UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-06379 --------------------- Nuveen Insured Municipal Opportunity Fund, Inc. ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Jessica R. Droeger Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: October 31 ------------------ Date of reporting period: October 31, 2004 ------------------ Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT October 31, 2004 Nuveen Investments Municipal Closed-End Exchange-Traded Funds NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NQI NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NIO NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NIF NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NPX NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NVG NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND NEA Photo of: Man and woman sitting on porch. Photo of: 2 children sitting in the grass. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Woman Photo of: Man and child Photo of: Woman NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. ------------------ DELIVERY DIRECT TO YOUR E-MAIL INBOX ------------------ IT'S FAST, EASY & FREE: WWW.INVESTORDELIVERY.COM if you get your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends and statements directly from Nuveen. (Be sure to have the address sheet that accompanied this report handy. You'll need it to complete the enrollment process.) Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Chairman's LETTER TO SHAREHOLDERS Once again, I am pleased to report that over the most recent fiscal year your Fund continued to provide you with monthly tax-free income and an attractive total return. For more specific information about the performance of your Fund, please see the Portfolio Manager's Perspectives and Performance Overview sections of this report. With longer-term interest rates still relatively low, many investors have begun to wonder whether these rates will soon begin to rise, and whether that makes this the time to adjust their holdings of fixed-income investments. No one knows what the future will bring, which is why we think a well-balanced portfolio that is structured and carefully monitored with the help of an investment professional can "OUR MISSION CONTINUES TO BE TO ASSIST YOU AND YOUR FINANCIAL ADVISOR BY OFFERING THE INVESTMENT SERVICES AND PRODUCTS THAT CAN HELP YOU TO SECURE YOUR FINANCIAL OBJECTIVES." be an important component in achieving your long-term financial goals. A well-diversified portfolio may actually help to reduce your overall investment risk, and we believe that a municipal bond investment like your Nuveen Fund can be an important building block in a portfolio designed to perform well through a variety of market conditions. As in past reports, I'd also like to direct your attention to the inside front cover, which explains the quick and easy process to begin receiving these Fund reports via e-mail and the internet. Thousands of Nuveen Fund shareholders already have signed-up, and they are getting their Fund information faster and more conveniently than ever. I urge you to consider joining them. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering the investment services and products that can help you to secure your financial objectives. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 15, 2004 Nuveen National Insured Municipal Closed-End Exchange-Traded Funds NQI, NIO, NIF, NPX, NVG, NEA Portfolio Manager's PERSPECTIVE Portfolio manager Dan Solender discusses the economic and market environment, key investment strategies, and the fiscal year performance of these six Nuveen Funds. With twelve years of investment experience, including eight at Nuveen, Dan has managed these Funds since May 2004. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED OCTOBER 31, 2004? During this fiscal year, the U.S. economy demonstrated improvement in a number of key areas, although the pace of the recovery slowed over the last six months of the period. The gross domestic product (GDP) expanded at annualized rates of 4.2% in the fourth quarter of 2003 and 4.5% in the first quarter of 2004. However, sharply higher energy prices restrained consumer spending during the second and third quarters of 2004, which in turn impacted economic momentum. Over this period, GDP growth moderated to 3.3% annualized in the second quarter and 3.9% annualized in the third quarter. Higher energy costs also continued to fuel lingering concerns about inflation. Although monthly gains in consumer prices were generally tame, by the end of October 2004 inflation was running well ahead of the 2003 pace. The Consumer Price Index (CPI) rose at a 3.9% annualized rate for the first 10 months of 2004, more than double the 1.9% rate for all of 2003. Excluding energy and food, the CPI increased at an annual rate of 2.4% for the first 10 months of 2004. During the second quarter of 2004 in particular, inflation worries, the slowing pace of economic recovery and continued geopolitical uncertainty acted as catalysts for heightened volatility in the fixed-income markets. As one example, the yield on the Bond Buyer 25 Revenue Bond Index (BB25), a widely followed municipal bond index, began this reporting period at 5.24%. The BB25 yield then dropped steadily over the next five months to 4.73% by mid-March 2004. As a series of improved employment reports sparked increased anticipation of action by the Federal Reserve, the index yield began to climb again, rising more than 70 basis points over the next eight weeks to 5.45%, where it hovered through the end of June. However, more bond-friendly news--including indications of relatively slow growth of wages and employment--prompted a retreat to 4.97% by the end of October 2004. 4 While intermediate and long-term bond yields generally fell over most of the second half of the Funds' fiscal years, short-term rates slowly rose. The Federal Reserve instituted three different one-quarter-point increases in the fed funds rate between June and September 2004. (On both November 10 and December 14, following the end of this reporting period, the Fed added additional quarter-point increases, bringing the fed funds rate to 2.25%.) Over the 12 month period, municipal new issue supply nationwide remained relatively strong, with $363.4 billion in new bonds coming to market. This represented a decrease of about 5% from the preceding 12-month period, as the improving economy and higher tax revenues lessened the need for some issuers to borrow. IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE 12 MONTHS ENDED OCTOBER 31, 2004? As the market continued to anticipate increased interest rates, our focus during this reporting period remained on finding bonds with the potential to add value and perform well under a variety of market scenarios. This included purchasing attractive bonds that we believed would enhance the Funds' yield curve positioning and help to mitigate interest rate risk. Interest rate risk is the risk that the value of a Fund's portfolio will decline if market interest rates rise (since bond prices move in the opposite direction of interest rates). In general, our purchase activity for each of these Funds centered on trying to find attractive securities in the long-intermediate part of the yield curve, that is, bonds that mature in 15 to 22 years. In many cases, bonds in this long-intermediate part of the yield curve offered yields similar to those of longer-term bonds with less inherent interest rate risk and, we believed, greater total return potential. One of our longer-term goals was to work to position all of these Funds so that they produce less volatile, roughly equivalent returns over time. As one strategy to reach this goal for some of the newer Funds, we have attempted to reduce some of the interest rate risk inherent in the portfolios of NVG and NEA by hedging in the derivatives markets. (Interest rate risk is the risk that the value of a Fund's portfolio will decline if market interest rates rise, since bond prices move in the opposite direction of interest rates.) Our only objective with these hedges is to reduce the Fund's interest rate risk, and not to potentially enhance its return by making a prediction about future interest rates. These hedges do not affect income stream or dividend-paying capabilities of NVG or NEA over 5 the short-term. Instead, the costs of the hedges are reflected as additions or subtractions to the Funds' net asset values as the market value of the hedges fluctuate. Although the hedges had negative market values as of October 31, 2004, they succeeded in reducing the volatility of NVG's and NEA's net asset value over the course of the reporting period. Demand for municipal securities remained firm through most of this fiscal year. However, since insured bonds accounted for about 50% of new municipal bond issuance during this period, we generally were able to find bonds with attractive prices, yields and structures. Each of the Funds continued to be well diversified geographically, and we sought to take advantage of price and yield differences between similar bonds issued in different states. In particular, we looked in higher-issue, higher-tax states like California and New York for securities that we believed offered attractive yields and strong performance potential. As the markets fluctuate, we believe these bonds may have more support for their prices. We also sought to enhance the Funds' call protection, particularly in NQI, by selling several bonds with short call dates and reinvesting the proceeds in longer-term securities with better call protection. HOW DID THE FUNDS PERFORM? Individual results for the Nuveen Funds, as well as for relevant comparative indexes, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE For periods ended 10/31/04 (Annualized) 1-YEAR 5-YEAR 10-YEAR -------------------------------------------------------------------------------- NQI 7.90% 9.32% 7.69% -------------------------------------------------------------------------------- NIO 7.64% 8.98% 7.96% -------------------------------------------------------------------------------- NIF 8.62% 8.84% 7.68% -------------------------------------------------------------------------------- NPX 7.89% 9.30% 8.79% -------------------------------------------------------------------------------- NVG 9.19% NA NA -------------------------------------------------------------------------------- NEA 8.07% NA NA -------------------------------------------------------------------------------- Lehman Brothers Insured Municipal Bond Index1 6.22% 7.69% 7.34% -------------------------------------------------------------------------------- Lipper Insured Leveraged Municipal Debt Funds Average2 7.41% 8.40% 7.78% -------------------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. 1 The Lehman Brothers Insured Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of insured municipal bonds. Results for the Lehman index do not reflect any expenses. 2 The Lipper Insured Leveraged Municipal Debt Funds category average is calculated using the returns of all closed-end exchange-traded funds in this category for each period as follows: 1 year, 27 funds; 5 years, 21 funds; and 10 years, 18 funds. Fund and Lipper returns assume reinvestment of dividends. 6 For the 12 months ended October 31, 2004, the total returns on net asset value (NAV) for all six Funds in this report outperformed the return on the Lehman Brothers Index. All of the Funds also outperformed the average return for their Lipper peer group for this period. One of the primary factors benefiting the 12-month performances of these Funds relative to that of the unleveraged Lehman Brothers Index was their use of financial leverage. While leverage can add volatility to the Funds' NAVs and share prices, especially when substantial shifts in interest rates occur, this strategy also can provide opportunities for additional income and total returns for common shareholders when short-term interest rates remain low, as they did during this period. As discussed earlier, one of our key strategies over this 12-month period was to enhance the Funds' yield curve positioning. The relative steepness of the yield curve provided us with a number of opportunities to implement this strategy, which helped the Funds' performance over the entire period. NVG, in particular, was heavily weighted in the 15-year to 20-year part of the yield curve, which performed well over the past 12 months, and had very little of its assets invested in bonds with maturities less than five years, which generally did not perform as well. We continued to work on enhancing the positioning of all of the Funds, especially NQI, NIO and NPX, which did not have as much weighting in the 15-year to 20-year part of the curve as NVG over this period. All six of these Funds benefited from their holdings in the healthcare sector. This group ranked second among the Lehman Brothers Index revenue sectors for the year. One sector that did not perform well during this period was housing, both multifamily and single family. The housing sector as a whole ranking at the bottom of the Lehman Brothers Index revenue sectors for the 12-month period. The sector's below-market performance stemmed largely from the increase in mortgage prepayments as interest rates remained low, which resulted in a number of bond calls. In general, the Funds' housing exposure had a negative impact on their performance, with NQI having the heaviest weighting in housing bonds over this fiscal year, and NVG and NEA the least. In addition, the performances of NQI, NIO and NPX were restrained by their relatively larger exposures to bonds with short call dates. As of October 31, 2004, NIO also held 14% of its portfolio in pre-refunded bonds, which significantly underperformed the market as a whole as measured by the Lehman Brothers Index, due to their shorter effective maturities. In contrast, the two newer funds, NVG and NEA, had virtually no short-term call exposure as of October 31, 2004, and pre-refunded bonds accounted for just 4% and 2% of their portfolios, respectively. 7 HOW ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES? With short-term interest rates remaining at relatively low levels throughout this reporting period, the leveraged structures of these Funds continued to support their dividend-paying capabilities. The extent of this benefit is tied in part to the short-term rates the Funds pay their MuniPreferred(R) shareholders. During periods of low short-term rates, leveraged Funds generally pay relatively lower dividends to their MuniPreferred shareholders, which can leave more earnings to support common share dividends. This strategy helped to maintain the dividends of NQI, NIO, NIF, NPX and NVG throughout the reporting period. However, given the relatively low interest rate environment prevalent since the introduction of NEA in late 2002, this Fund has had less of an opportunity to build its income stream. When the Fed began to raise short-term rates in June 2004, this also increased NEA's leveraging costs, necessitating a dividend cut in September 2004. All of these Funds seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of October 31, 2004, NQI, NIO, NIF, NPX, and NVG had positive UNII balances for both financial statement and tax purposes. NEA had a negative UNII balance for financial statement purposes, but a positive UNII balance for tax purposes. As of October 31, 2004, NQI was trading at a premium to its NAV that was in line with its average premium over the entire fiscal year. NEA also was trading at a premium as of that date, despite trading at an average discount for the entire period. NIO was trading at a share price that was virtually identical with its NAV after trading at an average discount for the entire period. NIF, NPX and NVG were trading at discounts similar to their average discounts for the entire fiscal year. 8 HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2004? Given the current geopolitical and economic climate, we continued to believe that maintaining strong credit quality was an important requirement for the Funds. As of October 31, 2004, NQI, NIO, NIF and NPX continued to be 100% invested in insured and/or U.S. guaranteed securities. NVG and NEA, which can invest up to 20% of their assets in uninsured investment-grade quality bonds, had allocated 92% and 89% of their portfolios, respectively, to insured bonds. As of October 31, 2004, potential call exposure for these Funds during 2004-2006 ranged from zero in NVG to 1% in NEA, 7% in NIF, 17% in NPX and NIO, and 22% in NQI. The number of actual bond calls in all of these Funds will depend largely on market interest rates in the future. 9 Nuveen Insured Quality Municipal Fund, Inc. NQI Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 88% Insured and U.S. Guaranteed 11% U.S. Guaranteed 1% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0845 Dec 0.0845 Jan 0.0845 Feb 0.0845 Mar 0.0845 Apr 0.0845 May 0.0845 Jun 0.0845 Jul 0.0845 Aug 0.0845 Sep 0.0845 Oct 0.0845 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 16.33 16.55 16.66 16.55 16.6 16.53 16.69 16.76 16.67 16.87 16.92 16.93 16.84 16.8 16.8 16.7 16.7 16.93 16.9 16.99 16.89 16.75 15.3 14.87 14.71 14.15 14.32 14.42 14.63 14.69 14.24 14.3 14.85 14.91 14.98 14.81 15.38 15.64 15.62 15.96 15.95 15.88 15.73 15.73 15.64 15.51 15.44 15.7 15.89 10/31/04 16 FUND SNAPSHOT ------------------------------------ Share Price $16.00 ------------------------------------ Common Share Net Asset Value $15.85 ------------------------------------ Premium/(Discount) to NAV 0.95% ------------------------------------ Market Yield 6.34% ------------------------------------ Taxable-Equivalent Yield1 8.81% ------------------------------------ Net Assets Applicable to Common Shares ($000) $605,028 ------------------------------------ Average Effective Maturity on Securities (Years) 20.17 ------------------------------------ Leverage-Adjusted Duration 7.64 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/90) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 4.37% 7.90% ------------------------------------ 5-Year 10.85% 9.32% ------------------------------------ 10-Year 8.95% 7.69% ------------------------------------ STATES (as a % of total investments) ------------------------------------ California 14.7% ------------------------------------ Texas 14.6% ------------------------------------ Illinois 12.2% ------------------------------------ New York 11.2% ------------------------------------ Washington 7.4% ------------------------------------ Florida 4.8% ------------------------------------ Nevada 4.5% ------------------------------------ Hawaii 4.0% ------------------------------------ Kentucky 2.8% ------------------------------------ North Dakota 2.3% ------------------------------------ Louisiana 2.0% ------------------------------------ Indiana 1.6% ------------------------------------ Pennsylvania 1.6% ------------------------------------ Other 16.3% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Transportation 19.3% ------------------------------------ Healthcare 14.4% ------------------------------------ Tax Obligation/General 13.2% ------------------------------------ Tax Obligation/Limited 13.0% ------------------------------------ Utilities 12.4% ------------------------------------ U.S. Guaranteed 11.1% ------------------------------------ Water and Sewer 7.1% ------------------------------------ Housing/Multifamily 6.9% ------------------------------------ Other 2.6% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2003 of $0.0529 per share. 10 Nuveen Insured Municipal Opportunity Fund, Inc. NIO Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 83% Insured and U.S. Guaranteed 15% U.S. Guaranteed 2% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.081 Dec 0.081 Jan 0.081 Feb 0.081 Mar 0.081 Apr 0.081 May 0.081 Jun 0.081 Jul 0.081 Aug 0.081 Sep 0.081 Oct 0.081 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 15.85 15.8 15.89 15.92 15.99 15.85 15.97 15.96 15.98 16.2 16.32 16.31 16.22 16.3 16.24 16.33 16.38 16.53 16.49 16.56 16.42 16.13 14.9 14.53 14.18 13.6 13.76 13.94 14.37 14.25 14.12 14.33 14.43 14.62 14.78 14.73 14.98 15.12 15.1 15.21 15.37 15.33 15.37 15.48 15.6 15.42 15.55 15.59 15.83 10/31/04 16.05 FUND SNAPSHOT ------------------------------------ Share Price $16.05 ------------------------------------ Common Share Net Asset Value $16.06 ------------------------------------ Premium/(Discount) to NAV -0.06% ------------------------------------ Market Yield 6.06% ------------------------------------ Taxable-Equivalent Yield1 8.42% ------------------------------------ Net Assets Applicable to Common Shares ($000) $1,302,985 ------------------------------------ Average Effective Maturity on Securities (Years) 19.23 ------------------------------------ Leverage-Adjusted Duration 7.75 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/19/91) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 9.47% 7.64% ------------------------------------ 5-Year 10.78% 8.98% ------------------------------------ 10-Year 8.97% 7.96% ------------------------------------ STATES (as a % of total investments) ------------------------------------ California 18.7% ------------------------------------ Texas 12.5% ------------------------------------ Alabama 10.3% ------------------------------------ Illinois 5.6% ------------------------------------ New York 5.0% ------------------------------------ Michigan 4.9% ------------------------------------ Nevada 4.7% ------------------------------------ Massachusetts 4.4% ------------------------------------ Colorado 4.3% ------------------------------------ Florida 3.8% ------------------------------------ Wisconsin 2.6% ------------------------------------ Ohio 2.5% ------------------------------------ Indiana 2.5% ------------------------------------ South Carolina 2.5% ------------------------------------ Other 15.7% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Transportation 20.7% ------------------------------------ U.S. Guaranteed 16.7% ------------------------------------ Tax Obligation/Limited 15.1% ------------------------------------ Utilities 14.1% ------------------------------------ Tax Obligation/General 9.5% ------------------------------------ Healthcare 9.0% ------------------------------------ Water and Sewer 5.2% ------------------------------------ Other 9.7% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2003 of $0.0300 per share. 11 Nuveen Premier Insured Municipal Income Fund, Inc. NIF Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 82% Insured and U.S. Guaranteed 3% U.S. Guaranteed 15% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0815 Dec 0.0815 Jan 0.0815 Feb 0.0815 Mar 0.0815 Apr 0.0815 May 0.0815 Jun 0.0815 Jul 0.0815 Aug 0.0815 Sep 0.0815 Oct 0.0815 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 15.78 15.8 15.82 15.88 16.15 16 16.06 16.1 16.21 16.35 16.53 16.56 16.33 16.38 16.32 16.33 16.55 16.65 16.52 16.57 16.56 16.18 14.98 14.6 14.23 13.7 13.69 13.78 14.25 14.32 14.17 14.25 14.6 14.76 14.57 14.3 14.58 14.9 14.9 15.01 15.22 15.21 15.43 15.56 15.48 15.34 15.35 15.42 15.67 10/31/04 15.64 FUND SNAPSHOT ------------------------------------ Share Price $15.64 ------------------------------------ Common Share Net Asset Value $16.00 ------------------------------------ Premium/(Discount) to NAV -2.25% ------------------------------------ Market Yield 6.25% ------------------------------------ Taxable-Equivalent Yield1 8.68% ------------------------------------ Net Assets Applicable to Common Shares ($000) $310,666 ------------------------------------ Average Effective Maturity on Securities (Years) 16.87 ------------------------------------ Leverage-Adjusted Duration 8.71 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/91) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 7.55% 8.62% ------------------------------------ 5-Year 10.31% 8.84% ------------------------------------ 10-Year 8.86% 7.68% ------------------------------------ STATES (as a % of total investments) ------------------------------------ California 21.0% ------------------------------------ Washington 14.0% ------------------------------------ Illinois 13.6% ------------------------------------ Texas 6.8% ------------------------------------ Nevada 5.2% ------------------------------------ Oregon 4.3% ------------------------------------ Georgia 3.4% ------------------------------------ Colorado 3.2% ------------------------------------ Indiana 3.1% ------------------------------------ Missouri 3.1% ------------------------------------ Hawaii 2.5% ------------------------------------ Michigan 2.4% ------------------------------------ Oklahoma 2.4% ------------------------------------ Other 15.0% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Transportation 18.5% ------------------------------------ U.S. Guaranteed 18.2% ------------------------------------ Tax Obligation/General 17.8% ------------------------------------ Tax Obligation/Limited 14.3% ------------------------------------ Healthcare 12.4% ------------------------------------ Utilities 7.2% ------------------------------------ Housing/Multifamily 5.2% ------------------------------------ Other 6.4% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 2 The Fund also paid shareholders a capital gains distribution in December 2003 of $0.0193 per share. 12 Nuveen Insured Premium Income Municipal Fund 2 NPX Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 94% Insured and U.S. Guaranteed 6% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.073 Dec 0.073 Jan 0.073 Feb 0.073 Mar 0.073 Apr 0.073 May 0.073 Jun 0.073 Jul 0.073 Aug 0.073 Sep 0.073 Oct 0.073 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 14.18 14.24 14.36 14.62 14.83 14.63 14.8 14.72 14.63 14.94 14.95 14.96 14.94 14.78 14.88 14.91 14.99 15.04 14.98 15.06 14.88 14.65 13.4 12.85 12.73 12.23 12.36 12.49 12.72 12.67 12.5 12.58 12.9 12.92 12.91 12.86 13.15 13.53 13.47 13.66 13.85 13.7 13.92 13.9 14 13.84 13.85 13.97 14.1 10/31/04 14.11 FUND SNAPSHOT ------------------------------------ Share Price $14.11 ------------------------------------ Common Share Net Asset Value $14.45 ------------------------------------ Premium/(Discount) to NAV -2.35% ------------------------------------ Market Yield 6.21% ------------------------------------ Taxable-Equivalent Yield1 8.63% ------------------------------------ Net Assets Applicable to Common Shares ($000) $539,697 ------------------------------------ Average Effective Maturity on Securities (Years) 17.95 ------------------------------------ Leverage-Adjusted Duration 7.42 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 7/22/93) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 6.42% 7.89% ------------------------------------ 5-Year 10.71% 9.30% ------------------------------------ 10-Year 10.08% 8.79% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Texas 10.3% ------------------------------------ California 9.8% ------------------------------------ Illinois 9.4% ------------------------------------ New York 8.6% ------------------------------------ Colorado 7.7% ------------------------------------ Pennsylvania 6.9% ------------------------------------ Nevada 5.9% ------------------------------------ Hawaii 5.3% ------------------------------------ Washington 4.7% ------------------------------------ Wisconsin 4.4% ------------------------------------ Massachusetts 2.8% ------------------------------------ North Dakota 2.5% ------------------------------------ Utah 2.2% ------------------------------------ Oregon 2.1% ------------------------------------ Indiana 2.1% ------------------------------------ Georgia 2.1% ------------------------------------ Other 13.2% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Tax Obligation/Limited 19.6% ------------------------------------ Utilities 18.9% ------------------------------------ Transportation 13.0% ------------------------------------ Tax Obligation/General 11.6% ------------------------------------ Healthcare 10.5% ------------------------------------ Water and Sewer 7.9% ------------------------------------ Education and Civic Organizations 6.0% ------------------------------------ U.S. Guaranteed 6.0% ------------------------------------ Other 6.5% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 13 Nuveen Insured Dividend Advantage Municipal Fund NVG Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 88% Insured and U.S. Guaranteed 4% AAA (Uninsured) 3% AA (Uninsured) 4% A (Uninsured) 1% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0775 Dec 0.0775 Jan 0.0775 Feb 0.0775 Mar 0.0775 Apr 0.0775 May 0.0775 Jun 0.0775 Jul 0.0775 Aug 0.0775 Sep 0.0775 Oct 0.0775 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 14.88 14.85 14.82 14.98 14.98 15.05 15.02 15.1 15.2 15.41 15.38 15.47 15.4 15.49 15.4 15.39 15.64 15.7 15.6 15.63 15.61 15.27 14.25 13.93 13.72 13.42 13.19 13.23 13.73 13.75 13.36 13.45 13.73 13.99 13.96 13.8 13.91 14.23 14.27 14.39 14.6 14.48 14.76 14.65 14.85 14.7 14.89 14.86 14.99 10/31/04 14.89 FUND SNAPSHOT ------------------------------------ Share Price $14.89 ------------------------------------ Common Share Net Asset Value $15.78 ------------------------------------ Premium/(Discount) to NAV -5.64% ------------------------------------ Market Yield 6.25% ------------------------------------ Taxable-Equivalent Yield1 8.68% ------------------------------------ Net Assets Applicable to Common Shares ($000) $470,389 ------------------------------------ Average Effective Maturity on Securities (Years) 19.17 ------------------------------------ Leverage-Adjusted Duration 7.48 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 7.61% 9.19% ------------------------------------ Since Inception 6.36% 10.40% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Texas 18.2% ------------------------------------ Indiana 11.2% ------------------------------------ Florida 10.8% ------------------------------------ Washington 9.5% ------------------------------------ Illinois 9.4% ------------------------------------ California 6.7% ------------------------------------ Tennessee 6.1% ------------------------------------ Pennsylvania 3.3% ------------------------------------ Oregon 3.0% ------------------------------------ Alabama 2.9% ------------------------------------ Nevada 2.8% ------------------------------------ Other 16.1% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Tax Obligation/General 23.9% ------------------------------------ Transportation 18.2% ------------------------------------ Tax Obligation/Limited 17.4% ------------------------------------ Water and Sewer 12.8% ------------------------------------ Education and Civic Organizations 8.2% ------------------------------------ Utilities 6.1% ------------------------------------ Healthcare 5.6% ------------------------------------ Other 7.8% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2003 of $0.0714 per share. 14 Nuveen Insured Tax-Free Advantage Municipal Fund NEA Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) Insured 87% Insured and U.S. Guaranteed 2% AAA (Uninsured) 3% AA (Uninsured) 2% A (Uninsured) 4% BBB (Uninsured) 2% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.0775 Dec 0.0775 Jan 0.0775 Feb 0.0775 Mar 0.0775 Apr 0.0775 May 0.0775 Jun 0.0775 Jul 0.0775 Aug 0.0775 Sep 0.0745 Oct 0.0745 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 14.96 14.68 14.71 14.89 14.92 14.98 14.95 14.9 15.22 15.21 15.38 15.4 15.22 15.52 15.4 15.4 15.77 15.78 15.41 15.52 15.63 15.12 14.21 13.64 13.51 13.37 13.09 13.14 13.65 13.77 13.34 13.2 13.6 13.85 13.9 13.58 13.8 14.09 14.2 14.18 14.1 14.45 14.45 14.54 14.43 14.4 14.64 14.83 14.83 10/31/04 14.91 FUND SNAPSHOT ------------------------------------ Share Price $14.91 ------------------------------------ Common Share Net Asset Value $14.75 ------------------------------------ Premium/(Discount) to NAV 1.08% ------------------------------------ Market Yield 6.00% ------------------------------------ Taxable-Equivalent Yield1 8.33% ------------------------------------ Net Assets Applicable to Common Shares ($000) $273,112 ------------------------------------ Average Effective Maturity on Securities (Years) 22.54 ------------------------------------ Leverage-Adjusted Duration 5.76 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 11/21/02) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 7.41% 8.07% ------------------------------------ Since Inception 5.79% 7.74% ------------------------------------ STATES (as a % of total investments) ------------------------------------ California 18.9% ------------------------------------ Texas 8.5% ------------------------------------ Michigan 7.8% ------------------------------------ New York 6.2% ------------------------------------ Washington 6.0% ------------------------------------ Indiana 5.8% ------------------------------------ Pennsylvania 5.7% ------------------------------------ Alabama 5.5% ------------------------------------ South Carolina 4.8% ------------------------------------ Wisconsin 4.4% ------------------------------------ Massachusetts 3.2% ------------------------------------ Illinois 2.6% ------------------------------------ Oregon 2.6% ------------------------------------ Colorado 2.5% ------------------------------------ Other 15.5% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Tax Obligation/General 28.6% ------------------------------------ Tax Obligation/Limited 27.6% ------------------------------------ Healthcare 14.1% ------------------------------------ Utilities 10.4% ------------------------------------ Transportation 7.5% ------------------------------------ Water and Sewer 6.7% ------------------------------------ Other 5.1% ------------------------------------ 1 Taxable equivalent yield represents the yield that must be earned on a fully taxable investment, in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable equivalent yield is lower. 2 The Fund also paid shareholders a capital gain distribution in December 2003 of $0.0053 per share. 15 Shareholder MEETING REPORT The annual shareholder meeting was held on August 3, 2004, at the Northern Trust Bank, Chicago, Illinois. NQI NIO NIF ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== Robert P. Bremner For 33,111,701 -- 72,857,481 -- 17,592,771 -- Withhold 337,638 -- 878,203 -- 164,784 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 33,449,339 -- 73,735,684 -- 17,757,555 -- ==================================================================================================================================== Lawrence H. Brown For 33,113,486 -- 72,857,277 -- 17,585,253 -- Withhold 335,853 -- 878,407 -- 172,302 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 33,449,339 -- 73,735,684 -- 17,757,555 -- ==================================================================================================================================== Jack B. Evans For 33,131,224 -- 72,854,999 -- 17,589,378 -- Withhold 318,115 -- 880,685 -- 168,177 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 33,449,339 -- 73,735,684 -- 17,757,555 -- ==================================================================================================================================== William C. Hunter For 33,126,306 -- 72,847,790 -- 17,573,760 -- Withhold 323,033 -- 887,894 -- 183,795 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 33,449,339 -- 73,735,684 -- 17,757,555 -- ==================================================================================================================================== William J. Schneider For -- 11,594 -- 26,202 -- 6,125 Withhold -- 10 -- 61 -- 33 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,604 -- 26,263 -- 6,158 ==================================================================================================================================== Timothy R. Schwertfeger For -- 11,593 -- 26,218 -- 6,125 Withhold -- 11 -- 45 -- 33 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,604 -- 26,263 -- 6,158 ==================================================================================================================================== Judith M. Stockdale For 33,092,062 -- 72,844,994 -- 17,584,129 -- Withhold 357,277 -- 890,690 -- 173,426 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 33,449,339 -- 73,735,684 -- 17,757,555 -- ==================================================================================================================================== 16 NPX NVG NEA ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== Robert P. Bremner For 34,563,887 -- 28,559,912 -- 17,988,639 -- Withhold 349,394 -- 308,620 -- 183,374 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 34,913,281 -- 28,868,532 -- 18,172,013 -- ==================================================================================================================================== Lawrence H. Brown For 34,562,842 -- 28,548,402 -- 18,050,572 -- Withhold 350,439 -- 320,130 -- 121,441 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 34,913,281 -- 28,868,532 -- 18,172,013 -- ==================================================================================================================================== Jack B. Evans For 34,569,807 -- 28,569,272 -- 18,051,257 -- Withhold 343,474 -- 299,260 -- 120,756 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 34,913,281 -- 28,868,532 -- 18,172,013 -- ==================================================================================================================================== William C. Hunter For 34,564,437 -- 28,558,516 -- 18,053,623 -- Withhold 348,844 -- 310,016 -- 118,390 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 34,913,281 -- 28,868,532 -- 18,172,013 -- ==================================================================================================================================== William J. Schneider For -- 10,275 -- 9,179 -- 5,600 Withhold -- 18 -- 32 -- 71 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 10,293 -- 9,211 -- 5,671 ==================================================================================================================================== Timothy R. Schwertfeger For -- 10,275 -- 9,179 -- 5,600 Withhold -- 18 -- 32 -- 71 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 10,293 -- 9,211 -- 5,671 ==================================================================================================================================== Judith M. Stockdale For 34,566,288 -- 28,567,735 -- 18,055,407 -- Withhold 346,993 -- 300,797 -- 116,606 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 34,913,281 -- 28,868,532 -- 18,172,013 -- ==================================================================================================================================== 17 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS NUVEEN INSURED QUALITY MUNICIPAL FUND, INC. NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. NUVEEN PREMIER INSURED MUNICIPAL INCOME FUND, INC. NUVEEN INSURED PREMIUM INCOME MUNICIPAL FUND 2 NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund as of October 31, 2004, and the related statements of operations for the year then ended, the statements of changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of investments owned as of October 31, 2004, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Insured Quality Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Insured Premium Income Municipal Fund 2, Nuveen Insured Dividend Advantage Municipal Fund and Nuveen Insured Tax-Free Advantage Municipal Fund at October 31, 2004, the results of their operations for the year then ended, the changes in their net assets and the financial highlights for the periods indicated therein in conformity with U.S. generally accepted accounting principles. /s/Ernst & Young LLP Chicago, Illinois December 15, 2004 18 Nuveen Insured Quality Municipal Fund, Inc. (NQI) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.2% (0.1% OF TOTAL INVESTMENTS) $ 1,135 Birmingham Waterworks and Sewerage Board, Alabama, 1/13 at 100.00 AAA $ 1,236,719 Water and Sewerage Revenue Bonds, Series 2002B, 5.250%, 1/01/20 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 2.1% (1.4% OF TOTAL INVESTMENTS) 2,730 Maricopa County Union High School District 210, Phoenix, 7/14 at 100.00 AAA 3,047,990 Arizona, General Obligation Bonds, Series 2004A, 5.000%, 7/01/15 - FSA Insured 9,200 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 9,498,264 Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS) 3,800 Arkansas Development Finance Authority, FNMA/GNMA 7/05 at 102.00 AAA 3,901,802 Mortgage-Backed Securities Program Single Family Mortgage Bonds, Series 1995B, 6.700%, 7/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 21.8% (14.5% OF TOTAL INVESTMENTS) 7,885 Alameda County, California, Certificates of Participation, 9/06 at 102.00 AAA 8,592,994 Alameda County Public Facilities Corporation, Series 1991, 6.000%, 9/01/21 (Pre-refunded to 9/01/06) - MBIA Insured 13,175 California Pollution Control Financing Authority, Revenue 9/09 at 101.00 AAA 14,181,043 Refunding Bonds, Southern California Edison Company, Series 1999A, 5.450%, 9/01/29 - MBIA Insured 9,000 California, General Obligation Bonds, Series 2002, 10/12 at 100.00 AAA 9,225,000 5.000%, 10/01/32 - MBIA Insured 20,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 21,133,450 5.000%, 4/01/27 - AMBAC Insured 3,750 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 AAA 3,862,050 5.000%, 4/01/31 - AMBAC Insured 5,500 California Statewide Community Development Authority, 1/05 at 102.00 AAA 5,630,075 Certificates of Participation, Salk Institute for Biological Studies, Series 1994, 6.200%, 7/01/24 - CONNIE LEE/ AMBAC Insured Foothill/Eastern Transportation Corridor Agency, California, Toll Road Revenue Refunding Bonds, Series 1999: 22,985 0.000%, 1/15/24 - MBIA Insured 1/10 at 44.52 AAA 7,725,948 22,000 0.000%, 1/15/31 - MBIA Insured 1/10 at 29.11 AAA 4,759,700 50,000 0.000%, 1/15/37 - MBIA Insured 1/10 at 20.19 AAA 7,495,000 5,000 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 5,197,950 Financing Project, Series 2002A, 5.125%, 3/01/32 - AMBAC Insured 5,000 Inland Empire Solid Waste Financing Authority, California, 8/06 at 102.00 AAA 5,434,950 Revenue Bonds, Landfill Improvement Financing Project, Series 1996B, 6.000%, 8/01/16 (Alternative Minimum Tax) (Pre-refunded to 8/01/06) - FSA Insured 5,483 Moreno Valley Public Finance Authority, California, GNMA 1/12 at 105.00 Aaa 6,123,414 Collateralized Assisted Living Housing Revenue Bonds, CDC Assisted Living Project, Series 2000A, 7.500%, 1/20/42 6,060 Ontario Redevelopment Financing Authority, San Bernardino 2/05 at 101.00 AAA 6,201,865 County, California, Revenue Bonds, Redevelopment Project 1, Series 1993, 5.850%, 8/01/22 - MBIA Insured 3,615 Pasadena Unified School District, Los Angeles County, 5/13 at 100.00 AAA 3,800,233 California, General Obligation Bonds, Series 2003D, 5.000%, 5/01/24 - MBIA Insured 2,000 San Diego Redevelopment Agency, California, Subordinate 9/14 at 100.00 AAA 2,136,900 Lien Tax Allocation Bonds, Centre City Project, Series 2004A, 5.000%, 9/01/21 - XLCA Insured San Francisco Airports Commission, California, Revenue Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A: 7,200 5.125%, 5/01/21 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 7,498,728 12,690 5.250%, 5/01/31 (Alternative Minimum Tax) - MBIA Insured 5/11 at 100.00 AAA 13,030,727 19 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 1.7% (1.1% OF TOTAL INVESTMENTS) $ 5,630 Arapahoe County Capital Improvement Trust Fund, 8/05 at 103.00 AAA $ 5,999,441 Colorado, Vehicle Registration Fee Revenue Bonds, Highway E-470 Project, Series 1986A, 6.150%, 8/31/26 (Pre-refunded to 8/31/05) - MBIA Insured 3,750 Denver, Colorado, Airport System Revenue Bonds, 11/06 at 101.00 AAA 3,990,525 Series 1996D, 5.500%, 11/15/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.4% (0.9% OF TOTAL INVESTMENTS) 8,000 Washington Convention Center Authority, District of 10/08 at 101.00 AAA 8,505,520 Columbia, Senior Lien Dedicated Tax Revenue Bonds, Series 1998, 5.000%, 10/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 7.2% (4.8% OF TOTAL INVESTMENTS) 3,250 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 3,475,875 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured 2,180 Florida Municipal Loan Council, Revenue Bonds, Series 2003A, No Opt. Call AAA 2,470,202 5.250%, 5/01/13 - MBIA Insured 20,000 Lee County, Florida, Airport Revenue Bonds, Series 2000A, 10/10 at 101.00 AAA 21,768,400 5.750%, 10/01/25 (Alternative Minimum Tax) - FSA Insured 4,115 Miami-Dade County Housing Finance Authority, Florida, 7/11 at 100.00 AAA 4,317,458 Multifamily Housing Revenue Bonds, Monterey Pointe Apartments, Series 2001-2A, 5.850%, 7/01/37 (Alternative Minimum Tax) - FSA Insured 7,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 7,280,140 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured 3,780 Palm Beach County School Board, Florida, Certificates 8/13 at 100.00 AAA 4,160,797 of Participation, Series 2003A, 5.000%, 8/01/16 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 11/14 at 100.00 AAA 1,070,290 Series 2004, 5.000%, 11/01/22 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 6.1% (4.0% OF TOTAL INVESTMENTS) 1,620 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 1,730,079 Series 2003A, 5.000%, 7/15/21 - FSA Insured Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 8,785 6.625%, 7/01/18 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 10,164,596 7,000 6.000%, 7/01/19 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 7,839,090 16,180 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 17,163,097 Revenue Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 18.4% (12.2% OF TOTAL INVESTMENTS) 10,000 Chicago, Illinois, General Obligation Bonds, Series 1995, 7/05 at 102.00 AAA 10,488,800 6.125%, 1/01/16 (Pre-refunded to 7/01/05) - AMBAC Insured 6,000 Chicago, Illinois, General Airport Second Lien Revenue 1/05 at 102.00 AAA 6,162,480 Refunding Bonds, O'Hare International Airport, Series 1994A, 6.375%, 1/01/12 - MBIA Insured 9,500 Chicago, Illinois, General Airport Second Lien Revenue 1/10 at 101.00 AAA 10,257,530 Refunding Bonds, O'Hare International Airport, Series 1999, 5.500%, 1/01/15 (Alternative Minimum Tax) - AMBAC Insured 7,165 Illinois Development Finance Authority, Revenue Bonds, 8/09 at 101.00 AAA 8,145,674 Bradley University Project, Series 1999, 5.500%, 8/01/29 (Pre-refunded to 8/01/09) - AMBAC Insured 25,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa 2/10 at 101.00 AAA 27,758,750 Health System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured 15,785 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 16,644,651 Series 2002, 5.250%, 4/01/27 - FSA Insured 13,275 Illinois, General Obligation Bonds, Illinois FIRST Program, 5/11 at 100.00 AAA 13,994,771 Series 2001, 5.250%, 5/01/26 - FSA Insured 18,000 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 6,609,420 Revenue Bonds, McCormick Place Expansion Project, Series 2002A, 0.000%, 12/15/24 - MBIA Insured 10,000 University of Illinois, Certificates of Participation, 8/11 at 100.00 AAA 11,340,400 Utility Infrastructure Projects, Series 2001B, 5.250%, 8/15/21 (Pre-refunded to 8/15/11) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 2.4% (1.6% OF TOTAL INVESTMENTS) Hammond Multi-School Building Corporation, Lake County, Indiana, First Mortgage Revenue Bonds, Series 2003B: 2,550 5.000%, 7/15/17 - FGIC Insured 7/13 at 100.00 AAA 2,756,320 1,610 5.000%, 7/15/19 - FGIC Insured 7/13 at 100.00 AAA 1,725,518 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 7,790 Indiana Transportation Finance Authority, Highway Revenue No Opt. Call AAA $ 9,959,203 Bonds, Series 1990A, 7.250%, 6/01/15 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,000 Wichita, Kansas, Water and Sewer Utility Revenue Bonds, 10/13 at 100.00 AAA 3,210,390 Series 2003, 5.000%, 10/01/21 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 4.2% (2.8% OF TOTAL INVESTMENTS) Kentucky Economic Development Finance Authority, Health System Revenue Bonds, Norton Healthcare Inc., Series 2000C: 6,345 0.000%, 10/01/27 - MBIA Insured 10/13 at 101.00 AAA 6,625,512 18,185 0.000%, 10/01/28 - MBIA Insured 10/13 at 101.00 AAA 18,911,854 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.0% (2.0% OF TOTAL INVESTMENTS) 13,170 New Orleans, Louisiana, General Obligation Refunding 10/05 at 101.00 AAA 13,829,422 Bonds, Series 1995, 6.200%, 10/01/21 - AMBAC Insured 4,045 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 4,338,020 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.5% (1.0% OF TOTAL INVESTMENTS) 8,000 Maine Health and Higher Educational Facilities Authority, 7/09 at 101.00 AAA 8,940,320 Revenue Bonds, Series 1999B, 6.000%, 7/01/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.4% (0.9% OF TOTAL INVESTMENTS) 7,535 Maryland Transportation Authority, Airport Parking Revenue 3/12 at 101.00 AAA 8,264,765 Bonds, Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.500%, 3/01/18 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Massachusetts Bay Transportation Authority, Senior 7/12 at 100.00 AAA 5,152,850 Sales Tax Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27 - FGIC Insured Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 1,250 5.250%, 1/01/21 - FGIC Insured 1/14 at 100.00 AAA 1,366,400 1,000 5.250%, 1/01/22 - FGIC Insured 1/14 at 100.00 AAA 1,086,720 1,195 5.250%, 1/01/23 - FGIC Insured 1/14 at 100.00 AAA 1,292,942 2,000 5.250%, 1/01/24 - FGIC Insured 1/14 at 100.00 AAA 2,156,000 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,750 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 4,998,235 Pollution Control Revenue Refunding Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.0% (0.0% OF TOTAL INVESTMENTS) 127 St. Louis Park, Minnesota, GNMA Mortgage-Backed 4/05 at 100.00 Aaa 127,083 Securities Program, Single Family Residential Mortgage Revenue Bonds, Series 1991A, 7.250%, 4/20/23 ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.6% (1.1% OF TOTAL INVESTMENTS) 2,545 Harrison County Wastewater Management District, No Opt. Call AAA 3,457,535 Mississippi, Wastewater Treatment Facilities Revenue Refunding Bonds, Series 1991A, 8.500%, 2/01/13 - FGIC Insured 2,715 Harrison County Wastewater Management District, No Opt. Call AAA 3,598,542 Mississippi, Wastewater Treatment Facilities Revenue Refunding Bonds, Series 1991B, 7.750%, 2/01/14 - FGIC Insured 2,685 Mississippi Home Corporation, GNMA Collateralized Single 6/06 at 105.00 Aaa 2,824,754 Family Mortgage Revenue Bonds, Series 1996C, 7.600%, 6/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,000 St. Louis Municipal Finance Corporation, Missouri, Leasehold 2/06 at 102.00 AAA 5,360,350 Revenue Bonds, City Justice Center, Series 1996A, 6.000%, 2/15/19 (Pre-refunded to 2/15/06) - AMBAC Insured 21 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 6.8% (4.5% OF TOTAL INVESTMENTS) $ 33,700 Director of Nevada State Department of Business and 1/10 at 100.00 AAA $ 34,958,358 Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 5,720 Reno, Nevada, Senior Lien Sales and Room Tax Revenue 6/12 at 100.00 AAA 5,908,074 Bonds, Reno Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/32 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 0.6% (0.4% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,700 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,814,767 1,700 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,803,615 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.8% (1.2% OF TOTAL INVESTMENTS) 6,000 Farmington, New Mexico, Pollution Control Revenue 4/05 at 100.00 A3 6,147,000 Refunding Bonds, Southern California Edison Company - Four Corners Project, Series 1991A, 7.200%, 4/01/21 New Mexico Finance Authority, Public Project Revolving Revenue Bonds, Series 2004C: 1,420 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,515,211 3,290 5.000%, 6/01/23 - AMBAC Insured 6/14 at 100.00 AAA 3,489,210 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.9% (11.2% OF TOTAL INVESTMENTS) 8,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AAA 8,338,320 Service Contract Refunding Bonds, Series 2002A, 5.000%, 7/01/25 - FGIC Insured 4,500 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 4,627,395 Dedicated Tax Fund Bonds, Series 2002A, 5.000%, 11/15/32 - FSA Insured New York City, New York, General Obligation Bonds, Fiscal Series 1991A: 2,000 8.000%, 3/15/11 - FSA Insured 3/05 at 100.00 AAA 2,355,540 6,000 7.250%, 3/15/19 - FSA Insured 3/05 at 100.00 AAA 7,092,060 10,335 New York City Municipal Water Finance Authority, 6/05 at 101.00 AAA 10,712,641 New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1996A, 6.000%, 6/15/25 (Pre-refunded to 6/15/05) - MBIA Insured 11,760 Dormitory Authority of the State of New York, Court 5/10 at 101.00 AAA 13,182,960 Facilities Lease Revenue Bonds, Series 1999, 5.750%, 5/15/30 - AMBAC Insured 7,000 New York State Energy Research and Development 7/05 at 102.00 A1 7,297,780 Authority, Facilities Revenue Refunding Bonds, Consolidated Edison Company Inc., Series 1995A, 6.100%, 8/15/20 10,875 New York State Housing Finance Agency, Housing Project 5/06 at 102.00 AAA 11,268,893 Mortgage Revenue Refunding Bonds, Series 1996A, 6.125%, 11/01/20 - FSA Insured 4,200 New York State Mortgage Agency, Homeowner Mortgage 10/09 at 100.00 AAA 4,434,150 Revenue Bonds, Series 82, 5.550%, 10/01/19 (Alternative Minimum Tax) - MBIA Insured 12,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 12,420,240 FHA-Insured Mortgage Revenue Bonds, New York and Presbyterian Hospital, Series 1994A, 6.900%, 8/15/34 (Pre-refunded to 2/15/05) - AMBAC Insured 15,000 Dormitory Authority of the State of New York, Revenue 10/12 at 100.00 AAA 17,115,300 Bonds, School Districts Financing Program, Series 2002D, 5.500%, 10/01/17 - MBIA Insured New York City Sales Tax Asset Receivable Corporation, New York, Local Government Assistance Corporation Dedicated Revenue Bonds, Series 2004A: 1,630 5.000%, 10/15/24 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 1,729,088 1,675 5.000%, 10/15/25 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 1,765,685 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,720 Union County, North Carolina, Certificates of Participation, 6/13 at 101.00 AAA 1,889,747 Series 2003, 5.000%, 6/01/16 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 3.4% (2.3% OF TOTAL INVESTMENTS) 20,000 Mercer County, North Dakota, Pollution Control Revenue 1/05 at 102.00 AAA 20,539,400 Refunding Bonds, Basin Electric Power Cooperative - Antelope Valley Unit 1 and Common Facilities, Second Series 1995, 6.050%, 1/01/19 - AMBAC Insured 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.2% (1.4% OF TOTAL INVESTMENTS) $ 7,000 Cleveland State University, Ohio, General Receipts Bonds, 6/14 at 100.00 AAA $ 7,770,420 Series 2004, 5.250%, 6/01/19 - FGIC Insured 5,000 Lorain County, Ohio, Health Facilities Revenue Bonds, 9/09 at 102.00 AAA 5,372,350 Catholic Healthcare Partners, Series 1999A, 5.500%, 9/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.5% (1.6% OF TOTAL INVESTMENTS) 7,000 Allegheny County, Pennsylvania, Airport Revenue Refunding 1/08 at 101.00 AAA 7,380,660 Bonds, Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16 (Alternative Minimum Tax) - MBIA Insured 7,250 Lehigh County Industrial Development Authority, 8/05 at 102.00 AAA 7,612,283 Pennsylvania, Pollution Control Revenue Refunding Bonds, Pennsylvania Power and Light Company Project, Series 1995A, 6.150%, 8/01/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.0% (0.6% OF TOTAL INVESTMENTS) 5,000 Puerto Rico Highway and Transportation Authority, No Opt. Call AAA 5,911,700 Highway Revenue Bonds, Series 2003AA, 5.500%, 7/01/16 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.8% (0.5% OF TOTAL INVESTMENTS) Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A: 7,500 0.000%, 1/01/24 - FSA Insured 1/13 at 52.75 AAA 2,574,675 5,000 0.000%, 1/01/25 - FSA Insured 1/13 at 49.71 AAA 1,608,900 2,750 0.000%, 1/01/26 - FSA Insured 1/13 at 46.78 AAA 827,640 ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 22.1% (14.6% OF TOTAL INVESTMENTS) 8,000 Abilene Health Facilities Development Corporation, Texas, 9/05 at 102.00 AAA 8,410,800 Hospital Revenue Refunding and Improvement Bonds, Hendrick Medical Center Project, Series 1995C, 6.150%, 9/01/25 - MBIA Insured 5,275 Austin, Texas, Combined Utility System Revenue Refunding 11/07 at 100.00 AAA 5,596,037 Bonds, Series 1997, 5.125%, 11/15/20 - FSA Insured 3,135 Corpus Christi, Texas, Utility System Revenue Bonds, 7/14 at 100.00 AAA 3,446,274 Series 2004, 5.250%, 7/15/20 - FSA Insured 3,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,378,450 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 (Alternative Minimum Tax) - FGIC Insured 3,735 Grand Prairie Independent School District, Dallas County, 2/13 at 100.00 AAA 3,868,153 Texas, General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured Harris County Hospital District, Texas, Revenue Refunding Bonds, Series 1990: 1,725 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 1,880,681 2,580 7.400%, 2/15/10 - AMBAC Insured No Opt. Call AAA 2,929,796 4,500 Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 4,702,095 Bonds, Series 2001A, 5.000%, 3/01/22 - FSA Insured 4,685 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 5,053,007 Bonds, Series 2000A, 5.500%, 7/01/19 (Alternative Minimum Tax) - FSA Insured 5,000 Houston, Texas, First Lien Combined Utility System Revenue 5/14 at 100.00 AAA 5,386,800 Bonds, Series 2004A, 5.250%, 5/15/24 - FGIC Insured 17,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 20,052,520 Revenue Refunding Bonds, Series 2002A, 5.750%, 12/01/32 - FSA Insured 19,200 Jefferson County Health Facilities Development 8/11 at 100.00 AAA 20,118,144 Corporation, Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.400%, 8/15/31 - AMBAC Insured 6,000 Laredo Community College District, Texas, Limited Tax 8/10 at 100.00 AAA 6,428,280 General Obligation Bonds, Series 2001, 5.375%, 8/01/31 - AMBAC Insured 22,045 North Central Texas Health Facilities Development 8/12 at 101.00 AAA 23,021,594 Corporation, Revenue Bonds, Children's Medical Center of Dallas, Series 2002, 5.250%, 8/15/32 - AMBAC Insured 17,429 Tarrant County Housing Finance Corporation, Texas, GNMA 3/12 at 105.00 Aaa 18,721,360 Collateralized Mortgage Loan Multifamily Housing Revenue Bonds, Bardin Green Apartments Project, Series 2001, 6.600%, 9/20/42 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.8% (0.6% OF TOTAL INVESTMENTS) 4,655 Salt Lake City, Utah, Hospital Revenue Refunding Bonds, 11/04 at 100.00 AAA 5,031,962 IHC Hospitals Inc., Series 1988A, 8.000%, 5/15/07 23 Nuveen Insured Quality Municipal Fund, Inc. (NQI) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.1% (7.4% OF TOTAL INVESTMENTS) $ 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA $ 11,459,640 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 (Alternative Minimum Tax) - MBIA Insured 4,670 Seattle Housing Authority, Washington, GNMA Collateralized 9/11 at 102.00 AAA 5,157,173 Mortgage Loan Low Income Housing Assistance Revenue Bonds, RHF/Esperanza Apartments Project, Series 2000A, 6.125%, 3/20/42 (Alternative Minimum Tax) 15,025 Seattle Housing Authority, Washington, GNMA Collateralized 11/11 at 105.00 AAA 17,248,850 Mortgage Loan Low Income Housing Assistance Revenue Bonds, Park Place Project, Series 2000A, 7.000%, 5/20/42 5,000 Seattle, Washington, Municipal Light and Power Revenue 12/10 at 100.00 AAA 5,486,850 Bonds, Series 2000, 5.250%, 12/01/21 - FSA Insured 1,600 Vancouver, Washington, Water and Sewerage Revenue No Opt. Call AAA 1,816,735 Bonds, Series 2004, 5.250%, 6/01/14 - FGIC Insured 10,000 Washington, General Obligation Refunding Bonds, 1/12 at 100.00 AAA 10,633,700 Series R-2003A, 5.000%, 1/01/19 - MBIA Insured 2,500 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 2,752,274 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured 11,750 Washington State Public Power Supply System, Revenue 7/08 at 102.00 AAA 12,797,747 Refunding Bonds, Nuclear Project 1, Series 1998A, 5.125%, 7/01/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 2.3% (1.5% OF TOTAL INVESTMENTS) 12,845 West Virginia Water Development Authority, Infrastructure 10/10 at 100.00 AAA 13,945,431 Revenue Bonds, West Virginia Infrastructure and Jobs Development Council Program, Series 2000A, 5.500%, 10/01/39 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,180 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,269,707 Series 2004, 5.000%, 11/01/26 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 947,209 Total Long-Term Investments (cost $849,599,816) - 150.8% 912,093,645 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,900 California Statewide Community Development Authority, A-1+ 1,900,000 Certificates of Participation, John Muir/Mt. Diablo Health System, Variable Rate Demand Obligations, Series 1997, 1.650%, 8/15/27 - AMBAC Insured+ ------------------------------------------------------------------------------------------------------------------------------------ $ 1,900 Total Short-Term Investments (cost $1,900,000) 1,900,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $851,499,816) - 151.1% 913,993,645 ------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.5% 9,033,970 ------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.6)% (318,000,000) ------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 605,027,615 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 24 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 15.5% (10.3% OF TOTAL INVESTMENTS) $ 3,815 Alabama Housing Finance Authority, GNMA Collateralized 7/05 at 103.00 Aaa $ 3,969,202 Multifamily Housing Revenue Refunding Bonds, Royal Hills Apartments, Series 1995F, 6.500%, 7/20/30 11,000 Birmingham Special Care Facilities Financing Authority, 5/05 at 102.00 AAA 11,420,860 Alabama, Revenue Bonds, Baptist Health System Inc., Series 1995B, 5.875%, 11/15/20 - MBIA Insured Birmingham Special Care Facilities Financing Authority, Alabama, Revenue Bonds, Baptist Health System Inc., Series 1996A: 7,465 5.875%, 11/15/19 - MBIA Insured 11/06 at 102.00 AAA 8,139,090 1,750 5.875%, 11/15/26 - MBIA Insured 11/06 at 102.00 AAA 1,883,963 11,175 Hoover Board of Education, Alabama, Capital Outlay Tax 2/11 at 100.00 AAA 12,088,892 Anticipation Warrants, Series 2001, 5.250%, 2/15/22 - MBIA Insured Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997A: 25,825 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 27,707,901 10,195 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 10,684,870 Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 1999A: 10,815 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 11,934,569 9,790 5.000%, 2/01/33 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 10,836,943 12,000 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 13,463,520 29,860 5.750%, 2/01/38 (Pre-refunded to 2/01/09) - FGIC Insured 2/09 at 101.00 AAA 33,950,521 18,760 Jefferson County, Alabama, Sewer Revenue Capitol 2/11 at 101.00 AAA 20,924,341 Improvement Warrants, Series 2001A, 5.000%, 2/01/41 (Pre-refunded to 2/01/11) - FGIC Insured Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002B: 2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,816,750 2,500 5.125%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,831,400 Jefferson County, Alabama, Sewer Revenue Capital Improvement Warrants, Series 2002D: 425 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 475,235 1,940 5.000%, 2/01/38 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 2,180,618 14,800 5.000%, 2/01/42 (Pre-refunded to 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 16,635,644 5,240 Jefferson County, Alabama, Sewer Revenue Refunding 2/11 at 101.00 AAA 5,869,953 Warrants, Series 2003B, 5.000%, 2/01/41 (Pre-refunded to 2/01/11) - FGIC Insured 4,250 Shelby County Board of Education, Alabama, General 2/05 at 102.00 AAA 4,377,033 Obligation Refunding Warrants, Series 1995, 5.875%, 2/01/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 2.5% (1.7% OF TOTAL INVESTMENTS) 11,245 Alaska Housing Finance Corporation, General Mortgage 6/09 at 100.00 AAA 11,751,812 Revenue Bonds, Series 1999A, 6.050%, 6/01/39 - MBIA Insured 11,460 Alaska Housing Finance Corporation, Governmental 12/05 at 102.00 AAA 11,829,700 Purpose Bonds, Series 1995A, 5.875%, 12/01/30 - MBIA Insured 2,680 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 2,811,454 Mortgage Program Bonds, First Series 1999A-2, 6.250%, 6/01/39 (Alternative Minimum Tax) 3,190 Alaska Housing Finance Corporation, Collateralized Veterans 12/09 at 100.00 AAA 3,374,127 Mortgage Program Bonds, First Series 1999A-1, 6.150%, 6/01/39 3,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 3,144,480 Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.8% (0.5% OF TOTAL INVESTMENTS) 1,000 Maricopa County Union High School District 210, Phoenix, 7/14 at 100.00 AAA 1,069,970 Arizona, General Obligation Bonds, Series 2004A, 5.000%, 7/01/22 - FSA Insured 25 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA (continued) $ 6,770 Pima County Industrial Development Authority, Arizona, 1/05 at 101.50 AAA $ 7,151,151 Lease Obligation Revenue Refunding Bonds, Tucson Electric Power Company, Series 1988A, 7.250%, 7/15/10 - FSA Insured 2,000 Yuma County Industrial Development Authority, Arizona, 8/11 at 101.00 AAA 2,302,980 Hospital Revenue Bonds, Yuma Regional Medical Center, Series 2001, 5.500%, 8/01/20 (Pre-refunded to 8/01/11) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 28.1% (18.7% OF TOTAL INVESTMENTS) California Rural Home Mortgage Finance Authority, Single Family Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 1996A: 105 7.550%, 11/01/26 (Alternative Minimum Tax) No Opt. Call AAA 105,301 85 7.750%, 5/01/27 (Alternative Minimum Tax) No Opt. Call AAA 85,242 4,500 California, General Obligation Bonds, Series 1998, 10/08 at 101.00 AAA 4,817,565 5.000%, 10/01/19 - FGIC Insured 10,000 California Department of Veterans Affairs, Home Purchase 6/12 at 101.00 AAA 10,740,600 Revenue Bonds, Series 2002A, 5.300%, 12/01/21 - AMBAC Insured 4,135 California Housing Finance Agency, Home Mortgage Revenue 11/10 at 55.40 AAA 1,692,414 Bonds, Series 2000Y, 0.000%, 8/01/20 (Alternative Minimum Tax) - FSA Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 30,000 5.375%, 5/01/17 - XLCA Insured 5/12 at 101.00 AAA 33,400,800 35,000 5.375%, 5/01/18 - AMBAC Insured 5/12 at 101.00 AAA 38,822,000 20,000 Cucamonga County Water District, San Bernardino County, 9/11 at 101.00 AAA 20,663,200 California, Certificates of Participation, Water Shares Purchase, Series 2000, 5.125%, 9/01/35 - FGIC Insured 5,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 5,254,900 Revenue Refunding Bonds, Long Beach Aquarium of the South Pacific, Series 2001, 5.250%, 11/01/30 - AMBAC Insured 20,000 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 21,384,200 Obligation Bonds, Series 2003A, 5.000%, 7/01/21 - FSA Insured 9,000 Orange County, California, Refunding Recovery Bonds, 6/05 at 102.00 AAA 9,389,880 Series 1995A, 5.750%, 6/01/15 - MBIA Insured 12,500 Orange County, California, Recovery Certificates of 7/06 at 102.00 AAA 13,504,375 Participation, Series 1996A, 6.000%, 7/01/26 - MBIA Insured 6,205 Port of Oakland, California, Revenue Bonds, Series 2002L, 11/12 at 100.00 AAA 6,447,553 5.000%, 11/01/22 (Alternative Minimum Tax) - FGIC Insured Poway Redevelopment Agency, California, Tax Allocation Bonds, Paguay Redevelopment Project, Series 2001: 15,000 5.200%, 6/15/30 - AMBAC Insured 12/11 at 101.00 AAA 15,685,500 5,000 5.125%, 6/15/33 - AMBAC Insured 12/11 at 101.00 AAA 5,170,900 6,000 Redlands Unified School District, San Bernardino County, 7/13 at 100.00 AAA 6,245,880 California, General Obligation Bonds, Series 2003, 5.000%, 7/01/26 - FSA Insured 11,000 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 11,310,530 Revenue Bonds, Series 2003R, 5.000%, 8/15/33 - MBIA Insured 19,300 Sacramento Power Authority, California, Revenue Bonds, 7/06 at 102.00 AAA 20,889,934 Power Authority Cogeneration Project, Series 1995, 5.875%, 7/01/15 - MBIA Insured 6,500 Salinas, California, GNMA Collateralized Housing 1/05 at 102.00 AAA 6,638,190 Facility Revenue Refunding Bonds, Villa Serra Project, Series 1994A, 6.600%, 7/20/30 10,000 San Francisco Airports Commission, California, Revenue 5/06 at 101.00 AAA 10,418,000 Bonds, San Francisco International Airport, Second Series, Issue 13B, 5.500%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured 13,710 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 14,155,575 Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.250%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured 11,500 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 11,886,170 Sales Tax Revenue Bonds, Series 2001, 5.125%, 7/01/36 - AMBAC Insured 66,685 San Joaquin Hills Transportation Corridor Agency, Orange No Opt. Call AAA 32,137,502 County, California, Senior Lien Toll Road Revenue Bonds, Series 1993, 0.000%, 1/01/21 San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue Refunding Bonds, Series 1997A: 31,615 5.250%, 1/15/30 - MBIA Insured 1/07 at 102.00 AAA 33,123,984 21,500 0.000%, 1/15/32 - MBIA Insured No Opt. Call AAA 5,077,225 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 12,525 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA $ 13,232,663 Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/20 - MBIA Insured 11,000 Santa Ana Financing Authority, California, Lease Revenue No Opt. Call AAA 13,672,890 Bonds, Police Administration and Housing Facility, Series 1994A, 6.250%, 7/01/24 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 6.5% (4.3% OF TOTAL INVESTMENTS) 10,000 Denver, Colorado, Airport System Revenue Refunding Bonds, 11/11 at 100.00 AAA 11,019,100 Series 2001A, 5.500%, 11/15/15 (Alternative Minimum Tax) - FGIC Insured 10,545 Denver, Colorado, Airport System Revenue Bonds, 11/06 at 101.00 AAA 11,221,356 Series 1996D, 5.500%, 11/15/25 - MBIA Insured 6,200 Denver Convention Center Hotel Authority, Colorado, 12/13 at 100.00 AAA 6,347,560 Senior Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 - XLCA Insured 35,995 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 14,306,933 Bonds, Series 1997B, 0.000%, 9/01/23 - MBIA Insured 30,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 34,603,184 Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured 11,800 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 74.80 AAA 6,977,812 Bonds, Series 2000B, 0.000%, 9/01/15 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.0% (0.7% OF TOTAL INVESTMENTS) 2,720 District of Columbia Housing Finance Agency, GNMA 12/04 at 100.00 AAA 2,722,203 Collateralized Single Family Mortgage Revenue Bonds, Series 1990B, 7.100%, 12/01/24 (Alternative Minimum Tax) District of Columbia Water and Sewerage Authority, Subordinate Lien Public Utility Revenue Bonds, Series 2003: 5,000 5.125%, 10/01/24 - FGIC Insured 10/13 at 100.00 AAA 5,275,500 5,000 5.125%, 10/01/25 - FGIC Insured 10/13 at 100.00 AAA 5,249,500 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.7% (3.8% OF TOTAL INVESTMENTS) 4,425 Jacksonville Economic Development Commission, Florida, 11/12 at 100.00 AAA 4,787,275 Healthcare Facilities Revenue Bonds, Mayo Clinic, Series 2001C, 5.500%, 11/15/36 - MBIA Insured 1,505 Lee County, Florida, Transportation Facilities Revenue 10/14 at 100.00 AAA 1,624,015 Bonds, Series 2004B, 5.000%, 10/01/21 - AMBAC Insured 35,920 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 37,357,518 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002A: 18,500 5.000%, 10/01/33 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 18,698,135 2,150 5.125%, 10/01/35 (Alternative Minimum Tax) - FSA Insured 10/12 at 100.00 AAA 2,190,119 3,000 Orange County, Florida, Revenue Refunding Bonds, 10/13 at 100.00 AAA 3,302,850 Solid Waste Facility, Series 2003, 5.000%, 10/01/14 - MBIA Insured Plantation, Florida, Non-Ad Valorem Revenue Refunding and Improvement Bonds, Series 2003: 2,010 5.000%, 8/15/16 - FSA Insured 8/13 at 100.00 Aaa 2,213,251 2,110 5.000%, 8/15/17 - FSA Insured 8/13 at 100.00 Aaa 2,308,403 2,225 5.000%, 8/15/18 - FSA Insured 8/13 at 100.00 Aaa 2,420,288 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 11/14 at 100.00 AAA 1,070,290 Series 2004, 5.000%, 11/01/22 - FSA Insured Fulton County Development Authority, Georgia, Revenue Bonds, Georgia Tech Molecular Science Building, Series 2004: 1,695 5.250%, 5/01/19 - MBIA Insured 5/14 at 100.00 AAA 1,878,840 1,135 5.250%, 5/01/20 - MBIA Insured 5/14 at 100.00 AAA 1,251,462 5,000 Glynn-Brunswick Memorial Hospital Authority, Georgia, 8/06 at 102.00 AAA 5,345,700 Revenue Bonds, Southeast Georgia Health Systems, Series 1996, 5.250%, 8/01/13 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.0% (1.3% OF TOTAL INVESTMENTS) 24,250 Hawaii Department of Budget and Finance, Special Purpose 5/06 at 101.00 AAA 25,723,430 Revenue Bonds, Hawaiian Electric Company Inc., Series 1996A, 6.200%, 5/01/26 (Alternative Minimum Tax) - MBIA Insured 27 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% (0.2% OF TOTAL INVESTMENTS) $ 1,070 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 $ 1,078,892 Senior Series 1994B-1, 6.750%, 7/01/22 970 Idaho Housing Agency, Single Family Mortgage Bonds, No Opt. Call Aa1 1,037,580 Senior Series 1994B-2, 6.900%, 7/01/26 (Alternative Minimum Tax) 1,150 Idaho Housing Agency, Single Family Mortgage Bonds, 1/05 at 102.00 Aaa 1,175,392 Senior Series 1995B, 6.600%, 7/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 8.5% (5.6% OF TOTAL INVESTMENTS) 1,050 Bedford Park Village, Illinois, General Obligation Bonds, 12/14 at 100.00 AAA 1,157,909 Series 2004A, 5.250%, 12/15/20 - FSA Insured 12,500 Chicago, Illinois, General Airport Second Lien Revenue 1/05 at 101.00 AAA 12,777,250 Refunding Bonds, O'Hare International Airport, Series 1993C, 5.000%, 1/01/18 - MBIA Insured Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Refunding Bonds, O'Hare International Airport, Series 2001E: 4,615 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 5,027,489 4,870 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 5,301,092 12,000 Cook County, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 13,323,120 Series 2003, 5.000%, 11/15/10 - MBIA Insured 5,000 DuPage and Will Counties Community School District 204 - 12/11 at 100.00 AAA 5,423,800 Indian Prairie, Illinois, General Obligation Bonds, Series 2001, 5.000%, 12/30/15 - FGIC Insured 5,455 Eastern Illinois University, Auxiliary Facilities System 4/05 at 76.71 AAA 4,144,054 Revenue Bonds, Series 1989, 0.000%, 10/01/09 - MBIA Insured 10,000 Illinois Development Finance Authority, Revenue Bonds, 5/08 at 101.00 AAA 10,865,700 Provena Health, Series 1998A, 5.500%, 5/15/21 - MBIA Insured 2,095 Illinois Educational Facilities Authority, Revenue Bonds, 12/07 at 100.00 Aaa 2,272,300 Robert Morris College, Series 2000, 5.800%, 6/01/30 - MBIA Insured 2,180 Illinois Educational Facilities Authority, Revenue Bonds, 10/10 at 101.00 AAA 2,505,365 DePaul University, Series 2000, 5.500%, 10/01/19 (Pre-refunded to 10/01/10) - AMBAC Insured 7,000 Illinois Health Facilities Authority, Revenue Bonds, 6/08 at 101.00 Aaa 7,417,200 Hospital Sisters Services Inc. Obligated Group, Series 1998A, 5.000%, 6/01/18 - MBIA Insured 4,500 Illinois Health Facilities Authority, Revenue Bonds, Alexian 1/09 at 101.00 AAA 4,728,375 Brothers Health System, Series 1999, 5.000%, 1/01/19 - FSA Insured 22,410 Illinois, General Obligation Bonds, Illinois FIRST Program, 2/12 at 100.00 AAA 23,371,613 Series 2002, 5.125%, 2/01/27 - FGIC Insured 4,560 Macon County, Illinois, Revenue Bonds, Millikin University, 10/05 at 100.00 AAA 4,745,318 Series 1995, 6.250%, 10/01/16 (Pre-refunded to 10/01/05) - AMBAC Insured Schaumburg, Illinois, General Obligation Bonds, Series 2004B: 4,260 5.000%, 12/01/22 - FGIC Insured 12/14 at 100.00 AAA 4,539,584 2,365 5.000%, 12/01/23 - FGIC Insured 12/14 at 100.00 AAA 2,502,241 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.7% (2.5% OF TOTAL INVESTMENTS) 2,030 Decatur Township-Marion County Multi-School Building 7/13 at 100.00 AAA 2,169,481 Corporation, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/20 - FGIC Insured 11,000 Indiana Health Facility Financing Authority, Hospital Revenue 5/06 at 100.00 Aaa 11,145,640 Bonds, Daughters of Charity, Series 1993, 5.750%, 11/15/22 4,035 Indiana State Office Building Commission, Revenue Bonds, No Opt. Call AAA 4,591,669 Indiana State Museum, Series 2004C, 5.250%, 7/01/15 - FGIC Insured 3,250 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 3,438,663 Waterworks Project, Series 2002A, 5.250%, 7/01/33 - MBIA Insured 20,000 Indianapolis Local Public Improvement Bond Bank, Indiana, No Opt. Call AAA 5,925,400 Series 1999E, 0.000%, 2/01/28 - AMBAC Insured 1,340 Monroe-Gregg Grade School Building Corporation, Morgan 1/14 at 100.00 AAA 1,393,573 County, Indiana, First Mortgage Bonds, Series 2004, 5.000%, 1/15/25 - FSA Insured 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 5,000 Noblesville Redevelopment Authority, Indiana, Economic 7/13 at 100.00 AAA $ 5,152,000 Development Lease Rental Bonds, Exit 10 Project, Series 2003, 5.000%, 1/15/28 - AMBAC Insured 10,000 Purdue University, Indiana, Student Fee Bonds, 1/12 at 100.00 AAA 10,652,900 Series 2002O, 5.000%, 7/01/19 - MBIA Insured 3,705 Whitley County Middle School Building Corporation, 7/13 at 100.00 AAA 4,050,565 Columbia City, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/16 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.3% (0.2% OF TOTAL INVESTMENTS) 3,045 Ames, Iowa, Hospital Revenue Refunding Bonds, Mary 6/13 at 100.00 Aaa 3,316,188 Greeley Medical Center, Series 2003, 5.000%, 6/15/15 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.7% (0.4% OF TOTAL INVESTMENTS) 1,055 Butler County Unified School District 394, Kansas, General 9/14 at 100.00 AAA 1,141,405 Obligation Bonds, Series 2004, 5.000%, 9/01/20 - FSA Insured 2,055 Kansas State Turnpike Authority, Revenue Bonds, 9/14 at 101.00 AAA 2,187,424 Series 2004A2, 5.000%, 9/01/23 (WI, settling 11/18/04) - FSA Insured 5,000 University of Kansas Hospital Authority, Health Facilities 9/09 at 100.00 AAA 5,430,600 Revenue Bonds, KU Health System, Series 1999A, 5.650%, 9/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.4% (0.9% OF TOTAL INVESTMENTS) 3,870 Kenton County School District Finance Corporation, 6/14 at 100.00 Aaa 4,183,586 Kentucky, School Building Revenue Bonds, Series 2004, 5.000%, 6/01/20 - MBIA Insured 12,980 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AAA 14,141,061 District, Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.500%, 5/15/34 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.5% (1.0% OF TOTAL INVESTMENTS) 5,000 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA 5,648,650 Refunding Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 3,025 Lafayette City and Parish, Louisiana, Utilities Revenue 11/14 at 100.00 AAA 3,312,072 Bonds, Series 2004, 5.250%, 11/01/22 - MBIA Insured 6,895 Orleans Levee District, Louisiana, Levee District General 12/05 at 103.00 AAA 7,394,474 Obligation Bonds, Series 1986, 5.950%, 11/01/15 - FSA Insured 3,000 St. Charles Parish, Louisiana, Pollution Control Revenue 12/04 at 100.00 AAA 3,091,500 Bonds, Louisiana Power and Light Company, Series 1991, 7.500%, 6/01/21 (Alternative Minimum Tax) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.2% (0.2% OF TOTAL INVESTMENTS) 3,000 Maine Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 3,096,090 Revenue Bonds, Series 2003B, 5.000%, 7/01/28 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 6.6% (4.4% OF TOTAL INVESTMENTS) 22,500 Massachusetts Development Finance Authority, Revenue 1/12 at 101.00 AAA 24,165,225 Bonds, WGBH Educational Foundation, Series 2002A, 5.375%, 1/01/42 - AMBAC Insured 8,400 Massachusetts Health and Educational Facilities Authority, 10/05 at 102.00 AAA 8,859,480 Revenue Bonds, Berkshire Health Systems, Series 1995D, 6.000%, 10/01/13 - MBIA Insured 1,180 Massachusetts Housing Finance Agency, Housing Revenue 12/05 at 102.00 AAA 1,226,374 Refunding Bonds, Series 1995A, 6.100%, 12/01/16 - MBIA Insured 15,000 Massachusetts, Special Obligation Dedicated Tax Revenue 1/14 at 100.00 AAA 16,229,400 Bonds, Series 2004, 5.250%, 1/01/23 - FGIC Insured 33,315 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 33,668,472 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured 1,500 University of Massachusetts Building Authority, Senior 11/14 at 100.00 AAA 1,674,600 Lien Project Revenue Bonds, Series 2004-1, 5.375%, 11/01/20 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 7.4% (4.9% OF TOTAL INVESTMENTS) 6,000 Detroit, Michigan, General Obligation Bonds, Series 2001A-1, 10/11 at 100.00 AAA 6,701,760 5.375%, 4/01/18 - MBIA Insured 5,490 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 6,691,047 Unlimited Tax School Building and Site Improvement Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured 29 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) Detroit, Michigan, Sewerage Disposal System Revenue Bonds, Series 1999A: $ 15,825 5.750%, 7/01/26 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA $ 18,198,908 20,000 5.875%, 7/01/27 (Pre-refunded to 1/01/10) - FGIC Insured 1/10 at 101.00 AAA 23,119,800 8,700 Detroit, Michigan, Senior Lien Water Supply System 7/07 at 101.00 AAA 8,993,016 Revenue Bonds, Series 1997A, 5.000%, 7/01/27 - MBIA Insured 8,000 Gaylord Community Schools, Otsego and Antrim Counties, 5/07 at 37.75 AAA 2,848,800 Michigan, School Building and Site Refunding Bonds, Series 1992, 0.000%, 5/01/21 (Pre-refunded to 5/01/07) - MBIA Insured Grand Rapids Community College, Kent County, Michigan, General Obligation Refunding Bonds, Series 2003: 1,050 5.250%, 5/01/17 - AMBAC Insured 5/13 at 100.00 AAA 1,162,581 1,085 5.250%, 5/01/20 - AMBAC Insured 5/13 at 100.00 AAA 1,185,645 27,000 Okemos Public School District, Ingham County, Michigan, 5/06 at 34.54 AAA 9,043,650 School Building and Site Bonds, Series 1991I, 0.000%, 5/01/21 (Pre-refunded to 5/01/06) - MBIA Insured 10,000 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 10,674,600 Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.250%, 12/01/25 - MBIA Insured 6,850 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 7,325,048 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/15 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.1% (0.7% OF TOTAL INVESTMENTS) 13,020 St. Paul Housing and Redevelopment Authority, Minnesota, 12/11 at 102.00 Aaa 13,883,617 GNMA Collateralized Multifamily Housing Revenue Bonds, Marian Center Project, Series 2001A, 3.870%, 6/20/43 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.1% (4.7% OF TOTAL INVESTMENTS) 7,370 Clark County, Nevada, Subordinate Lien Airport Revenue 7/14 at 100.00 AAA 7,774,318 Bonds, Series 2004A-2, 5.125%, 7/01/25 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 15,000 5.625%, 1/01/34 - AMBAC Insured 1/10 at 102.00 AAA 16,568,400 13,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 13,485,420 530 Nevada Housing Division, Single Family Mortgage Bonds, 4/05 at 101.00 Aa2 541,528 Senior Series 1994B-1, 6.700%, 10/01/17 410 Nevada Housing Division, Single Family Mortgage Bonds, 4/05 at 101.00 Aa2 413,571 Senior Series 1994B-2, 6.950%, 10/01/26 (Alternative Minimum Tax) 40,285 Reno, Nevada, Capital Improvement Revenue Bonds, 6/12 at 100.00 AAA 42,960,326 Series 2002, 5.375%, 6/01/32 - FGIC Insured 10,000 Reno, Nevada, Senior Lien Sales and Room Tax Revenue 6/12 at 100.00 AAA 10,401,600 Bonds, Reno Transportation Rail Access Corridor Project, Series 2002, 5.125%, 6/01/27 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.2% (0.8% OF TOTAL INVESTMENTS) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,169,920 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,425,905 New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 3,850 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 4,109,914 3,850 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 4,084,657 2,120 New Jersey Educational Facilities Authority, Revenue 7/14 at 100.00 AAA 2,282,370 Bonds, Ramapo College, Series 2004E, 5.000%, 7/01/21 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 7.5% (5.0% OF TOTAL INVESTMENTS) 8,685 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 9,529,529 General Revenue Bonds, Series 1998A, 5.300%, 12/01/19 - FSA Insured Metropolitan Transportation Authority, New York, State Service Contract Refunding Bonds, Series 2002A: 2,500 5.000%, 7/01/21 - FGIC Insured 7/12 at 100.00 AAA 2,659,375 5,000 5.000%, 7/01/25 - FGIC Insured 7/12 at 100.00 AAA 5,211,450 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 15,000 New York City Municipal Water Finance Authority, 6/06 at 101.00 AAA $ 15,734,100 New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1997A, 5.375%, 6/15/26 - FSA Insured New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1996B: 3,520 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA 3,776,854 6,480 5.750%, 6/15/26 - MBIA Insured 6/06 at 101.00 AAA 6,925,500 5,000 New York State Urban Development Corporation, 1/07 at 102.00 AAA 5,497,700 Correctional Capital Facilities Revenue Bonds, Series 1996-7, 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - MBIA Insured 15,600 Port Authority of New York and New Jersey, Consolidated 1/05 at 101.00 AAA 15,903,420 Bonds, Ninety-Seventh Series, 6.650%, 1/15/23 (Alternative Minimum Tax) - FGIC Insured New York City Sales Tax Asset Receivable Corporation, New York, Local Government Assistance Corporation Dedicated Revenue Bonds, Series 2004A: 4,825 5.000%, 10/15/24 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 5,118,312 1,665 5.000%, 10/15/25 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 1,755,143 25,000 Triborough Bridge and Tunnel Authority, New York, 11/12 at 100.00 AAA 25,707,750 Subordinate Lien General Purpose Revenue Refunding Bonds, Series 2002E, 5.000%, 11/15/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.4% (0.3% OF TOTAL INVESTMENTS) 5,000 North Carolina Municipal Power Agency 1, Catawba 1/13 at 100.00 AAA 5,529,000 Electric Revenue Bonds, Series 2003A, 5.250%, 1/01/16 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.8% (2.5% OF TOTAL INVESTMENTS) 2,650 Cleveland State University, Ohio, General Receipts Bonds, 6/14 at 100.00 AAA 2,868,758 Series 2004, 5.250%, 6/01/24 - FGIC Insured 2,000 Columbus City School District, Franklin County, Ohio, 12/14 at 100.00 AAA 2,165,200 General Obligation Bonds, Series 2004, 5.250%, 12/01/25 - FSA Insured 20,100 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica 11/09 at 101.00 AAA 21,057,162 Healthcare Obligated Group, Series 1999, 5.375%, 11/15/39 - AMBAC Insured 1,320 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/05 at 102.00 Aaa 1,320,950 Securities Program Residential Mortgage Revenue Bonds, Series 1995A-2, 6.625%, 3/01/26 (Alternative Minimum Tax) Ohio Air Quality Development Authority, Revenue Refunding Bonds, JMG Funding Limited Partnership Project, Series 1994: 13,750 6.375%, 1/01/29 (Alternative Minimum Tax) - AMBAC Insured 4/05 at 102.00 AAA 14,070,375 8,000 6.375%, 4/01/29 (Alternative Minimum Tax) - AMBAC Insured 4/05 at 102.00 AAA 8,186,400 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.4% (0.9% OF TOTAL INVESTMENTS) 7,145 Oklahoma Housing Finance Agency, GNMA Collateralized No Opt. Call AAA 7,349,347 Single Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 5,245 Oklahoma State Industries Authority, Revenue Bonds, 2/11 at 100.00 Aaa 5,650,386 Oklahoma Medical Research Foundation, Series 2001, 5.250%, 2/01/21 - AMBAC Insured 4,880 University of Oklahoma, Student Housing Revenue Bonds, 7/14 at 100.00 Aaa 5,209,449 Series 2004, 5.000%, 7/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.1% (0.1% OF TOTAL INVESTMENTS) 1,885 Oregon Housing and Community Services Department, 7/05 at 102.00 Aa2 1,939,137 Single Family Mortgage Revenue Bonds, Series 1995A, 6.450%, 7/01/26 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.2% (0.1% OF TOTAL INVESTMENTS) 2,000 Puerto Rico Highway and Transportation Authority, 7/13 at 100.00 AAA 2,222,600 Transportation Revenue Bonds, Series 2003G, 5.250%, 7/01/19 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.9% (1.3% OF TOTAL INVESTMENTS) 2,195 Providence Housing Development Corporation, Rhode Island, 1/05 at 102.00 AAA 2,242,171 FHA-Insured Mortgage Revenue Refunding Bonds, Barbara Jordan Apartments, Series 1994A, 6.750%, 7/01/25 - MBIA Insured 20,475 Rhode Island Depositors Economic Protection Corporation, 2/11 at 100.00 AAA 23,056,488 Special Obligation Refunding Bonds, Series 1993B, 5.250%, 8/01/21 (Pre-refunded to 2/01/11) - MBIA Insured 31 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 3.7% (2.5% OF TOTAL INVESTMENTS) $ 10,000 Beaufort County, South Carolina, Tax Increment Bonds, 12/12 at 100.00 AAA $ 10,323,200 New River Redevelopment Project, Series 2002, 5.000%, 6/01/27 - MBIA Insured Piedmont Municipal Power Agency, South Carolina, Electric Revenue Bonds, Series 1988A: 9,190 0.000%, 1/01/13 (Pre-refunded to 7/01/09) - AMBAC Insured 7/09 at 76.63 AAA 6,127,984 4,855 0.000%, 1/01/13 - AMBAC Insured No Opt. Call AAA 3,410,346 0.000%, 1/01/13 - AMBAC Insured No Opt. Call AAA 5,552,670 South Carolina JOBS Economic Development Authority, Hospital Revenue Bonds, Oconee Memorial Hospital Inc., Series 1995: 3,000 6.150%, 3/01/15 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 3,100,440 600 6.150%, 3/01/25 - CONNIE LEE/AMBAC Insured 3/05 at 102.00 AAA 619,884 8,000 South Carolina Jobs Economic Development Authority, 11/12 at 100.00 AAA 8,419,600 Industrial Revenue Bonds, South Carolina Electric and Gas Company, Series 2002A, 5.200%, 11/01/27 - AMBAC Insured 10,000 South Carolina Jobs Economic Development Authority, 11/12 at 100.00 AAA 10,514,600 Industrial Revenue Bonds, South Carolina Electric and Gas Company, Series 2002B, 5.450%, 11/01/32 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.5% (0.4% OF TOTAL INVESTMENTS) 6,455 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 7,054,347 Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/18 (Alternative Minimum Tax) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.7% (12.5% OF TOTAL INVESTMENTS) Austin, Texas, General Obligation Bonds, Series 2002: 2,150 5.375%, 9/01/18 - MBIA Insured 9/12 at 100.00 AAA 2,408,839 2,250 5.375%, 9/01/19 - MBIA Insured 9/12 at 100.00 AAA 2,508,503 22,650 Brazos River Authority, Texas, Revenue Refunding Bonds, 5/08 at 102.00 AAA 24,416,474 Houston Industries Inc., Series 1998C, 5.125%, 5/01/19 (Optional put 5/01/08) - AMBAC Insured 1,181 Capital Area Housing Finance Corporation, Texas, 4/12 at 106.00 AAA 1,283,443 FNMA Backed Single Family Mortgage Revenue Refunding Bonds, Series 2002A-2, 6.300%, 4/01/35 (Alternative Minimum Tax) - AMBAC Insured 11,460 Dallas County Utility and Reclamation District, Texas, 2/05 at 100.00 AAA 11,583,539 Unlimited Tax General Obligation Refunding Bonds, Series 1999B, 5.875%, 2/15/29 - AMBAC Insured 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 13,940,625 Bonds, Series 2000A, 6.125%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 25,000 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 25,782,750 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series 1989: 9,000 0.000%, 8/15/18 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 53.84 AAA 4,191,660 39,000 0.000%, 8/15/19 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 50.26 AAA 16,956,030 7,280 0.000%, 8/15/20 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 46.91 AAA 2,954,734 5,085 0.000%, 8/15/21 (Pre-refunded to 8/15/09) - AMBAC Insured 8/09 at 43.80 AAA 1,926,605 2,130 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AAA 2,324,064 Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/15 - MBIA Insured 6,570 Houston, Texas, General Obligation Public Improvement 3/11 at 100.00 AAA 7,272,464 Bonds, Series 2001A, 5.375%, 3/01/19 - FSA Insured 4,170 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 4,518,237 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 8,225 Houston, Texas, Airport System Subordinate Lien Revenue 7/07 at 100.00 AAA 8,674,578 Refunding Bonds, Series 1997, 5.125%, 7/01/22 - FGIC Insured 17,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue 9/11 at 100.00 AAA 18,248,475 Bonds, Convention and Entertainment Project, Series 2001B, 5.250%, 9/01/33 - AMBAC Insured 12,826 Houston Housing Finance Corporation, Texas, GNMA 9/11 at 105.00 Aaa 13,654,431 Collateralized Mortgage Multifamily Housing Revenue Bonds, RRG Apartments Project, Series 2001, 6.350%, 3/20/42 Houston, Texas, First Lien Combined Utility System Revenue Bonds, Series 2004A: 4,000 5.250%, 5/15/24 - FGIC Insured 5/14 at 100.00 AAA 4,309,440 5,000 5.250%, 5/15/25 - MBIA Insured 5/14 at 100.00 AAA 5,366,500 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 23,865 Jefferson County Health Facilities Development Corporation, 8/11 at 100.00 AAA $ 25,005,031 Texas, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001, 5.500%, 8/15/41 - AMBAC Insured 8,205 Lower Colorado River Authority, Texas, Revenue Refunding 5/11 at 100.00 AAA 8,622,552 and Improvement Bonds, Series 2001A, 5.000%, 5/15/21 - MBIA Insured Port of Houston Authority, Harris County, Texas, General Obligation Port Improvement Bonds, Series 2001B: 3,205 5.500%, 10/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,535,436 3,375 5.500%, 10/01/19 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 3,701,666 7,205 San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 7,841,634 Bonds, Series 2001, 5.375%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured Tarrant County Health Facilities Development Corporation, Texas, Revenue Bonds, Texas Health Resources System, Series 1997A: 2,900 5.250%, 2/15/22 - MBIA Insured 2/08 at 102.00 AAA 3,078,437 6,500 5.000%, 2/15/26 - MBIA Insured 2/08 at 101.00 AAA 6,617,455 8,715 Texas Department of Housing and Community Affairs, 9/06 at 102.00 AAA 9,046,170 Single Family Mortgage Revenue Bonds, Series 1996D, 6.250%, 9/01/28 (Alternative Minimum Tax) - MBIA Insured 1,910 Waco, Texas, Combined Tax and Revenue Certificates 2/14 at 100.00 AAA 2,038,906 of Obligation, Series 2004, 5.000%, 2/01/21 - MBIA Insured 1,840 Ysleta Independent School District Public Facility 11/09 at 100.00 AAA 1,976,933 Corporation, Texas, Lease Revenue Refunding Bonds, Series 2001, 5.375%, 11/15/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.2% (0.8% OF TOTAL INVESTMENTS) 2,000 Clearfield City, Utah, Sales Tax Revenue Bonds, 7/13 at 100.00 AAA 2,062,620 Series 2003, 5.000%, 7/01/28 - FGIC Insured 10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 10,906,000 Refunding Bonds, Series 2003A, 5.000%, 7/01/16 - FSA Insured 2,915 Utah Housing Finance Agency, FHA-Insured Section 8 1/05 at 100.00 AA 2,920,014 Assisted Multifamily Housing Revenue Bonds, Series 1992A, 7.400%, 7/01/24 120 Utah Housing Finance Agency, Single Family Mortgage 1/05 at 102.00 Aaa 120,802 Bonds, Series 1994D, 6.750%, 1/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.6% (1.1% OF TOTAL INVESTMENTS) 1,035 Loudoun County Industrial Development Authority, Virginia, 6/14 at 100.00 AAA 1,138,790 Public Safety Facilities Lease Revenue Bonds, Series 2003A, 5.250%, 12/15/20 - FSA Insured 4,840 Metropolitan Washington D.C. Airports Authority, 10/11 at 101.00 AAA 5,275,648 Airport System Revenue Bonds, Series 2001A, 5.500%, 10/01/19 (Alternative Minimum Tax) - MBIA Insured 4,265 Metropolitan Washington D.C. Airports Authority, 10/14 at 100.00 AAA 4,576,985 Airport System Revenue Bonds, Series 2004A, 5.000%, 10/01/20 - MBIA Insured 10,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 10,172,900 Mortgage Bonds, Series 2001H-1, 5.375%, 7/01/36 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 1.4% (0.9% OF TOTAL INVESTMENTS) 4,000 King County School District 414, Lake Washington, 12/14 at 100.00 AAA 4,436,160 Washington, General Obligation Bonds, Series 2004, 5.000%, 12/01/15 - FSA Insured 3,195 Kitsap County, Washington, Limited Tax General Obligation 7/10 at 100.00 AAA 3,488,365 Bonds, Series 2000, 5.500%, 7/01/25 - AMBAC Insured 4,250 Snohomish County Public Utility District 1, Washington, 1/05 at 100.00 AAA 5,233,960 Generation System Revenue Bonds, Series 1989, 6.650%, 1/01/16 - FGIC Insured 4,345 Washington State Public Power Supply System, Nuclear 7/07 at 102.00 AAA 4,698,335 Project 1 Revenue Refunding Bonds, Series 1997A, 5.125%, 7/01/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.8% (0.4% OF TOTAL INVESTMENTS) 10,000 Harrison County Commission, West Virginia, Solid Waste 11/04 at 101.00 AAA 10,132,400 Disposal Revenue Bonds, West Penn Power Company - Harrison Station, Series 1993B, 6.300%, 5/01/23 (Alternative Minimum Tax) - MBIA Insured 33 Nuveen Insured Municipal Opportunity Fund, Inc. (NIO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.9% (2.6% OF TOTAL INVESTMENTS) $ 680 Wisconsin Housing and Economic Development Authority, 1/05 at 100.00 AAA $ 681,366 Housing Revenue Bonds, Series 1992A, 6.850%, 11/01/12 - MBIA Insured 2,890 Wisconsin, General Obligation Bonds, Series 2004-3, 5/14 at 100.00 AAA 3,181,716 5.250%, 5/01/20 - FGIC Insured 10,945 Wisconsin, General Obligation Bonds, Series 2004-4, 5/14 at 100.00 AAA 11,807,903 5.000%, 5/01/20 - MBIA Insured 15,000 Wisconsin Health and Educational Facilities Authority, 2/07 at 102.00 AAA 16,088,400 Revenue Bonds, Marshfield Clinic, Series 1997, 5.750%, 2/15/27 - MBIA Insured 18,000 Wisconsin Health and Educational Facilities Authority, 8/07 at 102.00 AAA 19,593,900 Revenue Bonds, Aurora Health Care Inc., Series 1997, 5.250%, 8/15/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 1,993,367 Total Long-Term Investments (cost $1,798,811,022) - 149.9% 1,953,313,345 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.4% (0.3% OF TOTAL INVESTMENTS) 300 Burke County Development Authority, Georgia, Pollution A-1+ 300,000 Control Revenue Bonds, Oglethorpe Power Corporation - Vogtle Plant, Variable Rate Demand Obligations, Series 2001, 1.740%, 1/01/22 - AMBAC Insured+ 4,600 Puerto Rico Government Development Bank, Adjustable A-1 4,600,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 1.700%, 12/01/15 - MBIA Insured+ ------------------------------------------------------------------------------------------------------------------------------------ $ 4,900 Total Short-Term Investments (cost $4,900,000) 4,900,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $1,803,711,022) - 150.3% 1,958,213,345 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.9% 24,771,845 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.2)% (680,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $1,302,985,190 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 34 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 1.0% (0.6% OF TOTAL INVESTMENTS) $ 2,890 Alaska Housing Finance Corporation, Governmental Purpose 12/05 at 102.00 AAA $ 2,980,139 Bonds, Series 1995A, 5.875%, 12/01/24 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 31.3% (21.0% OF TOTAL INVESTMENTS) ABAG Finance Authority for Non-Profit Corporations, California, Insured Certificates of Participation, Children's Hospital Medical Center of Northern California, Series 1999: 6,750 5.875%, 12/01/19 - AMBAC Insured 12/09 at 101.00 AAA 7,725,983 10,000 6.000%, 12/01/29 - AMBAC Insured 12/09 at 101.00 AAA 11,311,500 4,755 Antioch Area Public Facilities Financing Agency, California, 8/09 at 101.00 AAA 5,340,388 Special Tax Bonds, Community Facilities District 1989-1, Series 1999, 5.700%, 8/01/22 - AMBAC Insured 3,250 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 3,536,000 Revenue Bonds, Pacific Gas and Electric Company, Series 1996A, 5.350%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured 165 Kern County Housing Authority, California, GNMA No Opt. Call AAA 166,008 Guaranteed Tax-Exempt Mortgage Obligation Bonds, Series 1994A-I, 7.150%, 12/30/24 (Alternative Minimum Tax) 210 Kern County Housing Authority, California, GNMA No Opt. Call AAA 210,575 Guaranteed Tax-Exempt Mortgage Obligation Bonds, Series 1994A-III, 7.450%, 6/30/25 (Alternative Minimum Tax) 5,180 La Verne-Grand Terrace Housing Finance Agency, California, No Opt. Call AAA 7,385,022 Single Family Residential Mortgage Revenue Bonds, Series 1984A, 10.250%, 7/01/17 11,080 Lodi, California, Electric System Revenue Certificates 1/09 at 40.71 AAA 4,012,511 of Participation, Series 1999B, 0.000%, 1/15/24 (Pre-refunded to 1/15/09) - MBIA Insured 5,000 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 6,983,700 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured 8,880 Pomona, California, GNMA/FHLMC Collateralized Single No Opt. Call AAA 12,046,608 Family Mortgage Revenue Refunding Bonds, Series 1990B, 7.500%, 8/01/23 10,305 San Bernardino, California, GNMA Mortgage-Backed No Opt. Call AAA 13,676,590 Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1990A, 7.500%, 5/01/23 14,755 San Bernardino County, California, GNMA Mortgage-Backed No Opt. Call AAA 18,434,454 Securities Program Single Family Home Mortgage Revenue Bonds, Series 1988A, 8.300%, 9/01/14 (Alternative Minimum Tax) 4,300 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA 4,508,164 Refunding Bonds, San Francisco International Airport, Second Series 2001, Issue 27A, 5.125%, 5/01/19 (Alternative Minimum Tax) - MBIA Insured 2,000 San Jose Redevelopment Agency, California, Tax Allocation 8/14 at 100.00 AAA 2,219,800 Bonds, Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.8% (3.2% OF TOTAL INVESTMENTS) 1,500 Adams and Arapahoe Counties Joint School District 28, 12/13 at 100.00 AAA 1,622,370 Aurora, Colorado, General Obligation Bonds, Series 2003A, 5.125%, 12/01/21 - FSA Insured 2,500 Denver, Colorado, Airport System Revenue Refunding Bonds, 11/12 at 100.00 AAA 2,743,475 Series 2002E, 5.500%, 11/15/18 (Alternative Minimum Tax) - FGIC Insured 6,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 6,715,920 Bonds, Series 2000A, 5.750%, 9/01/29 - MBIA Insured 1,310 Sand Creek Metropolitan District, Colorado, General 12/13 at 100.00 AAA 1,425,097 Obligation Bonds, Series 2004, 5.000%, 12/01/16 - XLCA Insured 1,390 Teller County School District RE-2, Woodland Park, Colorado, 12/14 at 100.00 AAA 1,487,134 General Obligation Bonds, Series 2004, 5.000%, 12/01/22 - MBIA Insured 1,000 University of Colorado, Enterprise System Revenue Bonds, 6/12 at 100.00 AAA 1,070,610 Series 2002A, 5.000%, 6/01/19 - FGIC Insured 35 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 3.5% (2.3% OF TOTAL INVESTMENTS) $ 1,500 JEA, Florida, Water and Sewerage System Revenue Bonds, 10/13 at 100.00 AAA $ 1,625,040 Series 2004A, 5.000%, 10/01/19 - FGIC Insured 4,145 Miami, Florida, General Obligation Bonds, Series 2002, 1/12 at 100.00 AAA 4,357,473 5.000%, 1/01/22 - MBIA Insured 4,240 Reedy Creek Improvement District, Florida, Utility Revenue 10/13 at 100.00 AAA 4,736,462 Bonds, Series 2003-1, 5.250%, 10/01/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 5.1% (3.4% OF TOTAL INVESTMENTS) 8,000 Fulton-DeKalb Hospital Authority, Georgia, Revenue Refunding 1/14 at 100.00 AAA 8,940,080 Certificates, Series 2003, 5.250%, 1/01/16 - FSA Insured 6,500 Medical Center Hospital Authority, Georgia, Revenue 8/09 at 102.00 AAA 7,054,320 Anticipation Certificates, Columbus Regional Healthcare System, Inc. Project, Series 1999, 5.500%, 8/01/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 3.8% (2.5% OF TOTAL INVESTMENTS) 8,030 Hawaii Department of Transportation, Airport System 7/10 at 101.00 AAA 9,240,041 Revenue Refunding Bonds, Series 2000B, 6.500%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 2,250 Hawaii Department of Budget and Finance, Special Purpose 1/09 at 101.00 AAA 2,509,515 Revenue Bonds, Hawaiian Electric Company Inc., Series 1999D, 6.150%, 1/01/20 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 20.3% (13.6% OF TOTAL INVESTMENTS) 4,000 Bridgeview, Illinois, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 4,218,800 5.000%, 12/01/22 - FGIC Insured 10,000 Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 10,865,800 Series 2000D, 5.500%, 1/01/35 - FGIC Insured 8,200 Chicago Board of Education, Illinois, General Obligation Lease No Opt. Call AAA 9,807,118 Certificates, Series 1992A, 6.250%, 1/01/15 - MBIA Insured 23,110 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 13,605,781 Program Revenue Bonds, Elgin School District U46, Kane, Cook and DuPage Counties, Series 2002, 0.000%, 1/01/17 - FSA Insured 10,010 Illinois Development Finance Authority, Revenue Bonds, 2/05 at 102.00 AAA 10,274,264 Catholic Health Partners Services, Series 1995A, 5.300%, 2/15/18 - CONNIE LEE/AMBAC Insured 10,150 Onterie Center Housing Finance Corporation, Illinois, 1/05 at 101.00 AAA 10,311,284 FHA-Insured Section 8 Assisted Mortgage Revenue Refunding Bonds, Onterie Center Project, Series 1992A, 7.050%, 7/01/27 - MBIA Insured 3,225 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 4,091,622 Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1992A, 9.000%, 6/01/09 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.6% (3.1% OF TOTAL INVESTMENTS) 4,725 Decatur Township-Marion County Multi-School Building 7/13 at 100.00 AAA 5,114,576 Corporation, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 7/15/17 - FGIC Insured 1,350 Indiana State Office Building Commission, Revenue Bonds, No Opt. Call AAA 1,540,620 Indiana State Museum, Series 2004C, 5.250%, 7/01/16 - FGIC Insured Indiana University, Parking Facility Revenue Bonds, Series 2004: 1,015 5.250%, 11/15/19 - AMBAC Insured 11/14 at 100.00 AAA 1,122,184 1,060 5.250%, 11/15/20 - AMBAC Insured 11/14 at 100.00 AAA 1,166,392 1,100 5.250%, 11/15/21 - AMBAC Insured 11/14 at 100.00 AAA 1,203,741 1,000 Metropolitan School District Steuben County K-5 Building 7/14 at 102.00 AAA 1,100,970 Corporation, Indiana, First Mortgage Bonds, Series 2003, 5.250%, 1/15/21 - FSA Insured 1,315 Monroe-Gregg Grade School Building Corporation, Morgan 1/14 at 100.00 AAA 1,421,199 County, Indiana, First Mortgage Bonds, Series 2004, 5.000%, 7/15/18 - FSA Insured 1,490 North Lawrence Community Schools Building Corporation, 1/14 at 100.00 AAA 1,601,988 Marion County, Indiana, First Mortgage Bonds, Series 2004, 5.000%, 7/15/19 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.2% (0.8% OF TOTAL INVESTMENTS) 3,345 Ames, Iowa, Hospital Revenue Refunding Bonds, Mary 6/13 at 100.00 Aaa 3,594,470 Greeley Medical Center, Series 2003, 5.000%, 6/15/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 2.4% (1.6% OF TOTAL INVESTMENTS) 6,500 Kentucky State Property and Buildings Commission, Revenue 10/11 at 100.00 AAA 7,434,310 Refunding Bonds, Project 72, Series 2001, 5.375%, 10/01/14 (Pre-refunded to 10/01/11) - MBIA Insured 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.7% (1.1% OF TOTAL INVESTMENTS) $ 5,000 Maryland Transportation Authority, Airport Parking Revenue 3/12 at 101.00 AAA $ 5,259,700 Bonds, Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/21 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 0.7% (0.5% OF TOTAL INVESTMENTS) Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 1,000 5.250%, 1/01/21 - FGIC Insured 1/14 at 100.00 AAA 1,093,120 1,000 5.250%, 1/01/24 - FGIC Insured 1/14 at 100.00 AAA 1,078,000 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 3.6% (2.4% OF TOTAL INVESTMENTS) 6,500 Michigan Higher Education Student Loan Authority, Revenue No Opt. Call AAA 7,060,885 Bonds, Series 2000 XII-T, 5.300%, 9/01/10 (Alternative Minimum Tax) - AMBAC Insured 3,810 Michigan Housing Development Authority, GNMA 8/12 at 102.00 Aaa 3,993,604 Collateralized Limited Obligation Multifamily Housing Revenue Bonds, Cranbrook Apartments, Series 2001A, 5.500%, 2/20/43 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.1% (1.4% OF TOTAL INVESTMENTS) 4,860 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,375,354 Minnesota, Airport Revenue Bonds, Series 2001B, 5.750%, 1/01/15 (Alternative Minimum Tax) - FGIC Insured 1,085 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 1,110,671 Series 1995D, 5.950%, 2/01/18 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 4.6% (3.1% OF TOTAL INVESTMENTS) 7,495 Jefferson County Industrial Development Authority, Missouri, 8/07 at 100.00 AAA 9,250,629 Housing Revenue Bonds, Richardson Road Apartments Project, Series 1985, 11.000%, 12/15/15 (Pre-refunded to 8/15/07) 2,000 Missouri Western State College, Auxiliary System Revenue 10/13 at 100.00 AAA 2,143,340 Bonds, Series 2003, 5.000%, 10/01/21 - MBIA Insured 2,500 St. Louis County Regional Convention and Sports Complex 8/13 at 100.00 AAA 2,783,525 Authority, Missouri, Lease Revenue Bonds, Convention and Sports Facility Project, Series 2003B-1, 5.250%, 8/15/16 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.7% (5.2% OF TOTAL INVESTMENTS) 10,000 Clark County, Nevada, Subordinate Lien Airport Revenue 7/11 at 100.00 AAA 10,572,100 Bonds, Series 2001B, 5.125%, 7/01/21 - FGIC Insured 7,990 Reno, Nevada, Senior Lien Sales and Room Tax Revenue 6/12 at 100.00 AAA 8,254,549 Bonds, Reno Transportation Rail Access Corridor Project, Series 2002, 5.250%, 6/01/41 - AMBAC Insured 5,050 Washoe County, Nevada, Gas and Water Facilities 1/05 at 101.00 AAA 5,190,895 Remarketed Revenue Refunding Bonds, Sierra Pacific Power Company, Series 1987, 6.300%, 12/01/14 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.1% (0.7% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,200 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,281,012 1,200 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,273,140 800 Rutgers State University, New Jersey, Certificates of 1/14 at 100.00 AAA 842,336 Participation, Lower Georges Street University Redevelopment Associates LLC, Series 2004, 5.000%, 1/01/24 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 3.4% (2.3% OF TOTAL INVESTMENTS) 10,000 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 10,621,200 Transportation Revenue Refunding Bonds, Series 2002F, 5.250%, 11/15/27 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.0% (0.7% OF TOTAL INVESTMENTS) 3,100 North Carolina Medical Care Commission, FHA-Insured 10/13 at 100.00 AAA 3,220,404 Mortgage Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.125%, 10/01/32 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 3.5% (2.4% OF TOTAL INVESTMENTS) 1,510 Oklahoma Housing Finance Agency, GNMA Collateralized No Opt. Call AAA 1,553,186 Single Family Mortgage Revenue Bonds, Series 1987A, 7.997%, 8/01/18 (Alternative Minimum Tax) 5,440 Sapulpa Municipal Authority, Oklahoma, Capital 7/10 at 101.00 AAA 6,270,035 Improvement Revenue Refunding Bonds, Series 2000, 5.625%, 7/01/20 (Pre-refunded to 7/01/10) - FSA Insured 37 Nuveen Premier Insured Municipal Income Fund, Inc. (NIF) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA (continued) $ 3,000 Tulsa Industrial Authority, Oklahoma, GNMA Collateralized 11/05 at 103.00 Aaa $ 3,126,810 Multifamily Housing Revenue Bonds, Country Club of Woodland Hills Project, Series 1995, 6.250%, 11/01/27 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 6.4% (4.3% OF TOTAL INVESTMENTS) Oregon Health Sciences University, Revenue Bonds, Series 2002A: 5,000 5.000%, 7/01/26 - MBIA Insured 1/13 at 100.00 AAA 5,195,050 9,000 5.000%, 7/01/32 - MBIA Insured 1/13 at 100.00 AAA 9,273,240 4,930 Oregon Health, Housing, Educational and Cultural Facilities 3/12 at 105.00 Aaa 5,425,120 Authority, GNMA Mortgage-Backed Securities Program Assisted Living Project Revenue Bonds, Necanicum Village LLC, Series 2001A, 6.850%, 6/20/42 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.1% (0.7% OF TOTAL INVESTMENTS) 3,075 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,427,948 Obligation Bonds, Series 2002B, 5.625%, 8/01/19 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,367,020 Revenue Bonds, Series 2003AA, 5.500%, 7/01/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.6% (1.7% OF TOTAL INVESTMENTS) 2,055 Memphis, Tennessee, Sanitary Sewerage System Revenue 10/14 at 100.00 AAA 2,198,398 Bonds, Series 2004, 5.000%, 10/01/22 - FSA Insured 5,000 Metropolitan Government Nashville-Davidson County Health 11/09 at 101.00 AAA 5,804,000 and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 6.000%, 11/15/30 (Pre-refunded to 11/15/09) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 10.2% (6.8% OF TOTAL INVESTMENTS) 160 Corpus Christi Housing Finance Corporation, Texas, 1/05 at 100.00 AAA 160,443 Single Family Mortgage Senior Revenue Refunding Bonds, Series 1991A, 7.700%, 7/01/11 - MBIA Insured 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 12,914,375 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured North Harris County Regional Water Authority, Texas, Senior Water Revenue Bonds, Series 2003: 4,565 5.250%, 12/15/20 - FGIC Insured 12/13 at 100.00 AAA 4,995,708 4,800 5.250%, 12/15/21 - FGIC Insured 12/13 at 100.00 AAA 5,226,096 7,600 San Antonio, Texas, Airport System Improvement Revenue 7/11 at 101.00 AAA 8,239,008 Bonds, Series 2001, 5.375%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 20.9% (14.0% OF TOTAL INVESTMENTS) 5,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 5,303,900 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 1,570 Clark County School District 101, Sedro-Woolley, Washington, 12/12 at 100.00 Aaa 1,749,765 General Obligation Bonds, Series 2002, 5.250%, 12/01/18 - FSA Insured King County School District 405, Bellevue, Washington, General Obligation Bonds, Series 2002: 12,060 5.000%, 12/01/19 - FGIC Insured 12/12 at 100.00 AAA 12,898,894 12,785 5.000%, 12/01/20 - FGIC Insured 12/12 at 100.00 AAA 13,610,655 Pierce County School District 343, Dieringer, Washington, General Obligation Refunding Bonds, Series 2003: 2,755 5.250%, 12/01/18 - FSA Insured 6/13 at 100.00 Aaa 3,023,089 2,990 5.250%, 12/01/19 - FSA Insured 6/13 at 100.00 Aaa 3,269,535 4,715 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,208,613 5.625%, 4/01/17 (Alternative Minimum Tax) - FGIC Insured 895 Port of Seattle, Washington, Special Facility Revenue 3/10 at 101.00 AAA 987,292 Bonds, Terminal 18, Series 1999C, 6.000%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 1,265 Tacoma, Washington, General Obligation Bonds, 12/12 at 100.00 AAA 1,359,331 Series 2002, 5.000%, 12/01/18 - FGIC Insured 4,200 Tacoma, Washington, Solid Waste Utility Revenue Refunding 12/11 at 100.00 AAA 4,583,376 Bonds, Series 2001, 5.250%, 12/01/20 - AMBAC Insured 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 5,000 Washington, General Obligation Bonds, Series 2001C, 1/11 at 100.00 AAA $ 5,309,050 5.250%, 1/01/26 - FSA Insured 6,990 Washington State Public Power Supply System, Revenue 7/08 at 102.00 AAA 7,613,299 Refunding Bonds, Nuclear Project 1, Series 1998A, 5.125%, 7/01/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 434,930 Total Long-Term Investments (cost $427,284,412) - 149.4% 464,037,798 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.1% (0.1% OF TOTAL INVESTMENTS) 300 Puerto Rico Government Development Bank, Adjustable A-1 300,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 1.700%, 12/01/15 - MBIA Insured+ ------------------------------------------------------------------------------------------------------------------------------------ $ 300 Total Short-Term Investments (cost $300,000) 300,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $427,584,412) - 149.5% 464,337,798 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.3% 7,328,689 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.8)% (161,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 310,666,487 ==================================================================================================================== All of the bonds in the portfolio are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 39 Nuveen Insured Premium Income Municipal Fund 2 (NPX) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.8% (0.5% OF TOTAL INVESTMENTS) Jefferson County, Alabama, General Obligation Warrants, Series 2004A: $ 1,500 5.000%, 4/01/21 - MBIA Insured 4/14 at 100.00 AAA $ 1,608,825 1,395 5.000%, 4/01/22 - MBIA Insured 4/14 at 100.00 AAA 1,487,210 1,040 5.000%, 4/01/23 - MBIA Insured 4/14 at 100.00 AAA 1,101,246 ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.9% (1.3% OF TOTAL INVESTMENTS) 7,745 Arkansas Development Finance Authority, State Facility 6/14 at 100.00 AAA 8,339,971 Revenue Bonds, Donaghey Plaza Project, Series 2004, 5.250%, 6/01/25 - FSA Insured 2,000 University of Arkansas, Fayetteville, Revenue Bonds, 11/14 at 100.00 Aaa 2,060,040 UAMS Campus, Series 2004B, 5.000%, 11/01/27 (WI, settling 11/18/04) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 14.6% (9.8% OF TOTAL INVESTMENTS) 31,200 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 24.23 AAA 5,615,376 Toll Road Revenue Refunding Bonds, Series 1999, 0.000%, 1/15/34 - MBIA Insured 6,850 Orange County, California, Recovery Certificates of 7/06 at 102.00 AAA 7,400,398 Participation, Series 1996A, 6.000%, 7/01/26 - MBIA Insured 15,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 15,822,300 of Participation, Series 2003, 5.250%, 2/01/30 - FGIC Insured 10,000 Orange County Water District, California, Revenue 8/13 at 100.00 AAA 10,224,200 Certificates of Participation, Series 2003B, 5.000%, 8/15/34 - MBIA Insured 1,435 Pasadena Area Community College District, Los Angeles 6/13 at 100.00 AAA 1,524,989 County, California, General Obligation Bonds, Series 2003A, 5.000%, 6/01/22 - FGIC Insured 1,940 Riverside, California, Certificates of Participation, 9/13 at 100.00 AAA 2,077,915 Series 2003, 5.000%, 9/01/20 - AMBAC Insured 13,000 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA 14,940,380 Improvement Revenue Bonds, Solid Waste and Redevelopment Projects, Series 1999, 5.800%, 12/01/19 - AMBAC Insured 2,000 San Jose Redevelopment Agency, California, Tax Allocation 8/14 at 100.00 AAA 2,219,800 Bonds, Merged Area Redevelopment Project, Series 2004A, 5.250%, 8/01/19 - MBIA Insured San Leandro Housing Finance Corporation, California, FHA-Insured Section 8 Assisted Mortgage Revenue Bonds, Ashland Village Apartments, Series 1993A: 1,010 6.550%, 1/01/12 - MBIA Insured 1/05 at 100.00 AAA 1,012,030 5,100 6.650%, 1/01/25 - MBIA Insured 1/05 at 100.00 AAA 5,107,344 12,500 University of California, Revenue Bonds, Multi-Purpose 5/13 at 100.00 AAA 12,845,250 Projects, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 11.6% (7.7% OF TOTAL INVESTMENTS) 1,940 Colorado Educational and Cultural Facilities Authority, 6/13 at 100.00 AAA 2,068,952 Charter School Revenue Bonds, Adams School District 12 - Pinnacle School, Series 2003, 5.250%, 6/01/23 - XLCA Insured 3,405 Colorado Educational and Cultural Facilities Authority, 12/13 at 100.00 AAA 3,642,124 Charter School Revenue Bonds, Classical Academy, Series 2003, 5.250%, 12/01/23 - XLCA Insured Colorado Health Facilities Authority, Revenue Bonds, Poudre Valley Health Care Inc., Series 1999A: 2,480 5.625%, 12/01/19 - FSA Insured 12/09 at 101.00 Aaa 2,782,758 3,500 5.750%, 12/01/23 - FSA Insured 12/09 at 101.00 Aaa 3,915,975 6,100 Denver School District 1, Colorado, General Obligation 12/13 at 100.00 AAA 6,645,706 Bonds, Series 2004, 5.000%, 12/01/18 - FSA Insured 12,955 Denver, Colorado, Airport System Revenue Bonds, 11/05 at 102.00 AAA 13,657,679 Series 1995A, 5.600%, 11/15/20 - MBIA Insured 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) Denver Convention Center Hotel Authority, Colorado, Senior Revenue Bonds, Convention Center Hotel, Series 2003A: $ 9,670 5.000%, 12/01/19 - XLCA Insured 12/13 at 100.00 AAA $ 10,350,961 17,495 5.000%, 12/01/33 - XLCA Insured 12/13 at 100.00 AAA 17,911,381 1,325 El Paso County, Colorado, Certificates of Participation, 12/12 at 100.00 AAA 1,366,274 Detention Facility Project, Series 2002B, 5.000%, 12/01/27 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 3,140 District of Columbia Housing Finance Agency, GNMA 12/04 at 102.00 AAA 3,146,311 Collateralized Single Family Mortgage Revenue Bonds, Series 1990C-4, 6.350%, 12/01/24 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 0.8% (0.5% OF TOTAL INVESTMENTS) 4,000 Florida State Board of Education, Full Faith and Credit Public 6/13 at 101.00 AAA 4,278,000 Education Capital Outlay Bonds, Series 2003J, 5.000%, 6/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.1% (2.1% OF TOTAL INVESTMENTS) 4,000 Cobb County Development Authority, Georgia, Parking Revenue 7/14 at 100.00 Aaa 4,221,760 Bonds, Kennesaw State University Project, Series 2004, 5.000%, 7/15/24 (WI, settling 11/10/04) - MBIA Insured Municipal Electric Authority of Georgia, Combustion Turbine Revenue Bonds, Series 2003A: 1,775 5.000%, 11/01/21 - MBIA Insured 11/13 at 100.00 AAA 1,893,588 2,580 5.000%, 11/01/22 - MBIA Insured 11/13 at 100.00 AAA 2,736,425 4,500 South Fulton Municipal Regional Water and Sewerage 1/13 at 100.00 Aaa 4,628,880 Authority, Georgia, Water and Sewerage Revenue Bonds, Series 2003, 5.000%, 1/01/33 - MBIA Insured 3,000 Valdosta and Lowndes County Hospital Authority, Georgia, 10/12 at 101.00 AAA 3,211,080 Revenue Certificates, South Georgia Medical Center, Series 2002, 5.200%, 10/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 7.9% (5.3% OF TOTAL INVESTMENTS) 2,375 Hawaii County, Hawaii, General Obligation Bonds, 7/13 at 100.00 AAA 2,563,528 Series 2003A, 5.000%, 7/15/19 - FSA Insured Hawaii Department of Transportation, Airport System Revenue Refunding Bonds, Series 2000B: 6,105 6.100%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 6,867,698 9,500 6.625%, 7/01/17 (Alternative Minimum Tax) - FGIC Insured 7/10 at 101.00 AAA 10,991,880 20,000 Hawaii Department of Budget and Finance, Special Purpose 7/10 at 101.00 AAA 22,083,000 Revenue Refunding Bonds, Hawaiian Electric Company Inc., Series 2000, 5.700%, 7/01/20 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,050 Idaho Housing and Finance Association, Single Family 1/08 at 101.50 AAA 1,115,100 Mortgage Bonds, Series 1998E, 5.450%, 7/01/18 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 14.1% (9.4% OF TOTAL INVESTMENTS) 2,500 Aurora, Illinois, Kane, DuPage, Kendall and Will Counties, 1/05 at 100.00 AAA 2,517,450 General Obligation Bonds, Series 1996, 5.800%, 1/01/14 (Pre-refunded to 1/01/05) - MBIA Insured 25,585 Chicago, Illinois, General Obligation Refunding Bonds, 1/06 at 102.00 AAA 26,690,016 Series 1996B, 5.125%, 1/01/25 - FGIC Insured 8,370 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/07 at 101.00 AAA 9,010,724 Series 1996A, 5.625%, 1/01/17 - MBIA Insured Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1994A: 280 6.100%, 1/01/08 (Alternative Minimum Tax) - MBIA Insured 1/05 at 101.00 AAA 286,451 710 6.250%, 1/01/14 (Alternative Minimum Tax) - MBIA Insured 1/05 at 101.00 AAA 726,408 8,235 Chicago, Illinois, General Airport Second Lien Revenue 1/05 at 102.00 AAA 8,461,051 Refunding Bonds, O'Hare International Airport, Series 1994A, 6.375%, 1/01/15 - MBIA Insured 4,115 Chicago Park District, Illinois, Limited Tax General Obligation 7/11 at 100.00 AAA 4,613,738 Park Bonds, Series 2001C, 5.500%, 1/01/18 - FGIC Insured 9,680 Illinois Educational Facilities Authority, Revenue Bonds, 6/08 at 100.00 AAA 10,275,514 Columbia College, Series 1998, 5.000%, 12/01/20 - MBIA Insured 1,950 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call AAA 2,390,875 SSM Healthcare System, Series 1992AA, 6.550%, 6/01/14 - MBIA Insured 41 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) Illinois Health Facilities Authority, Revenue Bonds, Lutheran General Health System, Series 1993A: $ 4,000 6.125%, 4/01/12 - FSA Insured No Opt. Call AAA $ 4,495,720 5,000 6.250%, 4/01/18 - FSA Insured No Opt. Call AAA 6,197,250 455 Peoria, Moline and Freeport, Illinois, GNMA Collateralized 10/05 at 105.00 AAA 455,642 Single Family Mortgage Revenue Bonds, Series 1995A, 7.600%, 4/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.1% (2.1% OF TOTAL INVESTMENTS) Hamilton County Public Building Corporation, Indiana, First Mortgage Bonds, Series 2004: 2,105 5.000%, 8/01/23 - FSA Insured 8/14 at 100.00 AAA 2,216,965 2,215 5.000%, 8/01/24 - FSA Insured 8/14 at 100.00 AAA 2,322,029 4,655 Hamilton Southeastern Consolidated School Building 1/14 at 100.00 AAA 5,117,754 Corporation, Hamilton County, Indiana, First Mortgage Bonds, Series 2004, 5.000%, 7/15/15 - FSA Insured 1,625 Hammond Multi-School Building Corporation, Lake County, 7/13 at 100.00 AAA 1,724,401 Indiana, First Mortgage Revenue Bonds, Series 2003B, 5.000%, 1/15/21 - FGIC Insured 5,285 Logansport School Building Corporation, Indiana, First 7/11 at 100.00 AAA 5,582,863 Mortgage Bonds, Series 2001, 5.125%, 1/15/22 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,300 Butler County Unified School District 394, Kansas, General 9/14 at 100.00 AAA 2,474,777 Obligation Bonds, Series 2004, 5.000%, 9/01/21 - FSA Insured 1,500 Kansas State Turnpike Authority, Revenue Bonds, 9/14 at 101.00 AAA 1,560,945 Series 2004A2, 5.000%, 9/01/27 (WI, settling 11/18/04) - FSA Insured 70 Olathe-Labette County, Kansas, GNMA Collateralized Single 2/05 at 105.00 Aaa 73,636 Family Mortgage Revenue Refunding Bonds, Series 1994A-I, 8.100%, 8/01/23 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS) 7,000 Kentucky Economic Development Finance Authority, Health No Opt. Call AAA 2,063,460 System Revenue Bonds, Norton Healthcare Inc., Series 2000B, 0.000%, 10/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.1% (2.8% OF TOTAL INVESTMENTS) 4,910 Massachusetts, General Obligation Bonds, Consolidated Loan, No Opt. Call AAA 5,729,675 Series 2002C, 5.500%, 11/01/15 - MBIA Insured 3,000 Massachusetts Development Finance Authority, Revenue No Opt. Call AAA 3,547,800 Bonds, WGBH Educational Foundation, Series 2002A, 5.750%, 1/01/42 - AMBAC Insured 2,600 Massachusetts Health and Educational Facilities Authority, 10/13 at 100.00 AAA 2,674,360 Revenue Bonds, Simmons College, Series 2003F, 5.000%, 10/01/33 - FGIC Insured 2,475 Massachusetts Housing Finance Agency, Single Family 6/06 at 102.00 AAA 2,520,466 Housing Revenue Bonds, Series 48, 6.350%, 6/01/26 (Alternative Minimum Tax) - MBIA Insured 1,630 Massachusetts Housing Finance Agency, Single Family 6/07 at 102.00 AAA 1,701,198 Housing Revenue Bonds, Series 53, 6.150%, 12/01/29 (Alternative Minimum Tax) - MBIA Insured Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, Series 2004: 3,650 5.250%, 1/01/22 - FGIC Insured 1/14 at 100.00 AAA 3,966,528 2,000 5.250%, 1/01/24 - FGIC Insured 1/14 at 100.00 AAA 2,156,000 ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 2.9% (1.9% OF TOTAL INVESTMENTS) 4,705 Grand Valley State University, Michigan, General Revenue 12/10 at 100.00 AAA 5,177,241 Bonds, Series 2000, 5.250%, 12/01/20 - FGIC Insured 10,000 Michigan Housing Development Authority, Rental Housing 4/07 at 102.00 AAA 10,518,600 Revenue Bonds, Series 1997A, 6.000%, 4/01/16 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 1.3% (0.8% OF TOTAL INVESTMENTS) 6,600 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102.00 AAA 6,756,156 Series 1995D, 5.950%, 2/01/18 - MBIA Insured 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.7% (1.1% OF TOTAL INVESTMENTS) $ 1,000 Hazelwood Industrial Development Authority, Missouri, 9/06 at 102.00 AAA $ 1,050,650 GNMA Collateralized Project Multifamily Housing Revenue Refunding Bonds, Lakes Apartments Project, Series 1996, 6.000%, 9/20/16 4,500 Kansas City Land Clearance Redevelopment Authority, 12/05 at 102.00 AAA 4,778,055 Missouri, Lease Revenue Bonds, Municipal Auditorium and Muehlebach Hotel Redevelopment Projects, Series 1995A, 5.900%, 12/01/18 - FSA Insured 1,000 Kansas City Municipal Assistance Corporation, Missouri, 1/06 at 101.00 AAA 1,053,510 Leasehold Revenue Bonds, Capital Improvements, Series 1996B, 5.750%, 1/15/14 - AMBAC Insured 1,030 Missouri Housing Development Commission, Multifamily 12/06 at 102.00 AAA 1,079,934 Housing Revenue Bonds, Brookstone Village Apartments, Series 1996A, 6.000%, 12/01/16 (Alternative Minimum Tax) - FSA Insured 1,250 Missouri Western State College, Auxiliary System Revenue 10/13 at 100.00 AAA 1,287,588 Bonds, Series 2003, 5.000%, 10/01/33 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 8.8% (5.9% OF TOTAL INVESTMENTS) 3,280 Clark County, Nevada, Subordinate Lien Airport Revenue 7/14 at 100.00 AAA 3,478,210 Bonds, Series 2004A-2, 5.125%, 7/01/24 - FGIC Insured 5,000 Clark County, Nevada, Industrial Development Revenue Bonds, 12/04 at 100.00 AAA 5,172,900 Nevada Power Company Project, Series 1992A, 6.700%, 6/01/22 (Alternative Minimum Tax) - FGIC Insured 5,000 Clark County, Nevada, Industrial Development Revenue 7/10 at 102.00 AAA 5,497,950 Bonds, Southwest Gas Corporation, Series 2000C, 5.950%, 12/01/38 (Alternative Minimum Tax) - AMBAC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 5,000 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,555,900 5,500 5.625%, 1/01/32 - AMBAC Insured 1/10 at 102.00 AAA 6,073,980 Las Vegas Convention and Visitors Authority, Nevada, Revenue Bonds, Series 1999: 2,695 5.750%, 7/01/15 - AMBAC Insured 7/09 at 101.00 AAA 3,057,478 6,035 5.750%, 7/01/16 - AMBAC Insured 7/09 at 101.00 AAA 6,838,198 6,500 5.750%, 7/01/17 - AMBAC Insured 7/09 at 101.00 AAA 7,352,930 3,535 5.750%, 7/01/18 - AMBAC Insured 7/09 at 101.00 AAA 3,998,863 4,000 6.000%, 7/01/19 - AMBAC Insured 7/09 at 101.00 AAA 4,568,240 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% (1.6% OF TOTAL INVESTMENTS) Essex County Improvement Authority, New Jersey, Guaranteed Revenue Bonds, Project Consolidation, Series 2004: 2,000 5.125%, 10/01/21 - MBIA Insured 10/14 at 100.00 Aaa 2,169,920 2,250 5.125%, 10/01/22 - MBIA Insured 10/14 at 100.00 Aaa 2,425,905 1,560 Mount Olive Township Board of Education, Morris County, 1/15 at 100.00 Aaa 1,668,685 New Jersey, General Obligation Bonds, Series 2004, 5.000%, 1/15/22 (WI, 11/09/04) - MBIA Insured New Jersey Economic Development Authority, Revenue Bonds, Motor Vehicle Surcharge, Series 2004A: 1,475 5.000%, 7/01/22 - MBIA Insured 7/14 at 100.00 AAA 1,574,577 1,475 5.000%, 7/01/23 - MBIA Insured 7/14 at 100.00 AAA 1,564,901 3,075 New Jersey Transit Corporation, Refunding Certificates No Opt. Call AAA 3,561,004 of Participation, Series 2003, 5.500%, 10/01/15 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.5% (0.3% OF TOTAL INVESTMENTS) New Mexico Finance Authority, Public Project Revolving Revenue Bonds, Series 2004C: 1,415 5.000%, 6/01/22 - AMBAC Insured 6/14 at 100.00 AAA 1,509,876 1,050 5.000%, 6/01/24 - AMBAC Insured 6/14 at 100.00 AAA 1,107,645 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 12.9% (8.6% OF TOTAL INVESTMENTS) 1,755 Nassau County, New York, General Obligation 3/10 at 100.00 AAA 2,018,004 Improvement Bonds, Series 2000E, 6.000%, 3/01/16 (Pre-refunded to 3/01/10) - FSA Insured 2,265 Nassau County, New York, General Obligation Improvement 3/10 at 100.00 AAA 2,711,862 Bonds, Series 2000F, 7.000%, 3/01/14 (Pre-refunded to 3/01/10) - FSA Insured 43 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 7,500 Nassau Health Care Corporation, New York, County Guaranteed 8/09 at 102.00 AAA $ 8,683,500 Revenue Bonds, Series 1999, 5.750%, 8/01/29 (Pre-refunded to 8/01/09) - FSA Insured 4,000 New York City, New York, General Obligation Bonds, Fiscal No Opt. Call AAA 4,182,680 Series 1995E, 8.000%, 8/01/05 - MBIA Insured 7,900 New York City, New York, General Obligation Bonds, 3/06 at 101.50 AAA 8,429,616 Fiscal Series 1996I, 5.875%, 3/15/18 - FSA Insured 7,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 7,776,580 Water and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/31 - FGIC Insured Dormitory Authority of the State of New York, Insured Revenue Bonds, New Island Hospital, Series 1999B: 3,400 5.750%, 7/01/19 - MBIA Insured 7/09 at 101.00 AAA 3,698,282 5,750 6.000%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 6,533,093 9,095 New York State Housing Finance Agency, Mortgage 5/06 at 102.00 AAA 9,424,421 Revenue Refunding Bonds, Housing Project, Series 1996A, 6.125%, 11/01/20 - FSA Insured 2,500 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 2,586,825 FHA-Insured Mortgage Revenue Bonds, New York and Presbyterian Hospital, Series 1994A, 6.800%, 8/15/24 (Pre-refunded to 2/15/05) - AMBAC Insured 2,750 New York State Thruway Authority, Highway and Bridge 4/14 at 100.00 AAA 3,056,405 Trust Fund Bonds, Second General, Series 2004, 5.000%, 4/01/15 - MBIA Insured 5,000 New York State Urban Development Corporation, 1/07 at 102.00 AAA 5,497,700 Correctional Capital Facilities Revenue Bonds, Series 1996-7, 5.700%, 1/01/27 (Pre-refunded to 1/01/07) - FSA Insured New York City Sales Tax Asset Receivable Corporation, New York, Local Government Assistance Corporation Dedicated Revenue Bonds, Series 2004A: 3,225 5.000%, 10/15/24 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 3,421,048 1,665 5.000%, 10/15/25 (WI, settling 11/04/04) - MBIA Insured 10/14 at 100.00 AAA 1,755,143 ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 3.8% (2.5% OF TOTAL INVESTMENTS) 10,715 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 11,930,402 MeritCare Obligated Group, Series 2000A, 5.600%, 6/01/21 - FSA Insured 8,000 North Dakota, Student Loan Trust Revenue Bonds, 12/10 at 100.00 AAA 8,429,920 Series 2000B, 5.850%, 12/01/25 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.1% (0.1% OF TOTAL INVESTMENTS) 700 Shaker Heights, Ohio, General Obligation Bonds, 12/13 at 100.00 AAA 744,639 Series 2003, 5.250%, 12/01/26 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 1.1% (0.7% OF TOTAL INVESTMENTS) Oklahoma City Airport Trust, Oklahoma, Junior Lien Tax Exempt Bonds, Twenty Seventh Series 2000A: 1,320 5.125%, 7/01/20 - FSA Insured 7/10 at 100.00 AAA 1,389,551 4,040 5.250%, 7/01/21 - FSA Insured 7/10 at 100.00 AAA 4,386,834 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.2% (2.1% OF TOTAL INVESTMENTS) Portland, Oregon, Airport Way Urban Renewal and Redevelopment Bonds, Series 2000A: 4,405 5.700%, 6/15/17 - AMBAC Insured 6/10 at 101.00 Aaa 4,985,755 3,665 5.750%, 6/15/18 - AMBAC Insured 6/10 at 101.00 Aaa 4,160,948 4,265 5.750%, 6/15/19 - AMBAC Insured 6/10 at 101.00 Aaa 4,842,140 1,375 5.750%, 6/15/20 - AMBAC Insured 6/10 at 101.00 Aaa 1,561,148 1,520 Portland Housing Authority, Oregon, Multifamily Housing 7/10 at 100.00 Aaa 1,589,950 Revenue Bonds, Lovejoy Station Apartments, Series 2000, 6.000%, 7/01/33 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 10.3% (6.9% OF TOTAL INVESTMENTS) 12,620 Allegheny County Hospital Development Authority, 11/10 at 102.00 AAA 14,818,656 Pennsylvania, Insured Revenue Bonds, West Penn Allegheny Health System, Series 2000A, 6.500%, 11/15/30 - MBIA Insured 9,485 Berks County Municipal Authority, Pennsylvania, Hospital 11/09 at 102.00 AAA 11,140,417 Revenue Bonds, Reading Hospital and Medical Center, Series 1999, 6.000%, 11/01/19 (Pre-refunded to 11/01/09) - FSA Insured 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 1,000 Luzerne County Industrial Development Authority, Exempt 12/04 at 102.00 Aaa $ 1,024,150 Facilities Revenue Refunding Bonds, Pennsylvania Gas and Water Company Project, Series 1994A, 7.000%, 12/01/17 (Alternative Minimum Tax) (Pre-refunded to 12/01/04) - AMBAC Insured Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General Ordinance, Fifth Series 2004A-1: 5,235 5.000%, 9/01/24 - FSA Insured 9/14 at 100.00 AAA 5,472,721 3,000 5.000%, 9/01/25 - FSA Insured 9/14 at 100.00 AAA 3,116,790 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 1997A: 2,360 5.125%, 8/01/27 - AMBAC Insured 8/07 at 102.00 AAA 2,553,850 10,370 5.125%, 8/01/27 - AMBAC Insured 8/07 at 102.00 AAA 10,812,488 2,500 Seneca Valley School District, Butler County, Pennsylvania, 7/14 at 100.00 Aaa 2,679,450 General Obligation Bonds, Series 2004, 5.125%, 1/01/23 - FGIC Insured 3,650 State Public School Building Authority, Pennsylvania, 6/13 at 100.00 AAA 3,756,398 Lease Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/29 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.8% (0.6% OF TOTAL INVESTMENTS) 4,000 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 4,509,280 5.250%, 8/01/17 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.0% (0.7% OF TOTAL INVESTMENTS) 5,000 South Carolina Public Service Authority, Revenue Bonds, 1/14 at 100.00 AAA 5,382,450 Santee Cooper Electric System, Series 2004A, 5.000%, 1/01/20 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 15.3% (10.3% OF TOTAL INVESTMENTS) Brazos River Authority, Texas, Revenue Refunding Bonds, Houston Industries Inc., Series 1998C: 10,000 5.125%, 5/01/19 - AMBAC Insured 5/08 at 102.00 AAA 10,779,900 9,000 5.125%, 11/01/20 (Optional put 11/01/08) - AMBAC Insured 11/08 at 102.00 AAA 9,686,520 Corpus Christi, Texas, Utility System Revenue Bonds, Series 2004: 3,475 5.000%, 7/15/22 - FSA Insured 7/14 at 100.00 AAA 3,693,195 3,645 5.000%, 7/15/23 - FSA Insured 7/14 at 100.00 AAA 3,847,079 12,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/09 at 100.00 AAA 12,914,375 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 3,895 Denton, Texas, Utility System Revenue Bonds, Series 2000A, 12/10 at 100.00 AAA 4,407,933 5.625%, 12/01/19 - FSA Insured 4,485 Lower Colorado River Authority, Texas, Contract Revenue 5/12 at 100.00 AAA 4,740,107 Refunding Bonds, Transmission Services Corporation, Series 2003B, 5.000%, 5/15/21 - FSA Insured 10,000 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AAA 10,226,600 Refunding Bonds, Transmission Services Corporation, Series 2003C, 5.000%, 5/15/33 - AMBAC Insured 4,151 Panhandle Regional Housing Finance Corporation, Texas, 7/12 at 105.00 Aaa 4,461,080 GNMA Collateralized Multifamily Housing Mortgage Revenue Bonds, Renaissance of Amarillo Apartments, Series 2001A, 6.650%, 7/20/42 Tarrant County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Cook Children's Healthcare System, Series 2000A: 6,725 5.750%, 12/01/17 - FSA Insured 12/10 at 101.00 AAA 7,605,303 7,500 5.750%, 12/01/24 - FSA Insured 12/10 at 101.00 AAA 8,399,325 2,300 Texas State University System, Financing Revenue Refunding 3/12 at 100.00 AAA 2,461,506 Bonds, Series 2002, 5.000%, 3/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 3.2% (2.2% OF TOTAL INVESTMENTS) 8,600 Intermountain Power Agency, Utah, Power Supply Revenue 7/13 at 100.00 AAA 9,280,088 Refunding Bonds, Series 2003A, 5.000%, 7/01/18 - FSA Insured 2,385 Mountain Regional Water Special Service District, Utah, 12/13 at 100.00 AAA 2,450,850 Water Revenue Bonds, Series 2003, 5.000%, 12/15/33 - MBIA Insured 5,525 Utah Transit Authority, Sales Tax Revenue Bonds, 12/12 at 100.00 AAA 5,777,990 Series 2002A, 5.000%, 6/15/24 - FSA Insured 45 Nuveen Insured Premium Income Municipal Fund 2 (NPX) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.3% (0.2% OF TOTAL INVESTMENTS) $ 1,320 Vermont Educational and Health Buildings Financing Agency, 12/10 at 101.00 AAA $ 1,525,920 Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A, 6.000%, 12/01/23 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.8% (0.5% OF TOTAL INVESTMENTS) Loudoun County Industrial Development Authority, Virginia, Public Safety Facilities Lease Revenue Bonds, Series 2003A: 1,150 5.250%, 12/15/22 - FSA Insured 6/14 at 100.00 AAA 1,251,890 500 5.250%, 12/15/23 - FSA Insured 6/14 at 100.00 AAA 541,405 2,250 Virginia Housing Development Authority, Multifamily 1/08 at 102.00 AAA 2,391,143 Housing Bonds, Series 1997B, 6.050%, 5/01/17 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 7.0% (4.7% OF TOTAL INVESTMENTS) 10,000 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 10,607,800 Consolidated System Revenue Bonds, Series 2001B, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 1,370 Clark County School District 101, La Center, Washington, 12/12 at 100.00 Aaa 1,443,021 General Obligation Bonds, Series 2002, 5.000%, 12/01/22 - FSA Insured 5,230 Douglas County Public Utility District 1, Washington, 9/09 at 102.00 AAA 5,890,392 Revenue Bonds, Wells Hydroelectric, Series 1999A, 6.125%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 3,485 Grant County Public Utility District 2, Washington, Priest 1/06 at 102.00 AAA 3,669,321 Rapids Hydroelectric Development Revenue Bonds, Second Series 1996B, 5.900%, 1/01/21 (Alternative Minimum Tax) - MBIA Insured Tacoma, Washington, General Obligation Bonds, Series 2004: 1,545 5.000%, 12/01/19 - MBIA Insured 12/14 at 100.00 AAA 1,674,176 1,620 5.000%, 12/01/20 - MBIA Insured 12/14 at 100.00 AAA 1,745,663 1,695 5.000%, 12/01/21 - MBIA Insured 12/14 at 100.00 AAA 1,814,886 6,200 Washington, General Obligation Various Purpose Bonds, 7/12 at 100.00 AAA 6,586,880 Series 2003A, 5.000%, 7/01/20 - FGIC Insured 3,950 Washington State Healthcare Facilities Authority, Revenue 11/08 at 101.00 Aaa 4,170,450 Bonds, Swedish Health Services, Series 1998, 5.125%, 11/15/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.5% (1.0% OF TOTAL INVESTMENTS) 8,000 Pleasants County, West Virginia, Pollution Control Revenue 5/05 at 102.00 AAA 8,327,440 Bonds, Monongahela Power Company Pleasants Station Project, Series 1995C, 6.150%, 5/01/15 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.6% (4.4% OF TOTAL INVESTMENTS) 1,000 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 1,074,530 Series 2004, 5.000%, 11/01/21 - FSA Insured 7,000 La Crosse, Wisconsin, Resource Recovery Revenue Refunding No Opt. Call AAA 8,410,850 Bonds, Northern States Power Company Project, Series 1996, 6.000%, 11/01/21 (Alternative Minimum Tax) - MBIA Insured 12,750 Milwaukee County, Wisconsin, Airport Revenue Bonds, 12/10 at 100.00 Aaa 13,865,114 Series 2000A, 5.750%, 12/01/25 (Alternative Minimum Tax) - FGIC Insured 6,250 Wisconsin Health and Educational Facilities Authority, 8/06 at 102.00 AAA 6,754,062 Revenue Bonds, Sinai Samaritan Medical Center Inc., Series 1996, 5.750%, 8/15/16 - MBIA Insured 5,000 Wisconsin Health and Educational Facilities Authority, 8/05 at 102.00 AAA 5,254,850 Revenue Bonds, Mercy Health System Corporation, Series 1995, 6.125%, 8/15/13 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 780,971 Total Long-Term Investments (cost $752,518,775) - 149.5% 806,693,666 =============----------------------------------------------------------------------------------------------------------------------- 46 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.2% (0.1% OF TOTAL INVESTMENTS) $ 855 Montgomery County Public Building Authority, Tennessee, VMIG-1 $ 855,000 Tennessee County Loan Pool Program Bonds, Variable Rate Demand Obligations, Series 2002, 1.750%, 4/01/32+ ------------------------------------------------------------------------------------------------------------------------------------ $ 855 Total Short-Term Investments (cost $855,000) 855,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $753,373,775) - 149.7% 807,548,666 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.1% 1,048,414 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.8)% (268,900,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 539,697,080 ==================================================================================================================== All of the bonds in the portfolio, excluding temporary investments in short-term municipal securities, are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, any of which ensure the timely payment of principal and interest. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 47 Nuveen Insured Dividend Advantage Municipal Fund (NVG) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.3% (2.9% OF TOTAL INVESTMENTS) $ 5,310 Athens, Alabama, Water and Sewerage Revenue Warrants, 5/12 at 101.00 AAA $ 5,620,529 Series 2002, 5.300%, 5/01/32 - MBIA Insured 3,045 Hoover, Alabama, General Obligation Bonds, Series 2003, 3/12 at 101.00 AAA 3,262,291 5.000%, 3/01/20 - MBIA Insured 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA 11,219,600 Improvement Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 3.4% (2.3% OF TOTAL INVESTMENTS) 15,000 Alaska, International Airport System Revenue Bonds, 10/12 at 100.00 AAA 15,858,900 Series 2002B, 5.250%, 10/01/27 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.1% (0.7% OF TOTAL INVESTMENTS) 5,000 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 5,162,100 Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured (PLG1) ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 9.8% (6.7% OF TOTAL INVESTMENTS) 8,890 California, General Obligation Veterans Welfare Bonds, 12/08 at 101.00 A 9,377,794 Series 1997BH, 5.400%, 12/01/14 (Alternative Minimum Tax) 3,200 California, Various Purpose General Obligation Bonds, 9/10 at 100.00 AAA 3,547,616 Series 2000, 5.250%, 9/01/17 - MBIA Insured 10,000 California, General Obligation Refunding Bonds, Series 2002, No Opt. Call AAA 10,467,200 5.000%, 2/01/23 - MBIA Insured 3,000 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 3,072,480 Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum Tax) - MBIA Insured 7,935 Los Angeles, California, Certificates of Participation, Real 4/12 at 100.00 AAA 8,336,590 Property Acquisition Program, Series 2002, 5.300%, 4/01/32 - AMBAC Insured 1,000 Los Angeles Convention and Exhibition Center Authority, 12/05 at 100.00 AAA 1,077,170 California, Certificates of Participation, Series 1985, 9.000%, 12/01/20 (Pre-refunded to 12/01/05) 7,500 Northern California Power Agency, Revenue Refunding 7/08 at 101.00 AAA 7,857,675 Bonds, Hydroelectric Project 1, Series 1998A, 5.200%, 7/01/32 - MBIA Insured 2,320 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 2,575,339 Revenue Bonds, Series 2001P, 5.250%, 8/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 0.9% (0.6% OF TOTAL INVESTMENTS) 1,580 Gunnison Watershed School District RE1J, Gunnison No Opt. Call Aaa 1,781,497 and Saguache Counties, Colorado, General Obligation Bonds, Series 2004, 5.000%, 12/01/15 - FSA Insured Sand Creek Metropolitan District, Colorado, General Obligation Bonds, Series 2004: 1,095 5.000%, 12/01/13 - XLCA Insured No Opt. Call AAA 1,214,870 1,170 5.000%, 12/01/14 - XLCA Insured 12/13 at 100.00 AAA 1,291,774 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 15.9% (10.8% OF TOTAL INVESTMENTS) Florida Municipal Loan Council, Revenue Bonds, Series 2003B: 2,305 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AAA 2,558,827 1,480 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AAA 1,634,601 11,600 Greater Orlando Aviation Authority, Florida, Airport Facilities 10/12 at 100.00 AAA 12,160,976 Revenue Bonds, Series 2002B, 5.125%, 10/01/21 (Alternative Minimum Tax) - FSA Insured 6,000 JEA, Florida, Water and Sewerage System Revenue Bonds, 4/07 at 100.00 AAA 6,352,800 Series 2002A, 5.500%, 10/01/41 - MBIA Insured 8,155 Lee County, Florida, Solid Waste System Revenue Refunding 10/11 at 100.00 Aaa 9,000,918 Bonds, Series 2001, 5.625%, 10/01/13 (Alternative Minimum Tax) - MBIA Insured 15,000 Miami-Dade County School Board, Florida, Certificates of No Opt. Call AAA 16,272,900 Participation, Series 2003A, 5.000%, 8/01/27 (Mandatory put 8/01/08) - MBIA Insured 48 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA (continued) Miami-Dade County, Florida, Aviation Revenue Bonds, Miami International Airport, Series 2002: $ 7,165 5.625%, 10/01/15 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA $ 8,004,810 5,600 5.750%, 10/01/16 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 6,316,744 10,000 5.125%, 10/01/21 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 10,497,200 2,000 5.250%, 10/01/22 (Alternative Minimum Tax) - FGIC Insured 10/12 at 100.00 AAA 2,107,820 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 11/14 at 100.00 AAA 1,070,290 Series 2004, 5.000%, 11/01/22 - FSA Insured 1,695 Georgia Housing and Finance Authority, Single Family 12/11 at 100.00 AAA 1,757,783 Mortgage Bonds, Series 2002B-2, 5.500%, 6/01/32 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 13.9% (9.4% OF TOTAL INVESTMENTS) 10,000 Bolingbrook, Illinois, General Obligation Bonds, 1/12 at 100.00 AAA 10,718,000 Series 2002A, 5.375%, 1/01/38 - FGIC Insured 5,000 Chicago, Illinois, General Obligation Refunding Bonds, 1/11 at 101.00 AAA 5,429,450 Series 2001A, 5.500%, 1/01/38 - MBIA Insured Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O'Hare International Airport, Series 2001C: 4,250 5.500%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,645,250 4,485 5.500%, 1/01/17 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 4,885,869 4,730 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 5,148,700 2,930 5.500%, 1/01/19 (Alternative Minimum Tax) - AMBAC Insured 1/11 at 101.00 AAA 3,171,315 3,000 Chicago, Illinois, General Airport Third Lien Revenue 1/12 at 100.00 AAA 3,332,460 Refunding Bonds, O'Hare International Airport, Series 2002A, 5.750%, 1/01/17 (Alternative Minimum Tax) - MBIA Insured 12,765 Chicago, Illinois, Revenue Bonds, Skyway Toll Bridge, 1/07 at 102.00 AAA 13,751,607 Series 1996, 5.500%, 1/01/23 - MBIA Insured 4,000 Cicero, Cook County, Illinois, General Obligation Corporate 12/12 at 101.00 AAA 4,266,040 Purpose Bonds, Series 2002, 5.000%, 12/01/21 - MBIA Insured 1,500 DuPage County Community School District 200, Wheaton, 10/13 at 100.00 Aaa 1,622,520 Illinois, General Obligation Bonds, Series 2003C, 5.250%, 10/01/22 - FSA Insured 5,000 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/12 at 100.00 AAA 5,343,150 Series 2002, 5.250%, 4/01/23 - FSA Insured 2,700 University of Illinois, Certificates of Participation, 8/11 at 100.00 AAA 3,020,787 Utility Infrastructure Projects, Series 2001A, 5.000%, 8/15/20 (Pre-refunded to 8/15/11) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 16.5% (11.2% OF TOTAL INVESTMENTS) 3,380 Evansville, Indiana, Sewerage Works Revenue Refunding 7/13 at 100.00 AAA 3,624,171 Bonds, Series 2003A, 5.000%, 7/01/20 - AMBAC Insured Indiana Bond Bank, Special Program Bonds, Hendricks County Redevelopment District, Series 2002D: 2,500 5.375%, 4/01/23 - AMBAC Insured 4/12 at 100.00 AAA 2,709,775 7,075 5.250%, 4/01/26 - AMBAC Insured 4/12 at 100.00 AAA 7,481,883 7,000 5.250%, 4/01/30 - AMBAC Insured 4/12 at 100.00 AAA 7,343,630 10,000 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 10,395,900 Bonds, Marion General Hospital, Series 2002, 5.250%, 7/01/32 - AMBAC Insured 25,000 Indianapolis Local Public Improvement Bond Bank, Indiana, 7/12 at 100.00 AAA 26,451,250 Waterworks Project, Series 2002A, 5.250%, 7/01/33 - MBIA Insured New Albany-Floyd County School Building Corporation, Indiana, First Mortgage Bonds, Series 2002: 2,500 5.750%, 7/15/17 - FGIC Insured 7/12 at 100.00 AAA 2,880,775 3,810 5.750%, 7/15/20 - FGIC Insured 7/12 at 100.00 AAA 4,390,301 Northern Wells Community School Building Corporation, Wells County, Indiana, First Mortgage Bonds, Series 2001: 420 5.250%, 1/15/19 - FGIC Insured 7/12 at 100.00 AAA 458,447 430 5.250%, 7/15/19 - FGIC Insured 7/12 at 100.00 AAA 470,351 1,675 5.400%, 7/15/23 - FGIC Insured 7/12 at 100.00 AAA 1,822,099 6,960 Valparaiso Middle School Building Corporation, Indiana, 1/13 at 100.00 AAA 7,261,786 First Mortgage Refunding Bonds, Series 2002, 5.000%, 7/15/24 - MBIA Insured 2,490 Whitley County Middle School Building Corporation, 7/13 at 100.00 AAA 2,695,301 Columbia City, Indiana, First Mortgage Bonds, Series 2003, 5.000%, 1/15/18 - FSA Insured 49 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 0.7% (0.5% OF TOTAL INVESTMENTS) $ 3,085 New Orleans, Louisiana, General Obligation Refunding 9/12 at 100.00 AAA $ 3,306,966 Bonds, Series 2002, 5.125%, 9/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.5% (2.4% OF TOTAL INVESTMENTS) 5,000 Massachusetts, General Obligation Bonds, Consolidated 8/14 at 100.00 AAA 5,339,850 Loan, Series 2004B, 5.000%, 8/01/22 - AMBAC Insured 10,000 Massachusetts, Special Obligation Refunding Notes, No Opt. Call Aaa 11,078,900 Federal Highway Grant Anticipation Note Program, Series 2003A, 5.000%, 12/15/13 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 2.4% (1.7% OF TOTAL INVESTMENTS) 10,000 Detroit, Michigan, Sewerage Disposal System Revenue 1/10 at 101.00 AAA 11,500,100 Bonds, Series 1999A, 5.750%, 7/01/26 (Pre-refunded to 1/01/10) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.3% (1.6% OF TOTAL INVESTMENTS) 1,600 St. Louis County Pattonville R3 School District, Missouri, 3/14 at 100.00 AAA 1,774,896 General Obligation Bonds, Series 2004, 5.250%, 3/01/19 - FSA Insured 8,735 St. Louis, Missouri, Airport Revenue Bonds, Airport 7/11 at 100.00 AAA 9,136,635 Development Program, Series 2001A, 5.250%, 7/01/31 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.5% (0.3% OF TOTAL INVESTMENTS) Municipal Energy Agency of Nebraska, Power Supply System Revenue Bonds, Series 2003A: 1,000 5.250%, 4/01/20 - FSA Insured 4/13 at 100.00 AAA 1,092,710 1,000 5.250%, 4/01/21 - FSA Insured 4/13 at 100.00 AAA 1,087,480 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.2% (2.8% OF TOTAL INVESTMENTS) 9,810 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AAA 10,405,958 Bonds, Series 2002C, 5.000%, 6/15/21 - MBIA Insured 8,750 Truckee Meadows Water Authority, Nevada, Water Revenue 7/11 at 100.00 AAA 9,126,075 Bonds, Series 2001A, 5.250%, 7/01/34 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.1% (0.8% OF TOTAL INVESTMENTS) Bernards Township School District, Somerset County, New Jersey, General Obligation Bonds, Series 2004: 2,345 5.000%, 1/01/15 - FGIC Insured 1/14 at 100.00 AAA 2,602,317 2,465 5.000%, 1/01/16 - FGIC Insured 1/14 at 100.00 AAA 2,717,243 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 2.2% (1.5% OF TOTAL INVESTMENTS) 10,000 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 10,296,700 Transportation Revenue Refunding Bonds, Series 2002A, 5.000%, 11/15/30 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.6% (0.3% OF TOTAL INVESTMENTS) 2,435 North Carolina Medical Care Commission, FHA-Insured 10/13 at 100.00 AAA 2,643,168 Mortgage Revenue Bonds, Betsy Johnson Regional Hospital Project, Series 2003, 5.375%, 10/01/24 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 4.5% (3.0% OF TOTAL INVESTMENTS) 4,725 Clackamas County School District 62, Oregon City, Oregon, 6/14 at 100.00 AAA 5,256,988 General Obligation Bonds, Series 2004, 5.000%, 6/15/15 - FSA Insured Oregon, General Obligation Veterans Welfare Bonds, Series 82: 7,690 5.375%, 12/01/31 12/11 at 100.00 AA 7,962,072 3,585 5.500%, 12/01/42 12/11 at 100.00 AA 3,716,892 1,615 Oregon Department of Administrative Services, State Lottery 4/14 at 100.00 AAA 1,774,627 Revenue Bonds, Series 2004A, 5.000%, 4/01/17 - FSA Insured 2,085 Salem-Keizer School District 24J, Marion County, Oregon, 6/14 at 100.00 AAA 2,277,154 General Obligation Bonds, Series 2004, 5.000%, 6/15/18 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.9% (3.3% OF TOTAL INVESTMENTS) 4,500 Allegheny County, Pennsylvania, Airport Revenue Refunding No Opt. Call AAA 5,055,750 Bonds, Pittsburgh International Airport, Series 1997A, 5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured (PLG2) 5,000 Pennsylvania Higher Educational Facilities Authority, 7/08 at 100.00 AAA 5,367,600 Revenue Bonds, University of Pennsylvania, Series 1998, 5.500%, 7/15/38 - MBIA Insured 50 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 1,000 Pennsylvania Higher Educational Facilities Authority, 11/13 at 100.00 AA $ 1,088,220 Revenue Bonds, Lycoming College, Series 2003-AA2, 5.250%, 11/01/16 - RAAI Insured Philadelphia, Pennsylvania, General Obligation Bonds, Series 2003A: 3,090 5.250%, 2/15/14 - XLCA Insured 2/13 at 100.00 AAA 3,444,176 1,000 5.250%, 2/15/15 - XLCA Insured 2/13 at 100.00 AAA 1,107,150 Philadelphia Municipal Authority, Pennsylvania, Lease Revenue Bonds, Series 2003B: 3,540 5.250%, 11/15/16 - FSA Insured 11/13 at 100.00 AAA 3,911,169 2,000 5.250%, 11/15/18 - FSA Insured 11/13 at 100.00 AAA 2,185,740 1,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 1,053,090 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/23 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.8% (0.4% OF TOTAL INVESTMENTS) Greenville, South Carolina, Tax Increment Revenue Improvement Bonds, Series 2003: 1,000 5.500%, 4/01/17 - MBIA Insured 4/13 at 100.00 AAA 1,138,820 2,300 5.000%, 4/01/21 - MBIA Insured 4/13 at 100.00 AAA 2,453,686 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 9.0% (6.1% OF TOTAL INVESTMENTS) 10,000 Memphis and Shelby County Sports Authority Inc., Tennessee, 11/12 at 100.00 AAA 10,408,000 Revenue Bonds, Memphis Arena, Series 2002A, 5.125%, 11/01/28 - AMBAC Insured 10,000 Memphis and Shelby County Sports Authority Inc., 11/12 at 100.00 AAA 10,401,200 Tennessee, Revenue Bonds, Memphis Arena, Series 2002B, 5.125%, 11/01/29 - AMBAC Insured Memphis, Tennessee, Sanitary Sewerage System Revenue Bonds, Series 2004: 1,495 5.000%, 10/01/19 - FSA Insured 10/14 at 100.00 AAA 1,629,834 1,455 5.000%, 10/01/20 - FSA Insured 10/14 at 100.00 AAA 1,576,260 1,955 5.000%, 10/01/21 - FSA Insured 10/14 at 100.00 AAA 2,104,636 15,195 Tennessee State School Bond Authority, Higher Educational 5/12 at 100.00 AAA 16,084,667 Facilities Second Program Bonds, Series 2002A, 5.250%, 5/01/32 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 26.9% (18.2% OF TOTAL INVESTMENTS) 3,500 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 3,941,525 Refunding and Improvement Bonds, Series 2001A, 5.750%, 11/01/13 (Alternative Minimum Tax) - FGIC Insured 10,000 Gainesville Hospital District, Texas, Limited Tax General 8/11 at 100.00 AAA 10,459,000 Obligation Bonds, Series 2002, 5.375%, 8/15/32 - MBIA Insured 3,645 Galveston, Texas, General Obligation Refunding Bonds, No Opt. Call AAA 3,961,094 Series 2001A, 5.250%, 5/01/21 - AMBAC Insured Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003: 2,240 5.000%, 11/15/16 - MBIA Insured 11/13 at 100.00 AAA 2,428,026 2,355 5.000%, 11/15/17 - MBIA Insured 11/13 at 100.00 AAA 2,534,051 13,000 Houston Area Water Corporation, Texas, Contract Revenue 3/12 at 100.00 AAA 13,416,910 Bonds, Northeast Water Purification Plant, Series 2002, 5.125%, 3/01/32 - FGIC Insured 2,500 Houston Higher Education Finance Corporation, Texas, 11/09 at 101.00 AAA 2,657,550 Revenue Bonds, Rice University, Series 1999A, 5.375%, 11/15/29 1,000 Houston, Texas, First Lien Combined Utility System Revenue 5/14 at 100.00 AAA 1,077,360 Bonds, Series 2004A, 5.250%, 5/15/24 - FGIC Insured 4,345 San Antonio, Texas, Water System Senior Lien Revenue 5/12 at 100.00 AAA 4,913,674 Refunding Bonds, Series 2002, 5.500%, 5/15/17 - FSA Insured 9,145 Texas, General Obligation Bonds, Veterans Housing 6/12 at 100.00 Aa1 9,626,484 Assistance Program Fund II, Series 2002A-1, 5.250%, 12/01/22 (Alternative Minimum Tax) 6,710 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 6,873,053 Residential Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) Texas Public Finance Authority, Revenue Bonds, Texas Southern University Financing System, Series 2002: 3,520 5.125%, 11/01/20 - MBIA Insured 5/12 at 100.00 Aaa 3,768,899 3,520 5.125%, 11/01/21 - MBIA Insured 5/12 at 100.00 Aaa 3,750,138 51 Nuveen Insured Dividend Advantage Municipal Fund (NVG) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 8,725 Texas Department of Housing and Community Affairs, 3/12 at 100.00 AAA $ 9,038,315 Single Family Mortgage Bonds, Series 2002B, 5.550%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured Texas Student Housing Authority, Revenue Bonds, Austin Project, Senior Series 2001A: 9,400 5.375%, 1/01/23 - MBIA Insured 1/12 at 102.00 Aaa 10,157,170 11,665 5.500%, 1/01/33 - MBIA Insured 1/12 at 102.00 Aaa 12,610,915 5,000 Texas Water Development Board, Senior Lien State 1/10 at 100.00 AAA 5,489,400 Revolving Fund Revenue Bonds, Series 1999B, 5.250%, 7/15/17 Williamson County, Texas, General Obligation Bonds, Series 2002: 3,500 5.200%, 2/15/21 - FSA Insured 2/12 at 100.00 AAA 3,743,354 3,000 5.250%, 2/15/22 - FSA Insured 2/12 at 100.00 AAA 3,204,690 7,340 5.250%, 2/15/23 - FSA Insured 2/12 at 100.00 AAA 7,807,557 5,000 5.250%, 2/15/25 - FSA Insured 2/12 at 100.00 AAA 5,329,500 ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 14.1% (9.5% OF TOTAL INVESTMENTS) 7,675 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 8,688,561 Bonds, Nuclear Project 1, Series 2002A, 5.500%, 7/01/15 - MBIA Insured 6,600 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 7,319,862 Bonds, Columbia Generating Station, Series 2002B, 5.350%, 7/01/18 - FSA Insured 3,200 King County School District 414, Lake Washington, 12/14 at 100.00 AAA 3,523,424 Washington, General Obligation Bonds, Series 2004, 5.000%, 12/01/16 - FSA Insured 2,500 Port of Seattle, Washington, Revenue Refunding Bonds, 11/12 at 100.00 AAA 2,810,475 Series 2002D, 5.750%, 11/01/15 (Alternative Minimum Tax) - FGIC Insured 2,200 Everett School District 2, Snohomish County, Washington, 12/13 at 100.00 AAA 2,391,531 General Obligation Bonds, Series 2003B, 5.000%, 6/01/17 - FSA Insured 3,255 Thurston and Pierce Counties School District, Washington, 6/13 at 100.00 Aaa 3,609,338 General Obligation Bonds, Yelm Community Schools, Series 2003, 5.250%, 12/01/16 - FSA Insured Washington State Economic Development Finance Authority, Wastewater Revenue Bonds, LOTT Project, Series 2002: 2,000 5.500%, 6/01/17 - AMBAC Insured 6/12 at 100.00 Aaa 2,265,920 4,325 5.125%, 6/01/22 - AMBAC Insured 6/12 at 100.00 Aaa 4,575,893 15,000 Washington State Healthcare Facilities Authority, Revenue 8/13 at 102.00 AAA 15,354,750 Bonds, Harrison Memorial Hospital, Series 1998, 5.000%, 8/15/28 - AMBAC Insured 10,000 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 10,242,300 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.125%, 10/01/31 - AMBAC Insured 5,170 Whitman County School District 267, Pullman, Washington, 6/12 at 100.00 Aaa 5,486,248 General Obligation Bonds, Series 2002, 5.000%, 12/01/20 - FSA Insured 52 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 3.8% (2.6% OF TOTAL INVESTMENTS) $ 4,570 Wisconsin Housing and Economic Development Authority, 3/12 at 100.00 AA $ 4,765,962 Home Ownership Revenue Bonds, Series 2002E, 5.250%, 9/01/22 (Alternative Minimum Tax) 11,950 Wisconsin, Transportation Revenue Refunding Bonds, 7/12 at 100.00 AAA 12,965,631 Series 2002-1, 5.125%, 7/01/18 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ $ 649,655 Total Long-Term Investments (cost $652,877,253) - 147.9% 695,675,200 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.6% 7,713,971 ------------------------------------------------------------------------------------------------------------------------------------ Preferred Shares, at Liquidation Value - (49.5)% (233,000,000) ------------------------------------------------------------------------------------------------------------------------------------ Net Assets Applicable to Common Shares - 100% $ 470,389,171 ==================================================================================================================== START HERE FORWARD SWAP TRANSACTIONS OUTSTANDING AT OCTOBER 31, 2004: SWAP UNREALIZED EFFECTIVE TERMINATION APPRECIATION NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION) ------------------------------------------------------------------------------------------------------------------------------------ Agreement with JPMorgan dated July 1, 2004, to pay semi-annually the notional amount multiplied by 5.805% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offer Rate). $16,800,000 2/02/05 2/02/25 $(1,490,566) Agreement with Morgan Stanley dated July 15, 2004, to pay semi-annually the notional amount multiplied by 5.717% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offer Rate). 9,000,000 1/14/05 1/14/35 (753,396) Agreement with JPMorgan dated July 28, 2004, to pay quarterly the notional amount multiplied by 4.495% (annualized) and receive quarterly the notional amount multiplied by the daily arithmetic average of the weekly BMA (Bond Market Association) Municipal Swap Index for the quarter. 8,500,000 12/13/04 12/13/24 (506,283) ------------------------------------------------------------------------------------------------------------------------------------ $(2,750,245) ------------------------------------------------------------------------------------------------------------------------------------ At least 80% of the Fund's net assets are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. (PLG1) Portion of security, with an aggregate market value of $740,082, has been pledged to collateralize the net payment obligations under forward swap contracts. (PLG2) Portion of security, with an aggregate market value of $1,977,360, has been pledged to collateralize the net payment obligations under forward swap contracts. See accompanying notes to financial statements. 53 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 8.3% (5.5% OF TOTAL INVESTMENTS) $ 5,655 Colbert County-Northwest Health Care Authority, Alabama, 6/13 at 101.00 Baa3 $ 5,522,673 Revenue Bonds, Helen Keller Hospital, Series 2003, 5.750%, 6/01/27 3,100 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 5/12 at 102.00 AAA 3,372,211 Series 1998A, 5.400%, 6/01/22 - MBIA Insured 6,280 Jefferson County, Alabama, Sewer Revenue Capital 8/12 at 100.00 AAA 7,058,908 Improvement Warrants, Series 2002D, 5.000%, 2/01/32 (Pre-refunded to 8/01/12) - FGIC Insured 1,750 Montgomery, Alabama, General Obligation Warrants, 5/12 at 101.00 AAA 1,866,673 Series 2003, 5.000%, 5/01/21 - AMBAC Insured 4,500 Sheffield, Alabama, Electric Revenue Warrants, Series 2003, 7/13 at 100.00 Aaa 4,896,945 5.500%, 7/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 3.8% (2.5% OF TOTAL INVESTMENTS) 10,000 Maricopa County Pollution Control Corporation, Arizona, 11/12 at 100.00 AAA 10,340,500 Revenue Bonds, Arizona Public Service Company - Palo Verde Project, Series 2002A, 5.050%, 5/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 28.9% (18.9% OF TOTAL INVESTMENTS) 13,500 California, General Obligation Refunding Bonds, Series 2002, 4/12 at 100.00 AAA 14,197,545 5.250%, 4/01/30 - XLCA Insured 7,500 California, General Obligation Bonds, Series 2004, 4/14 at 100.00 AAA 7,724,100 5.000%, 4/01/31 - AMBAC Insured 26,300 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 27,119,245 Department of General Services, Capital East End, Series 2002A, 5.000%, 12/01/27 - AMBAC Insured (PLG) 2,910 Cathedral City, California, Public Financing Authority, 8/12 at 102.00 AAA 3,029,514 Tax Allocation Bonds, Housing Set-Aside, Series 2002D, 5.000%, 8/01/26 - MBIA Insured 2,500 Irvine, California, Public Facilities and Infrastructure Authority, 3/05 at 103.00 AAA 2,577,875 Assessment Revenue Bonds, Series 2003C, 5.000%, 9/02/23 - AMBAC Insured 4,000 Montara Sanitary District, California, General Obligation 8/11 at 101.00 AAA 4,138,760 Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured Plumas County, California, Certificates of Participation, Capital Improvement Program, Series 2003A: 1,130 5.250%, 6/01/19 - AMBAC Insured 6/13 at 101.00 AAA 1,249,814 1,255 5.250%, 6/01/21 - AMBAC Insured 6/13 at 101.00 AAA 1,374,576 1,210 Redding, California, Joint Power Financing Authority Lease 3/13 at 100.00 AAA 1,266,398 Revenue Bonds, Capital Projects, Series 2003A, 5.000%, 3/01/23 - AMBAC Insured 3,750 Sacramento Municipal Utility District, California, Electric 8/13 at 100.00 AAA 3,880,575 Revenue Bonds, Series 2003R, 5.000%, 8/15/28 - MBIA Insured 1,500 San Diego Community College District, California, General 5/13 at 100.00 AAA 1,550,910 Obligation Bonds, Series 2003A, 5.000%, 5/01/28 - FSA Insured 3,000 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 3,056,070 Bonds, Merged Area Redevelopment Project, Series 2002, 5.000%, 8/01/32 - MBIA Insured 1,055 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 1,085,943 Participation, Series 2003A, 5.000%, 1/01/28 - MBIA Insured 6,300 University of California, Revenue Bonds, Multi-Purpose 5/13 at 100.00 AAA 6,474,006 Projects, Series 2003A, 5.000%, 5/15/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.8% (2.5% OF TOTAL INVESTMENTS) Bowles Metropolitan District, Colorado, General Obligation Bonds, Series 2003: 4,300 5.500%, 12/01/23 - FSA Insured 12/13 at 100.00 AAA 4,800,821 3,750 5.500%, 12/01/28 - FSA Insured 12/13 at 100.00 AAA 4,088,700 1,450 Colorado Educational and Cultural Facilities Authority, 8/14 at 100.00 AAA 1,545,338 Charter School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/24 - XLCA Insured 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.1% (0.8% OF TOTAL INVESTMENTS) $ 3,000 Pinellas County Health Facilities Authority, Florida, Revenue 5/13 at 100.00 A1 $ 3,138,210 Bonds, Baycare Health System, Series 2003, 5.500%, 11/15/27 ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% (0.9% OF TOTAL INVESTMENTS) 3,825 Metropolitan Atlanta Rapid Transit Authority, Georgia, 1/13 at 100.00 AAA 3,933,248 Sales Tax Revenue Bonds, Second Indenture Series 2002, 5.000%, 7/01/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 3.9% (2.6% OF TOTAL INVESTMENTS) Cook County School District No. 100, Berwyn South, Illinois, General Obligation Refunding Bonds, Series 2003B: 905 5.250%, 12/01/21 (Pre-refunded to 12/01/13) - FSA Insured 12/13 at 100.00 Aaa 1,037,374 405 5.250%, 12/01/21 - FSA Insured 12/13 at 100.00 Aaa 440,830 Cook County School District No. 145, Arbor Park, Illinois, General Obligation Bonds, Series 2004: 3,285 5.125%, 12/01/20 - FSA Insured 12/14 at 100.00 Aaa 3,582,358 2,940 5.125%, 12/01/23 - FSA Insured 12/14 at 100.00 Aaa 3,143,448 2,500 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 2,553,950 Lake Forest Hospital, Series 2003, 5.250%, 7/01/23 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 8.9% (5.8% OF TOTAL INVESTMENTS) 2,500 Evansville, Indiana, Sewerage Works Revenue Refunding 7/13 at 100.00 AAA 2,633,750 Bonds, Series 2003A, 5.000%, 7/01/23 - AMBAC Insured 2,190 Indiana Bond Bank, Common School Fund Advance Purchase 8/13 at 100.00 AAA 2,349,454 Funding Bonds, Series 2003B, 5.000%, 8/01/19 - MBIA Insured 1,000 Indiana University, Student Fee Revenue Bonds, 8/13 at 100.00 AAA 1,056,910 Series 2003O, 5.000%, 8/01/22 - FGIC Insured IPS Multi-School Building Corporation, Indiana, First Mortgage Bonds, Series 2003: 11,020 5.000%, 7/15/19 - MBIA Insured 7/13 at 100.00 AAA 11,844,186 6,000 5.000%, 7/15/20 - MBIA Insured 7/13 at 100.00 AAA 6,421,380 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 2.4% (1.6% OF TOTAL INVESTMENTS) 6,250 Kansas Development Finance Authority, Revenue Bonds, 4/13 at 102.00 AAA 6,682,563 Board of Regents, Scientific Research and Development Facilities Projects, Series 2003C, 5.000%, 10/01/22 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.5% (0.3% OF TOTAL INVESTMENTS) Kentucky State Property and Buildings Commission, Revenue Refunding Bonds, Project 77, Series 2003: 340 5.000%, 8/01/23 - MBIA Insured 8/13 at 100.00 AAA 382,469 985 5.000%, 8/01/23 - MBIA Insured 8/13 at 100.00 AAA 1,040,318 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.3% (1.5% OF TOTAL INVESTMENTS) 5,785 New Orleans, Louisiana, General Obligation Refunding Bonds, 12/12 at 100.00 AAA 6,165,479 Series 2002, 5.300%, 12/01/27 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.9% (3.2% OF TOTAL INVESTMENTS) 9,000 Massachusetts Bay Transportation Authority, Senior Sales 7/12 at 100.00 AAA 9,275,130 Tax Revenue Refunding Bonds, Series 2002A, 5.000%, 7/01/27 - FGIC Insured 1,125 Massachusetts Development Finance Authority, Revenue 9/13 at 100.00 A1 1,185,818 Bonds, Middlesex School, Series 2003, 5.125%, 9/01/23 3,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 3,031,830 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 12.0% (7.8% OF TOTAL INVESTMENTS) 6,130 Detroit, Michigan, Senior Lien Water Supply System 7/13 at 100.00 AAA 6,444,346 Revenue Bonds, Series 2003A, 5.000%, 7/01/23 - MBIA Insured 4,465 Detroit, Michigan, Senior Lien Water Supply System 7/13 at 100.00 AAA 4,723,791 Revenue Refunding Bonds, Series 2003C, 5.000%, 7/01/22 - MBIA Insured 955 Grand Rapids Community College, Kent County, Michigan, 5/13 at 100.00 AAA 1,052,286 General Obligation Refunding Bonds, Series 2003, 5.250%, 5/01/18 - AMBAC Insured 55 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN (continued) $ 10,800 Michigan Strategic Fund, Limited Obligation Resource 12/12 at 100.00 AAA $ 11,256,084 Recovery Revenue Refunding Bonds, Detroit Edison Company, Series 2002D, 5.250%, 12/15/32 - XLCA Insured 2,250 Romulus Community Schools, Wayne County, Michigan, 5/11 at 100.00 AA+ 2,369,520 General Obligation Refunding Bonds, Series 2001, 5.250%, 5/01/25 6,500 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 6,671,470 Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport, Series 2001A, 5.000%, 12/01/30 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.1% (0.7% OF TOTAL INVESTMENTS) Clay County Public School District No. 53, Liberty, Missouri, General Obligation Bonds, Series 2004: 1,325 5.250%, 3/01/23 - FSA Insured 3/14 at 100.00 AAA 1,438,420 1,500 5.250%, 3/01/24 - FSA Insured 3/14 at 100.00 AAA 1,622,355 ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.5% (1.0% OF TOTAL INVESTMENTS) 4,105 Forsyth, Rosebud County, Montana, Pollution Control 3/13 at 101.00 AAA 4,226,713 Revenue Refunding Bonds, Puget Sound Energy, Series 2003A, 5.000%, 3/01/31 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.9% (1.2% OF TOTAL INVESTMENTS) 5,000 Lincoln, Nebraska, Sanitary Sewer System Revenue 6/13 at 100.00 AAA 5,176,150 Refunding Bonds, Series 2003, 5.000%, 6/15/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 0.9% (0.6% OF TOTAL INVESTMENTS) 2,315 Clark County, Nevada, Subordinate Lien Airport Revenue 7/11 at 100.00 AAA 2,399,798 Bonds, Series 2001B, 5.200%, 7/01/31 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.4% (0.9% OF TOTAL INVESTMENTS) New Mexico State University, Revenue Bonds, Series 2004: 1,975 5.000%, 4/01/19 - AMBAC Insured 4/14 at 100.00 AAA 2,142,440 1,530 5.000%, 4/01/23 - AMBAC Insured 4/14 at 100.00 AAA 1,621,326 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 9.4% (6.2% OF TOTAL INVESTMENTS) 25,000 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 25,724,750 Transportation Revenue Refunding Bonds, Series 2002F, 5.000%, 11/15/31 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.3% (2.2% OF TOTAL INVESTMENTS) 8,700 North Carolina Medical Care Commission, Revenue Bonds, 10/13 at 100.00 AA 9,110,727 Maria Parham Medical Center, Series 2003, 5.375%, 10/01/33 - RAAI Insured ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.9% (2.6% OF TOTAL INVESTMENTS) 9,350 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 9,633,866 Series 2002A, 5.000%, 7/01/32 - MBIA Insured 1,000 Sunrise Water Authority, Oregon, Water Revenue Bonds, 3/14 at 100.00 AAA 1,084,140 Series 2004, 5.000%, 3/01/19 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 8.7% (5.7% OF TOTAL INVESTMENTS) 3,000 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 3,033,270 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 2,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 8/13 at 100.00 AAA 2,053,940 General Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 1997A: 925 5.125%, 8/01/27 - AMBAC Insured 8/07 at 102.00 AAA 1,000,980 4,075 5.125%, 8/01/27 - AMBAC Insured 8/07 at 102.00 AAA 4,248,880 13,000 State Public School Building Authority, Pennsylvania, Lease 6/13 at 100.00 AAA 13,341,770 Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/33 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 7.3% (4.8% OF TOTAL INVESTMENTS) 5,000 Florence County, South Carolina, Hospital Revenue Bonds, 11/14 at 100.00 AAA 5,387,150 McLeod Regional Medical Center Project, Series 2004A, 5.250%, 11/01/23 - FSA Insured 56 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA (continued) Greenville County School District, South Carolina, Installment Purchase Revenue Bonds, Series 2003: $ 3,000 5.000%, 12/01/22 12/13 at 100.00 AA- $ 3,119,850 1,785 5.000%, 12/01/23 12/13 at 100.00 AA- 1,849,563 1,365 Myrtle Beach, South Carolina, Water and Sewer System 3/13 at 100.00 AAA 1,511,683 Revenue Refunding Bonds, Series 2003, 5.375%, 3/01/19 - FGIC Insured 8,000 South Carolina Transportation Infrastructure Bank, Revenue 10/12 at 100.00 Aaa 8,186,160 Bonds, Series 2002A, 5.000%, 10/01/33 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 13.1% (8.5% OF TOTAL INVESTMENTS) 7,975 Fort Bend Independent School District, Fort Bend County, 8/10 at 100.00 AAA 8,186,098 Texas, General Obligation Bonds, Series 2000, 5.000%, 8/15/25 12,500 Grand Prairie Independent School District, Dallas County, 2/13 at 100.00 AAA 12,945,625 Texas, General Obligation Bonds, Series 2003, 5.125%, 2/15/31 - FSA Insured 5,515 Houston, Texas, General Obligation Refunding Bonds, 3/12 at 100.00 AAA 5,947,597 Series 2002, 5.250%, 3/01/20 - MBIA Insured 2,000 Houston, Texas, First Lien Combined Utility System Revenue 5/14 at 100.00 AAA 2,146,600 Bonds, Series 2004A, 5.250%, 5/15/25 - MBIA Insured 5,850 Katy Independent School District, Harris, Fort Bend and 2/12 at 100.00 AAA 6,306,593 Waller Counties, Texas, General Obligation Bonds, Series 2002A, 5.125%, 2/15/18 ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS) 1,500 Hampton, Virginia, Revenue Bonds, Convention Center Project, 1/13 at 100.00 AAA 1,569,120 Series 2002, 5.125%, 1/15/28 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 9.2% (6.0% OF TOTAL INVESTMENTS) 4,945 Broadway Office Properties, King County, Washington, 12/12 at 100.00 AAA 5,052,010 Lease Revenue Bonds, Washington Project, Series 2002, 5.000%, 12/01/31 - MBIA Insured 5,250 Chelan County Public Utility District 1, Washington, 7/12 at 100.00 AAA 5,411,753 Hydro Consolidated System Revenue Bonds, Series 2002C, 5.125%, 7/01/33 - AMBAC Insured 2,135 Kitsap County Consolidated Housing Authority, Washington, 7/13 at 100.00 Aaa 2,233,445 Revenue Bonds, Bremerton Government Center Project, Series 2003, 5.000%, 7/01/23 - MBIA Insured 1,935 Pierce County School District 343, Dieringer, Washington, 6/13 at 100.00 Aaa 2,133,686 General Obligation Refunding Bonds, Series 2003, 5.250%, 12/01/17 - FSA Insured 9,670 Washington, General Obligation Bonds, Series 2003D, 6/13 at 100.00 AAA 10,276,406 5.000%, 12/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.3% (0.8% OF TOTAL INVESTMENTS) 3,000 West Virginia State Building Commission, Lease Revenue No Opt. Call AAA 3,444,750 Refunding Bonds, Regional Jail Project, Series 1998A, 5.375%, 7/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.7% (4.4% OF TOTAL INVESTMENTS) 1,190 Sun Prairie Area School District, Dane County, Wisconsin, 3/14 at 100.00 Aaa 1,279,452 General Obligation Bonds, Series 2004C, 5.250%, 3/01/24 - FSA Insured 4,750 Wisconsin Health and Educational Facilities Authority, 8/08 at 102.00 AAA 5,064,023 Revenue Refunding Bonds, Wausau Hospital Inc., Series 1998A, 5.125%, 8/15/20 - AMBAC Insured 3,000 Wisconsin Health and Educational Facilities Authority, No Opt. Call AAA 3,560,190 Revenue Bonds, Meriter Hospital Inc., Series 1992A, 6.000%, 12/01/22 - FGIC Insured 3,600 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 3,607,307 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 4,605 Wisconsin Health and Educational Facilities Authority, 9/13 at 100.00 A- 4,716,118 Revenue Bonds, Franciscan Sisters of Christian Charity HealthCare Ministry, Series 2003A, 5.875%, 9/01/33 ------------------------------------------------------------------------------------------------------------------------------------ $ 397,220 Total Long-Term Investments (cost $398,499,338) - 152.5% 416,429,006 =============----------------------------------------------------------------------------------------------------------------------- 57 Nuveen Insured Tax-Free Advantage Municipal Fund (NEA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 0.2% (0.1% OF TOTAL INVESTMENTS) $ 500 Puerto Rico Government Development Bank, Adjustable A-1 $ 500,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 1.700%, 12/01/15 - MBIA Insured+ ------------------------------------------------------------------------------------------------------------------------------------ $ 500 Total Short-Term Investments (cost $500,000) 500,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $398,999,338) - 152.7% 416,929,006 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.0% 182,953 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.7)% (144,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 273,111,959 ==================================================================================================================== FORWARD SWAP TRANSACTIONS OUTSTANDING AT OCTOBER 31, 2004: SWAP UNREALIZED EFFECTIVE TERMINATION APPRECIATION NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION) ------------------------------------------------------------------------------------------------------------------------------------ Agreement with Morgan Stanley dated June 7, 2004, to pay semi-annually the notional amount multiplied by 5.990% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offer Rate). $10,000,000 12/09/04 12/09/24 $(1,174,645) Agreement with Morgan Stanley dated June 9, 2004, to pay semi-annually the notional amount multiplied by 6.009% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offer Rate). 30,000,000 12/13/04 12/13/24 (3,585,382) Agreement with JPMorgan dated June 23, 2004, to pay semi-annually the notional amount multiplied by 5.932% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offer Rate). 14,500,000 1/14/05 1/14/25 (1,546,601) ------------------------------------------------------------------------------------------------------------------------------------ $(6,306,628) ------------------------------------------------------------------------------------------------------------------------------------ At least 80% of the Fund's net assets are invested in municipal securities that are either covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance which ensures the timely payment of principal and interest. Up to 20% of the Fund's net assets may be invested in municipal securities that are (i) either backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities (also ensuring the timely payment of principal and interest), or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. (PLG) Portion of security, with an aggregate market value of $7,743,937, has been pledged to collateralize the net payment obligations under forward swap contracts. See accompanying notes to financial statements. 58 Statement of ASSETS AND LIABILITIES October 31, 2004 INSURED INSURED INSURED INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $851,499,816, $1,803,711,022, $427,584,412, $753,373,775, $652,877,253 and $398,999,338, respectively) $913,993,645 $1,958,213,345 $464,337,798 $807,548,666 $695,675,200 $416,929,006 Cash 498,671 37,340 44,529 503,334 816,424 199,250 Receivables: Interest 12,312,152 29,957,929 7,608,762 13,837,994 9,955,873 6,482,324 Investments sold 394,750 7,528,748 35,000 2,127,753 -- -- Other assets 61,096 103,013 26,179 52,389 32,648 11,203 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 927,260,314 1,995,840,375 472,052,268 824,070,136 706,480,145 423,621,783 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Payable for investments purchased 3,491,779 11,335,115 -- 14,698,220 -- -- Forward swaps, at value -- -- -- -- 2,750,245 6,306,628 Accrued expenses: Management fees 482,017 1,014,387 250,528 423,168 191,254 114,351 Other 196,785 383,862 103,533 298,604 111,138 63,995 Preferred share dividends payable 62,118 121,821 31,720 53,064 38,337 24,850 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 4,232,699 12,855,185 385,781 15,473,056 3,090,974 6,509,824 ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 318,000,000 680,000,000 161,000,000 268,900,000 233,000,000 144,000,000 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $605,027,615 $1,302,985,190 $310,666,487 $539,697,080 $470,389,171 $273,111,959 ==================================================================================================================================== Common shares outstanding 38,177,064 81,138,036 19,411,049 37,353,512 29,807,822 18,512,923 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.85 $ 16.06 $ 16.00 $ 14.45 $ 15.78 $ 14.75 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 381,771 $ 811,380 $ 194,110 $ 373,535 $ 298,078 $ 185,129 Paid-in surplus 532,667,962 1,128,874,275 269,330,311 491,941,519 423,486,786 261,493,819 Undistributed (Over-distribution of) net investment income 7,235,743 16,469,788 2,607,073 5,255,974 2,707,005 (383,115) Accumulated net realized gain (loss) from investments 2,248,310 2,327,424 1,781,607 (12,048,839) 3,849,600 193,086 Net unrealized appreciation (depreciation) of investments and forward swap transactions 62,493,829 154,502,323 36,753,386 54,174,891 40,047,702 11,623,040 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $605,027,615 $1,302,985,190 $310,666,487 $539,697,080 $470,389,171 $273,111,959 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 59 Statement of OPERATIONS Year Ended October 31, 2004 INSURED INSURED INSURED INSURED INSURED PREMIER PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INSURED INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $48,352,195 $99,777,574 $23,666,324 $40,937,786 $33,539,655 $20,193,346 ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 5,711,518 12,010,312 2,959,435 5,008,357 4,364,285 2,638,419 Preferred shares - auction fees 797,177 1,704,656 403,603 674,091 584,096 360,986 Preferred shares - dividend disbursing agent fees 50,138 70,191 30,082 50,138 30,082 20,053 Shareholders' servicing agent fees and expenses 106,673 174,875 42,475 61,798 10,342 6,739 Custodian's fees and expenses 182,510 384,772 95,776 165,507 141,291 87,743 Directors'/Trustees' fees and expenses 21,495 50,053 9,126 18,284 18,891 9,100 Professional fees 39,508 76,587 21,936 27,438 36,939 25,607 Shareholders' reports - printing and mailing expenses 78,298 189,807 42,487 76,625 63,936 42,802 Stock exchange listing fees 16,077 32,564 11,889 15,374 2,574 1,591 Investor relations expense 71,147 160,308 41,185 51,410 61,181 48,631 Portfolio insurance expense 27,841 49,080 -- 642 -- -- Other expenses 51,297 86,349 30,736 34,152 34,510 13,808 ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 7,153,679 14,989,554 3,688,730 6,183,816 5,348,127 3,255,479 Custodian fee credit (15,674) (20,382) (13,538) (22,524) (9,764) (4,662) Expense reimbursement -- -- -- -- (2,088,546) (1,324,667) ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 7,138,005 14,969,172 3,675,192 6,161,292 3,249,817 1,926,150 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 41,214,190 84,808,402 19,991,132 34,776,494 30,289,838 18,267,196 ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investments 2,202,219 2,845,723 1,804,462 4,743,922 3,840,906 192,046 Change in net unrealized appreciation (depreciation) of investments 5,112,646 13,606,844 5,140,974 3,531,341 11,761,364 10,225,971 Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- -- -- (2,750,245) (6,306,628) ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 7,314,865 16,452,567 6,945,436 8,275,263 12,852,025 4,111,389 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,891,716) (6,198,825) (1,461,536) (2,517,974) (2,131,112) (1,362,594) From accumulated net realized gains from investments (114,034) (149,437) (26,521) -- (140,030) (7,435) ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (3,005,750) (6,348,262) (1,488,057) (2,517,974) (2,271,142) (1,370,029) ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $45,523,305 $94,912,707 $25,448,511 $40,533,783 $40,870,721 $21,008,556 ==================================================================================================================================== See accompanying notes to financial statements. 60 Statement of CHANGES IN NET ASSETS INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO) ------------------------------- ----------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 41,214,190 $ 41,802,309 $ 84,808,402 $ 86,163,989 Net realized gain from investments 2,202,219 1,876,817 2,845,723 2,436,868 Change in net unrealized appreciation (depreciation) of investments 5,112,646 (4,019,790) 13,606,844 11,623,684 Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- -- -- Distributions to Preferred Shareholders: From net investment income (2,891,716) (2,683,386) (6,198,825) (5,618,357) From accumulated net realized gains from investments (114,034) (433,291) (149,437) (990,259) ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 45,523,305 36,542,659 94,912,707 93,615,925 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (38,923,489) (37,979,535) (78,914,962) (78,840,403) From accumulated net realized gains from investments (1,766,378) (4,511,581) (2,358,124) (10,041,988) ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (40,689,867) (42,491,116) (81,273,086) (88,882,391) ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 2,092,259 2,555,277 1,258,836 -- Preferred shares offering costs -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 2,092,259 2,555,277 1,258,836 -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 6,925,697 (3,393,180) 14,898,457 4,733,534 Net assets applicable to Common shares at the beginning of year 598,101,918 601,495,098 1,288,086,733 1,283,353,199 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $605,027,615 $598,101,918 $1,302,985,190 $1,288,086,733 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 7,235,743 $ 7,882,002 $ 16,469,788 $ 16,782,480 ==================================================================================================================================== See accompanying notes to financial statements. 61 Statement of CHANGES IN NET ASSETS (continued) PREMIER INSURED INSURED PREMIUM INCOME (NIF) INCOME 2 (NPX) ------------------------------ --------------------------- YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 19,991,132 $ 20,369,025 $34,776,494 $ 35,671,340 Net realized gain from investments 1,804,462 398,323 4,743,922 4,868,689 Change in net unrealized appreciation (depreciation) of investments 5,140,974 2,116,009 3,531,341 (3,467,246) Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- -- -- Distributions to Preferred Shareholders: From net investment income (1,461,536) (1,427,461) (2,517,974) (2,405,892) From accumulated net realized gains from investments (26,521) (66,215) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 25,448,511 21,389,681 40,533,783 34,666,891 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (18,972,928) (18,862,625) (32,708,575) (32,051,466) From accumulated net realized gains from investments (373,855) (674,649) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (19,346,783) (19,537,274) (32,708,575) (32,051,466) ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 653,067 937,964 897,328 559,464 Preferred shares offering costs -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 653,067 937,964 897,328 559,464 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 6,754,795 2,790,371 8,722,536 3,174,889 Net assets applicable to Common shares at the beginning of year 303,911,692 301,121,321 530,974,544 527,799,655 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $310,666,487 $303,911,692 $539,697,080 $530,974,544 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 2,607,073 $ 3,050,407 $ 5,255,974 $ 5,784,342 ==================================================================================================================================== See accompanying notes to financial statements. 62 INSURED DIVIDEND INSURED TAX-FREE ADVANTAGE (NVG) ADVANTAGE (NEA) ------------------------------ ---------------------------- FOR THE PERIOD 11/21/02 (COMMENCEMENT YEAR YEAR YEAR OF OPERATIONS) ENDED ENDED ENDED THROUGH 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 30,289,838 $ 30,822,852 $ 18,267,196 $ 15,163,064 Net realized gain from investments 3,840,906 2,261,496 192,046 103,646 Change in net unrealized appreciation (depreciation) of investments 11,761,364 2,080,176 10,225,971 7,703,697 Change in net unrealized appreciation (depreciation) of forward swap transactions (2,750,245) -- (6,306,628) -- Distributions to Preferred Shareholders: From net investment income (2,131,112) (1,986,953) (1,362,594) (1,000,298) From accumulated net realized gains from investments (140,030) (389,279) (7,435) -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 40,870,721 32,788,292 21,008,556 21,970,109 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (27,722,483) (27,721,277) (17,104,309) (14,343,267) From accumulated net realized gains from investments (2,127,005) (3,132,797) (98,078) -- ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (29,849,488) (30,854,074) (17,202,387) (14,343,267) ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- (1,575) 114,799 264,457,500 Net proceeds from shares issued to shareholders due to reinvestment of distributions -- -- 78,604 12,612 Preferred shares offering costs (108) 3,032 -- (3,084,842) ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions (108) 1,457 193,403 261,385,270 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 11,021,125 1,935,675 3,999,572 269,012,112 Net assets applicable to Common shares at the beginning of year 459,368,046 457,432,371 269,112,387 100,275 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $470,389,171 $459,368,046 $273,111,959 $269,112,387 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 2,707,005 $ 2,280,637 $ (383,115) $ (180,848) ==================================================================================================================================== See accompanying notes to financial statements. 63 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Insured Quality Municipal Fund, Inc. (NQI), Nuveen Insured Municipal Opportunity Fund, Inc. (NIO), Nuveen Premier Insured Municipal Income Fund, Inc. (NIF), Nuveen Insured Premium Income Municipal Fund 2 (NPX), Nuveen Insured Dividend Advantage Municipal Fund (NVG) and Nuveen Insured Tax-Free Advantage Municipal Fund (NEA). Common shares of Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) are traded on the New York Stock Exchange while Common shares of Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end, diversified management investment companies. Prior to the commencement of operations of Insured Tax-Free Advantage (NEA), the Fund had no operations other than those related to organizational matters, the initial capital contribution of $100,275 by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. and the recording of the organization expenses ($11,500) and their reimbursement by Nuveen Investments, LLC, also a wholly owned subsidiary of Nuveen Investments, Inc. Each Fund seeks to provide current income exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Securities Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the security. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are valued at amortized cost, which approximates market value. Securities Transactions Securities transactions are recorded on a trade date basis. Realized gains and losses from such transactions are determined on the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. The securities so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At October 31, 2004, Insured Quality (NQI), Insured Opportunity (NIO) and Insured Premium Income 2 (NPX) had outstanding when-issued purchase commitments of $3,491,779, $9,056,334, and $14,698,220, respectively. There were no such outstanding purchase commitments in any of the other Funds. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. Federal Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, and in the case of Insured Tax-Free Advantage (NEA) the alternative minimum tax applicable to individuals, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended October 31, 2004, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions made by the Funds are subject to federal taxation. 64 Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in more than one Series. The dividend rate on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable weekly at the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) --------------------------------------------------------------------------------------------------------- Number of shares: Series M 2,600 4,000 -- 2,080 3,160 -- Series T 2,600 4,000 -- 2,200 3,080 2,880 Series W 2,600 4,000 840 2,080 -- 2,880 Series W2 -- 3,200 -- -- -- -- Series TH 2,320 4,000 2,800 2,200 3,080 -- Series TH2 -- 4,000 -- -- -- -- Series F 2,600 4,000 2,800 2,196 -- -- --------------------------------------------------------------------------------------------------------- Total 12,720 27,200 6,440 10,756 9,320 5,760 ========================================================================================================= Insured Tax-Free Advantage (NEA) issued the Preferred shares listed above on January 17, 2003. Insurance Insured Quality (NQI), Insured Opportunity (NIO), Premier Insured Income (NIF) and Insured Premium Income 2 (NPX) invest in municipal securities which are either covered by insurance or are backed by an escrow or trust account containing sufficient U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest. Insured Dividend Advantage (NVG) and Insured Tax-Free Advantage (NEA) invest at least 80% of their net assets (including net assets applicable to Preferred shares) in municipal securities that are covered by insurance. Each Fund may also invest up to 20% of its net assets (including net assets applicable to Preferred shares) in municipal securities which are either (i) backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, or (ii) municipal bonds that are rated, at the time of investment, within the four highest grades (Baa or BBB or better by Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the Adviser. Each insured municipal security is covered by Original Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance does not guarantee the market value of the municipal securities or the value of the Funds' Common shares. Original Issue Insurance and Secondary Market Insurance remain in effect as long as the municipal securities covered thereby remain outstanding and the insurer remains in business, regardless of whether the Funds ultimately dispose of such municipal securities. Consequently, the market value of the municipal securities covered by Original Issue Insurance or Secondary Market Insurance may reflect value attributable to the insurance. Portfolio Insurance, in contrast, is effective only while the municipal securities are held by the Funds. Accordingly, neither the prices used in determining the market value of the underlying municipal securities nor the Common share net asset value of the Funds include value, if any, attributable to the Portfolio Insurance. Each policy of the Portfolio Insurance does, however, give the Funds the right to obtain permanent insurance with respect to the municipal security covered by the Portfolio Insurance policy at the time of its sale. Forward Swap Transactions The Funds may invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to mitigate the negative impact that an increase in long-term interest rates could have on Common share net earnings. Forward interest rate swap transactions involve each Fund's agreement with the counterparty to pay, in the future, a fixed rate payment in exchange for the counterparty paying the Fund a variable rate payment. The amount of the payment obligation is based on the notional or nominal amount of the forward swap contract. The Funds may close out a contract prior to the effective date. When a forward swap is terminated, it does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash. Each Fund intends to, but is not obligated to, terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment. To minimize such credit risk, all counterparties are required to segregate collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to segregate assets of the Funds 65 Notes to FINANCIAL STATEMENTS (continued) as collateral with a value approximately equal to the amount of the unrealized loss. The Funds help reduce the credit risks associated with forward swap transactions by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the swap counterparties. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Offering Costs Nuveen Investments, LLC has agreed to pay all Common share offering costs (other than the sales load) that exceed $.03 per Common share for Insured Tax-Free Advantage (NEA). Insured Tax-Free Advantage's (NEA) share of Common share offering costs ($440,201) was recorded as a reduction of the proceeds from the sale of Common shares. Costs incurred by Insured Tax-Free Advantage (NEA) in connection with the offering of Preferred shares ($3,084,842) were recorded as a reduction to paid-in surplus. Indemnifications Under the Funds' organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common and Preferred shares were as follows: INSURED INSURED PREMIER INSURED QUALITY (NQI) OPPORTUNITY (NIO) INCOME (NIF) --------------------- ---------------------- --------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 --------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- -- -- -- Shares issued to shareholders due to reinvestment of distributions 126,022 156,328 77,090 -- 39,908 57,779 --------------------------------------------------------------------------------------------------------- 126,022 156,328 77,090 -- 39,908 57,779 ========================================================================================================= Preferred shares sold -- -- -- -- -- -- ========================================================================================================= 66 INSURED INSURED INSURED PREMIUM INCOME 2 (NPX) DIVIDEND ADVANTAGE (NVG) TAX-FREE ADVANTAGE (NEA) ---------------------- ------------------------ --------------------------- FOR THE PERIOD 11/21/02 (COMMENCEMENT YEAR YEAR YEAR YEAR YEAR OF OPERATIONS) ENDED ENDED ENDED ENDED ENDED THROUGH 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- -- -- 18,500,000 Shares issued to shareholders due to reinvestment of distributions 60,649 38,904 -- -- 5,076 847 ------------------------------------------------------------------------------------------------------------- 60,649 38,904 -- -- 5,076 18,500,847 ============================================================================================================= Preferred shares sold -- -- -- -- -- 5,760 ============================================================================================================= 3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended October 31, 2004, were as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------- Purchases $79,125,934 $153,213,327 $61,689,322 $125,998,157 $73,502,496 $53,705,885 Sales and maturities 76,297,734 152,768,857 61,082,770 108,397,342 76,960,805 53,838,660 ============================================================================================================= 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses on investments, timing differences in recognizing income on taxable market discount securities and timing differences in recognizing certain gains and losses on security transactions. At October 31, 2004, the cost of investments was as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------- Cost of investments $851,183,584 $1,803,021,761 $427,537,899 $753,351,254 $652,781,430 $398,982,963 =================================================================================================================== Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2004, were as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ---------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $62,931,512 $156,056,876 $36,938,531 $54,522,909 $43,609,637 $17,946,043 Depreciation (121,451) (865,292) (138,632) (325,497) (715,867) -- ---------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $62,810,061 $155,191,584 $36,799,899 $54,197,412 $42,893,770 $17,946,043 ================================================================================================================ The tax components of undistributed net investment income and net realized gains at October 31, 2004, were as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------------------ Undistributed net tax-exempt income * $10,089,309 $21,953,357 $4,174,273 $7,983,324 $4,959,625 $1,004,575 Undistributed net ordinary income ** 425,383 -- 801,863 -- 320,955 -- Undistributed net long-term capital gains 1,941,207 2,848,599 979,744 -- 3,528,645 193,086 ======================================================================================================================== * Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 1, 2004, paid on November 1, 2004. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 67 Notes to FINANCIAL STATEMENTS (continued) The tax character of distributions paid during the fiscal years ended October 31, 2004 and October 31, 2003, was designated for purposes of the dividends paid deduction as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE 2004 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) ------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $41,497,482 $84,945,305 $20,407,082 $35,184,856 $29,829,269 $18,503,309 Distributions from net ordinary income ** 264,316 78,388 -- -- 2,266,382 105,523 Distributions from net long-term capital gains 1,880,412 2,507,561 400,376 -- 1,939 -- ============================================================================================================= PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE 2003 (NQI) (NIO) (NIF) (NPX) (NVG) (NEA)*** ------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $40,502,631 $84,020,174 $20,270,539 $34,382,914 $29,729,306 $13,903,084 Distributions from net ordinary income ** 538,152 410,238 22,665 -- 3,522,076 -- Distributions from net long-term capital gains 4,406,720 11,032,247 740,863 -- -- -- ============================================================================================================= ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** For the period November 21, 2002 (commencement of operations) through October 31, 2003. At October 31, 2004, Insured Premium Income 2 (NPX) had an unused capital loss carryforward of $12,018,781 available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforward will expire in 2008. 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES As approved by the Board of Directors/Trustees, effective August 1, 2004, a complex-wide management fee structure was adopted for all funds sponsored by the Adviser and its affiliates. This fee structure separates each fund's management fee into two components - a complex-level component, based on the aggregate amount of all funds assets managed by the Adviser and its affiliates, and a specific fund-level component, based only on the amount of assets within each individual fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser and its affiliates. Under no circumstances will this pricing structure result in a fund paying management fees at a rate higher than would otherwise have been applicable had the complex-wide management fee structure not been implemented. As a consequence of this new management fee structure, the funds' effective management fees were reduced by approximately .006% as of November 30, 2004. 68 Effective August 1, 2004, the annual fund-level fee, payable monthly, for each of the Funds is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO) PREMIER INSURED INCOME (NIF) AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS INSURED PREMIUM INCOME 2 (NPX) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ AVERAGE DAILY NET ASSETS INSURED DIVIDEND ADVANTAGE (NVG) (INCLUDING NET ASSETS INSURED TAX-FREE ADVANTAGE (NEA) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================ Effective August 1, 2004, the annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as follows: COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion (2) .1400 ================================================================================ (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. Each Fund paid through July 31, 2004, an annual management fee, payable monthly, at the rates set forth below, which were based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: INSURED QUALITY (NQI) INSURED OPPORTUNITY (NIO) AVERAGE DAILY NET ASSETS PREMIER INSURED INCOME (NIF) (INCLUDING NET ASSETS INSURED PREMIUM INCOME 2 (NPX) ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For the next $3 billion .5875 For net assets over $5 billion .5750 ================================================================================ 69 Notes to FINANCIAL STATEMENTS (continued) AVERAGE DAILY NET ASSETS INSURED DIVIDEND ADVANTAGE (NVG) (INCLUDING NET ASSETS INSURED TAX-FREE ADVANTAGE (NEA) ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For net assets over $2 billion .5750 ================================================================================ The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised Funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised Funds. For the first ten years of Insured Dividend Advantage's (NVG) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Dividend Advantage (NVG) for any portion of its fees and expenses beyond March 31, 2012. For the first eight years of Insured Tax-Free Advantage's (NEA) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING NOVEMBER 30, NOVEMBER 30, -------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Insured Tax-Free Advantage (NEA) for any portion of its fees and expenses beyond November 30, 2010. 70 6. SUBSEQUENT EVENTS - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2004, to shareholders of record on November 15, 2004, as follows: PREMIER INSURED INSURED INSURED INSURED INSURED INSURED PREMIUM DIVIDEND TAX-FREE QUALITY OPPORTUNITY INCOME INCOME 2 ADVANTAGE ADVANTAGE (NQI) (NIO) (NIF) (NPX) (NVG) (NEA) --------------------------------------------------------------------------------------------------------- Dividend per share $.0845 $.0810 $.0815 $.0730 $.0775 $.0745 ========================================================================================================= 71 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period: Investment Operations Less Distributions ------------------------------------------------------------------ --------------------------------- Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== INSURED QUALITY (NQI) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 $15.72 $1.08 $ .20 $(.08) $ -- $ 1.20 $(1.02) $(.05) $(1.07) 2003 15.87 1.10 (.05) (.07) (.01) .97 (1.00) (.12) (1.12) 2002 15.78 1.12 .03 (.11) (.01) 1.03 (.92) (.02) (.94) 2001 14.51 1.18 1.20 (.26) -- 2.12 (.85) -- (.85) 2000 13.95 1.20 .60 (.34) -- 1.46 (.90) -- (.90) INSURED OPPORTUNITY (NIO) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.89 1.05 .20 (.08) -- 1.17 (.97) (.03) (1.00) 2003 15.83 1.06 .17 (.07) (.01) 1.15 (.97) (.12) (1.09) 2002 15.72 1.15 .03 (.11) (.01) 1.06 (.93) (.02) (.95) 2001 14.64 1.17 1.04 (.26) -- 1.95 (.87) -- (.87) 2000 14.25 1.21 .39 (.33) -- 1.27 (.88) -- (.88) PREMIER INSURED INCOME (NIF) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.69 1.03 .36 (.08) -- 1.31 (.98) (.02) (1.00) 2003 15.59 1.05 .13 (.07) -- 1.11 (.98) (.03) (1.01) 2002 15.55 1.14 (.05) (.11) -- .98 (.94) -- (.94) 2001 14.66 1.18 .85 (.26) -- 1.77 (.88) -- (.88) 2000 14.25 1.20 .43 (.33) -- 1.30 (.89) -- (.89) INSURED PREMIUM INCOME 2 (NPX) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 14.24 .93 .23 (.07) -- 1.09 (.88) -- (.88) 2003 14.17 .96 .03 (.06) -- .93 (.86) -- (.86) 2002 13.94 .99 .16 (.10) -- 1.05 (.82) -- (.82) 2001 13.05 1.01 .86 (.23) -- 1.64 (.75) -- (.75) 2000 12.40 .99 .66 (.29) -- 1.36 (.71) -- (.71) INSURED DIVIDEND ADVANTAGE (NVG) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.41 1.02 .42 (.07) -- 1.37 (.93) (.07) (1.00) 2003 15.35 1.03 .15 (.07) (.01) 1.10 (.93) (.11) (1.04) 2002(a) 14.33 .55 1.10 (.05) -- 1.60 (.47) -- (.47) INSURED TAX-FREE ADVANTAGE (NEA) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 14.54 .99 .21 (.07) -- 1.13 (.92) (.01) (.93) 2003(b) 14.33 .82 .42 (.05) -- 1.19 (.78) -- (.78) ==================================================================================================================================== Total Returns --------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ==================================================================================================== INSURED QUALITY (NQI) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 $ -- $15.85 $16.0000 4.37% 7.90% 2003 -- 15.72 16.3900 12.92 6.27 2002 -- 15.87 15.5500 10.82 6.83 2001 -- 15.78 14.9200 15.53 14.94 2000 -- 14.51 13.6875 10.94 10.86 INSURED OPPORTUNITY (NIO) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 16.06 16.0500 9.47 7.64 2003 -- 15.89 15.6400 10.22 7.51 2002 -- 15.83 15.2100 9.80 7.01 2001 -- 15.72 14.7400 19.84 13.61 2000 -- 14.64 13.0625 5.06 9.25 PREMIER INSURED INCOME (NIF) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 16.00 15.6400 7.55 8.62 2003 -- 15.69 15.5100 7.84 7.28 2002 -- 15.59 15.3300 6.84 6.57 2001 -- 15.55 15.2500 19.97 12.40 2000 -- 14.66 13.5000 9.92 9.41 INSURED PREMIUM INCOME 2 (NPX) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 14.45 14.1100 6.42 7.89 2003 -- 14.24 14.1200 8.84 6.70 2002 -- 14.17 13.7700 6.32 7.83 2001 -- 13.94 13.7500 29.46 12.85 2000 -- 13.05 11.2500 4.35 11.35 INSURED DIVIDEND ADVANTAGE (NVG) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 15.78 14.8900 7.61 9.19 2003 -- 15.41 14.8100 6.10 7.37 2002(a) (.11) 15.35 14.9600 2.84 10.44 INSURED TAX-FREE ADVANTAGE (NEA) ---------------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 .01 14.75 14.9100 7.41 8.07 2003(b) (.20) 14.54 14.7900 3.87 6.98 ==================================================================================================== Ratios/Supplemental Data ------------------------------------------------------------------------------------------------ Before Credit/Reimbursement After Credit/Reimbursement*** ----------------------------- -------------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ==================================================================================================================================== INSURED QUALITY (NQI) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 $ 605,028 1.19% 6.88% 1.19% 6.88% 8% 2003 598,102 1.20 6.93 1.20 6.94 14 2002 601,495 1.23 7.22 1.21 7.24 44 2001 596,999 1.24 7.72 1.23 7.74 34 2000 549,120 1.24 8.48 1.23 8.49 24 INSURED OPPORTUNITY (NIO) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 1,302,985 1.16 6.59 1.16 6.59 8 2003 1,288,087 1.17 6.67 1.16 6.68 21 2002 1,283,353 1.20 7.42 1.19 7.42 37 2001 1,274,659 1.21 7.69 1.20 7.70 39 2000 1,186,701 1.20 8.47 1.20 8.48 16 PREMIER INSURED INCOME (NIF) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 310,666 1.21 6.53 1.20 6.53 13 2003 303,912 1.22 6.66 1.21 6.68 25 2002 301,121 1.25 7.40 1.23 7.42 43 2001 299,654 1.26 7.79 1.24 7.81 34 2000 282,544 1.26 8.37 1.24 8.39 21 INSURED PREMIUM INCOME 2 (NPX) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 539,697 1.16 6.52 1.16 6.53 14 2003 530,975 1.17 6.68 1.16 6.69 31 2002 527,800 1.20 7.13 1.19 7.14 26 2001 519,296 1.22 7.39 1.20 7.41 27 2000 486,009 1.22 7.87 1.20 7.88 55 INSURED DIVIDEND ADVANTAGE (NVG) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 470,389 1.15 6.09 .70 6.54 11 2003 459,368 1.17 6.22 .72 6.67 25 2002(a) 457,432 1.10* 5.71* .61* 6.20* 22 INSURED TAX-FREE ADVANTAGE (NEA) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 273,112 1.20 6.24 .71 6.73 13 2003(b) 269,112 1.12* 5.52* .65* 6.00* 72 ==================================================================================================================================== Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ============================================================================== INSURED QUALITY (NQI) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 $318,000 $25,000 $72,565 2003 318,000 25,000 72,021 2002 318,000 25,000 72,287 2001 318,000 25,000 71,934 2000 318,000 25,000 68,170 INSURED OPPORTUNITY (NIO) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 680,000 25,000 72,904 2003 680,000 25,000 72,356 2002 680,000 25,000 72,182 2001 680,000 25,000 71,862 2000 680,000 25,000 68,629 PREMIER INSURED INCOME (NIF) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 161,000 25,000 73,240 2003 161,000 25,000 72,191 2002 161,000 25,000 71,758 2001 161,000 25,000 71,530 2000 161,000 25,000 68,873 INSURED PREMIUM INCOME 2 (NPX) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 268,900 25,000 75,176 2003 268,900 25,000 74,365 2002 268,900 25,000 74,070 2001 268,900 25,000 73,280 2000 268,900 25,000 70,185 INSURED DIVIDEND ADVANTAGE (NVG) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 233,000 25,000 75,471 2003 233,000 25,000 74,288 2002(a) 233,000 25,000 74,081 INSURED TAX-FREE ADVANTAGE (NEA) ------------------------------------------------------------------------------ Year Ended 10/31: 2004 144,000 25,000 72,415 2003(b) 144,000 25,000 71,721 ============================================================================== * Annualized. ** Total Investment Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common Share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) For the period March 25, 2002 (commencement of operations) through October 31, 2002. (b) For the period November 21, 2002 (commencement of operations) through October 31, 2003. See accompanying notes to financial statements. 72-73 SPREAD Board Members AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Funds is currently set at seven. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger (1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen Investments, 152 3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and 333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.; Chairman and Director (since 1997) of Nuveen Asset Management Inc.; Director (since 1996) of Institutional Capital Corporation; Chairman and Director (since 1999) of Rittenhouse Asset Management, Inc.; Chairman of Nuveen Investments Advisers Inc. (since 2002). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 152 8/22/40 333 W. Wacker Drive Chicago, IL 60606 ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 152 7/29/34 Trust Company; Director, Community Advisory Board for 333 W. Wacker Drive Highland Park and Highwood, United Way of the North Chicago, IL 60606 Shore (since 2002). ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 152 10/22/48 corporation (since 1996); Director and Vice Chairman, United 333 W. Wacker Drive Fire & Casualty Company; formerly Director, Federal Reserve Chicago, IL 60606 Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. ------------------------------------------------------------------------------------------------------------------------------------ William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 152 3/6/48 Business at the University of Connecticut (since 2003); 333 W. Wacker Drive previously Senior Vice President and Director of Research Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director, Credit Research Center at Georgetown University; Director of Xerox Corporation (since 2004). 74 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Board member 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 152 9/24/44 Group, Vice President, Miller-Valentine Realty, a construction 333 W. Wacker Drive company; Chair, Miami Valley Hospital; Chair, Dayton Chicago, IL 60606 Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 152 12/29/47 Foundation (since 1994); prior thereto, Executive Director, 333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994) Chicago, IL 60606 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 152 9/9/56 Administrative Associate General Counsel, formerly, Vice President and 333 W. Wacker Drive Officer Assistant General Counsel of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (since 2002), General Counsel and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Managing Director (since 2002), Assistant Secretary and Associate General Counsel, formerly, Vice President (since 2000), of Nuveen Asset Management Inc.; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments Inc.; Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since 2003); Chartered Financial Analyst. ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Vice President (since 2002), formerly, Assistant Vice President 152 9/22/63 (since 1999) of Nuveen Investments, LLC; Chartered 333 W. Wacker Drive Financial Analyst. Chicago, IL 60606 ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 152 2/3/66 and Assistant President (since 2000), previously, Associate of Nuveen 333 W. Wacker Drive Secretary Investments, LLC. Chicago, IL 60606 75 Board Members AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 152 11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice 333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp (since 1999); Vice President and Treasurer of Nuveen Asset Management Inc. (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC (since 2002); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. (since 2003); Chartered Financial Analyst. ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 152 9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998) 333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002) Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice President of 152 10/24/45 Nuveen Investments, LLC; Managing Director (since 2004) 333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp. ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 152 3/2/64 LLC; Managing Director (since 2001), formerly Vice President 333 W. Wacker Drive of Nuveen Advisory Corp. and Nuveen Institutional Advisory Chicago, IL 60606 Corp. (since 1995); Managing Director of Nuveen Asset Management Inc. (since 2001); Vice President of Nuveen Investment Advisers Inc. (since 2002); Chartered Financial Analyst. ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 152 5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and 333 W. Wacker Drive Funds Controller (1998-2003) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. 76 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance 152 4/13/56 and Chief (since August 2004) of Nuveen Investments, LLC, 333 W. Wacker Drive Compliance Nuveen Investments Advisers Inc., Nuveen Asset Chicago, IL 60606 Officer Management Inc., Nuveen Advisory Corp., Nuveen Institutional Advisory Corp. and Rittenhouse Asset Management, Inc.; formerly, Senior Attorney (1994-July 2004), The Northern Trust Company. ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 152 3/22/63 LLC, previously Assistant Vice President (since 1999); 333 W. Wacker Drive prior thereto, Associate of Nuveen Investments, LLC; Chicago, IL 60606 Certified Public Accountant. ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 152 8/27/61 President (since 1993) of Nuveen Investments, LLC. 333 W. Wacker Drive Chicago, IL 60606 ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 152 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen Investments, Inc. and (since 1997) Nuveen Asset Management Inc.; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002). ------------------------------------------------------------------------------------------------------------------------------------ Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, LLC; 152 7/7/65 Managing Director (since 1997), formerly Vice President 333 W. Wacker Drive (since 1996) of Nuveen Advisory Corp. and Nuveen Institutional Chicago, IL 60606 Advisory Corp.; Managing Director of Nuveen Asset Management Inc. (since 1999). Chartered Financial Analyst. (1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and board member of the Adviser. (2) Board members serve an indefinite term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 77 Reinvest Automatically EASILY AND CONVENIENTLY Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit,nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on the dividends or distributions awaiting reinvestment. Because the market price may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 78 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments and (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2004, are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's web site at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. GLOSSARY OF TERMS USED IN THIS REPORT AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. LEVERAGE-ADJUSTED DURATION: Duration is a measure of the sensitivity of a bond or bond fund's value to changes when interest rates change. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is longer than the duration of the Fund's portfolio of bonds. MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. BOARD OF DIRECTORS/TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL Each Fund intends to repurchase shares of its own common or preferred stock, where applicable, in the future at such times and in such amounts as is deemed advisable. No shares were purchased during the period ended October 31, 2004. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 79 Nuveen Investments: SERVING Investors For GENERATIONS Photo of: 2 women looking at a photo album. Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing $100 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in tax-free investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. To learn more about the products and services Nuveen Investments offers and for a prospectus, where applicable, talk to your financial advisor, or call us at (800) 257-8787. Please read the information carefully before you invest. o Share prices Learn more o Fund details about Nuveen Funds at o Daily financial news WWW.NUVEEN.COM/ETF o Investor education o Interactive planning tools Logo: NUVEEN Investments EAN-D-1004D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The registrant has posted such code of ethics on its website at www.nuveen.com/etf. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans has served as the registrant's audit committee financial expert from July 26, 2004 to the end of the reporting period on October 31, 2004. Prior to July 26, 2004, William E. Bennett, who was "independent" for purposes of Item 3 of Form N-CSR, served as the audit committee financial expert. Although Mr. Bennett served as the audit committee financial expert during the reporting period, he unexpectedly resigned from the Board effective April 30, 2004. Accordingly for this reporting period, the registrant did not have a designated "audit committee financial expert" from May 1, 2004 to July 26, 2004. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidiary, The First National Bank of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy as to accrual of assets/loans; designated performing/non-performing assets; set the level of reserves against the credit portfolio; and determined the carrying value of credit related assets and exposure. Among other things, Mr. Bennett was also responsible for the oversight of the internal analysis function including setting ground rules for the review and preparation of financial analysis and financial statements for use in making credit and risk decisions for clients. Mr. Bennett has significant experience reviewing, analyzing and evaluating financial statements of domestic and international companies in a variety of industries with complex accounting issues. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. NUVEEN INSURED MUNICIPAL OPPORTUNITY FUND, INC. The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP entered into on or after May 6, 2003, the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 49,233 $ 0 $ 364 $ 2,550 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2003 $ 42,082 $ 0 $ 739 $ 2,350 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ The above "Tax Fees" were billed for professional services for tax advice, tax compliance and tax planning. SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Advisory Corp. ("NAC" or the "Adviser"), and any entity controlling, controlled by or under common control with NAC ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The table also shows the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed. FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2003 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A N/A N/A pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. For engagements entered into on or after May 6, 2003, the Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP independence. FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 2,914 $ 0 $ 0 $ 2,914 October 31, 2003 $ 3,089 $ 0 $ 0 $ 3,089 Audit Committee Pre-Approval Policies and Procedures. Generally, the audit committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the audit committee if they are expected to be for amounts greater than $10,000; (ii) reported to the audit committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the audit committee at the next audit committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans and William J. Schneider. ITEM 6. SCHEDULE OF INVESTMENTS. See Schedule I in Item 1. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. In the rare event that a municipal issuer held by the Fund were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, the Adviser would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the Fund's Board of Directors or Trustees or its representative. In the case of a conflict of interest, the proxy would be submitted to the applicable Fund's Board to determine how the proxy should be voted. A member of the Adviser's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17 CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the results were provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable at this time. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. In the event of a vacancy on the Board, the nominating and governance committee receives suggestions from various sources, including shareholders, as to suitable candidates. Suggestions should be sent in writing to Lorna Ferguson, Vice President for Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, IL 60606. The nominating and governance committee sets appropriate standards and requirements for nominations for new directors or trustees and reserves the right to interview all candidates and to make the final selection of any new directors or trustees. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because posted on registrant's website at www.nuveen.com/etf. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Insured Municipal Opportunity Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 6, 2005 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (Principal Executive Officer) Date: January 6, 2005 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date: January 6, 2005 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.