are compen-
sated by NIAC.
As of July 29, 1996, NIAC owned all the shares of each class of each Fund with 5,004 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 Growth and Income Stock Fund and the Nuveen Balanced Stock and Bond Fund, NIAC has entered into a Sub-Advisory Agreement with ICAP under which ICAP, subject to NIAC's supervision, manages the Fund's investment portfolio. For the Nuveen Balanced Municipal and Stock Fund, NIAC has entered into a Sub-Advisory Agreement with ICAP under which ICAP, subject to NIAC's supervision, manages the Fund's equity investments. NIAC is also responsible for managing the Fund's business affairs and provid- ing day-to-day administrative services to the Fund.
NIAC is a wholly-owned subsidiary of Nuveen, which is also the principal under- writer of the Fund's shares. Nuveen is sponsor of the Nuveen Tax-Free Unit Trust, a registered unit investment trust, is also the principal underwriter for the Nuveen Mutual Funds, and has served as co-managing underwriter for the shares of the Nuveen Exchange-Traded Funds. Over 1,000,000 individuals have in- vested to date in Nuveen's funds and trusts. Founded in 1898, Nuveen is a sub- sidiary 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.
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.
With regard to Fund assets subject to the Sub-Advisory Agreement, ICAP provides continuous advice and recommendations concerning the Fund's investments, and is responsible for selecting the broker-dealers who execute the portfolio transac- tions. ICAP also serves as investment adviser to the ICAP Funds, Inc. and to pension and profit-sharing plans, and other institutional and private invest- ors. 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.
PORTFOLIO TRANSACTIONS
NIAC (with respect to transactions in Municipal Obligations) and ICAP (with re- spect to other transactions) are responsible for decisions to buy and sell se- curities 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 bro- kerage 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, and with respect to brokered transactions, 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. Pur- chases may be made from underwriters, dealers, and, on occasion, the issuers. Commissions 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 negotiating commissions, the portfolio manager considers the firm's reliabili- ty, the quality of its execution services on a continuing basis and its finan- cial condition. Brokerage will not be allocated based on the sale of a Fund's shares. NIAC expects that all transactions in Municipal Obligations will be ef- fected on a principal (as opposed to an agency) basis and, accordingly, does not expect 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
broker or dealer would have charged for effecting the transaction. Brokerage
and research services include (a) furnishing advice as to the value of securi-
ties, the advisability of investing, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; (b) furnish-
ing analyses and reports concerning issuers, industries, securities, economic
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 avail- able to the Funds. The Management Agreement and the Sub-Advisory Agreement pro- vide that such higher commissions will not be paid by the Funds unless the ap- plicable adviser determines in good faith that the amount is reasonable in re- lation 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 servic- ing 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 possible to measure separately the benefits from research services to each of the accounts (including 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 research 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 equi- tably 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, each Fund's net asset value per share is deter- mined as of the close of trading (normally 4:00 p.m. eastern time) on each day the New York Stock Exchange (the "Exchange") is open for business. 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 Chapman and Cutler, counsel to the Trust.
As described in the Prospectuses, each of the Funds intends to qualify under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") for
tax treatment as a regulated investment company. In order to qualify as a regu-
lated investment 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 an-
nual gross income (including tax-exempt interest) from dividends, interest,
payments with respect to securities loans, gains from the sale or other dispo-
sition of stock or securities, foreign currencies or other income (including
but not limited 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: stock, securities and certain options, futures, or for-
ward 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 Fund's total assets is invested in
the securities of any one issuer (other than United States Government securi-
ties and securities of other regulated investment companies) or two or more is-
suers controlled by a Fund and engaged in the same, similar or related trades
or businesses.
As a regulated investment company, a Fund will not be subject to federal income tax in any taxable year for which it distributes at least 90% of its "invest- ment company taxable income" (which includes dividends, taxable interest, in- come 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). A Fund may retain for investment its net capital gain (which consists of the excess of its net long-term capital gain over its net short-term capital loss). However, if the Fund retains any net capital gain or any investment company taxable income, it will be subject to federal
income tax at regular corporate rates on the amount retained. If the Fund re- tains any net capital gain, such Fund may designate the retained amount as un- distributed capital gains in a notice to its shareholders who, if subject to federal income tax 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 net capital gains included in the shareholder's gross income. Each Fund intends to distribute at least annu- ally to its shareholders all or substantially all of its investment 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, 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 in- curred 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 and will be subject to federal income tax to the extent it is a distribution of ordinary income or capital gain.
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 or with the payment of a reduced sales load pursuant to the rein- vestment or exchange privilege. Any disregarded portion of such load will re- sult in an increase in the shareholder's tax basis in the shares subsequently acquired. Moreover, losses recognized by a shareholder on the redemption or ex- change of shares of a Fund held for six months or less are disallowed to the extent of any distribution of exempt-interest dividends 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 shareholder purchases other shares of such Fund (whether through reinvestment of distributions or other- wise) or the shareholder acquires or enters into a contract or option to ac- quire 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 re- demption or exchange. If disallowed, the loss will be reflected in an adjust- ment 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.
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.
Shareholders who are non-resident aliens are subject to U.S. withholding tax on ordinary income dividends at a rate of 30% or such lower rate as prescribed by an applicable tax treaty.
A corporate shareholder will generally be entitled to a 70% dividends received deduction with respect to any portion of such shareholder's ordinary income dividends which are attributable to dividends received by a Fund on certain Eq- uity Securities (other than corporate shareholders, such as "S" corporations,
which are not eligible for the deduction because of their special characteris- tics and other than for purposes of special taxes such as the accumulated earn- ings tax and the personal holding corporation tax). A 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 additional limitations on the eligibility of dividends for the 70% divi- dends received deduction. These limitations include a requirement that stock (and therefore Shares of a Fund) must generally be held at least 46 days (as determined under Section 246(c) of the Code). Regulations have been issued 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 indebted- ness incurred by such corporation. It should be noted that various legislative proposals that would affect the dividends received deduction have been intro- duced. To the extent dividends received by a Fund are attributable to foreign corporations, a corporate shareholder will not be entitled to the dividends re- ceived deduction with respect to its share of such foreign dividends since the dividends received deduction is generally available only with respect to divi- dends paid by domestic corporations. It should be noted that payments to a Fund of dividends on Equity Securities that are attributable to foreign corporations may be subject to foreign withholding taxes. Corporate shareholders should con- sult with their tax advisers with respect to the limitations on, and possible modifications to, the dividends received deduction.
Nuveen Balanced Municipal and Stock Fund Tax Matters
In addition to the matters discussed above, the Nuveen Balanced Municipal and Stock Fund intends to qualify to pay "exempt-interest" dividends 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 market discount on Municipal Obliga- tions treated as
interest and net short-term capital gains, if any, realized by the Fund will be taxable to shareholders 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 regard- less of whether the distribution is received in additional shares or in cash.
In general, market discount is the amount (if any) by which the stated redemp- tion 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). Accretion of market discount 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 or- dinary income by the Fund when principal payments are received on the Municipal Obligation, upon sale or at redemption (including early redemption) or at the Fund's election, as such market discount accrues. Market discount income recog- nized 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 corpora- tion 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 information, investors should consult their tax advisers before investing in the Fund.
The Code provides that interest on indebtedness incurred or continued to pur- chase or carry shares of a fund that distributes exempt-interest dividends 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 as- sets, 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.
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 federal income taxation of the Funds and their shareholders. For complete pro- visions, reference should be made to the pertinent Code sections and Treasury Regulations. The Code and Treasury Regulations are subject to change by legis- lative or administrative action, and any such change may be retroactive with respect to Fund transactions. Shareholders are advised to consult their own tax advisers for more detailed information concerning the federal taxation of the Funds and the income tax consequences to their shareholders.
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 expressing 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 reinvest-
ment dates during the period. Cumulative total return may also be shown as the increased dollar value of the hypothetical investment over the period. Cumula- tive 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 example, 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 Treasury bill securities (essen- tially a risk-free return) over that period, by (b) the standard deviation of the investment's monthly returns for the period. This ratio is sometimes re- ferred 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. Re- turns and net asset value of each class of shares of the Funds will fluctuate. Factors affecting the performance of the Funds include general market condi- tions, 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 value, 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
publications such as Barron's, Changing Times, Forbes and Money Magazine. Per-
formance comparisons by these indexes, services or publications may rank mu-
tual funds over different periods of time by means of aggregate, average,
year-by-year, or other types of total return and performance figures. Any
given performance quotation or performance comparison should not be considered
as representative of the performance of the Funds for any future period.
There are differences and similarities between the investments which the Funds may purchase and the investments measured by the indexes and reporting serv- ices which are described herein. The Consumer
Price Index is generally considered to be a measure of inflation. Lipper, Morn- ingstar, Wiesenberger and CDA are widely recognized mutual fund reporting serv- ices 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 GROWTH AND INCOME 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 40 MANAGED ACCOUNTS TOTALLING APPROXIMATELY $2.4 BILLION FOR WHICH ICAP SERVES AS INVESTMENT ADVISER AND THAT HAVE THE SAME INVESTMENT OBJECTIVES AND POLICIES AS THE FUND.
1ST
HALF ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- ------------------------------------------------------------------------------------------------
ICAP Discretionary Eq-
uity Composite (Gross). 10.66 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)... 10.02 36.63 0.74 15.24 6.12 32.15 0.26 32.05 8.09 27.63 14.75
S&P 500................. 10.20 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......... 8.90 31.80 (1.05) 11.12 8.36 28.66 (4.79) 23.56 15.05 2.48 15.93
|
NUVEEN BALANCED STOCK AND BOND 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 8 MANAGED ACCOUNTS TOTALLING APPROXIMATELY $370 MILLION FOR WHICH ICAP SERVES AS INVESTMENT ADVISER AND THAT HAVE THE SAME INVESTMENT OBJECTIVES AND POLICIES AS THE FUND.
1ST
HALF ANNUAL TOTAL RETURNS FOR THE YEAR ENDING DECEMBER 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------
ICAP Balanced Composite
(Gross)................ 5.77 29.09 0.21 13.81 7.34 31.04 2.69 31.14 8.57 27.52 15.75
ICAP Balanced Composite
(Net).................. 5.20 27.76 (0.89) 12.61 6.18 29.70 1.57 29.80 7.40 26.20 14.52
Balanced Index.......... 6.04 28.71 0.09 9.29 7.41 23.91 2.07 23.81 12.53 6.27 16.50
Morningstar Balanced Av-
erage.................. 4.81 25.07 (2.84) 11.03 7.80 25.78 (0.25) 18.85 12.84 2.51 16.63
|
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 Growth and Income Stock Fund and the Nuveen Balanced Stock and Bond Fund, respectively, as summarized in the Summary of Fund Expenses section of each Fund's prospectus. The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") is a widely-recog- nized, unmanaged index of common stock prices. S&P 500 returns assume reinvest- ment of all dividends paid by the stocks included in the index, but do not in- clude brokerage commissions or other fees an investor would incur by investing in the portfolio of stocks comprising the index. The
Morningstar Growth and Income Average represents the composite returns of the 511 funds comprising the Morningstar Growth and Income category and assumes re- investment of all fund dividends and distributions. The Balanced Fund Index represents the investment performance of an unmanaged index comprised 60% of the S&P 500 and 40% of the Lehman Brothers Intermediate Treasury Index (the "Lehman Index"). The Lehman Index is an unmanaged index of all public obliga- tions of the U.S. Treasury, U.S. Government agencies, quasi-federal corpora- tions and corporate debt guaranteed by the U.S. Government with maturities be- tween one and ten years and an outstanding par value of at least $100 million. The Morningstar Balanced Average represents the composite returns of the 309 funds comprising the Morningstar Balanced category and assumes reinvestment of all fund dividends and distributions.
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 August 1, 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 asset value of the Class A shares.
Net Asset Value per share.............................................. $20.000 Per Share Sales Charge--5.25% of public offering price (5.54% of net asset value per share)................................................ $ 1.108 Per Share Offering Price to the Public................................. $21.108 |
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) transfer agency fees attributable to a specific class of shares, (ii) printing and post- age expenses related to preparing and distributing materials such as share- holder 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 ex- penses 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 addi- tional incremental expenses subsequently identified and determined to be prop- erly 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 pay-
ment with a single remittance for all investments in a Fund during each invest-
ment 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 ("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 bro- kers, dealers, banks or other qualified financial intermediaries (collectively referred to as "Dealers"), or others, in a manner consistent with the then ef- fective registration statement of the Trust. Pursuant to the Distribution Agreement, Nuveen, at its own expense, finances certain activities incident to the sale and distribution of the Funds' shares, including printing and distrib- uting of prospectuses and statements of additional information to other than existing shareholders, the printing and distributing of sales literature, ad- vertising 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 per- son at a meeting called for the purpose of considering such amendments. During the continuance of the Plan, the selection and nomination of the non-interested trustees of the Trust will be committed to the discretion of the non-interested trustees then in office.
INDEPENDENT PUBLIC ACCOUNTANTS AND CUSTODIAN
Arthur Andersen LLP, independent public accountants, 33 West Monroe Street, Chicago, Illinois 60603 have been selected as auditors for the Trust. In addi- tion to audit services, Arthur Andersen LLP will provide consultation and as- sistance on accounting, internal control, tax and related matters. The finan- cial statements included in this Statement of Additional Information have been audited by Arthur Andersen LLP as indicated in their report with respect there- to, and are included 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, 770 Broadway, New York, New York 10003. The custodian performs custodial, fund ac- counting and portfolio accounting services.
FINANCIAL STATEMENTS
NUVEEN INVESTMENT TRUST
STATEMENT OF NET ASSETS
JULY 29, 1996
GROWTH AND BALANCED STOCK BALANCED MUNICIPAL
INCOME STOCK FUND AND BOND FUND AND STOCK FUND
----------------- -------------- ------------------
Assets:
Cash..................... $ 33,360 $ 33,360 $ 33,360
Deferred organization
costs (note 2).......... 180,000 180,000 180,000
-------- -------- --------
Total assets........... 213,360 213,360 213,360
-------- -------- --------
Liabilities:
Organization costs ac-
crued................... 180,000 180,000 180,000
-------- -------- --------
Net assets................. $ 33,360 $ 33,360 $ 33,360
======== ======== ========
Shares outstanding (note
1):
Class A shares........... 417 417 417
Class B shares........... 417 417 417
Class C shares........... 417 417 417
Class R shares........... 417 417 417
Net asset value and redemp-
tion price per share:
Class A, B, C and R
shares.................. $ 20.00 $ 20.00 $ 20.00
======== ======== ========
Offering price per share:
Class B, C and R shares
at net asset value...... $ 20.00 $ 20.00 $ 20.00
======== ======== ========
Class A shares at net as-
set value plus maximum
sales
charge of 5.25% of of-
fering price............ $ 21.11 $ 21.11 $ 21.11
======== ======== ========
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(1) THE TRUST:
The Trust was organized as a Massachusetts business trust on May 6, 1996 and has been inactive since that date except for matters relating to its organiza- tion, its registration as an open-end series investment company and the regis- tration of its shares under the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, and the sale of the outstanding shares to Nuveen Institutional Advisory Corp., the Trust's investment adviser. The Trust's shares are issued in separate series. Additional series may be added in the future. Each series issues its own shares at a price equal to net asset value for the Class B, C, and R shares and at varying sales charges for the Class A shares.
(2) DEFERRED ORGANIZATION COSTS:
The Trust expects to incur approximately $540,000 in organization costs. These costs have been divided equally among the Funds and will be amortized over a 60-month period beginning with the commencement of Trust operations.
Nuveen Institutional Advisory Corp., the Trust's initial shareholder, has agreed that if any of the initial shares are redeemed during the first 60 months of the Trust's operations by any holder thereof, the proceeds of redemp- tion will be reduced by the pro rata share of the unamortized organization ex- penses as of the date of redemption. The pro rata share by which the redemption proceeds shall be reduced shall be derived by dividing the number of original shares redeemed by the total number of original shares outstanding at the time of redemption.
(3) RELATED PARTIES:
Nuveen Institutional Advisory Corp., will act as investment adviser for and manage the investment and reinvestment of the assets of each series and will administer each of their business affairs. For these services each series has agreed to pay an annual management fee as described in each series' Prospectus.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholder and Board of Trustees of
Nuveen Investment Trust
We have audited the accompanying statement of net assets of Nuveen Investment Trust (a Massachusetts business trust) comprising the Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund as of July 29, 1996. The statement of net assets is the respon- sibility of Nuveen Investment Trust's management. Our responsibility is to ex- press an opinion on the statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing stan- dards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of net assets is free of mate- rial misstatement. An audit includes examining, on a test basis, evidence sup- porting the amounts and disclosures in the statement of net assets. Our proce- dures included confirmation of cash held by the custodian as of July 29, 1996. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly, in all material respects, the net assets of the Funds constituting the Nuveen Investment Trust as of July 29, 1996, in conformity with generally accepted ac- counting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
July 29, 1996
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, July 29, 1996, for each of the Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund
Report of Independent Public Accountants dated July 29, 1996
(b) Exhibits
1(a). Declaration of Trust of Registrant./1/
1(b). Certificate for the Establishment and Designation of
Series and Classes, dated
June 20, 1996.
2. By-Laws of Registrant./1/
3. Not applicable.
4. Specimen certificate of Shares of each Fund.
5(a). Form of Management Agreement between Registrant and Nuveen
Institutional Advisory Corp./2/
5(b). Form of Sub-Advisory Agreement between Nuveen
Institutional Advisory Corp and Institutional Capital
Corporation./2/
6(a). Form of Distribution Agreement between Registrant and John
Nuveen & Co. Incorporated.
7. Not applicable.
8. Form of Custodian Agreement between Registrant and Chase
Manhattan Bank.
9(a). Not applicable.
10(a). Opinion and consent of Chapman and Cutler, dated July 30,
1996.
10(b). Opinion and consent of Bingham, Dana & Gould, dated July
30, 1996.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Subscription Agreement with Nuveen Institutional Advisory
Corp.
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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./2/
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./1/ Powers of Attorney for Messrs.
Leafstrand, Bacon, Kissick, Lyon, and Ms. Wellington,
Trustees, authorizing, among others, James J. Wesolowski
and Gifford R. Zimmerman to execute the Registration
Statement.
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/1/Incorporated by reference to the initial registration statement filed on Form N-1A for Registrant.
/2/Incorporated by reference to the pre-effective amendment no. 1 filed on Form N-1A for Registrant.
ITEM 25: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26: NUMBER OF HOLDERS OF SECURITIES
At July 29, 1996:
NUMBER OF
TITLE OF SERIES RECORD HOLDERS
--------------- --------------
Nuveen Growth and Income Stock Fund........................ 1
Nuveen Balanced Stock and Bond Fund........................ 1
Nuveen Balanced Municipal and Stock Fund................... 1
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ITEM 27: INDEMNIFICATION
Section 4 of Article XII of Registrant's Declaration of Trust provides as fol- lows:
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 Investment Trust Er- rors and Omission policies in the aggregate amount of $40,000,000 (with a maxi- mum deductible of $500,000) 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 di- rector, officer, employee, partner or trustee, see the descriptions under "Man- agement" 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, Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves, Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc., Nuveen Insured Tax-Free Bond Fund, Inc., Nuveen Tax-Free Money Market Fund, Inc., Nuveen Multistate Tax-Free Trust and the Registrant. Nuveen also acts as depositor and principal underwriter of the Nuveen Tax-Free Unit Trust, a regis- tered unit investment trust. Nuveen has also served or is serving as co-manag- ing underwriter to the following closed-end management type investment compa- nies: Nuveen Municipal Value Fund, Inc., Nuveen California Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen California Performance Plus Municipal Fund, Inc., Nuveen New York Performance Plus Municipal Fund, Inc., Nuveen Municipal Advan- tage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Cali- fornia Municipal Market Opportunity Fund, Inc., Nuveen Investment Quality Mu- nicipal Fund, Inc., Nuveen California Investment Quality Municipal Fund, Inc., Nuveen New York Investment Quality Municipal Fund, Inc., Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen New Jersey Investment Quality Municipal Fund, Inc., Nuveen Pennsylvania Invest- ment 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 In- sured 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 California Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen Pre- mier Insured Munici
pal Income Fund, Inc., Nuveen Premium Income Municipal Fund 2, Inc., Nuveen In- sured California Premium Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal Fund, Inc., Nuveen Select Maturities Municipal Fund, Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen Insured Florida Pre- mium 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 California Premium Income Municipal Fund 2, Inc., Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Vir- ginia Premium Income Municipal Fund, Nuveen Washington Premium Income Municipal Fund, Nuveen Connecticut Premium Income Municipal Fund, Nuveen Georgia Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen North Carolina Premium Income Municipal Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured Premium Income Municipal Fund 2, 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 and Nuveen Select Tax-Free Income Portfolio 3.
(b)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT - ------------------------------------------------------------------------------- Anthony T. Dean President, Chief Operating Chairman and Trustee 333 West Wacker Drive Officer and Director Chicago, IL 60606 Timothy R. Schwertfeger Chairman of the Board, President and Trustee 333 West Wacker Drive Chief Executive Officer, Chicago, IL 60606 and Director 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 Clifton L. Fenton 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 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 Institutional Advisory Corp., 333 West Wacker Drive, Chicago, Illinois 60606, maintains the Declaration of Trust, By-Laws, minutes of trustees and shareholder meetings and contracts of the Registrant and all advisory material of the investment adviser.
The Chase Manhattan Bank, 770 Broadway, New York, New York 10003, maintains all general and subsidiary ledgers, journals, trial balances, records of all port- folio 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 30TH DAY OF JULY, 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 July 30, 1996
Controller (Principal
Financial and
Accounting Officer)
Trustee
Timothy R. Schwertfeger President and Trustee
Trustee
Trustee
Trustee
Trustee
Anthony T. Dean Chairman and Trustee
(Principal Executive
Officer)
/s/ Gifford R. Zimmerman
By________________________
Gifford R. Zimmerman
Attorney-in-Fact
July 30, 1996
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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/
1(b). Certificate for the Establishment and Designation of
Series and Classes, dated
June 20, 1996.
2. By-Laws of Registrant./1/
3. Not applicable.
4. Specimen certificate of Shares of each Fund.
5(a). Form of Management Agreement between Registrant and
Nuveen Institutional Advisory Corp./2/
5(b). Form of Sub-Advisory Agreement between Nuveen
Institutional Advisory Corp. and Institutional
Capital Corporation./2/
6(a). Form of Distribution Agreement between Registrant and
John Nuveen & Co. Incorporated.
7. Not applicable.
8. Form of Custodian Agreement between Registrant and
Chase Manhattan Bank.
9(a). Not applicable.
10(a). Opinion and consent of Chapman and Cutler, dated July
30, 1996.
10(b). Opinion and consent of Bingham, Dana & Gould, dated
July 30, 1996.
11. Consent of Independent Public Accountants.
12. Not applicable.
13. Subscription Agreement with Nuveen Institutional
Advisory Corp.
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./2/
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
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./1/ Powers of Attorney for
Messrs. Leafstrand, Bacon, Lyon, Kissick and Ms.
Wellington, Trustees, authorizing, James J.
Wesolowski and Gifford R. Zimmerman to execute the
Registration Statement.
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/1/Incorporated by reference to the initial registration statement filed on Form N-1A for Registrant.
/2/Incorporated by reference to the pre-effective amendment no. 1 filed on Form
N-1A for Registrant.
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 6, 1996 (the "Declaration"), of Nuveen Investment Trust, a Massachusetts business trust (the "Trust"), the Trustees of the Trust, this 20th day of June, 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 Growth and Income Stock Fund
Nuveen Balanced Stock and Bond Fund
Nuveen Balanced Municipal and Stock 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 20th day of June, 1996.
/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 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 Designation of Series and who acknowledged the same to be his/her free act and deed, before me this 20th day of June, 1996.
/s/ Karen L. Healy
.....................................
Notary Public
My Commission Expires: 12/30/99
..............
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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 6, 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 20th day of June, 1996.
/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 Designation of Classes and who acknowledged the same to be his/her free act and deed, before me this 20th day of June, 1996.
/s/ Karen L. Healy
.........................................
Notary Public
My Commission Expires: 12/30/99
..................
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EXHIBIT (b)4
Number Class [ ] Shares
Nuveen Investment Trust
[Name of Series]
Organized Under the Laws of the Commonwealth of Massachusetts
This is to certify that See Reverse for
Certain Definitions
is the owner of
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CUSIP 67064Y 30 5
of beneficial interest, with the par value of one-cent ($.01) each, of the [Name of Series] series of the Nuveen Investment Trust (herein called the "Trust") transferable on the books of the Trust by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. The shares represented by this certificate are issued and held subject to all of the provisions of the Declaration of Trust establishing the Trust as a Massachusetts business trust and any amendments thereto and any designation of classes, and the By-Laws of the Trust, and any amendments thereto, copies of which are on file with the Transfer Agent, to all of which the holder by acceptance hereof expressly assents. This certificate is executed on behalf of the Trust by the officers as officers and not individually and the obligations hereof are not binding upon any of the Trustees, officers or shareholders individually but are binding only upon the assets and property of the Trust. This certificate is not valid unless countersigned by the Transfer Agent.
WITNESS THE FACsimile signatures of its duly authorized officers.
Dated:
Nuveen Investment Trust
Secretary, Nuveen Investment Trust Chairman of the Board, Nuveen
Investment Trust
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Nuveen Investment Trust
[Name of Series]
Nuveen Investment Trust (the "Trust") will furnish to any shareholder, upon request and without charge, a full statement of the designations, preferences, limitation as to dividends, qualifications and terms and conditions of redemption and relative rights and preferences of the shares of each class or series of the Trust authorized to be issued, so far as they have been determined, and the authority of the Board of Trustees to determine the relative rights and preferences of subsequent classes or series. Any such request should be addressed to the Secretary of the Trust.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - ___________ Custodian ____________ under Uniform gifts
(Cust) (Minor)
to Minors Act ____________
(State)
Additional abbreviations may also be used though not in the above list.
For value received,____________ hereby sell, assign and transfer unto
___________________________________________________________________ Shares of the beneficial interest represented by the within certificate, and do hereby irrevocably constitute and appoint _________________________________________
________________________________________________________________Attorney to
transfer the said shares on the books of the within-named Trust with full power of substitution in the premises.
Dated, _________________________ NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
Owner___________________________ The signature(s) must be guaranteed by one
of the following entities: U.S. bank,
trust company, credit union, savings
association, or foreign bank having a U.S.
correspondent bank: a U.S. registered
securities dealer or broker, municipal
securities dealer or broker, or government
securities dealer or broker; or a national
securities exchange, registered securities
association or clearing agency.
Signature of Co-Owner, if any
_________________________________
Signature(s) guaranteed by:
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This Space Must Not Be Covered In Any Way
EXHIBIT (b)6(a)
AGREEMENT made as of this ______ day of_________, l996 between NUVEEN INVESTMENT TRUST, a business trust organized under the laws of the Commonwealth of Massachusetts (the "Fund"), and JOHN NUVEEN & CO. INCORPORATED, a Delaware corporation (the "Underwriter").
In consideration of the mutual covenants hereinafter contained, it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints the Underwriter its agent for the distribution of shares of beneficial interest, par value $.0l per share, including such series or classes of shares as may now or hereafter be authorized, (the "Shares") in jurisdictions wherein Shares may legally be offered for sale; provided, however, that the Fund, in its absolute discretion, may: (a) issue or sell Shares directly to holders of Shares of the Fund upon such terms and conditions and for such consideration, if any, as it may determine, whether in connection with the distribution of subscription or purchase rights, the payment or reinvestment of dividends or distributions, or otherwise; and (b) issue or sell Shares at net asset value in connection with merger or consolidation with, or acquisition of the assets of, other investment companies or similar companies.
2. The Underwriter hereby accepts appointment as agent for the distribution of the Shares and agrees that it will use its best efforts to sell such part of the authorized Shares remaining unissued as from time to time shall be effectively registered under the Securities Act of l933 ("Securities Act"), at prices determined as hereinafter provided and on terms hereinafter set forth, all subject to applicable Federal and State laws and regulations and to the Declaration of Trust of the Fund.
3. The Fund agrees that it will use its best efforts to keep effectively registered under the Securities Act for sale, as herein contemplated, such Shares as the Underwriter shall reasonably request and as the Securities and Exchange Commission shall permit to be so registered.
4. Notwithstanding any other provision hereof, the Fund may terminate, suspend, or withdraw the offering of the Shares, or Shares of any series or class, whenever, in its sole discretion, it deems such action to be desirable.
5. The Underwriter shall sell Shares to, or through, brokers, dealers, banks or other qualified financial intermediaries (hereinafter referred to as "dealers"), or others, in such manner not inconsistent with the provisions hereof and the then effective Registration Statement of the Fund under the Securities Act (and related Prospectus and Statement of Additional Information) as the Underwriter may determine from time to time, provided that no dealer, or other person, shall be appointed nor authorized to act as agent of the Fund without the prior consent of the Fund. The Underwriter shall have the right to enter into
agreements with brokers, dealers and banks (referred to herein as "dealers") of its choice for the sale of Shares and fix therein the portion of the sales charge which may be allocated to such dealers; provided that the Fund shall approve the form of such agreements and shall evidence such approval by filing said form and any amendments thereto as attachments to this Agreement, which shall be filed as an exhibit to the Fund's currently effective registration statement under the Securities Act. Shares sold to dealers shall be for resale by such dealers only at the public offering price(s) set forth in the Fund's then current Prospectus. The current forms of such agreements are attached hereto as Exhibits 1, 2 and 3.
6. Shares offered for sale, or sold by the Underwriter, shall be so offered or sold at a price per Share determined in accordance with the then current Prospectus relating to the sale of Shares except as departure from such prices shall be permitted by the rules and regulations of the Securities and Exchange Commission. Any public offering price shall be the net asset value per Share plus a sales charge of not more than 5.25% of such public offering price. Shares may be sold at net asset value without a sales charge to such class or classes of investors or in such class or classes of transactions as may be permitted under applicable rules of the Securities and Exchange Commission and as described in the then current Prospectus of the Fund. The net asset value per Share of each series or class shall be calculated in accordance with the Declaration of Trust of the Fund and shall be determined in the manner, and at the time, set forth in the then current Prospectus of the Fund relating to such Shares.
7. The price the Fund shall receive for all Shares purchased from the Fund shall be the net asset value used in determining the public offering price applicable to the sale of such Shares. The excess, if any, of the sales price over the net asset value of Shares sold by the Underwriter as agent shall be retained by the Underwriter as a commission for its services hereunder. Out of such commission, the Underwriter may allow commissions or concessions to dealers in such amounts as the Underwriter shall determine from time to time. Except as may be otherwise determined by the Underwriter and the Fund from time to time, such commissions or concessions shall be uniform to all dealers.
8. The Underwriter shall issue and deliver, or cause to be issued and delivered, on behalf of the Fund such confirmations of sales made by it as agent, pursuant to this Agreement, as may be required. At, or prior to, the time of issuance of Shares, the Underwriter will pay, or cause to be paid, to the Fund the amount due the Fund for the sale of such Shares. Certificates shall be issued, or Shares registered on the transfer books of the Fund, in such names and denominations as the Underwriter may specify.
9. The Fund will execute any and all documents, and furnish any and all information, which may be reasonably necessary in connection with the qualification of the Shares for sale (including the qualification of the Fund as a dealer, where necessary or advisable) in such states as the Underwriter may reasonably request (it being understood that the Fund shall not be required, without its consent, to comply with any requirement which, in its opinion, is unduly burdensome).
l0. The Fund will furnish to the Underwriter, from time to time, such information with respect to the Fund and the Shares as the Underwriter may reasonably request for use in connection with the sale of Shares. The Underwriter agrees that it will not use or distribute, nor will it authorize dealers or others to use, distribute or disseminate, in connection with the sale of such Shares, any statements other than those contained in the Fund's current Prospectus and Statement of Additional Information, except such supplemental literature or advertising as shall be lawful under Federal and State securities laws and regulations, and that it will furnish the Fund with copies of all such material.
ll. The Underwriter shall order Shares from the Fund only to the extent that it
shall have received purchase orders therefor. The Underwriter will not make,
nor authorize any dealers or others, to make: (a) any short sale of Shares; or
(b) any sale of Shares to any officer or trustee of the Fund, nor to any officer
or trustee of the Underwriter, or of any corporation or association furnishing
investment advisory, managerial, or supervisory services to the Fund, nor to any
such corporation or association, unless such sales are made in accordance with
the then current Prospectus relating to the sale of such Shares.
l2. In selling Shares for the account of the Fund, the Underwriter will in all respects conform to the requirements of all Federal and State laws and the Rules of Fair Practice of the National Association of Securities Dealers, Inc. relating to such sales, and will indemnify and save harmless the Fund from any damage or expense on account of any wrongful act by the Underwriter or any employee, representative, or agent of the Underwriter. The Underwriter will observe and be bound by all the provisions of the Declaration of Trust of the Fund (and of any fundamental policies adopted by the Fund pursuant to the Investment Company Act of l940, notice of which shall have been given by the Fund to the Underwriter) which at the time in any way require, limit, restrict, prohibit or otherwise regulate any action on the part of the Underwriter.
l3. The Underwriter will require each dealer to conform to the provisions hereof and of the Registration Statement (and related Prospectus) at the time in effect under the Securities Act with respect to the public offering price of the Shares, and neither the Underwriter nor any such dealer shall withhold the placing of purchase orders so as to make a profit thereby.
l4. The Fund will pay, or cause to be paid, expenses (including the fees and
disbursements of its own counsel) of any registration of Shares under the
Securities Act, expenses of qualifying or continuing the qualification of the
Shares for sale and, in connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of such states as
may be designated by the Underwriter under the conditions herein specified, and
expenses incident to the issuance of the Shares such as the cost of Share
certificates, issue taxes, and fees of the transfer and shareholder service
agent. The Underwriter will pay, or cause to be paid, all expenses (other than
expenses which any dealer may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the Shares issued or sold
hereunder, including, without limiting the generality of the foregoing, all:
(a) expenses of printing and distributing any Prospectus and Statement of
Additional Information and of preparing, printing and distributing or
disseminating any other literature, advertising and selling aids in connection
with such offering of the Shares
for sale (except that such expenses need not include expenses incurred by the Fund in connection with the preparation, printing and distribution of any report or other communication to holders of Shares in their capacity as such), and (b) expenses of advertising in connection with such offering. No transfer taxes, if any, which may be payable in connection with the issue or delivery of Shares sold as herein contemplated, or of the certificates for such Shares, shall be borne by the Fund, and the Underwriter will indemnify and hold harmless the Fund against liability for all such transfer taxes.
l5. This agreement shall continue in effect until August l, l997, unless and until terminated by either party as hereinafter provided, and will continue from year to year thereafter, but only so long as such continuance is specifically approved, at least annually, in the manner required by the Investment Company Act of l940. Either party hereto may terminate this agreement on any date by giving the other party at least six months' prior written notice of such termination, specifying the date fixed therefor. Without prejudice to any other remedies of the Fund in any such event, the Fund may terminate this agreement at any time immediately upon any failure of fulfillment of any of the obligations of the Underwriter hereunder.
Without prejudice to any other remedies of the Fund in any such event, the Fund may terminate this Agreement at any time immediately upon any failure of fulfillment of any of the obligations of the Underwriter hereunder.
l6. This agreement shall automatically terminate in the event of its assignment.
l7. Any notice under this agreement shall be in writing, addressed, and delivered or mailed, postage pre-paid, to the other party at such address as such other party may designate for the receipt of such notice.
18. The Declaration of Trust of the Fund on file with the Secretary of State of the Commonwealth of Massachusetts was executed on behalf of the Fund by the initial trustees of the Fund and not individually, and any obligation of the Fund shall be binding only upon the assets of the Fund (or applicable series thereof) and shall not be binding upon any trustee, officer or shareholder of the Fund. Neither the authorization of any action by the trustees or shareholders of the Fund nor the execution of this agreement on behalf of the Fund shall impose any liability upon any Trustee, officer or shareholder of the Fund.
IN WITNESS WHEREOF, the Fund and the Underwriter have each caused this agreement to be executed on its behalf as of the day and year first above written.
NUVEEN INVESTMENT TRUST
By
Vice President
Attest:
Assistant Secretary
JOHN NUVEEN & CO. INCORPORATED
By
Vice President
Attest:
Assistant Secretary
EXHIBIT A TO NUVEEN MUTUAL FUNDS
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
Policies and Procedures With Respect to Sales of Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have the following classes of shares generally available to the public: Class A Shares, which are normally subject to an up-front sales charge and a service fee; Class B Shares, which are subject to an asset-based sales charge, a service fee, and a declining contingent deferred sales charge ("CDSC"); and Class C Shares, which are subject to an asset-based sales charge, a service fee, and a 12-month CDSC, it is important for an investor to choose the method of purchasing shares which best suits his or her particular circumstances. To assist investors in these decisions, John Nuveen & Co. Incorporated, underwriter for the Nuveen Mutual Funds, has instituted the following policies with respect to orders for Fund shares. These policies apply to each Authorized Dealer which distributes Fund shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000 should be placed only for Class A shares, unless such purchase for Class B or Class C Shares has been reviewed and approved by the Authorized Dealer's appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B or Class C Shares in light of the relevant facts and circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his or her Shares;
c. whether the investor expects to reinvest dividends; and
d. any other relevant circumstances such as the availability of purchases under a letter of intent, a combined discount or a cumulative discount, as described in the Prospectus for the Fund, and any anticipated changes in the funds net asset value per share.
There are instances when one method of purchasing Shares may be more appropriate than the other. For example, investors who would qualify for a significant discount from the maximum sales load on Class A Shares might determine that payment of such a reduced up-front sales charge is preferable to the payment of a higher ongoing distribution fee on Class B or Class C Shares. On the other hand, investors who prefer not to pay an up-front sales charge may wish to defer the sales charge by purchasing Class B or Class C Shares. Those who plan to redeem their shares within five years might consider Class C Shares, particularly if they do not expect to reinvest dividends in additional shares. Note that, if an investor anticipate redeeming Class B Shares within a short period of time such as one year, that investor may bear higher distribution expenses than if Class A Shares had been purchased. In addition, investors who intend to hold their shares for a significantly long
time may not wish to bear the higher ongoing asset-based sales charges of Class B or Class C Shares, irrespective of the fact that the CDSC that would apply to a redemption of Class B Shares is reduced over time and is ultimately eliminated, and that the CDSC that would apply to a redemption of Class C Shares is relatively short in duration and small in amount.
Appropriate supervisory personnel within your organization must ensure that all employees receiving investor inquiries about the purchase of shares of the Funds advise the investor of the available pricing structures offered by the Funds and the impact of choosing one method over another, including breakpoints and the availability of letters of intent, combined purchases and cumulative discounts. In some instances it may be appropriate for a supervisory person to discuss a purchase with the investor.
These policies are effective immediately with respect to any order for the purchase of shares of the Funds.
July 18, 1996
NUVEEN TAX-EXEMPT MUTUAL FUNDS
DEALER DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
As principal underwriter of shares of the various Nuveen non-money market open- end mutual funds, and of the shares of any future such funds (collectively, the "Funds"), we invite you to join a selling group for the distribution of shares of common stock of the Funds (the "Shares"). As exclusive agent of the Funds, we offer to sell you Shares on the following terms:
1. In all sales of Shares to the public you shall act as dealer for your own account, and in no transaction shall you have any authority to act as agent for any Fund, for us or for any other member of the Selling Group.
2. Orders received from you shall be accepted by us only at the public offering price applicable to each order, as established by the then current Prospectus of the appropriate Fund, subject to the discounts provided in such Prospectus. Upon receipt from you of any order to purchase Shares we shall confirm to you in writing or by wire to be followed by a confirmation in writing. Additional instructions may be forwarded to you from time to time. All orders are subject to acceptance or rejection by us in our sole discretion.
3. You may offer and sell Shares to your customers only at the public offering price determined in the manner described in the current Prospectus of the appropriate Fund. Shares will be offered at a public offering price based upon the net asset value of such Shares plus, with respect to certain class(es) of Shares, a sales charge from which you shall receive a discount equal to a percentage of the applicable offering price as provided in the Prospectus. You may receive a distribution fee and/or a service fee with respect to certain class(es) of Shares for which such fees are applicable, as provided in the applicable Prospectus, which distribution fee and/or service fee shall be payable for such periods and at such intervals as are from time to time specified by us. Your placement of an order for Shares after the date of any notice of such amendment shall conclusively evidence your agreement to be bound thereby.
Reduced sales charges may also be available as a result of a cumulative discount or pursuant to a letter of intent. Further information as to such reduced sales charges, if any, is set forth in the appropriate Fund Prospectus. You agree to advise us promptly as to the amounts of any sales made by you to the public qualifying for reduced sales charges.
4. By accepting this Agreement, you agree:
(a) That you will purchase Shares only from us;
(b) That you will purchase Shares from us only to cover purchase orders already received from your customers, or for your own bona fide investment; and
(c) That you will not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding.
(d) That, with respect to the sale of Shares of Funds that offer multiple classes of Shares, you will comply with the terms of the Policies and Procedures with Respect to Sales of Multiple Classes of Shares, attached hereto as Exhibit A.
5. We will not accept from you any conditional orders for Shares.
6. Payment for Shares ordered from us shall be in New York clearing house funds and must be received by the Funds' agent, Shareholder Services, Inc., P. O. Box 5330, Denver, Colorado 80217-5330, within three business days after our acceptance of your order. If such payment is not received, we reserve the right, without notice, forthwith to cancel the sale or, at our option, to cause the Fund to redeem the Shares ordered, in which case we may hold you responsible for any loss, including loss of profit, suffered by us as result of your failure to make such payment. If any Shares confirmed to you under the terms of this agreement are repurchased by the issuing Fund or by us as agent for the Fund, or are tendered for repurchase, within seven business days after the date of our confirmation of the original purchase order, you shall promptly refund to us the full discount, commission, or other concession, if any, allowed or paid to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares or any Fund except those contained in the applicable current Prospectus and printed information subsequently issued by the appropriate Fund or by us as information supplemental to such Prospectus. You agree that you will not offer or sell any Shares except under circumstances that will result in compliance with the applicable Federal and state securities laws and that in connection with sales and offers to sell Shares you will furnish to each person to whom any such sale or offer is made a copy of the then current Prospectus for the appropriate Fund (as the amended or supplemented) and will not furnish to any persons any information relating to Shares which is inconsistent in any respect with the information contained in the then current Prospectus or cause any advertisement to be published in any newspaper or posted in any public place without our consent and the consent of the appropriate Fund. You shall be responsible for any required filing of such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate Fund. We reserve the right, in our discretion, without notice, to modify, suspend or withdraw entirely the offering of any Shares, and upon notice to change the price, sales charge, or dealer discount or to modify, cancel or change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are a registered securities dealer and a member in good standing of the National Association of Securities Dealers, Inc. and agree to comply with all applicable state and Federal laws, rules and regulations applicable to transactions hereunder and to the Rules of Fair Practice of the National Association of Securities Dealers, Inc., including specifically Section 26, Article III thereof. You likewise agree that you will not offer to sell Shares in any state or other jurisdiction in which they may not lawfully be offered for sale.
11. You shall provide such office space and equipment, telephone facilities, personnel and literature distribution as is necessary or appropriate for providing information and services to your customers. Such services and assistance may include, but not be
limited to, establishment and maintenance of shareholder accounts and records, processing purchase and redemption transactions, answering routine inquiries regarding the Funds, and such other services as may be agreed upon from time to time and as may be permitted by applicable statute, rule, or regulation. You shall perform these services in good faith and with reasonable care. You shall immediately inform the Funds or us of all written complaints received by you from Fund shareholders relating to the maintenance of their accounts and shall promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago, Illinois 60606. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State of Illinois. This Agreement is subject to the Prospectuses of the Funds from time to time in effect, and, in the event of a conflict, the terms of the Prospectuses shall control. References herein to the "Prospectus" of a Fund shall mean the prospectus and statement of additional information of such Fund as from time to time in effect. Any changes, modifications or additions reflected in any such Prospectus shall be effective on the date of such Prospectus (or supplement thereto) unless specified otherwise. This Agreement shall supersede any prior dealer distribution agreement with respect to the Funds.
JOHN NUVEEN & CO. INCORPORATED
By:
We have read the foregoing agreement and accept and agree to the terms and conditions therein.
Firm Name
6/6/95
EXHIBIT A TO NUVEEN MUTUAL FUNDS
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
Policies and Procedures With Respect to Sales of Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have the following classes of shares generally available to the public: Class A Shares, which are normally subject to an up-front sales charge and a service fee; Class B Shares, which are subject to an asset-based sales charge, a service fee, and a declining contingent deferred sales charge ("CDSC"); and Class C Shares, which are subject to an asset-based sales charge, a service fee, and a 12-month CDSC , it is important for an investor to choose the method of purchasing shares which best suits his or her particular circumstances. To assist investors in these decisions, John Nuveen & Co. Incorporated, underwriter for the Nuveen Mutual Funds, has instituted the following policies with respect to orders for Fund shares. These policies apply to each Authorized Dealer which distributes Fund shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000 should be placed only for Class A shares, unless such purchase for Class B or Class C Shares has been reviewed and approved by the Authorized Dealer's appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B
or Class C Shares in light of the relevant facts and circumstances,
including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his or her
Shares;
c. whether the investor expects to reinvest dividends; and
d. any other relevant circumstances such as the availability of
purchases under a letter of intent, a combined discount or a
cumulative discount, as described in the Prospectus for the
Fund, and any anticipated changes in the funds net asset value
per share.
There are instances when one method of purchasing Shares may be more appropriate than the other. For example, investors who would qualify for a significant discount from the maximum sales load on Class A Shares might determine that payment of such a reduced up-front sales charge is preferable to the payment of a higher ongoing distribution fee on Class B or Class C Shares. On the other hand, investors who prefer not to pay an up-front sales charge may wish to defer the sales charge by purchasing Class B or Class C Shares. Those who plan to redeem their shares within five years might consider Class C Shares, particularly if they do not expect to reinvest dividends in additional shares. Note that, if an investor anticipate redeeming Class B Shares within a short period of time such as one year, that investor may bear higher distribution expenses than if Class A Shares had been purchased. In addition, investors who intend to hold their shares for a significantly long time may not wish to bear the higher ongoing asset-based sales charges of Class B or Class C
Shares, irrespective of the fact that the CDSC that would apply to a redemption of Class B Shares is reduced over time and is ultimately eliminated, and that the CDSC that would apply to a redemption of Class C Shares is relatively short in duration and small in amount.
Appropriate supervisory personnel within your organization must ensure that all employees receiving investor inquiries about the purchase of shares of the Funds advise the investor of the available pricing structures offered by the Funds and the impact of choosing one method over another, including breakpoints and the availability of letters of intent, combined purchases and cumulative discounts. In some instances it may be appropriate for a supervisory person to discuss a purchase with the investor.
These policies are effective immediately with respect to any order for the purchase of shares of the Funds.
Nuveen Tax-Free Mutual Funds
CUSIP QUOTRON
Number Symbol
Money Market Funds
Nuveen Tax-Exempt Money Market Fund, Inc. 670634104 NUVXX
Nuveen Tax-Free Reserves, Inc. 670639103 NRFXX
Nuveen CA Tax-Free Money Market Fund -
Service Portfolio 670620303 NCTXX
Distribution Portfolio 67062D402 NCTXX
Institutional Portfolio 67062D501 NCTXX
Nuveen MA Tax-Free Money Market Fund -
Service Portfolio 670637107 NMAXX
Distribution Portfolio 670637206 NMAXX
Institutional Portfolio 670637305 NMAXX
Nuveen NY Tax-Free Money Market Fund -
Service Portfolio 670637404 NTFXX
Distribution Portfolio 670637503 NTFXX
Institutional Portfolio 670637602 NTFXX
Nuveen Tax-Free Mutual Funds with Multiclass Shares
R SHARE A SHARE C SHARE
CUSIP QUOTRON CUSIP QUOTRON CUSIP QUOTRON
NUMBER SYMBOL NUMBER SYMBOL NUMBER SYMBOL
Long Term Value Funds
Nuveen Municipal Bond Fund, Inc. 670623107 NUVBX 670623206 NMBAX 670623305 #
Nuveen AZ Tax-Free Value Fund 67062Y109 NMARX* 67062Y174 # 67062Y182 #
Nuveen CA Tax-Free Value Fund 67062D105 NCSPX 67062D600 NCAAX* 67062D709 #
Nuveen FL Tax-Free Value Fund 67062Y117 NMFLX 67062Y703 NFLAX* 67062Y802 #
Nuveen MD Tax-Free Value Fund 67062Y125 NMMDX 67062Y190 NMDAX* 67062Y208 #
Nuveen MA Tax-Free Value Fund 670636109 NBMAX 670636406 NMAAX* 670636505 #
Nuveen MI Tax-Free Value Fund 67062Y133 NMMIX 67062Y885 # 67062Y877 #
Nuveen NJ Tax-Free Value Fund 67062Y141 NMNJX 67062Y307 NNJAX* 67062Y406 #
Nuveen NY Tax-Free Value Fund 670636208 NTNYX 670636604 NNYAX* 670636703 #
Nuveen OH Tax-Free Value Fund 670636307 NXOHX 670636802 NOHAX* 670636885 #
Nuveen PA Tax-Free Value Fund 67062Y158 NBPAX 67062Y869 # 67062Y851 #
Nuveen VA Tax-Free Value Fund 67062Y166 NMVAX 67062Y505 # 67062Y604 #
Long Insured Value Funds
Nuveen Insured Municipal Bond Fund 67062G108 NITNX 67062G405 NMBIX 67062G504 #
Nuveen CA Insured Tax-Free Value Fund 67062D204 NCIBX 67062D808 # 67062D881 #
Nuveen NY Insured Tax-Free Value Fund 67062G306 NINYX 67062G801 NNYIX* 67062G884 #
Nuveen MA Insured Tax-Free Value Fund 67062G207 NIMAX 67062G603 # 67062G702 #
|
Nuveen/ICAP Equity and Balanced Mutual Funds with Multiclass Shares
A Share B Share C Share R Share
Cusip
Quotron Quotron CUSIP Quotron Cusip Quotron Cusip
Number
Symbol Symbol Number Symbol Number Symbol Number
Nuveen Growth
and Income Stock Fund 67064Y107 # 67064Y206 # 67064Y305 # 67064Y404 #
Nuveen Balanced Stock
and Bond Fund 67064Y1883 # 67064Y875 # 67064Y867 # 67064Y859 #
Nuveen Balanced Municipal
and Stock Fund 67064Y503 # 67064Y602 # 67064Y701 #6 67064Y800 #
|
# Will receive a supplemental listing when the number of class shareholder accounts is 300 or when the class asset base reaches $1 million.
Note: A Quotron Symbol requires 1,000 shareholder accounts or $25 million in assets
* Denotes supplemental listing only
NUVEEN TAX-EXEMPT MUTUAL FUNDS DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT (Bank Version) As principal underwriter of shares of common stock (the "Shares") of the |
various Nuveen non-money market open-end mutual funds and any future such funds (collectively, the "Funds"), we offer to make available Shares for purchase by your customers on the following terms:
1. In all sales of Shares to the public you shall act as agent for your
customers, and in no transaction shall you have any authority to act as
agent for any Fund or for us. The customers in question are for all
purposes your customers and not customers of John Nuveen & Co.
Incorporated. We shall execute transactions for each of your customers
only upon your authorization, it being understood in all cases that (a) you
are acting as agent for the customer; (b) the transactions are without
recourse against you by the customer; (c) as between you and the customer,
the customer will have full beneficial ownership of the securities; (d)
each transaction is initiated solely upon the order of the customer; and
(e) each transaction is for the account of the customer and not for your
account.
2. Orders received from you shall be accepted by us only at the public offering price applicable to each order, as established by the then current Prospectus of the appropriate Fund, subject to the discounts provided in such Prospectus. Upon receipt from you of any order to purchase Shares we shall confirm to you in writing or by wire to be followed by a confirmation in writing, and we shall concurrently send to your customer a letter confirming such order, together with a copy of the appropriate Fund's current Prospectus. Additional instructions may be forwarded to you from time to time. All orders are subject to acceptance or rejection by us in our sole discretion .
3. Members of the general public, including your customers, may purchase Shares only at the public offering price determined in the manner described in the current Prospectus of the appropriate Fund. Shares will be offered at a public offering price based upon the net asset value of such Shares plus, with respect to certain class(es) of Shares, a sales charge which, together with the amount of that sales charge to be retained by banks acting as agent for their customers, is set forth in the Prospectus. You may receive a distribution fee and/or a service fee with respect to certain class(es) of Shares for which such fees are applicable, as provided in the applicable Prospectus, which distribution fee and/or service fee shall be payable for such periods and at such intervals as are from time to time specified by us. Your placement of an order for Shares after the date of any notice of such amendment shall conclusively evidence your agreement to be bound thereby. Reduced sales charges may also be available as a result of a cumulative discount or pursuant to a letter of intent. Further information as to such reduced sales charges, if any, is set forth in the appropriate Fund Prospectus. You agree to advise us promptly as to the amounts of any sales made by or though you to the public qualifying for reduced sales charges.
4. By accepting this Agreement, you agree:
(a) That you will purchase Shares only from us, and only to cover purchase orders already received from your customers;
(b) That you will not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding; and
(c) That, with respect to the sale of Shares of Funds that offer multiple classes of Shares, you will comply with the terms of the Policies and Procedures with Respect to Sales of Multiple Classes of Shares, attached hereto as Exhibit A.
5. We will not accept from you any conditional orders for Shares.
6. Payment for Shares ordered from us shall be in New York clearing house funds and must be received by the Funds' agent, Shareholder Services, Inc., P. O. Box 5330, Denver, Colorado 80217-5330, within three business days after our acceptance of your order. If such payment is not received, we reserve the right, without notice, forthwith to cancel the sale or, at our option, to cause the Fund to redeem the Shares ordered, in which case we may hold you responsible for any loss, including loss of profit, suffered by us as result of your or your customer's failure to make such payment. If any Shares confirmed to you or your customer under the terms of this agreement are repurchased by the issuing Fund or by us as agent for the Fund, or are tendered for repurchase, within seven business days after the date of our confirmation of the original purchase order, you shall promptly refund to us the full discount, commission, or other concession, if any, allowed or paid to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares or any Fund except those contained in the applicable current Prospectus and printed information issued by the appropriate Fund or by us as information supplemental to such Prospectus. You agree that you will not offer or sell any Shares except under circumstances that will result in compliance with the applicable Federal and state securities laws and that in connection with sales and offers to sell Shares you will furnish to each person to whom any such sale or offer is made a copy of the then current Prospectus for the appropriate Fund (as amended or supplemented) and will not furnish to any persons any information relating to Shares which is inconsistent in any respect with the information contained in the then current Prospectus or cause any advertisement to be published in any newspaper or posted in any public place without our consent and the consent of the appropriate Fund. You shall be responsible for any required filing of such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate Fund. We reserve the right, in our discretion, without notice, to modify, suspend or withdraw entirely the offering of any Shares, and upon notice to change the price, sales charge, or dealer discount or to modify, cancel or change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are a bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934, as amended, and are duly authorized to engage in the transactions to be performed hereunder. You hereby agree to comply with all applicable state and Federal laws, rules and regulations applicable to transactions hereunder. You likewise agree that you will not make Shares available in any state or other jurisdiction in which they may not lawfully be offered for sale.
11. You shall provide such office space and equipment, telephone facilities, personnel and literature distribution as is necessary or appropriate for providing information and
services to your customers. Such services and assistance may include, but not be limited to, establishment and maintenance of shareholder accounts and records, processing purchase and redemption transactions, answering routine inquiries regarding the Funds, and such other services as may be agreed upon from time to time and as may be permitted by applicable statute, rule, or regulation. You shall perform these services in good faith and with reasonable care. You shall immediately inform the Funds or us of all written complaints received by you from Fund shareholders relating to the maintenance of their accounts and shall promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago, Illinois 60606. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State of Illinois. This Agreement is subject to the Prospectuses of the Funds from time to time in effect, and, in the event of a conflict, the terms of the Prospectuses shall control. References herein to the "Prospectus" of a Fund shall mean the prospectus and statement of additional information of such Fund as from time to time in effect. Any changes, modifications or additions reflected in any such Prospectus shall be effective on the date of such Prospectus (or supplement thereto) unless specified otherwise. This Agreement shall supersede any prior dealer distribution agreement with respect to the Funds.
JOHN NUVEEN & CO. INCORPORATED
We have read the foregoing agreement and accept and agree to the terms and conditions therein.
Firm Name
EXHIBIT A TO NUVEEN MUTUAL FUNDS
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
Policies and Procedures With Respect to Sales of Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have the following classes of shares generally available to the public: Class A Shares, which are normally subject to an up-front sales charge and a service fee; Class B Shares, which are subject to an asset-based sales charge, a service fee, and a declining contingent deferred sales charge ("CDSC"); and Class C Shares, which are subject to an asset-based sales charge, a service fee, and a 12-month CDSC , it is important for an investor to choose the method of purchasing shares which best suits his or her particular circumstances. To assist investors in these decisions, John Nuveen & Co. Incorporated, underwriter for the Nuveen Mutual Funds, has instituted the following policies with respect to orders for Fund shares. These policies apply to each Authorized Dealer which distributes Fund shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000 should be placed only for Class A shares, unless such purchase for Class B or Class C Shares has been reviewed and approved by the Authorized Dealer's appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B
or Class C Shares in light of the relevant facts and circumstances,
including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his or her
Shares;
c. whether the investor expects to reinvest dividends; and
d. any other relevant circumstances such as the availability of
purchases under a letter of intent, a combined discount or a
cumulative discount, as described in the Prospectus for the
Fund, and any anticipated changes in the funds net asset value
per share.
There are instances when one method of purchasing Shares may be more appropriate than the other. For example, investors who would qualify for a significant discount from the maximum sales load on Class A Shares might determine that payment of such a reduced up-front sales charge is preferable to the payment of a higher ongoing distribution fee on Class B or Class C Shares. On the other hand, investors who prefer not to pay an up-front sales charge may wish to defer the sales charge by purchasing Class B or Class C Shares. Those who plan to redeem their shares within five years might consider Class C Shares, particularly if they do not expect to reinvest dividends in additional shares. Note that, if an investor anticipate redeeming Class B Shares within a short period of time such as one year, that investor may bear higher distribution expenses than if Class A Shares had been purchased. In addition, investors who intend to hold their shares for a significantly long time may not wish to bear the higher ongoing asset-based sales charges of Class B or Class C
Shares, irrespective of the fact that the CDSC that would apply to a redemption of Class B Shares is reduced over time and is ultimately eliminated, and that the CDSC that would apply to a redemption of Class C Shares is relatively short in duration and small in amount.
Appropriate supervisory personnel within your organization must ensure that all employees receiving investor inquiries about the purchase of shares of the Funds advise the investor of the available pricing structures offered by the Funds and the impact of choosing one method over another, including breakpoints and the availability of letters of intent, combined purchases and cumulative discounts. In some instances it may be appropriate for a supervisory person to discuss a purchase with the investor.
These policies are effective immediately with respect to any order for the purchase of shares of the Funds.
NUVEEN TAX-FREE MUTUAL FUNDS
CUSIP QUOTRON
NUMBER SYMBOL
MONEY MARKET FUNDS
Nuveen Tax-Exempt Money Market Fund, Inc. 670634104 NUVXX
Nuveen Tax-Free Reserves, Inc. 670639103 NRFXX
Nuveen CA Tax-Free Money Market Fund -
Service Portfolio 670620303 NCTXX
Distribution Portfolio 67062D402 NCTXX
Institutional Portfolio 67062D501 NCTXX
Nuveen MA Tax-Free Money Market Fund -
Service Portfolio 670637107 NMAXX
Distribution Portfolio 670637206 NMAXX
Institutional Portfolio 670637305 NMAXX
Nuveen NY Tax-Free Money Market Fund -
Service Portfolio 670637404 NTFXX
Distribution Portfolio 670637503 NTFXX
Institutional Portfolio 670637602 NTFXX
Nuveen Tax-Free Mutual Funds with Multiclass Shares
|
R SHARE A SHARE C SHARE
CUSIP QUOTRON CUSIP QUOTRON CUSIP QUOTRON
NUMBER SYMBOL NUMBER SYMBOL NUMBER SYMBOL
LONG TERM VALUE FUNDS
Nuveen Municipal Bond Fund, Inc. 670623107 NUVBX 670623206 NMBAX 670623305 #
Nuveen AZ Tax-Free Value Fund 67062Y109 NMARX* 67062Y174 # 67062Y182 #
Nuveen CA Tax-Free Value Fund 67062D105 NCSPX 67062D600 NCAAX* 67062D709 #
Nuveen FL Tax-Free Value Fund 67062Y117 NMFLX 67062Y703 NFLAX* 67062Y802 #
Nuveen MD Tax-Free Value Fund 67062Y125 NMMDX 67062Y190 NMDAX* 67062Y208 #
Nuveen MA Tax-Free Value Fund 670636109 NBMAX 670636406 NMAAX* 670636505 #
Nuveen MI Tax-Free Value Fund 67062Y133 NMMIX 67062Y885 # 67062Y877 #
Nuveen NJ Tax-Free Value Fund 67062Y141 NMNJX 67062Y307 NNJAX* 67062Y406 #
Nuveen NY Tax-Free Value Fund 670636208 NTNYX 670636604 NNYAX* 670636703 #
Nuveen OH Tax-Free Value Fund 670636307 NXOHX 670636802 NOHAX* 670636885 #
Nuveen PA Tax-Free Value Fund 67062Y158 NBPAX 67062Y869 # 67062Y851 #
Nuveen VA Tax-Free Value Fund 67062Y166 NMVAX 67062Y505 # 67062Y604 #
LONG INSURED VALUE FUNDS
Nuveen Insured Municipal Bond Fund 67062G108 NITNX 67062G405 NMBIX 67062G504 #
Nuveen CA Insured Tax-Free Value Fund 67062D204 NCIBX 67062D808 # 67062D881 #
Nuveen NY Insured Tax-Free Value Fund 67062G306 NINYX 67062G801 NNYIX* 67062G884 #
Nuveen MA Insured Tax-Free Value Fund 67062G207 NIMAX 67062G603 # 67062G702 #
|
Nuveen/ICAP Equity and Balanced Mutual Funds with Multiclass Shares
A SHARE B SHARE C SHARE R SHARE
CUSIP Quotron CUSIP Quotron CUSIP Quotron CUSIP
Quotron
Number Symbol Number Symbol Number Symbol Number
Symbol
Nuveen Growth
and Income Stock Fund 67064Y107 # 67064Y206 # 67064Y305 # 67064Y404 #
Nuveen Balanced Stock
and Bond Fund 67064Y1883 # 67064Y875 # 67064Y867 # 67064Y859 #
Nuveen Balanced Municipal
and Stock Fund 67064Y503 # 67064Y602 # 67064Y701 #6 67064Y800 #
|
# Will receive a supplemental listing when the number of class shareholder accounts is 300 or when the class asset base reaches $1 million.
Note: A Quotron Symbol requires 1,000 shareholder accounts or $25 million in assets
* Denotes supplemental listing only
NUVEEN TAX-EXEMPT MUTUAL FUNDS (Version for Bank-Affiliated Broker-Dealers)
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
As principal underwriter of shares of common stock (the "Shares") of the various Nuveen non-money market open-end mutual funds and any future such funds (collectively, the "Funds"), we offer to make available Shares for purchase by your customers on the following terms:
1. In all sales of Shares to the public you shall act as agent for your
customers, and in no transaction shall you have any authority to act as
agent for any Fund or for us. The customers in question are for all
purposes your customers and not customers of John Nuveen & Co.
Incorporated. We shall execute transactions for each of your customers
only upon your authorization, it being understood in all cases that (a) you
are acting as agent for the customer; (b) the transactions are without
recourse against you by the customer; (c) as between you and the customer,
the customer will have full beneficial ownership of the securities; (d)
each transaction is initiated solely upon the order of the customer; and
(e) each transaction is for the account of the customer and not for your
account.
2. Orders received from you shall be accepted by us only at the public offering price applicable to each order, as established by the then current Prospectus of the appropriate Fund, subject to the discounts provided in such Prospectus. Upon receipt from you of any order to purchase Shares we shall confirm to you in writing or by wire to be followed by a confirmation in writing, and we shall concurrently send to your customer a letter confirming such order, together with a copy of the appropriate Fund's current Prospectus. Additional instructions may be forwarded to you from time to time. All orders are subject to acceptance or rejection by us in our sole discretion.
3. Members of the general public, including your customers, may purchase Shares only at the public offering price determined in the manner described in the current Prospectus of the appropriate Fund. Shares will be offered at a public offering price based upon the net asset value of such Shares plus, with respect to certain class(es) of Shares, a sales charge which, together with the amount of that sales charge to be retained by banks or bank-affiliated broker-dealers acting as agent for their customers, is set forth in the Prospectus. You may receive a distribution fee and/or a service fee with respect to certain class(es) of Shares for which such fees are applicable, as provided in the applicable Prospectus, which distribution fee and/or service fee shall be payable for such periods and at such intervals as are from time to time specified by us. Your placement of an order for Shares after the date of any notice of such amendment shall conclusively evidence your agreement to be bound thereby. Reduced sales charges may also be available as a result of a cumulative discount or pursuant to a letter of intent. Further information as to such reduced sales charges, if any, is set forth in the appropriate Fund Prospectus. You agree to advise us promptly as to the amounts of any sales made by or though you to the public qualifying for reduced sales charges.
4. By accepting this Agreement, you agree:
(a) That you will purchase Shares only from us, and only to cover purchase orders already received from your customers;
(b) That you will not withhold placing with us orders received from your customers so as to profit yourself as a result of such withholding; and
(c) That, with respect to the sale of Shares of Funds that offer multiple classes of Shares, you will comply with the terms of the Policies and Procedures with Respect to Sales of Multiple Classes of Shares, attached hereto as Exhibit A.
5. We will not accept from you any conditional orders for Shares.
6. Payment for Shares ordered from us shall be in New York clearing house funds and must be received by the Funds' agent, Shareholder Services, Inc., P. O. Box 5330, Denver, Colorado 80217-5330, within three business days after our acceptance of your order. If such payment is not received, we reserve the right, without notice, forthwith to cancel the sale or, at our option, to cause the Fund to redeem the Shares ordered, in which case we may hold you responsible for any loss, including loss of profit, suffered by us as result of your or your customer's failure to make such payment. If any Shares confirmed to you or your customer under the terms of this agreement are repurchased by the issuing Fund or by us as agent for the Fund, or are tendered for repurchase, within seven business days after the date of our confirmation of the original purchase order, you shall promptly refund to us the full discount, commission, or other concession, if any, allowed or paid to you on such Shares.
7. Shares sold hereunder shall be available in book-entry form on the books of Shareholder Services, Inc. unless other instructions have been given.
8. No person is authorized to make any representations concerning Shares or any Fund except those contained in the applicable current Prospectus and printed information issued by the appropriate Fund or by us as information supplemental to such Prospectus. You agree that you will not offer or sell any Shares except under circumstances that will result in compliance with the applicable Federal and state securities laws and that in connection with sales and offers to sell Shares you will furnish to each person to whom any such sale or offer is made a copy of the then current Prospectus for the appropriate Fund (as amended or supplemented) and will not furnish to any persons any information relating to Shares which is inconsistent in any respect with the information contained in the then current Prospectus or cause any advertisement to be published in any newspaper or posted in any public place without our consent and the consent of the appropriate Fund. You shall be responsible for any required filing of such advertising.
9. All sales will be made subject to our receipt of Shares from the appropriate Fund. We reserve the right, in our discretion, without notice, to modify, suspend or withdraw entirely the offering of any Shares, and upon notice to change the price, sales charge, or dealer discount or to modify, cancel or change the terms of this agreement.
10. Your acceptance of this agreement constitutes a representation that you are a registered securities broker-dealer and a member in good standing of the National Association of Securities Dealers, Inc. and agree to comply with all state and Federal laws, rules and regulations applicable to transactions hereunder and with the Rules of Fair Practice of the NASD, including specifically Section 26 of Article III thereof. You likewise agree that you will not offer to sell Shares in any state or other jurisdiction in which they may not lawfully be offered for sale. We agree to advise
you currently of the identity of those states and jurisdictions in which the Shares may lawfully be offered for sale.
11. You shall provide such office space and equipment, telephone facilities, personnel and literature distribution as is necessary or appropriate for providing information and services to your customers. Such services and assistance may include, but not be limited to, establishment and maintenance of shareholder accounts and records, processing purchase and redemption transactions, answering routine inquiries regarding the Funds, and such other services as may be agreed upon from time to time and as may be permitted by applicable statute, rule, or regulation. You shall perform these services in good faith and with reasonable care. You shall immediately inform the Funds or us of all written complaints received by you from Fund shareholders relating to the maintenance of their accounts and shall promptly answer all such complaints.
12. All communications to us should be sent to 333 W. Wacker Drive, Chicago, Illinois 60606. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below.
13. This Agreement shall be construed in accordance with the laws of the State of Illinois. This Agreement is subject to the Prospectuses of the Funds from time to time in effect, and, in the event of a conflict, the terms of the Prospectuses shall control. References herein to the "Prospectus" of a Fund shall mean the prospectus and statement of additional information of such Fund as from time to time in effect. Any changes, modifications or additions reflected in any such Prospectus shall be effective on the date of such Prospectus (or supplement thereto) unless specified otherwise. This Agreement shall supersede any prior distribution agreement with respect to the Funds.
JOHN NUVEEN & CO. INCORPORATED
By:
We have read the foregoing agreement and accept and agree to the terms and conditions therein.
Firm Name
The above agreement should be executed in duplicate and both copies returned to us for signature. We will return a fully executed copy to you for your files.
6/6/95
EXHIBIT A TO NUVEEN MUTUAL FUNDS
DISTRIBUTION AND SHAREHOLDER SERVICING AGREEMENT
Policies and Procedures With Respect to Sales of Multiple Classes of Funds
The Nuveen non-money market open-end mutual funds (the "Funds") have the following classes of shares generally available to the public: Class A Shares, which are normally subject to an up-front sales charge and a service fee; Class B Shares, which are subject to an asset-based sales charge, a service fee, and a declining contingent deferred sales charge ("CDSC"); and Class C Shares, which are subject to an asset-based sales charge, a service fee, and a 12-month CDSC , it is important for an investor to choose the method of purchasing shares which best suits his or her particular circumstances. To assist investors in these decisions, John Nuveen & Co. Incorporated, underwriter for the Nuveen Mutual Funds, has instituted the following policies with respect to orders for Fund shares. These policies apply to each Authorized Dealer which distributes Fund shares.
1. Purchase orders for a single purchaser equal to or exceeding $1,000,000 should be placed only for Class A shares, unless such purchase for Class B or Class C Shares has been reviewed and approved by the Authorized Dealer's appropriate supervisor.
2. Any purchase order for less than $1,000,000 may be for Class A, Class B or Class C Shares in light of the relevant facts and circumstances, including:
a. the specific purchase order dollar amount;
b. the length of time the investor expects to hold his or her Shares;
c. whether the investor expects to reinvest dividends; and
d. any other relevant circumstances such as the availability of purchases under a letter of intent, a combined discount or a cumulative discount, as described in the Prospectus for the Fund, and any anticipated changes in the funds net asset value per share.
There are instances when one method of purchasing Shares may be more appropriate than the other. For example, investors who would qualify for a significant discount from the maximum sales load on Class A Shares might determine that payment of such a reduced up-front sales charge is preferable to the payment of a higher ongoing distribution fee on Class B or Class C Shares. On the other hand, investors who prefer not to pay an up-front sales charge may wish to defer the sales charge by purchasing Class B or Class C Shares. Those who plan to redeem their shares within five years might consider Class C Shares, particularly if they do not expect to reinvest dividends in additional shares. Note that, if an investor anticipate redeeming Class B Shares within a short period of time such as one year, that investor may bear higher distribution expenses than if Class A Shares had been purchased. In addition, investors who intend to hold their shares for a significantly long time may not wish to bear the higher ongoing asset-based sales charges of Class B or Class C
Shares, irrespective of the fact that the CDSC that would apply to a redemption of Class B Shares is reduced over time and is ultimately eliminated, and that the CDSC that would apply to a redemption of Class C Shares is relatively short in duration and small in amount.
Appropriate supervisory personnel within your organization must ensure that all employees receiving investor inquiries about the purchase of shares of the Funds advise the investor of the available pricing structures offered by the Funds and the impact of choosing one method over another, including breakpoints and the availability of letters of intent, combined purchases and cumulative discounts. In some instances it may be appropriate for a supervisory person to discuss a purchase with the investor.
These policies are effective immediately with respect to any order for the purchase of shares of the Funds.
Nuveen Tax-Free Mutual Funds
CUSIP QUOTRON
Number Symbol
Money Market Funds
Nuveen Tax-Exempt Money Market Fund, Inc. 670634104 NUVXX
Nuveen Tax-Free Reserves, Inc. 670639103 NRFXX
Nuveen CA Tax-Free Money Market Fund --
Service Portfolio 670620303 NCTXX
Distribution Portfolio 67062D402 NCTXX
Institutional Portfolio 67062D501 NCTXX
Nuveen MA Tax-Free Money Market Fund --
Service Portfolio 670637107 NMAXX
Distribution Portfolio 670637206 NMAXX
Institutional Portfolio 670637305 NMAXX
Nuveen NY Tax-Free Money Market Fund --
Service Portfolio 670637404 NTFXX
Distribution Portfolio 670637503 NTFXX
Institutional Portfolio 670637602 NTFXX
Nuveen Tax-Free Mutual Funds with Multiclass Shares
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R SHARE A SHARE C SHARE
CUSIP Quotron CUSIP Quotron CUSIP Quotron
NUMBER Symbol NUMBER Symbol NUMBER Symbol
Long Term Value Funds
Nuveen Municipal Bond Fund, Inc. 670623107 NUVBX 670623206 NMBAX 670623305 #
Nuveen AZ Tax-Free Value Fund 67062Y109 NMARX* 67062Y174 # 67062Y182 #
Nuveen CA Tax-Free Value Fund 67062D105 NCSPX 67062D600 NCAAX* 67062D709 #
Nuveen FL Tax-Free Value Fund 67062Y117 NMFLX 67062Y703 NFLAX* 67062Y802 #
Nuveen MD Tax-Free Value Fund 67062Y125 NMMDX 67062Y190 NMDAX* 67062Y208 #
Nuveen MA Tax-Free Value Fund 670636109 NBMAX 670636406 NMAAX* 670636505 #
Nuveen MI Tax-Free Value Fund 67062Y133 NMMIX 67062Y885 # 67062Y877 #
Nuveen NJ Tax-Free Value Fund 67062Y141 NMNJX 67062Y307 NNJAX* 67062Y406 #
Nuveen NY Tax-Free Value Fund 670636208 NTNYX 670636604 NNYAX* 670636703 #
Nuveen OH Tax-Free Value Fund 670636307 NXOHX 670636802 NOHAX* 670636885 #
Nuveen PA Tax-Free Value Fund 67062Y158 NBPAX 67062Y869 # 67062Y851 #
Nuveen VA Tax-Free Value Fund 67062Y166 NMVAX 67062Y505 # 67062Y604 #
Long Insured Value Funds
Nuveen Insured Municipal Bond Fund 67062G108 NITNX 67062G405 NMBIX 67062G504 #
Nuveen CA Insured Tax-Free Value Fund 67062D204 NCIBX 67062D808 # 67062D881 #
Nuveen NY Insured Tax-Free Value Fund 67062G306 NINYX 67062G801 NNYIX* 67062G884 #
Nuveen MA Insured Tax-Free Value Fund 67062G207 NIMAX 67062G603 # 67062G702 #
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Nuveen/ICAP Equity and Balanced Mutual Funds with Multiclass Shares
A Share B Share C Share R Share
Cusip
Quotron
Number Quotron Cusip Quotron Cusip Quotron Cusip Quotron
Symbol Symbol Number Symbol Number Symbol Number Symbol
Nuveen Growth
and Income Stock Fund 67064Y107 # 67064Y206 # 67064Y305 # 67064Y404 #
Nuveen Balanced Stock
and Bond Fund 67064Y1883 # 67064Y875 # 67064Y867 # 67064Y859 #
Nuveen Balanced Municipal
and Stock Fund 67064Y503 # 67064Y602 # 67064Y701 #6 67064Y800 #
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# Will receive a supplemental listing when the number of class shareholder accounts is 300 or when the class asset base reaches $1 million.
Note: A Quotron Symbol requires 1,000 shareholder accounts or $25 million in assets
* Denotes supplemental listing only
EXHIBIT (b)8
TABLE OF CONTENTS
Page
----
1. Appointment 1
2. Delivery of Documents 1
3. Definitions 3
4. Delivery and Registration of the Property 4
5. Voting Rights 5
6. Receipt and Disbursement of Money 5
6A. Advances By Custodian 7
7. Receipt and Delivery of Securities 8
8. Use of Securities Depository or the Book Entry System 9
9. Segregated Account 11
10. Instructions Consistent With The Declaration, etc. 12
11. Transaction Not Requiring Instructions, 15
Collection of Income and Other Payments 15
Miscellaneous Transactions 16
12. Transactions Requiring Instructions 17
13. Purchase of Securities 19
14. Sale of Securities 20
15. Not In Use 20
16. Records 20
17. Cooperation with Accountants 21
18. Reports to Fund Independent Public Accountants 21
19. Confidentiality 21
20. Equipment Failures 22
21. Right to Receive Advice 22
22. Compliance with Governmental Rules and Regulations 23
23. Compensation 23
24. Indemnification 24
25. Responsibility of Chase Manhattan Bank 25
26. Collection of Income 26
27. Ownership Certificates for Tax Purposes 26
28. Effective Period; Terminations and Amendment 27
29. Successor Custodian 28
30. Notices 29
31. Further Actions 29
32. Amendments 30
33. Additional Funds 30
34. Miscellaneous 30
35. Declaration of Trust 30
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THIS AGREEMENT is made this 15th day of July, 1996 by and between NUVEEN
INVESTMENT TRUST (the "Fund"), and CHASE MANHATTAN BANK, N.A., a New York State
chartered bank.
W I T N E S S E T H
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interest in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends to initially offer shares in three series, Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund (such series together with all other series subsequently established by the Fund and made subject to this Contract in accordance with paragraph 33, being herein referred to as the "Fund(s)"):
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints Chase Manhattan Bank, N.A. to act as custodian of its portfolio securities, cash and other property on the terms set forth in this Agreement. Chase Manhattan Bank, N.A. accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Section 23 of this Agreement.
2. DELIVERY OF DOCUMENTS. The Fund has furnished Chase Manhattan Bank, N.A. with copies properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Trustees authorizing the appointment of Chase Manhattan Bank, N.A. as Custodian of the portfolio securities, cash and other property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and containing the signatures of the Fund's officers and/or the persons authorized to sign Proper Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Declaration of Trust filed with the Commonwealth of Massachusetts and all amendments thereto (such Declaration of Trust as currently in effect and from time to time, be amended, are herein called the "Declaration");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as currently in effect and as they shall from time to time be amended, are herein called the "By-Laws"),
(e) Resolutions of the Fund's Board of Trustees appointing the investment advisor of the Fund and resolutions of the Fund's Board of Trustees and the Fund's Shareholders approving the proposed Investment Advisory Agreement between the Fund and the advisor (the "Advisory Agreement");
(f) The Advisory Agreement
(g) The Fund's Registration Statement on Form N-1A under the 1940 Act and
the Securities Act of 1933, as amended ("the 1933 Act") as filed with the SEC;
and
(h) The Fund's most recent prospectus and statement of additional
information including all amendments and supplements thereto (the "Prospectus").
Upon request the Fund will furnish Chase Manhattan Bank, N.A. with copies of all amendments of or supplements to the foregoing, if any. The Fund will also furnish Chase Manhattan Bank, N.A. upon request with a copy of the opinion of counsel for the Fund with respect to the validity of the Shares and the status of such Shares under the 1933 Act filed with the SEC, and any other applicable federal law or regulation.
(a) "Authorized Person". As used in this Agreement, the term "Authorized Person" means the Fund's President, Treasurer and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Trustees of the Fund to give Proper Instructions on behalf of the Fund as set forth in resolutions of the Fund's Board of Trustees.
(b) "Book-Entry System". As used in this Agreement, the term "Book-Entry System" means a book-entry system authorized by the U.S. Department of Treasury, its successor or successors and its nominee or nominees.
(c) "Proper Instructions". Proper Instructions as used herein means a writing signed or initialed by two or more persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction or type of transaction involved, including a specific statement of the purpose for which such action is requested. Oral instructions will be considered Proper Instructions if Chase Manhattan Bank, N.A. reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. The Fund shall cause all such oral instructions to be confirmed in writing. Upon receipt of a certificate of the Secretary or an Assistant Secretary as to the authorization by the Board of Trustees of the Fund accompanied by a detailed description of procedures approved by the Board of Trustees, Proper Instructions may include communications effected directly between electro-mechanical or electronic devices provided that the Board of Trustees and Chase Manhattan Bank, N.A. are satisfied that such procedures afford adequate safeguards for the Fund's assets. For purposes of this Section, Proper Instructions shall include instructions received by Chase Manhattan Bank, N.A. pursuant to any three-party agreement which requires a segregated asset account in accordance with Section 9.
(d) "Property". The term "Property", as used in this Agreement, means:
(i) any and all securities and other property of the Fund which the Fund may from time to time deposit, or cause to be deposited, with Chase Manhattan Bank, N.A. or which Chase Manhattan Bank, N.A. may from time to time hold for the Fund;
(ii) all income in respect of any such securities or other property;
(iii) all proceeds of the sales of any of such securities or other property; and
(iv) all proceeds of the sale of securities issued by the Fund, which are received by Chase Manhattan Bank, N.A. from time to time from or on behalf of the Fund.
(e) "Securities Depository". As used in this Agreement, the term "Securities Depository" shall mean The Depository Trust Company, a clearing agency registered with the SEC or its successor or successors and its nominee or nominees; and shall also mean any other registered clearing agency, its successor or successors specifically identified in a certified copy of a resolution of the Company's Board of Trustees approving deposits by Chase Manhattan Bank, N.A. therein.
4. DELIVERY AND REGISTRATION OF THE PROPERTY. The Fund will deliver or cause to be delivered to Chase Manhattan Bank, N.A. all securities and all moneys owned by it, including payments of interest, principal and capital distributions and cash received for the issuance of its Shares, at any time during the period of this Agreement, except for securities and monies to be delivered to any subcustodian appointed pursuant to Section 7 hereof. Chase Manhattan Bank, N.A. will not be responsible for such securities and such monies until actually received by it. All securities delivered to Chase Manhattan Bank, N.A. or to any such subcustodian (other than in bearer form) shall be registered in the name of the Fund or in the name of a nominee of the Fund or in the name of Chase Manhattan Bank, N.A. or any nominee of Chase Manhattan Bank, N.A. (with or without indication of fiduciary status) or in the name of any subcustodian or any nominee of such subcustodian appointed pursuant to Paragraph 7 hereof or shall be properly endorsed and in form for transfer satisfactory to Chase Manhattan Bank, N.A.
5. VOTING RIGHTS. With respect to all securities, however registered, it is understood that the voting and other rights and powers shall be exercised by the Fund. Chase Manhattan Bank, N.A.'s only duty shall be to mail for delivery on the next business day to the Fund any documents received, including proxy statements and offering circulars, with any proxies for securities registered in a nominee name executed by such nominee. Where warrants, options, tenders or other securities have fixed expiration dates, the Fund understands that in order for Chase Manhattan Bank, N.A. to act, Chase Manhattan Bank, N.A. must receive the Fund's instructions at its offices in New York, addressed as Chase Manhattan Bank, N.A. may from time to time request, by no later than noon (NY City time) at least one business day prior to the last scheduled date to act with respect thereto (or such earlier date or time as Chase Manhattan Bank, N.A. may reasonably notify the Fund). Absent Chase Manhattan Bank, N.A.'s timely receipt of such instructions, such instruments will expire without liability to Chase Manhattan Bank, N.A.
6. RECEIPT AND DISBURSEMENT OF MONEY.
(a) Chase Manhattan Bank, N.A. shall open and maintain a custody account for the Fund, subject only to draft or order by Chase Manhattan Bank, N.A. acting pursuant to the terms of this Agreement, and shall hold in such account, subject to the provisions hereof, all
cash received by it from or for the Fund other than cash maintained by the Fund in a bank account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by Chase Manhattan Bank, N.A. for the Fund may be deposited by it to its credit at Chase Manhattan Bank, N.A. in the Banking Department of Chase Manhattan Bank, N.A. or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act, and that each such bank or trust company shall be approved by vote of a majority of the Board of Trustees of the Fund. Such funds shall be deposited by Chase Manhattan Bank, N.A. in its capacity as Custodian and shall be withdrawable by Chase Manhattan Bank, N.A. only in that capacity.
(b) Upon receipt of Proper Instructions (which may be continuing
instructions as deemed appropriate by the parties) Chase Manhattan Bank, N.A.
shall make payments of cash to, or for the account of, the Fund from such cash
only (i) for the purchase of securities, options, futures contracts or options
on futures contracts for the Fund as provided in Section 13 hereof; (ii) in the
case of a purchase of securities effected through a Book-Entry System or
Securities Depository, in accordance with the conditions set forth in Section 8
hereof; (iii) in the case of repurchase agreements entered into between the Fund
and Chase Manhattan Bank, N.A., or another bank, or a broker-dealer which is a
member of The National Association of Securities Dealers, Inc. ("NASD"), either
(a) against delivery of the securities either in certificate form or through an
entry crediting Chase Manhattan Bank, N.A.'s account at the Federal Reserve Bank
with such securities or (b) against delivery of the receipt evidencing purchase
by the Fund of securities owned by Chase Manhattan Bank, N.A. along with written
evidence of the agreement by Chase Manhattan Bank, N.A. to repurchase such
securities from the Fund; (iv) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be effected
prior to receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund; (v) for the payment of dividends
or other distributions on shares declared pursuant to the governing documents of
the Fund, or for the payment of interest, taxes, administration, distribution or
advisory fees or expenses which are to be borne by the Fund under the terms of
this Agreement, any Advisory Agreement, or any administration
agreement; (vi) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund and held by or to be
delivered to Chase Manhattan Bank, N.A.; (vii) to a subcustodian pursuant to
Section 7 hereof; (viii) for such common expenses incurred by the Fund in the
ordinary course of its business, including but not limited to printing and
mailing expenses, legal fees, accountants fees, exchange fees; or (ix) for any
other proper purpose, but only upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of Trustees or of
the Executive Committee of the Fund signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying the amount of
such payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
(c) Chase Manhattan Bank, N.A. is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received as custodian for the Fund.
6A. ADVANCES BY CUSTODIAN. The Custodian may from time to time agree to advance cash to the Fund, without interest, for the fund's other proper corporate purposes. If the Custodian advances cash for any purpose, the Fund shall and hereby does grant to the Custodian a security interest in Fund securities equal in value to the amount of the cash advance but in no event shall the value of securities in which a security interest has been granted exceed 20% of the value of the Fund's total assets at the time of the pledge; should the Fund fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to reasonably dispose of any securities in which it has a security interest to the extent necessary to obtain reimbursement.
7. RECEIPT AND DELIVERY OF SECURITIES.
(a) Except as provided by Section 8 hereof, Chase Manhattan Bank, N.A. shall hold and physically segregate all securities and noncash Property received by it for the Fund. All such securities and non-cash Property are to be held or disposed of by Chase Manhattan Bank, N.A. for the Fund pursuant to the terms of this Agreement. In the absence of Proper Instructions accompanied by a certified resolution authorizing the specific transaction by the Fund's Board, Chase Manhattan Bank, N.A. shall have no power or authority to withdraw, deliver, assign, hypothecate, pledge or otherwise dispose of any such securities and
investments, except in accordance with the express terms provided for in this Agreement. In no case may any director, officer, employee or agent of the Fund withdraw any securities. In connection with its duties under this Section 7, Chase Manhattan Bank, N.A. may, at its own expense, enter into subcustodian agreements with other banks or trust companies for the receipt of certain securities and cash to be held by Chase Manhattan Bank, N.A. for the account of the Fund pursuant to this Agreement; provided that each such bank or trust company has an aggregate capital, surplus and undivided profits, as shown by its last published report, of not less than twenty million dollars ($20,000,000) and that such bank or trust company agrees with Chase Manhattan Bank, N.A. to comply with all relevant provisions of the 1940 Act and applicable rules and regulations thereunder. Chase Manhattan Bank, N.A. will be liable for acts or omissions of any subcustodian. Chase Manhattan Bank, N.A. shall employ sub- custodians upon receipt of Proper Instructions, but only in accordance with an applicable vote by the Board of Trustees of the Fund.
(b) Promptly after the close of business on each day Chase Manhattan Bank, N.A. shall furnish the Fund with confirmations and a summary of all transfers to or from the account of the Fund during said day. Where securities are transferred to the account of the Fund established at a Securities Depository or Book Entry System pursuant to Section 8 hereof, Chase Manhattan Bank, N.A. shall also by book-entry or otherwise identify as belonging to such Fund the quantity of securities in a fungible bulk of securities registered in the name of Chase Manhattan Bank, N.A. (or its nominee) or shown in Chase Manhattan Bank, N.A.'s account on the books of a Securities Depository or Book-Entry System. At least monthly and from time to time, Chase Manhattan Bank, N.A. shall furnish the Fund with a detailed statement of the Property held for the Fund under this Agreement.
8. USE OF SECURITIES DEPOSITORY OR BOOK-ENTRY SYSTEM. The Fund shall deliver to Chase Manhattan Bank, N.A. a certified resolution of the Board of Trustees of the Fund approving, authorizing and instructing Chase Manhattan Bank, N.A. on a continuous and ongoing basis until instructed to the contrary by Proper Instructions actually received by Chase Manhattan Bank, N.A. (i) to deposit in a Securities Depository or Book-Entry System all securities of the Fund eligible for deposit therein and (ii) to utilize a Securities Depository or Book-Entry System to the extent possible in connection with the performance
of its duties hereunder, including without limitation settlements of purchases and sales of securities by the Fund, and deliveries and returns of securities collateral in connection with borrowings. Without limiting the generality of such use, it is agreed that the following provisions shall apply thereto:
(a) Securities and any cash of the Fund deposited in a Securities Depository or Book-Entry System will at all times (1) be represented in an account of Chase Manhattan Bank, N.A. in the Securities Depository or Book Entry System (the "Account") and (2) be segregated from any assets and cash controlled by Chase Manhattan Bank, N.A. in other than a fiduciary or custodian capacity but may be commingled with other assets held in such capacities. Chase Manhattan Bank, N.A. will effect payment for securities and receive and deliver securities in accordance with accepted industry practices as set forth in (b) below, unless the Fund has given Chase Manhattan Bank, N.A. Proper Instructions to the contrary. The records of Chase Manhattan Bank, N.A. with respect to securities of the Fund maintained in a Securities Depository or Book Entry System shall identify by book entry those securities belonging to the Fund.
(b) Chase Manhattan Bank, N.A. shall pay for securities purchased for the
account of the Fund upon (i) receipt of advice from the Securities Depository or
Book Entry System that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of Chase Manhattan Bank, N.A. to
reflect such payment and transfer for the account of the Fund. Upon receipt of
Proper Instructions, Chase Manhattan Bank, N.A. shall transfer securities sold
for the account of the Fund upon (i) receipt of advice from the Securities
Depository or Book Entry System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the records of
Chase Manhattan Bank, N.A. to reflect such transfer and payment for the account
of the Fund. Copies of all advices from the Securities Depository or Book Entry
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by Chase Manhattan Bank, N.A. and be provided
to the Fund at its request. Upon request, Chase Manhattan Bank, N.A. shall
furnish the Fund confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's transactions in a Securities Depository or Book Entry System for the account of the Fund.
(c) Chase Manhattan Bank, N.A. shall provide the Fund with any report obtained by Chase Manhattan Bank, N.A. on the Securities Depository or Book Entry System's accounting system, internal accounting control and procedures for safeguarding securities deposited in the Securities Depository or Book Entry System;
(d) All Books and records maintained by Chase Manhattan Bank, N.A. which relate to the Fund participation in a Securities Depository or Book-Entry System will at all times during Chase Manhattan Bank, N.A.'s regular business hours be open to the inspection of the Fund's duly authorized employees or agents, and the Fund will be furnished with all information in respect of the services rendered to it as it may require.
(e) Anything to the contrary in this Agreement notwithstanding, Chase Manhattan Bank, N.A. shall be liable to the Fund for any loss or damage to the Fund resulting from any negligence, misfeasance or misconduct of Chase Manhattan Bank, N.A. or any of its agents or of any of its or their employees in connection with its or their use of the Securities Depository or Book Entry Systems or from failure of Chase Manhattan Bank, N.A. or any such agent to enforce effectively such rights as it may have against such Securities Depository or Book Entry System; at the election of the Fund, it shall be entitled to be subrogated to the rights of Chase Manhattan Bank, N.A. with respect to any claim against the Securities Depository or Book Entry System or any other person which Chase Manhattan Bank, N.A. may have as a consequence of any such loss or damage if and to the extent that the Fund has not been made whole for any such loss or damage.
9. SEGREGATED ACCOUNT. Chase Manhattan Bank, N.A. shall upon receipt of Proper Instructions establish and maintain a segregated account or accounts for and on behalf of the Fund, into which account or accounts may be transferred cash and/or securities, including securities maintained in an account by Chase Manhattan Bank, N.A. pursuant to Section 8 hereof, (i) in accordance with the provisions of any agreement among the Fund, Chase Manhattan Bank, N.A. and a broker dealer registered under the Securities and Exchange Act of 1934 and a member of the NASD (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or the Commodity Futures Trading Commission or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Fund, (ii) for purposes of segregating cash or government securities in connection with options purchased, sold or written by the Fund or commodity futures contracts or options thereon purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund with the procedures required by Investment Company Act Release No. 10666, or any subsequent release or releases of the Securities and Exchange Commission relating to the maintenance of segregated accounts by registered investment companies and (iv) for other proper corporate purposes, but only, in the case of clause (iv), upon receipt of, in addition to Proper Instructions, a certified copy of a resolution of the Board of Trustees or of the Executive Committee signed by an officer of the Fund and certified by the Secretary or an Assistant Secretary, setting forth the purpose or purposes of such segregated account and declaring such purposes to be proper corporate purposes.
10. INSTRUCTIONS CONSISTENT WITH THE DECLARATION, ETC.
(a) Unless otherwise provided in this Agreement, Chase Manhattan Bank, N.A. shall act only upon Proper Instructions. Chase Manhattan Bank, N.A. may assume that any Proper Instructions received hereunder are not in any way inconsistent with any provision of the Declaration or By-Laws or any vote or resolution of the Fund's Board of Trustees or any committee thereof. Chase Manhattan Bank, N.A. shall be entitled to rely upon any Proper Instructions actually received by Chase Manhattan Bank, N.A. pursuant to this Agreement. The Fund agrees that Chase Manhattan Bank, N.A. shall incur no liability in acting in good faith upon Proper Instructions given to Chase Manhattan Bank, N.A., except to the extent such liability was incurred as a result of Chase Manhattan Bank, N.A.'s negligence or willful misconduct. In accord with instructions from the Fund, as required by accepted industry practice or as Chase Manhattan Bank, N.A. may elect in effecting the execution of Fund instructions, advances of cash or other Property made by Chase Manhattan Bank, N.A., arising from the purchase, sale, redemption, transfer or other disposition of Property of the Fund, or in connection with the disbursement of funds to any party, or in payment of fees, expenses, claims or liabilities owed to Chase Manhattan Bank,
N.A. by the Fund, or to any other party which has secured judgment in a court of law against the Fund which creates an overdraft in the accounts or over-delivery of Property, shall be deemed a loan by Chase Manhattan Bank, N.A. to the Fund, payable on demand, bearing interest at such rate customarily charged by Chase Manhattan Bank, N.A. for similar loans.
(b) The Fund agrees that test arrangements, authentication methods or other security devices to be used with respect to instructions which the Fund may give by telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess, or through an electronic instruction system, shall be processed in accordance with terms and conditions for the use of such arrangements, methods or devices as Chase Manhattan Bank, N.A. may put into effect and modify from time to time. The Fund shall safeguard any test keys, identification codes or other security devices which Chase Manhattan Bank, N.A. makes available to the Fund and agrees that the Fund shall be responsible for any loss, liability or damage incurred by Chase Manhattan Bank, N.A. or by the Fund as a result of Chase Manhattan Bank, N.A.'s acting in accordance with instructions from any unauthorized person using the proper security device except to the extent such loss, liability or damage was incurred as a result of Chase Manhattan Bank, N.A.'s negligence or willful misconduct. Chase Manhattan Bank, N.A. may electronically record, but shall not be obligated to so record, any instructions given by telephone and any other telephone discussions with respect to the Fund. In the event that the Fund uses Chase Manhattan Bank, N.A.'s Asset Management system or any successor electronic communications or information system, the Fund agrees that Chase Manhattan Bank, N.A. is not responsible for the consequences of the failure of that system to perform for any reason, beyond the reasonable control of Chase Manhattan Bank, N.A., or the failure of any communications carrier, utility, or communications network. In the event that system is inoperable, the Fund agrees that it will accept the communication of transaction instructions by telephone, facsimile transmission on equipment compatible to Chase Manhattan Bank, N.A.'s facsimile receiving equipment or by letter, at no additional charge to the Fund.
(c) Chase Manhattan Bank, N.A. shall transmit promptly to the Fund all written information (including, without limitation, pendency of calls and maturities of securities and
expirations of rights in connection therewith and notices of exercise of call and put options written by the Fund and the maturity of futures contracts purchased or sold by the Fund) received by Chase Manhattan Bank, N.A. from issuers of the securities being held for the Fund. With respect to tender or exchange offers, Chase Manhattan Bank, N.A. shall transmit promptly by facsimile to the Fund all written information received by Chase Manhattan Bank, N.A. from issuers of the securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If the Fund desires to take action with respect to any tender offer, exchange offer or any other similar transaction, the Fund shall notify Chase Manhattan Bank, N.A. at least three business days prior to the date on which Chase Manhattan Bank, N.A. is to take such action or upon the date such notification is first received by the Fund, if later. If any Property registered in the name of a nominee of Chase Manhattan Bank, N.A. is called for partial redemption by the issuer of such property, Chase Manhattan Bank, N.A. is authorized to allot the called portion to the respective beneficial holders of the Property in such manner deemed to be fair and equitable by Chase Manhattan Bank, N.A. in its sole discretion.
11. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. Chase Manhattan Bank, N.A. is authorized to take the following action without Proper Instructions:
(a) Collection of Income and Other Payments. Chase Manhattan Bank, N.A. shall:
(i) collect and receive on a timely basis for the account of the Fund, all income and other payments and distributions, including (without limitation) stock dividends, rights, warrants and similar items, included or to be included in the Property of the Fund, and promptly advise the Fund of such receipt and shall credit such income, as collected, to the Fund. From time to time, Chase Manhattan Bank, N.A. may elect, but shall not be obligated, to credit the account with interest, dividends or principal payments on payable or contractual settlement date, in anticipation of receiving same from a payor, central depository, broker or other agent employed by the Fund or Chase Manhattan Bank, N.A. Any such crediting and posting shall be at the Fund's sole risk, and Chase Manhattan Bank, N.A. shall be authorized to reverse any such advance posting in the event it does not receive good funds from any such payor, central
depository, broker or agent of the Customer. Chase Manhattan Bank, N.A. agrees to promptly notify the Fund of the reversal of any such advance posting.
(ii) endorse and deposit for collection in the name of the Fund, checks, drafts, or other orders for the payment of money on the same day as received;
(iii) receive and hold for the account of the Fund all securities received by the Fund as a result of a stock dividend, share split-up or reorganization, merger, recapitalization, readjustment or other rearrangement or distribution of rights or similar securities issued with respect to any portfolio securities of the Fund held by Chase Manhattan Bank, N.A. hereunder;
(iv) present for payment and collect the amount payable upon all securities which may mature or be called, redeemed or retired, or otherwise become payable on the date such securities become payable;
(v) take any action which may be necessary and proper in connection with the collection and receipt of such income and other payments and the endorsement for collection of checks, drafts and other negotiable instruments;
(vi) to effect an exchange of the securities where the par value is changed, and to surrender securities at maturity or upon an earlier call for redemption, or when securities otherwise become payable, against payment therefore in accordance with accepted industry practice. If any Property registered in the name of a nominee of Chase Manhattan Bank, N.A. is called for partial redemption by the issuer of such property, Chase Manhattan Bank, N.A. is authorized to allot the called portion to the respective beneficial holders of the Property in such manner deemed to be fair and equitable by Chase Manhattan Bank, N.A. in its sole discretion.
(b) Miscellaneous Transactions. Chase Manhattan Bank, N.A. is authorized to deliver or cause to be delivered Property against payment or other consideration or written receipt therefor for examination by a dealer selling for the account of the Fund in accordance with street delivery custom.
12. TRANSACTIONS REQUIRING INSTRUCTIONS. In addition to the actions requiring Proper Instructions set forth herein, upon receipt of Proper Instructions and not otherwise,
Chase Manhattan Bank, N.A., directly or through the use of a Securities Depository or Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in such Proper Instructions, proxies, consents, authorizations, and any other instruments whereby the authority of the Fund as owner of any securities may be exercised;
(b) Deliver any securities held for the Fund against receipt of other securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, merger, consolidation or recapitalization of any issuer of securities or corporation, or the exercise of any conversion privilege;
(c) Deliver any securities held for the Fund to any protective committee, reorganization committee or other person in connection with the reorganization, refinancing, merger, consolidation, recapitalization or sale of assets of any issuer of securities or corporation, against receipt of such certificates of deposit, interim receipts or other instruments or documents, and cash, if any, as may be issued to it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Fund and take such other steps as shall be stated in said instructions to be for the purpose of effectuating any duly authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Fund;
(e) Release securities belonging to the Fund to any bank or trust company for the purpose of pledge or hypothecation to secure any loan incurred by the Fund; provided, however, that securities shall be released only upon payment to Chase Manhattan Bank, N.A. of the monies borrowed, or upon receipt of adequate collateral as agreed upon by the Fund and Chase Manhattan Bank, N.A. which may be in the form of cash or obligations issued by the U.S. government, its agencies or instrumentalities, except that in cases where additional collateral is required to secure a borrowing already made, subject to proper prior authorization, further securities may be released for that purpose; and pay such loan upon re-delivery to it of the securities pledged or hypothecated therefore and upon surrender of the note or notes evidencing the loan; and
(f) Deliver securities in accordance with the provisions of any agreement among the Fund, Chase Manhattan Bank, N.A. and a broker-dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The National Association of Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Funds;
(g) Deliver securities in accordance with the provisions of any agreement among the Fund, Chase Manhattan Bank, N.A. and a Futures Commission Merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission and/or any Contract Market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Fund; and
(h) Deliver securities against payment or other consideration or written receipt therefore for transfer of securities into the name of the Fund or Chase Manhattan Bank, N.A. or a nominee of either, or for exchange or securities for a different number of bonds, certificates, or other evidence, representing the same aggregate face amount or number of units bearing the same interest rate, maturity date and call provisions, if any; provided that, in any such case, the new securities are to be delivered to Chase Manhattan Bank, N.A.;
(i) Exchange securities in temporary form for securities in definitive form;
(j) Surrender, in connection with their exercise, warrants, rights or similar securities, provided that in each case, the new securities and cash, if any, are to be delivered to Chase Manhattan Bank, N.A.;
(k) Deliver securities upon receipt of payment in connection with any repurchase agreement related to such securities entered into by the Fund;
(l) Deliver securities pursuant to any other proper corporate purpose, but only upon receipt of, in addition to Proper Instructions, a certified copy of a resolution of the Board of Trustees or of the Executive Committee signed by an officer of the Funds and certified by the Secretary or an Assistant Secretary, specifying the securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom delivery of such securities shall be made.
13. PURCHASE OF SECURITIES. Promptly after each purchase of securities, options, futures contracts or options on futures contracts by the investment advisor, the Fund shall deliver to Chase Manhattan Bank, N.A. (as Custodian) Proper Instructions specifying with respect to each such purchase: (a) the name of the issuer and the title of the securities, (b) the number of shares of the principal amount purchased and accrued interest, if any, (c) the dates of purchase and settlement, (d) the purchase price per unit, (e) the total amount payable upon such purchase, (f) the name of the person from whom or the broker through whom the purchase was made and (g) the Fund name. Chase Manhattan Bank, N.A. shall upon receipt of securities purchased by or for the Fund registered in the name of the Fund or in the name of a nominee of Chase Manhattan Bank, N.A. or of the Fund or in proper form for transfer or upon receipt of evidence of title to options, futures contracts or options on futures contracts purchased by the Fund, pay out of the moneys held for the account of the Fund the total amount payable to the person from whom or the broker through whom the purchase was made, provided that the same conforms to the total amount payable as set forth in such Proper Instructions. Except as specifically stated otherwise in this Agreement, in any and every case where payment for purchase of securities for the account of the Fund is made by Chase Manhattan Bank, N.A. in advance of receipt of the securities purchased in the absence of specific written instructions from the Fund to so pay in advance, Chase Manhattan Bank, N.A. shall be absolutely liable to the Fund for such securities to the same extent as if the securities had been received by Chase Manhattan Bank, N.A.
14. SALE OF SECURITIES. Promptly after each sale of securities by the Fund at the instruction of the investment advisor, the Fund shall deliver to Chase Manhattan Bank, N.A. (as Custodian) Proper Instructions, specifying with respect to each such sale: (a) the name of the issuer and the title of the security, (b) the number of shares or principal amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale price per unit, (e) the total amount payable to the Fund upon such sale, (f) the name of the broker through whom or the person to whom the sale was made and (g) the Fund name. Chase Manhattan Bank, N.A. shall deliver the securities upon receipt of the total amount payable to the Fund upon such
sale, provided that the same conforms to the total amount payable as set forth in such Proper Instructions. Subject to the foregoing, Chase Manhattan Bank, N.A. may accept payment in such form as shall be satisfactory to it, and may deliver securities and arrange for payment in accordance with the customs prevailing among dealers in securities.
15. NOT IN USE.
16. RECORDS. The books and records pertaining to the Fund which are in the possession of Chase Manhattan Bank, N.A. shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act, as amended, and other applicable securities laws and rules and regulations. The Fund, or the Fund's authorized representative, shall have access to such books and records at all times during Chase Manhattan Bank, N.A.'s normal business hours, and such books and records shall be surrendered to the Fund promptly upon request. Upon reasonable request of the Fund, copies of any such books and records shall be provided by Chase Manhattan Bank, N.A. to the Fund or the Fund's authorized representative at the Fund's expense.
17. COOPERATION WITH ACCOUNTANTS. Chase Manhattan Bank, N.A. shall cooperate with the Fund's independent certified public accountants and shall take all reasonable action in the performance of its obligations under this Agreement to assure that the necessary information is made available to such accountants for the expression of their unqualified opinion, including but not limited to the opinion included in the Fund's Form N-1A, Form N-SAR and other reports to the Securities and Exchange Commission and with respect to any other requirement of such Commission.
18. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS. Chase Manhattan Bank, N.A. shall provide the Fund, at such times as the Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a Securities Depository or Book Entry System, relating to the services provided by Chase Manhattan Bank, N.A. under this Contract; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by the Fund to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.
19. CONFIDENTIALITY. Chase Manhattan Bank, N.A. agrees on behalf of itself and its employees to treat confidentially and as the proprietary information of the Fund all records and other information relative to the Fund and its prior, present or potential Shareholders and relative to the advisors and its prior, present or potential customers, and not to use such records and information for any purpose other than performance of its responsibilities and duties hereunder, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where Chase Manhattan Bank, N.A. may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. Nothing contained herein, however, shall prohibit Chase Manhattan Bank, N.A. from advertising or soliciting the public generally with respect to other products or services, regardless of whether such advertisement or solicitation may include prior, present or potential Shareholders of the Fund.
20. EQUIPMENT FAILURES. In the event of equipment failures beyond Chase Manhattan Bank, N.A.'s control, Chase Manhattan Bank, N.A. shall, at no additional expense to the Fund, take reasonable steps to minimize service interruptions but shall not have liability with respect thereto. Chase Manhattan Bank, N.A. shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provisions for back up emergency use of electronic data processing equipment to the extent appropriate equipment is available.
21. RIGHT TO RECEIVE ADVICE.
(a) Advice of Fund. If Chase Manhattan Bank, N.A. shall be in doubt as to any action to be taken or omitted by it, it may request, and shall receive, from the Fund clarification or advice.
(b) Advice of Counsel. If Chase Manhattan Bank, N.A. shall be in doubt as to any question of law involved in any action to be taken or omitted by Chase Manhattan Bank, N.A., it may request advice at its own cost from counsel of its own choosing (who may be
counsel for the Fund or Chase Manhattan Bank, N.A., at the option of Chase Manhattan Bank, N.A.).
(c) Conflicting Advice. In case of conflict between directions or advice received by Chase Manhattan Bank, N.A. pursuant to sub-paragraph (a) of this paragraph and advice received by Chase Manhattan Bank, N.A. pursuant to subparagraph (b) of this paragraph, Chase Manhattan Bank, N.A. shall be entitled to rely on and follow the advice received pursuant to the latter provision alone.
(d) Protection of Chase Manhattan Bank, N.A. Chase Manhattan Bank, N.A.
shall be protected in any action or inaction which it takes or omits to take in
reliance on any directions or advice received pursuant to subparagraphs (a) or
(b) of this section which Chase Manhattan Bank, N.A., after receipt of any such
directions or advice, in good faith believes to be consistent with such
directions or advice. However, nothing in this paragraph shall be construed as
imposing upon Chase Manhattan Bank, N.A. any obligation (i) to seek such
directions or advice, or (ii) to act in accordance with such directions or
advice when received, unless, under the terms of another provision of this
Agreement, the same is a condition to Chase Manhattan Bank, N.A.'s properly
taking or omitting to take such action. Nothing in this subsection shall excuse
Chase Manhattan Bank, N.A. when an action or omission on the part of Chase
Manhattan Bank, N.A. constitutes willful misfeasance, bad faith, negligence or
reckless disregard by Chase Manhattan Bank, N.A. of its duties under this
Agreement.
22. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The Fund assumes full responsibility for insuring that the contents of each Prospectus of the Fund complies with all applicable requirements of the 1933 Act, the 1940 Act, and any laws, rules and regulations of governmental authorities having jurisdiction.
23. COMPENSATION. As compensation for the services rendered by Chase Manhattan Bank, N.A. during the term of this Agreement, the Fund will pay to Chase Manhattan Bank, N.A., in addition to reimbursement of its out-of-pocket expenses, monthly fees as outlined in Exhibit A.
24. INDEMNIFICATION. The Fund, as sole owner of the Property, agrees to indemnify and hold harmless Chase Manhattan Bank, N.A. and its nominees from all taxes,
charges, expenses, assessments, claims, and liabilities (including, without limitation, liabilities arising under the 1933 Act, the Securities Exchange Act of 1934, the 1940 Act, and any state and foreign securities and blue sky laws, all as or to be amended from time to time) and expenses, including (without limitation) attorney's fees and disbursements (hereafter "liabilities and expenses"), arising directly or indirectly from any action or thing which Chase Manhattan Bank, N.A. takes or does or omits to take or do (i) at the request or on the direction of or in reliance on the advice of the Fund, or (ii) upon Proper Instructions, provided, that neither Chase Manhattan Bank, N.A. nor any of its nominees or sub-custodians shall be indemnified against any liability to the Fund or to its Shareholders (or any expenses incident to such liability) arising out of (x) Chase Manhattan Bank, N.A.'s or such nominee's or sub- custodian's own willful misfeasance, bad faith, negligence or reckless disregard of its duties under this Agreement or any agreement between Chase Manhattan Bank, N.A. and any nominee or subcustodian or (y) Chase Manhattan Bank, N.A.'s own negligent failure to perform its duties under this Agreement. Chase Manhattan Bank, N.A. similarly agrees to indemnify and hold harmless the Fund from all liabilities and expenses arising directly or indirectly from Chase Manhattan Bank, N.A.'s or such nominee's or sub-custodian's willful misfeasance, bad faith, negligence or reckless disregard in performing its duties under this agreement. In the event of any advance of cash for any purpose made by Chase Manhattan Bank, N.A. resulting from orders or Proper Instructions of the Fund, or in the event that Chase Manhattan Bank, N.A. or its nominee or subcustodian shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's or sub-custodian's own negligent action, negligent failure to act, willful misconduct, or reckless disregard, the Fund shall promptly reimburse Chase Manhattan Bank, N.A. for such advance of cash or such taxes, charges, expenses, assessments claims or liabilities.
25. RESPONSIBILITY OF CHASE MANHATTAN BANK, N.A. In the performance of its duties hereunder, Chase Manhattan Bank, N.A. shall be obligated to exercise care and diligence and to act in good faith to insure the accuracy and completeness of all services performed under this Agreement. Chase Manhattan Bank, N.A. shall be responsible for its own negligent failure or that of any subcustodian it shall appoint to perform its duties under
this Agreement but to the extent that duties, obligations and responsibilities
are not expressly set forth in this Agreement, Chase Manhattan Bank, N.A. shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith, or negligence on the part of Chase Manhattan Bank, N.A.
or such subcustodian or reckless disregard of such duties, obligations and
responsibilities. Without limiting the generality of the foregoing or of any
other provision of this Agreement, Chase Manhattan Bank, N.A. in connection with
its duties under this Agreement shall, so long as and to the extent it is in the
exercise of reasonable care, not be under any duty or obligation to inquire into
and shall not be liable for or in respect of (a) the validity or invalidity or
authority or lack thereof of any advice, direction, notice or other instrument
which conforms to the applicable requirements of this Agreement, if any, and
which Chase Manhattan Bank, N.A. believes to be genuine, (b) the validity of the
issue of any securities purchased or sold by the Fund, the legality of the
purchase or sale thereof or the propriety of the amount paid or received
therefor, (c) the legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefore, (d) the legality of the
redemption of any Shares, or the propriety of the amount to be paid therefor,
(e) the legality of the declaration or payment of any dividend or distribution
on Shares, of (f) delays or errors or loss of data occurring by reason of
circumstances beyond Chase Manhattan Bank, N.A.'s control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown (except as provided in Section 20), flood or catastrophe,
acts of God, insurrection, war, riots, or failure of the mail, transportation,
communication or power supply.
26. COLLECTION OF INCOME. Chase Manhattan Bank, N.A. shall collect on a timely basis all income and other payments with respect to registered securities held hereunder to which the Fund shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer securities if, on the date of payment by the issuer, such securities are held by Chase Manhattan Bank, N.A. or its agent thereof and shall credit such income, as collected, to the Fund's custodian account. Without limiting the generality of the foregoing, Chase Manhattan Bank, N.A. shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when
due on securities held hereunder. Income due the Fund on securities loaned pursuant to the provisions of Section 9 shall be the responsibility of the Fund. Chase Manhattan Bank, N.A. will have no duty or responsibility in connection therewith, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Fund is properly entitled.
27. OWNERSHIP CERTIFICATES FOR TAX PURPOSES. Chase Manhattan Bank, N.A. shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to securities of the Fund held by it and in connection with transfers of securities.
28. EFFECTIVE PERIOD; TERMINATION AND AMENDMENT.
This Agreement shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than thirty (30) days after the date of such delivery or mailing; provided, however that Chase Manhattan Bank, N.A. shall not act under Section 8 hereof in the absence of receipt of an initial certificate of the Secretary or an Assistant Secretary that the Board of Trustees of the Fund has approved the initial use of a particular Securities Depository or Book Entry System and the receipt of an annual certificate of the Secretary or an Assistant Secretary that the Board of Trustees has reviewed the use by the Fund of such Securities Depository and/or Book Entry System, as required in each case by Rule 17f-4 under the Investment Company Act of 1940, as amended; provided further, however, that the Fund shall not amend or terminate this Agreement in contravention of any applicable federal or state regulations, or any provision of the Declaration of Trust, and further provided, that the Fund may at any time by action of its Board of Trustees (i) substitute another bank or trust company for Chase Manhattan Bank, N.A. by giving notice as described above to Chase Manhattan Bank, N.A., or (ii) immediately terminate this Agreement in the event of the appointment of a conservator or receiver for Chase Manhattan Bank, N.A. by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Agreement, the Fund shall pay to Chase Manhattan Bank, N.A. such compensation as may be due as of the date of such termination and shall likewise reimburse Chase Manhattan Bank, N.A. for its costs, expenses and disbursements.
29. SUCCESSOR CUSTODIAN.
If a successor custodian shall be appointed by the Board of Trustees of the Fund, Chase Manhattan Bank, N.A. shall, upon termination, deliver to such successor custodian at the office of the custodian, duly endorsed and in the form for transfer, all securities then held by it hereunder and shall transfer to an account of the successor custodian all of the Fund's securities held in a Securities Depository or Book Entry System.
If no such successor custodian shall be appointed, Chase Manhattan Bank, N.A. shall, in like manner, upon receipt of a certified copy of a vote of the Board of Trustees of the Fund, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or certified copy of a vote of the Board of Trustees shall have been delivered to Chase Manhattan Bank, N.A. on or before the date when such termination shall be come effective, then Chase Manhattan Bank, N.A. shall have the right to deliver to a bank or trust company, which is a "bank" as defined in the 1940 Act, doing business in New York, New York, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by Chase Manhattan Bank, N.A. and all instruments held by Chase Manhattan Bank, N.A. relative thereto and all other property held by it under this Agreement and to transfer to an account of such successor custodian all of the Fund's securities held in any Securities Depository or Book Entry System. Thereafter, such bank or trust company shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the possession of Chase Manhattan Bank, N.A. after the date of termination hereof owing to failure of the Fund to procure the certified copy of the vote referred to or of the Board of Trustees to appoint a successor custodian, Chase Manhattan Bank, N.A. shall be entitled to fair compensation for its services during such period as Chase Manhattan Bank, N.A. retains
possession of such securities, funds and other properties and the provisions of this Contract relating to the duties and obligations of Chase Manhattan Bank, N.A. shall remain in full force and effect.
30. NOTICES. All notices and other communications (collectively referred to
as "Notice" or "Notices") in this section hereunder shall be in writing and
shall be first sent by telegram, cable, telex, or facsimile sending device and
thereafter by overnight mail for delivery on the next business day. Notices
shall be addressed (a) if to Chase Manhattan Bank, N.A., at Chase Manhattan
Bank, N.A.'s address, 770 Broadway, New York, New York, 10003, facsimile number
(212) 388-4239; (b) if to the Fund, at the address of the Fund Attention:
Controller, facsimile number (312) 917-8049; or (c) if to neither of the
foregoing, at such other address as shall have been notified to the sender of
any such Notice or other communication. Notices sent by overnight mail shall be
deemed to have been given the next business day. Notices sent by messenger shall
be deemed to have been given on the day delivered, and notices sent by
confirming telegram, cable, telex or facsimile sending device shall be deemed to
have been given immediately. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
31. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof.
32. AMENDMENTS. This Agreement or any part hereof may be changed or waived only by an instrument in writing signed by the party against which enforcement of such change or waiver is sought.
33. ADDITIONAL FUNDS. In the event that the Fund establishes one or more series of Shares in addition to Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund with respect to which it desires to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such series of Shares shall become a Fund hereunder.
34. MISCELLANEOUS. This Agreement embodies the entire Agreement and understanding between the parties hereto, and supersedes all prior agreements and
understandings relating to the subject matter hereof. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in New York and governed by New York law. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall insure to the benefit of the parties hereto and their respective successors.
35. The Fund's Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund by the Fund's officers as officers and not individually and the obligations imposed upon the Fund by this Agreement are not binding upon any of the Fund's Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first above written.
CHASE MANHATTAN BANK, N.A.
Attest: ___________________________ By: ___________________________
THOMAS V. DIBELLA PETER C. ARRIGHETTI
VICE PRESIDENT SENIOR VICE PRESIDENT
|
NUVEEN INVESTMENT TRUST
Attest: __________________________ By: ___________________________
GIFFORD R. ZIMMERMAN O. WALTER RENFFTLEN
ASSISTANT GENERAL COUNSEL VICE PRESIDENT & CONTROLLER
|
ADMINISTRATION AND MAINTENANCE FEE
- ----------------------------------
.01375% (1 3/8 Basis Points) on first $10 billion
.00875% (7/8 Basis Point) on second $10 billion
.0075% (3/4 Basis Point) on third $10 billion
.00625% (5/8 Basis Point) on remainder
TRANSACTION FEES
- ----------------
$15.00 Per Book Entry Transaction
$25.00 Per Physical Transaction
$35.00 Per Future Contract or Option Wire
$8.00 Per outgoing Wire Transfer for ETFs
$5.00 Per incoming and outgoing Wire Transfer for Open End and
Money Market Funds
|
NOTES:
1. Schedule should be applied to total assets for all Exchange Traded Funds, Open End Load Funds, and Money Market Funds.
2. Add $5.00 per book entry transaction and physical transaction if Custody inputs trades.
1. During each month, daily net overdrafts are offset by daily net cash balances dollar for dollar with no penalty or charge for daily net overdrafts.
2. At the end of each month, the net overdraft for the month incurs an
overdraft charge computed as follows:
The negative average monthly balance plus 10% reserves multiplied by the
average monthly Fed Funds rate divided by 365 days and then multiplied by
the number of days in the month.
3. Net credit balance at month end carries forward and is eligible for offset with overdrafts in the next month. The carry forward net credit balance incurs a 10% reduction. Carry forward balances expire at the end of each portfolio's fiscal year end for "fully invested funds"; for new funds not fully invested, the credit balance
carries forward until the fund become fully invested. Each series of the Fund will use its best efforts to keep its cumulative balances at each calendar quarter end below $50 million.
4. Nuveen Institutional Advisory Corp. or Nuveen Advisory Corp. will be responsible for promptly advising Chase Manhattan Bank, N.A. of the date a new fund becomes fully invested.
5. Effective January 1, 1996, FDIC charges will be no longer applied to the portfolios.
6. Overdrafts are permissible only as a means of compensating for positive balances.
7. Due to FDIC capitalization requirements, overdrafts are not permissible on June 30th and December 31st.
8. The allowable overdraft policy will not apply to the Growth and Income Stock Fund and the Balanced Stock and Bond Fund series of Nuveen Investment Trust. Instead, those series will receive an earnings credit which will be applied to the bill and used to reduce the monthly custody fees. This monthly assessment will be determined as follows:
The positive average monthly balance less 10% reserves multiplied by the monthly average 90-Day Treasury Bill rate divided by 365 days and then multiplied by the number of days in the month.
If the average monthly balance is negative a charge will be applied to the custody bill as follows:
The negative average monthly balance plus 10% reserves multiplied by the average monthly Fed Funds rate divided by 365 days and then multiplied by the number of days in the month.
EXHIBIT (b)10(a)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
July 30, 1996
Nuveen Investment Trust
333 West Wacker Drive
Chicago, Illinois 60606-1286
Gentlemen:
We have served as counsel for the Nuveen Investment Trust (the "Fund"), which proposes to offer and sell shares of various classes of its three series, Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund (collectively, the "Shares") in the manner and on the terms set forth in its Registration Statement filed with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended.
In connection therewith, we have examined such pertinent records and documents and matters of law, including the opinions of Bingham, Dana & Gould LLP upon which we have relied as they relate to the laws of the Commonwealth of Massachusetts, as we have deemed necessary in order to enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
The Shares of the Fund which are currently being registered by the Registration Statement referred to above may be legally and validly issued from time to time in accordance with the Fund's Declaration of Trust dated May 6, 1996, the Fund's By-Laws, the Fund's Certificate for the Establishment and Designation of Series, dated June 20, 1996, and subject
to
Nuveen Investment Trust
July 30, 1996
compliance with the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, and applicable state laws regulating the sale of securities and the receipt by the Fund of a purchase price of not less than the net asset value per share and such Shares, when so sold, will be legally issued and outstanding, fully paid and non-assessable, except that, as set forth in the Registration Statement, shareholders of the Fund may under certain circumstances be held personally liable for its obligations.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement (File No. 333-03715) relating to the Shares referred to above, to the use of our name and to the reference to our firm and said Registration Statement.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT (b)10(b)
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110-1726
July 30, 1996
Nuveen Investment Trust
333 West Wacker Drive
Chicago, Illinois 60606-1286
Re: Registration Statement on Form N-1A under the Securities Act of 1933
Ladies and Gentlemen:
We have acted as special Massachusetts counsel to Nuveen Investment Trust (the "Fund") on behalf of its three series Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund, and Nuveen Balanced Municipal and Stock Fund, in connection with the Fund's Pre-Effective Amendment Number 2 to be filed on or about July 30, 1996 (the "Amendment") to its Registration Statement on Form N-lA as filed with the Securities and Exchange Commission on May 14, 1996 (as proposed to be amended, the "Registration Statement") with respect to certain of its Class A Common Shares, par value $.Ol per share (the "Class A Shares"), Class B Common Shares, par value $.Ol per share (the "Class B Shares"), Class C Common Shares, par value $.Ol per share (the "Class C Shares") and Class R Common Shares, par value $.Ol per share (the "Class R Shares", such Class A Common Shares, Class B Shares, Class C Shares and Class R Shares referred to collectively herein as the "Shares"). You have requested that we deliver this opinion to you in connection with the Fund's filing of such Amendment.
In connection with the furnishing of this opinion, we have examined the following documents:
(a) a certificate dated as of a recent date of the Secretary of the Commonwealth of Massachusetts as to the existence of the Fund;
(b) a copy, certified by the Secretary of the Commonwealth of Massachusetts, of the Fund's Declaration of Trust dated May 6, 1996;
(c) a copy of the Fund's Certificate for the Establishment and Designation of Classes designating the Class A Shares, Class B Shares, Class C Shares and Class R Shares, as executed by the Trustees of the Fund and
filed with Secretary of the Commonwealth of Massachusetts (the "Designation of Classes");
(d) a copy of the Fund's Certificate for the Establishment and Designation of Series designating Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund, and Nuveen Balanced Municipal and Stock Fund, as executed by the Trustees of the Fund and filed with the Secretary of the Commonwealth of Massachusetts (the "Designation of Series");
(e) a Certificate executed by an appropriate officer of the Fund, certifying as to, and attaching copies of, the Fund's Declaration of Trust, Designation of Classes, Designation of Series, By-Laws, and certain resolutions adopted by the Trustees of the Fund;
(f) a printer's proof dated as of July 27, 1996 of the Amendment.
In such examination, we have assumed the genuineness of all signatures, the conformity to the originals of all of the documents reviewed by us as copies, the authenticity and completeness of all original documents reviewed by us in original or copy form and the legal competence of each individual executing any document. We have assumed that the Amendment, as filed with the Securities and Exchange Commission, will be in substantially the form of the printer's proof referred to in paragraph (f) above.
This opinion is based entirely on our review of the documents listed above and such investigation of law as we have deemed necessary or appropriate. We have made no other review or investigation of any kind whatsoever, and we have assumed, without independent inquiry, the accuracy of the information set forth in such documents.
This opinion is limited solely to the internal substantive laws of the Commonwealth of Massachusetts as applied by courts located in such Commonwealth, except that we express no opinion as to any Massachusetts securities law.
We understand that all of the foregoing assumptions and limitations are acceptable to you.
Based upon and subject to the foregoing, please be advised that it is our opinion that:
1. The Fund is duly organized and existing under the Fund's Declaration of Trust and the laws of the Commonwealth of Massachusetts as a voluntary association with transferable shares of beneficial interest commonly referred to as a "Massachusetts business trust."
2. The Shares, when issued and sold in accordance with the Fund's Declaration of Trust, Designation of Classes, Designation of Series and By-Laws and for the consideration described in the Registration Statement, will be legally issued, fully paid and non-assessable, except that, as set forth in the Registration Statement, shareholders of the Fund may under certain circumstances be held personally liable for its obligations.
We hereby consent to the reference to our name in the Registration Statement under the heading "Legal Opinions" and to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
BINGHAM, DANA & GOULD LLP
EXHIBIT (b)11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report dated July 29, 1996, and to all references to our firm included in or made a part of this registration statement on Form N-1A of Nuveen Investment Trust, comprising the Nuveen Growth and Income Stock Fund, Nuveen Balanced Stock and Bond Fund and Nuveen Balanced Municipal and Stock Fund.
/s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Chicago, Illinois July 29, 1996 |
EXHIBIT (B) 13
NUVEEN INVESTMENT TRUST
This Agreement made this 29th day of July, 1996 by and between Nuveen Investment Trust, a Massachusetts business trust (the "Fund"), and Nuveen Institutional Advisory Corp., a Delaware corporation (the "Subscriber");
WITNESSETH:
WHEREAS, the Fund has been formed for the purposes of carrying on business as an open-end diversified management investment company; and
WHEREAS, the Subscriber has been selected by the Fund's Board of Trustees to serve as investment adviser to the Fund; and
WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Fund wishes to sell to the Subscriber, 5,004 common shares (417 shares of each of the four classes of shares designated in the Fund's Establishment and Designation of Classes, a total of 1,668 shares of each of the three series of shares designated in the Fund's Establishment and Designation of Series of Shares of Beneficial Interest), for a purchase price of $20.00 per share;
NOW THEREFORE, IT IS AGREED:
1. The Subscriber subscribes for and agrees to purchase from the Fund 5,004 common shares, (417 shares of each of the four classes of shares designated in the Fund's Establishment and Designation of Classes, a total of 1,668 shares of each of the three series designated in the Fund's Establishment and Designation of Series of Shares), for a purchase price of $20.00 per share. Subscriber agrees to make payment for these shares at such time as demand for payment may be made by an officer of the Fund.
WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Fund wishes to sell to the Subscriber, 5001 common shares, 1,667 shares of each of the three series of shares designated in the Fund's Establishment and Designation of Series of Shares of Beneficial Interest, for a purchase price of $20.00 per share;
NOW THEREFORE, IT IS AGREED:
1. The Subscriber subscribes for and agrees to purchase from the Fund 5,001 common shares, 1,667 shares of each of the three series designated in the Fund's
Establishment and Designation of Series of Shares, for a purchase price of $20.00 per share. Subscriber agrees to make payment for these shares at such time as demand for payment may be made by an officer of the Fund.
2. The Fund agrees to issue and sell said shares to Subscriber promptly upon its receipt of the purchase price.
3. To induce the Fund to accept its subscription and issue the shares subscribed for, the Subscriber represents that it is informed as follows:
(a) That the shares being subscribed for have not been and will not be registered under the Securities Act of 1933 ("Securities Act");
(b) That the shares will be sold by the Fund in reliance on an exemption from the registration requirements of the Securities Act;
(c) That the Fund's reliance upon an exemption from the registration requirements of the Securities Act is predicated in part on the representations and agreements contained in this Subscription Agreement;
(d) That when issued, the shares will be "restricted securities" as defined in paragraph (a)(3) of Rule 144 of the General Rules and Regulations under the Securities Act ("Rule 144") and cannot be sold or transferred by Subscriber unless they are subsequently registered under the Securities Act or unless an exemption from such registration is available;
(e) That there do not appear to be any exemptions from the registration provisions of the Securities Act available to the Subscriber for resale of the shares. In the future, certain exemptions may possibly become available, including an exemption for limited sales including an exemption for limited sales in accordance with the conditions of Rule 144.
The Subscriber understands that a primary purpose of the information acknowledged in subparagraphs (a) through (e) above is to put it on notice as to restrictions on the transferability of the shares.
4. To further induce the Fund to accept its subscription and issue the shares subscribed for, the Subscriber:
(a) Represents and warrants that the shares subscribed for are being and will be acquired for investment for its own account and not on behalf of any other person or persons and not with a view to, or for sale in connection with, any public distribution thereof; and
(b) Agrees that any certificates representing the shares subscribed for may bear a legend substantially in the following form:
The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933 or any other federal or state securities law. These shares may not be offered for sale, sold or otherwise transferred unless registered under said securities laws or unless some exemption from registration is available.
5. This Subscription Agreement and all of its provisions shall be binding upon the legal representatives, heirs, successors and assigns of the parties hereto.
6. The Fund's Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund by the Fund's officers as officers and not individually and the obligations imposed upon the Fund by this Agreement are not binding upon any of the Fund's Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, this Subscription Agreement has been executed by the parties hereto as of the day and date first above written.
NUVEEN INVESTMENT TRUST
NUVEEN INSTITUTIONAL ADVISORY CORP.
By:
EXHIBIT (b)15
NUVEEN INVESTMENT TRUST
WHEREAS, the Fund desires to adopt a Plan of Distribution and Service pursuant to Rule 12b-1 under the Act ("Rule 12b-1"), and the Board of Trustees of the Fund has determined that there is a reasonable likelihood that adoption of this Plan of Distribution and Service will benefit the Fund and its shareholders;
WHEREAS, the Fund has adopted a Multiple Class Plan Pursuant to Rule 18f-3 (the "Rule 18f-3 Plan") to enable the various Classes of Shares to be granted different rights and privileges and to bear different expenses, and has an effective registration statement on file with the SEC containing a Prospectus describing such Classes of Shares;
WHEREAS, as described in the Rule 18f-3 Plan, the purchase of Class A Shares is generally subject to an up-front sales charge, as set forth in the Fund's Prospectus and Statement of Additional Information, and the purchase of Class B and Class C Shares will not be subject to an up-front sales charge, but in lieu thereof the Class B Shares will be subject to an asset-based distribution fee (and a declining contingent deferred sales charge) and Class C Shares will be subject to an asset-based distribution fee (and a one-year contingent deferred sales charge), as described in the Prospectus for the Shares; and
WHEREAS, Shares representing an investment in Class B will automatically convert to Class A Shares 8 years after the investment, as described in the Prospectus for the Shares;
NOW, THEREFORE, the Fund hereby adopts, and the Distributor hereby agrees to the terms of, this Plan of Distribution and Service (the "Plan") in accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Fund is authorized to compensate the Distributor for services performed and expenses incurred by the Distributor in connection with
the distribution of Shares of Class A, Class B and Class C of the Fund and the servicing of accounts holding such Shares.
(b) The amount of such compensation paid during any one year shall consist
(i) with respect to Class A Shares of a Service Fee not to exceed .25% of average daily net assets of the Class A Shares of the Fund;
(ii) with respect to Class B Shares of a Service Fee not to exceed .25% of average daily net assets of the Class B Shares of the Fund, plus a Distribution Fee not to exceed .75% of average daily net assets of the Class B Shares of the Fund; and
(iii) with respect to Class C Shares of a Service Fee not to exceed .25% of average daily net assets of the Class C Shares of the Fund, plus a Distribution Fee not to exceed .75% of average daily net assets of the Class C Shares of the Fund.
Such compensation shall be calculated and accrued daily and paid monthly or at such other intervals as the Board of Trustees may determine.
(c) With respect to Class A Shares, the Distributor shall pay any Service Fees it receives under the Plan for which a particular underwriter, dealer, broker, bank or selling entity having a Dealer Agreement in effect ("Authorized Dealer", which may include the Distributor) is the dealer of record to such Authorized Dealers to compensate such organizations for providing services to shareholders relating to their investment. The Distributor may retain any Service Fees not so paid.
(d) With respect to the Class B Shares, the Distributor:
(i) shall retain the Distribution Fee to compensate it for costs associated with the distribution of the Class B Shares, including the payment of broker commissions to Authorized Dealers (which may include the Distributor) who were the dealer of record with respect to the purchase of those shares; and
(ii) shall pay any Service Fees it receives under the Plan for which a particular Authorized Dealer is the dealer of record (which may include the Distributor) to such Authorized Dealers to compensate such organizations for providing services to shareholders relating to their investment; provided, however, that the Distributor shall be entitled to retain, for the first year after purchase of the Class B Shares, the Service Fee to the extent that it may have pre-paid the Service Fee for that period to the Authorized Dealer of record.
The Distributor may retain any Distribution or Service Fees not so paid.
(e) With respect to the Class C Shares, the Distributor:
(i) shall pay the Distribution Fee it receives under the Plan with respect to Class C Shares for which a particular Authorized Dealer is the dealer of record (which may include the Distributor) to such Authorized Dealers to compensate such organizations in connection with such share sales; provided, however, that the Distributor shall be entitled to retain, for the first year after purchase of the Class C Shares, the Distribution Fee to the extent that it may have pre-paid the Distribution Fee for that period to the Authorized Dealer of record; and
(ii) shall pay any Service Fees it receives under the Plan for which a particular Authorized Dealer is the dealer of record (which may include the Distributor) to such Authorized Dealers to compensate such organizations for providing services to shareholders relating to their investment; provided, however, that the Distributor shall be entitled to retain, for the first year after purchase of the Class B Shares, the Service Fee to the extent that it may have pre-paid the Service Fee for that period to the Authorized Dealer of record.
The Distributor may retain any Distribution or Service Fees not so paid.
(f) Services for which such Authorized Dealers may receive Service Fee payments include any or all of the following: maintaining account records for shareholders who beneficially own Shares; answering inquiries relating to the shareholders' accounts, the policies of the Fund and the performance of their investment; providing assistance and handling transmission of funds in connection with purchase, redemption and exchange orders for Shares; providing assistance in connection with changing account setups and enrolling in various optional fund services; producing and disseminating shareholder communications or servicing materials; the ordinary or capital expenses, such as equipment, rent, fixtures, salaries, bonuses, reporting and recordkeeping and third party consultancy or similar expenses, relating to any activity for which payment is authorized by the Board; and the financing of any other activity for which payment is authorized by the Board.
(g) Payments of Distribution or Service Fees to any organization as of any quarter-end will not exceed the appropriate amount based on the annual percentages set forth in subparagraphs (c), (d) and (e) above, based on average net assets of accounts for which such organization appeared on the records of the Fund and/or its transfer agent as the organization of record during the preceding quarter.
2. This Plan shall not take effect until the Plan, together with any related agreement(s), has been approved by votes of a majority of both (a) the Board of Trustees of the Fund, and (b) those Trustees of the Fund who are not "interested persons" of the Fund (as defined in the Act) and who have no direct or indirect financial interest in the operation
of the Plan or any agreements related to it (the "Rule 12b-1 Trustees") cast in person at a meeting (or meetings) called for the purpose of voting on the Plan and such related Agreement(s).
3. This Plan shall remain in effect until August 1, 1997, and shall continue in effect thereafter so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in paragraph 2.
4. The Distributor shall provide to the Board of Trustees of the Fund and the Board shall review, at least quarterly, a written report of distribution- and service-related activities, Distribution Fees, Service Fees, and the purposes for which such activities were performed and expenses incurred.
5. This Plan may be terminated at any time by vote of a majority of the Rule 12b-1 Trustees or by vote of a majority (as defined in the Act) of the outstanding voting Shares of the Fund.
6. This Plan may not be amended to increase materially the amount of compensation payable by the Fund with respect to Class A, Class B or Class C Shares under paragraph 1 hereof unless such amendment is approved by a vote of at least a majority (as defined in the Act) of the outstanding voting Shares of that Class of Shares. No material amendment to the Plan shall be made unless approved in the manner provided in paragraph 2 hereof.
7. While this Plan is in effect, the selection and nomination of the Trustees who are not interested persons (as defined in the Act) of the Fund shall be committed to the discretion of the Trustees who are not such interested persons.
8. The Fund shall preserve copies of this Plan and any related agreements and all reports made pursuant to paragraph 4 hereof, for a period of not less than six years from the date of the Plan, any such agreement or any such report, as the case may be, the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund and Distributor have executed this Plan of Distribution and Servicing as of the day and year first above written.
NUVEEN INVESTMENT TRUST
JOHN NUVEEN & CO. INCORPORATED
EXHIBIT (b)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 along) 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 17th day of July, 1996.
/s/ Robert H. Lyon -------------------- Robert H. Lyon |
State of Illinois )
)ss
County of Cook )
|
On this 17th day of July, 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 -------------------- Karen L. Healy |
My Commission Expires: 12/30/99
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 along) 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 17th day of July, 1996.
/s/ Thomas E. Leafstrand -------------------------- Thomas E. Leafstrand |
State of Illinois )
)ss
County of Cook )
|
On this 17th day of July, 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 -------------------- Karen L. Healy |
My Commission Expires: 12/30/99
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 along) 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 17th day of July, 1996.
/s/ James E. Bacon ----------------------------------------- James E. Bacon |
State of Illinois )
)ss
County of Cook )
|
On this 17th day of July, 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 ---------------------------------------- Karen L. Healy |
My Commission Expires: 12/30/99
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 along) 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 17th day of July, 1996.
/s/ Shelia W. Wellington -------------------------- Shelia W. Wellington |
State of Illinois )
)ss
County of Cook )
|
On this 17th day of July, 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 ------------------------ Karen L. Healy |
My Commission Expires: 12/30/99
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 along) 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 17th day of July, 1996.
/s/ William L. Kissick ------------------------ William L. Kissick |
State of Illinois )
)ss
County of Cook )
|
On this 17th day of July, 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 --------------------- Karen L. Healy |
My Commission Expires: 12/30/99
| ARTICLE 6 |
| SERIES: |
| NUMBER: 011 |
| NAME: CLASS A GROWTH AND INCOME |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 012 |
| NAME: CLASS B GROWTH AND INCOME |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 013 |
| NAME: CLASS C GROWTH AND INCOME |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 014 |
| NAME: CLASS R GROWTH AND INCOME |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 021 |
| NAME: CLASS A BALANCED STOCK AND BOND |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 022 |
| NAME: CLASS B BALANCED STOCK AND BOND |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 023 |
| NAME: CLASS C BALANCED STOCK AND BOND |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 024 |
| NAME: CLASS R BALANCED STOCK AND BOND |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 031 |
| NAME: CLASS A BALANCED MUNICIPAL AND STOCK |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 032 |
| NAME: CLASS B BALANCED MUNICIPAL AND STOCK |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 033 |
| NAME: CLASS C BALANCED MUNICIPAL AND STOCK |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |
| ARTICLE 6 |
| SERIES: |
| NUMBER: 034 |
| NAME: CLASS R BALANCED MUNICIPAL AND STOCK |
| PERIOD TYPE | OTHER |
| FISCAL YEAR END | JUN 30 1997 |
| PERIOD END | JUL 29 1996 |
| INVESTMENTS AT COST | 0 |
| INVESTMENTS AT VALUE | 0 |
| RECEIVABLES | 0 |
| ASSETS OTHER | 213,360 |
| OTHER ITEMS ASSETS | 0 |
| TOTAL ASSETS | 213,360 |
| PAYABLE FOR SECURITIES | 0 |
| SENIOR LONG TERM DEBT | 0 |
| OTHER ITEMS LIABILITIES | 180,000 |
| TOTAL LIABILITIES | 180,000 |
| SENIOR EQUITY | 0 |
| PAID IN CAPITAL COMMON | 33,360 |
| SHARES COMMON STOCK | 417 |
| SHARES COMMON PRIOR | 0 |
| ACCUMULATED NII CURRENT | 0 |
| OVERDISTRIBUTION NII | 0 |
| ACCUMULATED NET GAINS | 0 |
| OVERDISTRIBUTION GAINS | 0 |
| ACCUM APPREC OR DEPREC | 0 |
| NET ASSETS | 33,360 |
| DIVIDEND INCOME | 0 |
| INTEREST INCOME | 0 |
| OTHER INCOME | 0 |
| EXPENSES NET | 0 |
| NET INVESTMENT INCOME | 0 |
| REALIZED GAINS CURRENT | 0 |
| APPREC INCREASE CURRENT | 0 |
| NET CHANGE FROM OPS | 0 |
| EQUALIZATION | 0 |
| DISTRIBUTIONS OF INCOME | 0 |
| DISTRIBUTIONS OF GAINS | 0 |
| DISTRIBUTIONS OTHER | 0 |
| NUMBER OF SHARES SOLD | 417 |
| NUMBER OF SHARES REDEEMED | 0 |
| SHARES REINVESTED | 0 |
| NET CHANGE IN ASSETS | 33,360 |
| ACCUMULATED NII PRIOR | 0 |
| ACCUMULATED GAINS PRIOR | 0 |
| OVERDISTRIB NII PRIOR | 0 |
| OVERDIST NET GAINS PRIOR | 0 |
| GROSS ADVISORY FEES | 0 |
| INTEREST EXPENSE | 0 |
| GROSS EXPENSE | 0 |
| AVERAGE NET ASSETS | 33,360 |
| PER SHARE NAV BEGIN | 0 |
| PER SHARE NII | 0 |
| PER SHARE GAIN APPREC | 0 |
| PER SHARE DIVIDEND | 0 |
| PER SHARE DISTRIBUTIONS | 0 |
| RETURNS OF CAPITAL | 0 |
| PER SHARE NAV END | 20.00 |
| EXPENSE RATIO | 0 |
| AVG DEBT OUTSTANDING | 0 |
| AVG DEBT PER SHARE | 0 |