-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QM86I1S958mj6rYND25j6ZX2DYq2m+bh3KM49+IGh8zapDmbcHDFS1EqQFuhyLpS kgSD/k12UI7VxUx3fr33pw== 0000891804-96-000219.txt : 19960801 0000891804-96-000219.hdr.sgml : 19960801 ACCESSION NUMBER: 0000891804-96-000219 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN SELECT MATURITIES MUNICIPAL FUND CENTRAL INDEX KEY: 0000890119 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07056 FILM NUMBER: 96601674 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129177200 FORMER COMPANY: FORMER CONFORMED NAME: NUVEEN INTERMEDIATE OPPORTUNITY MUNICIPAL FUND DATE OF NAME CHANGE: 19600201 N-30D 1 NUVEEN SELECT MATURITIES MUNICIPAL FUND (NIM) Nuveen Exchange-Traded Funds Providing tax-free income to help you live your dreams NUVEEN SELECT MATURITIES MUNICIPAL FUND (NIM) ANNUAL REPORT/MAY 31, 1996 Photographic image of couple walking on beach. CONTENTS 3 Dear shareholder 5 Answering your questions 8 Fund performance 9 Commonly used terms 11 Portfolio of investments 17 Statement of net assets 18 Statement of operations 19 Statement of changes in net assets 20 Notes to financial statements 28 Financial highlights 30 Report to independent auditors Dear shareholder Photographic image of head shot of Chairman and Chief Executive Officer of Nuveen. "Municipal bonds continue to play an important role in meeting the investment goals of conservative investors." As I begin my duties as the new chairman and chief executive officer of John Nuveen & Co. Incorporated and chairman of the board of the Nuveen exchange-traded funds, I am pleased to report to you on the performance of your fund. My experience with Nuveen over 19 years has reinforced my commitment to maintaining Nuveen's successful tradition of value investing and prudent management, helping our shareholders meet their need for tax-free investment income with a full range of investment choices. Our focus will continue to be on building shareholder value, providing research-oriented management, and delivering dependable performance. With this focus, we anticipate many more years of progress and accomplishment for fund shareholders and our firm. Municipal bonds continue to play an important role in meeting the investment goals of conservative investors. The performance of the Nuveen Select Maturities Municipal Fund demonstrates how quality investments can provide attractive tax-free income while delivering the relative stability of an intermediate-term investment. As of May 31, 1996, the current annualized yield on share price was 5.82%. To match this yield, investors in the 36% federal income tax bracket would have had to earn 9.09% on taxable alterna tives. Without question, taxable yields at this level on investments of comparable quality can be difficult to achieve in today's markets. With the strength of the bond market last year, the fund also continued to produce attractive returns. The change in net asset value, including the reinvestment of all dividends and capital gains, for the Nuveen Select Maturities Municipal Fund was 4.76%, equivalent to taxable investments with total returns of 7.95%. The years ahead present opportunities as well as challenges for all of us. I want to thank you for your continued confidence in Nuveen exchange-traded funds, and I look forward to sharing reports of continued progress with you. Sincerely, Timothy R. Schwertfeger Chairman of the Board July 15, 1996 Answering your questions Tom Spalding, head of Nuveen's portfolio management team, discusses investment performance and recent factors affecting the municipal market. What are the best measures of fund performance? Fund performance can be gauged in many ways, with each method providing certain insights. Among these various measures of performance, total return is generally recognized as one of the more compre hensive. We use the term "total return" to refer to a share's appreciation plus reinvested dividend income and capital gains distributions, if applicable. In 1994, total returns for municipal bond funds--and the entire bond market--declined, in one of the most difficult period for bonds in decades. This was immediately followed by 1995's exceptional market recovery, which resulted in a rebound in total returns. During the first part of 1996, municipal bond funds have continued to provide solid total returns, although at a slightly lower level than during 1995's bull market. The events of these past few years illustrate the importance of considering risk, or variability of returns, when comparing total returns. Over this time period, Nuveen's prudent approach to management has protected investors from wide swings in performance by maintaining a higher level of value than peer group funds during 1994's bear market and participating only slightly less in 1995's recovery. Another important measure of fund performance involves assessing whether a fund has met its stated investment goals. At Nuveen, we continue to empha size our fund's goals of providing dependable tax-free dividends and adhering to a value investing approach. In this regard, the steadiness of dividends over the long term is a good practical measure of success. Photographic image of Tom Spalding, Portfolio Manager at Nuveen. Tom Spalding, head of Nuveen's portfolio management team, answers investors' questions on develop ments in the municipal market. What has been Nuveen's investment approach during this period? Because we believe that a value approach offers investors greater price stability in uncertain markets, Nuveen continues to pursue value investing as the optimal way to meet our investors' objectives. We define value investing as a disciplined approach to security selection and portfolio construction designed to deliver above-market performance by identifying individual bonds with current yields, prices, credit quality, and future prospects that are exceptionally attractive in relation to other bonds in the market. This approach was rewarded over the past year, as many of our portfolio holdings were upgraded by the national rating agencies, indicating that our Research Department's judgments about credit quality were on target. As opportunity allowed, we moved to protect current income by investing a larger percentage of our portfolios in non-callable bonds. Because these bonds cannot be redeemed before maturity, their yield is assured for the long term even if interest rates decline. As another measure of income protec tion, we also purchased an increased number of bonds at discounts from their par value. These bonds, which are yielding slightly below market levels due to their current coupon, are less likely to be called from our portfolios, assuring more stable yields for our investors. NUVEEN SELECT MATURITIES MUNICIPAL FUND NIM Shareholders enjoyed 12 months of steady dividends, in accordance with the Fund's goal of providing attractive, dependable tax-free income. Shareholders also received a capital gains distribution in December. 12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains 6/94 $0.0540 7/94 $0.0540 8/94 $0.0540 9/94 $0.0540 10/94 $0.0540 11/94 $0.0540 12/94 $0.0540 $0.0433 1/95 $0.0540 3/95 $0.0540 3/95 $0.0540 5/94 $0.0540 6/95 $0.0540 FUND HIGHLIGHTS 5/31/96 Yield 5.82% Taxable-equivalent yield 9.09% Annual total return on NAV 4.76% Taxable-equivalent total return 7.95% Share price $11.125 NAV $11.59 The price, net asset value and dividend history used in this chart constitute past performance and do not necessarily predict the future price, net asset value or dividends of the Fund or of any other Nuveen Fund.
Commonly used terms Yield An exchange-traded fund's annualized monthly dividend on a given date (in the case of this report, May 31, 1996) divided by its closing price per share on that date. Taxable equivalent yield The return an investor subject to a given federal income tax rate would need to obtain from a fully taxable investment to equal the fund's stated annualized yield on share price. In this report, this tax rate is assumed to be 36% for shareholders, based on incomes of $121,300-$263,750 for investors filing singly, $147,700-$263,750 for those filing jointly. Net Asset Value (NAV) The market value of all securities and other assets held by an exchange-traded fund, minus any liabilities. The NAV per share is the fund's net assets, divided by its total number of shares outstanding. Total return on NAV The percentage change in a fund's NAV per common share for a given period, assuming reinvestment of all dividends and capital gains distributions, if any. Taxable equivalent total return The total return an investor subject to a given income tax rate would need to obtain from a fully taxable investment to equal the fund's stated total return on NAV. The Fund intends to repurchase shares of its own common stock in the future at such times and in such amounts as are deemed advisable. No shares were repurchased during the 12 months ended May 31, 1996. Any future repurchases will be reported to shareholders in the next annual or semiannual report. PORTFOLIO OF INVESTMENTS
PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE ARIZONA - 1.8% $ 2,470,000 Arizona Educational Loan Marketing Corporation, Educational Loan Revenue Bonds, 6.375%, 9/01/05 (Alternative Minimum Tax) 9/02 at 101 Aa $ 2,546,175 - --------------------------------------------------------------------------------------------------------------------------------- ARKANSAS - 1.1% 1,500,000 Arkansas Student Loan Authority, 6.750%, 6/01/06 (Alternative Minimum Tax) 6/01 at 102 A 1,584,120 - --------------------------------------------------------------------------------------------------------------------------------- COLORADO - 6.6% 5,500,000 City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1991A, 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Baa 6,571,180 1,611,133 El Paso County, Colorado, Single Family Mortgage Revenue Taxable Refunding Bonds, Series 1992A Class A-2, 8.750%, 6/01/11 No Opt. Call Aaa 1,722,832 1,000,000 Summit County, Colorado, Sports Facilities Refunding Revenue Bonds (Keystone Resorts Management, Inc. Project), Series 1990, 7.750%, 9/01/06 No Opt. Call A- 1,164,980 - --------------------------------------------------------------------------------------------------------------------------------- DISTRICT OF COLUMBIA - 3.9% 5,400,000 District of Columbia (Washington, D.C.), General Obligation Refunding Bonds, Series 1993A, 6.000%, 6/01/07 No Opt. Call Aaa 5,557,734 - --------------------------------------------------------------------------------------------------------------------------------- FLORIDA - 4.3% 2,000,000 State of Florida, Faith and Credit, State Board of Education, Public Education Capital Outlay Bonds, Series 1986-C, 7.100%, 6/01/07 No Opt. Call Aaa 2,107,740 3,500,000 Hillsborough County Industrial Development Authority, Pollution Control Revenue Refunding Bonds (Tampa Electric Company Project), Series 1992, 8.000%, 5/01/22 5/02 at 103 Aa2 4,098,010 - --------------------------------------------------------------------------------------------------------------------------------- GEORGIA - 8.8% 2,540,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds, 1992B Series, 7.500%, 1/01/07 No Opt. Call Aaa 2,941,091 1,800,000 State of Georgia, General Obligation Bonds, 1994-D, 6.700%, 8/01/09 No Opt. Call Aaa 2,021,022 945,000 Urban Residential Finance Authority of the City of Atlanta, Revenue Bonds (Landrum Arms Project), Series 1994, 6.750%, 7/01/04 No Opt. Call N/R 976,374 5,755,000 Development Authority of Burke County, Georgia, Pollution Control Revenue Bonds (Oglethorpe Power Corporation Vogtle Project) Series 1992, 8.000%, 1/01/15 1/03 at 103 Aaa 6,732,832 PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE ILLINOIS - 11.6% $ 2,615,000 Illinois Housing Development Authority, Section 8 Elderly Housing Revenue Bonds (Skyline Tower Apartments), Series 1992B, 6.625%, 11/01/07 11/02 at 102 A $ 2,721,614 4,700,000 The Illinois Development Finance Authority, Child Care Facility Revenue Bonds (The Illinois Facilities Fund Project), Series 1992, 7.400%, 9/01/04 9/02 at 102 N/R 4,848,191 1,300,000 General Obligation Lease Certificates, 1992 Series A (Board of Education of the City of Chicago), Illinois, 6.125%, 1/01/07 No Opt. Call Aaa 1,372,475 2,765,000 Chicago Metropolitan Housing Development Corporation (Chicago, Illinois), Housing Development Revenue Refunding Bonds, (FHA- Insured Mortgage Loan-Section 8 Assisted Project), Series 1993B, 5.700%, 1/01/13 7/03 at 100 Aaa 2,698,281 3,000,000 City of Chicago, Illinois, Tax Increment Allocation Revenue and Refunding Bonds (Stockyards Industrial - Commercial Redevelopment Project), Series 1994A, 9.250%, 1/01/12 No Opt. Call N/R 3,289,590 745,000 City of Danville, Vermilion County, Illinois, Single Family Mortgage Revenue Refunding Bonds, Series 1993, 7.300%, 11/01/10 11/03 at 102 A1 777,475 925,000 City of Rock Island, Illinois, Residential Mortgage Revenue Refunding Bonds, Series 1992, 7.700%, 9/01/08 9/02 at 102 Aa 985,042 - --------------------------------------------------------------------------------------------------------------------------------- INDIANA - 5.6% The Indianapolis Local Public Improvement Bond Bank, Series 1992 D Bonds: 1,000,000 6.400%, 2/01/05 No Opt. Call A+ 1,066,970 1,000,000 6.600%, 2/01/07 No Opt. Call A+ 1,076,070 2,100,000 The Indianapolis Local Public Improvement Bond Bank, Transportation Revenue Bonds, Series 1992, 6.000%, 7/01/10 7/03 at 102 Aa 2,153,802 1,540,000 The Trustees of Indiana University, Indiana University Facility Revenue Bonds, Series 1994A, 6.000%, 11/15/06 No Opt. Call Aaa 1,622,482 2,000,000 Hospital Authority of Elkhart County, Indiana, Hospital Revenue Bonds, Series 1992 (Elkhart General Hospital, Inc.), 7.000%, 7/01/08 7/02 at 102 A1 2,137,440 - --------------------------------------------------------------------------------------------------------------------------------- LOUISIANA - 1.5% 2,000,000 Louisiana Public Facilities Authority, Student Loan Revenue Bonds, 6.750%, 9/01/06 (Alternative Minimum Tax) 9/02 at 102 Aaa 2,102,220 PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE MAINE - 1.1% $ 1,500,000 Maine Educational Loan Marketing Corporation, Student Loan Revenue Refunding Bonds, Series 1992, Student Loan Revenue Refunding Bonds, Subordinate Series 1992A-2, 6.600%, 5/01/05 (Alternative Minimum Tax) 5/02 at 101 A $ 1,558,155 - --------------------------------------------------------------------------------------------------------------------------------- MARYLAND - 1.5% 2,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds (Woodside Apartments Project), Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax) (Mandatory put 12/01/03) No Opt. Call BBB+ 2,089,700 - --------------------------------------------------------------------------------------------------------------------------------- MASSACHUSETTS - 1.2% 1,760,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, 1994 Series B, 4.700%, 7/01/06 No Opt. Call Aaa 1,664,168 - --------------------------------------------------------------------------------------------------------------------------------- MICHIGAN - 2.8% 3,800,000 Greater Detroit Resource Recovery Authority, Michigan, Resource Revenue Refunding Bonds, Series 1996-A, 6.250%, 12/13/07 No Opt. Call Aaa 4,020,932 - --------------------------------------------------------------------------------------------------------------------------------- NEBRASKA - 4.2% Nebraska Public Gas Agency, Gas Supply System Revenue Bonds, 1995 Series A: 1,000,000 5.250%, 4/01/02 No Opt. Call Baa1 984,170 1,250,000 5.300%, 4/01/03 No Opt. Call Baa1 1,222,750 1,000,000 5.400%, 4/01/04 No Opt. Call Baa1 975,260 2,400,000 Airport Authority of the City of Omaha (Nebraska), Airport Facilities Revenue Refund Bonds, Series 1991, 8.375%, 1/01/14 1/02 at 102 A 2,780,112 - --------------------------------------------------------------------------------------------------------------------------------- NEW JERSEY - 0.7% 1,000,000 The Essex County Utilities Authority (Essex County, New Jersey), Solid Waste System Revenue Bonds, Series 1996A, 5.500%, 4/01/02 No Opt. Call Aaa 1,030,310 - --------------------------------------------------------------------------------------------------------------------------------- NEW YORK - 10.7% 2,000,000 New York State Medical Care, Facilities Finance Agency, FHA-Insured Mortgage Project Revenue Bonds, 1995 Series D, 6.100%, 8/15/15 2/06 at 102 AA+ 2,000,600 4,000,000 The City of New York, General Obligation Bonds, Fiscal 1991 Series D, 9.500%, 8/01/02 8/01 at 101 1/2 Baa1 4,710,440 2,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series B, 6.750%, 8/15/03 No Opt. Call Baa1 2,121,240 PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE NEW YORK (CONTINUED) $ 4,000,000 New York City Housing Development Corporation, Multi-Family Housing Revenue Bonds, 1993 Series A, 5.700%, 11/01/13 5/03 at 102 Aa $ 3,934,760 2,130,000 City of Niagara Falls, Niagara County, New York, Water Treatment Plant (Serial) Bonds, 1994, 8.500%, 11/01/07 (Alternative Minimum Tax) No Opt. Call Aaa 2,669,401 - --------------------------------------------------------------------------------------------------------------------------------- NORTH CAROLINA - 1.9% 3,000,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds, Series 1993, 4.100%, 1/01/05 No Opt. Call Aaa 2,714,610 - --------------------------------------------------------------------------------------------------------------------------------- OHIO - 5.4% 2,000,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, Hospital Facilities Revenue Bonds, Series 1992, (Summa Health System Project), 6.250%, 11/15/07 11/02 at 102 A 2,040,000 4,500,000 County of Hamilton, Ohio, Hospital Facilities Revenue, Refunding Bonds, Series 1992A (Bethesda Hospital, Inc.), 6.250%, 1/01/06 No Opt. Call A1 4,618,710 1,000,000 Oxford Water Supply System Mortgage Revenue, 6.000%, 12/01/14 12/02 at 102 Aaa 1,017,630 - --------------------------------------------------------------------------------------------------------------------------------- PENNSYLVANIA - 1.6% 1,930,000 Pennsylvania Higher Educational Facilities Authority, 7.625%, 7/01/15 No Opt. Call Aaa 2,261,478 - --------------------------------------------------------------------------------------------------------------------------------- RHODE ISLAND - 2.1% 3,000,000 Rhode Island Housing and Mortgage Finance Corporation, Homeownership Opportunity Bonds, Series 7, 6.500%, 4/01/25, (Alternative Minimum Tax) 4/02 at 102 AA+ 3,055,620 - --------------------------------------------------------------------------------------------------------------------------------- SOUTH DAKOTA - 2.6% 3,595,000 South Dakota Student Loan Assistance Corporation, 7.400%, 8/01/99 (Alternative Minimum Tax) No Opt. Call A 3,770,436 - --------------------------------------------------------------------------------------------------------------------------------- TENNESSEE - 0.7% 1,000,000 Tennessee Housing Development Agency, Homeownership Program Bonds, Issue WR, Series 1992, 6.400%, 7/01/06 7/02 at 102 Aa 1,026,550 - --------------------------------------------------------------------------------------------------------------------------------- TEXAS - 3.9% 625,000 Austin-Travis County Mental Health Centers, 6.500%, 3/01/15 3/05 at 102 Aaa 652,938 PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE TEXAS (CONTINUED) $ 1,290,000 City of Galveston Property Finance Authority, Inc., Single Family Mortgage Revenue Bonds, Series 1991A, 8.500%, 9/01/11 9/01 at 103 A $ 1,400,656 1,185,000 Texas Community MHMR Centers Revenue Bonds (Mental Health and Mental Retardation Center Facilities Acquisition Program), Series 1995 A-E, 6.500%, 3/01/15 3/05 at 102 Aaa 1,238,799 1,400,000 Travis County Health Facilities Development Corporation (Daughters of Charity Health System), 5.900%, 11/15/07 11/03 at 102 Aa 1,426,236 855,000 Tri-County Mental Health and Retardation Center, 6.500%, 3/01/15 3/05 at 102 Aaa 897,399 - --------------------------------------------------------------------------------------------------------------------------------- VIRGINIA - 1.5% 2,000,000 Hampton Redevelopment and Housing Authority Multifamily Housing Revenue Refunding Bonds, Series 1994 (Chase Hampton II Apartments), 7.000%, 7/01/24 (Mandatory put 7/01/04) 7/02 at 104 Baa3 2,129,120 - --------------------------------------------------------------------------------------------------------------------------------- WASHINGTON - 10.3% Washington Health Care Facilities Authority, Revenue Bonds, Series 1996 (Yakima Valley Memorial Hospital Association, Yakima): 1,880,000 6.000%, 12/01/09 No Opt. Call AAA 1,921,942 1,500,000 6.000%, 12/01/10 No Opt. Call AAA 1,524,735 Washington Public Power Supply System, Nuclear Project No. 1 Refunding Revenue Bonds Series 1993A: 2,500,000 7.000%, 7/01/07 No Opt. Call Aa 2,712,750 3,000,000 7.000%, 7/01/08 No Opt. Call Aa 3,290,250 7,000,000 Washington Public Power Supply System, Nuclear Project No. 3 Refunding Revenue Bonds, Series 1990B, 0.000%, 7/01/06 No Opt. Call Aa 3,909,920 1,255,000 Public Utility District No. 1, of Douglas County, Washington, Wells Hydroelectric Revenue Bonds, Series of 1990, 7.700%, 9/01/08 (Alternative Minimum Tax) 9/00 at 102 A+ 1,379,910 - --------------------------------------------------------------------------------------------------------------------------------- $134,066,133 Total Investments - (cost $135,102,331) - 97.4% 139,627,429 ============ PRINCIPAL OPT. CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 1.2% $ 1,000,000 Clark County, Nevada, Industrial Development Revenue Bonds, (Nevada Cogeneration Associates I Project), Series 1990, Variable Rate Demand Bonds, 3.800%, 11/01/20+ (Alternative Minimum Tax) VMIG-1 $ 1,000,000 700,000 County of Daviess, Kentucky, Solid Waste Disposal Facilities Revenue Bonds (Scott Paper Company Project), Variable Rate Demand Bonds, 3.850%, 12/01/23+ (Alternative Minimum Tax) A-1+ 700,000 $ 1,700,000 Total Temporary Investments - 1.2% 1,700,000 =========== Other Assets Less Liabilities - 1.4% 2,036,306 Net Assets - 100% $143,363,735 ============ NUMBER MARKET MARKET STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT SUMMARY OF AAA Aaa 22 $ 50,493,051 36% RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 12 31,139,715 22 PORTFOLIO OF A+ A1 6 11,056,575 8 INVESTMENTS A, A- A, A2, A3 8 17,020,073 12 (INCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 8 20,803,860 15 TEMPORARY Non-rated Non-rated 3 9,114,155 7 INVESTMENTS): TOTAL 59 $139,627,429 100% * Optional Call Provisions (not covered by the report of independent auditors): 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 auditors): Using the higher of Standard & Poor's or Moody's rating. N/R - Investment is not rated. + The 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.
STATEMENT OF NET ASSETS ASSETS Investments in municipal securities, at market value (note 1) $139,627,429 Temporary investments in short-term municipal securities, at amortized cost (note 1) 1,700,000 Cash 189,275 Receivables: Interest 2,588,436 Investments sold 20,385 Other assets 47,919 ------------ Total assets 144,173,444 ------------ LIABILITIES Accrued expenses: Management fees (note 6) 60,600 Other 81,095 Dividends payable 668,014 ------------ Total liabilities 809,709 ------------ Net assets (note 7) $143,363,735 ============ Shares outstanding 12,370,635 ============ Net asset value per share outstanding (net assets divided by shares outstanding) $ 11.59 ============ See accompanying notes to financial statements.
STATEMENT OF OPERATIONS Year ended May 31, 1996 INVESTMENT INCOME Tax-exempt interest income (note 1) $ 8,853,072 ----------- Expenses: Management fees (note 6) 725,139 Shareholders' servicing agent fees and expenses 24,910 Custodian's fees and expenses 45,637 Trustees' fees and expenses (note 6) 2,466 Professional fees 16,346 Shareholders' reports--printing and mailing expenses 60,338 Stock exchange listing fees 23,347 Investor relations expense 9,629 Other expenses 6,467 ----------- Total expenses 914,279 ----------- Net investment income 7,938,793 ----------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain from investment transactions, net of taxes (notes 1 and 3) 922,639 Net change in unrealized appreciation (depreciation) of investments (2,000,905) ----------- Net gain (loss) from investments (1,078,266) ----------- Net increase in net assets from operations $ 6,860,527 =========== See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS Year ended Year ended 5/31/96 5/31/95 OPERATIONS Net investment income $ 7,938,793 $ 7,862,011 Net realized gain from investment transactions, net of taxes, if applicable 922,639 204,387 Net change in unrealized appreciation (depreciation) of investments (2,000,905) 4,606,003 ------------- ------------- Net increase in net assets from operations 6,860,527 12,672,401 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS (note 1) From undistributed net investment income (8,031,140) (8,012,616) From accumulated net realized gains from investment transactions (517,776) (198,988) In excess of accumulated net realized gains from investment transactions -- (75,518) ------------- ------------- Decrease in net assets from distributions to shareholders (8,548,916) (8,287,122) ------------- ------------- CAPITAL SHARE TRANSACTIONS (note 2) Net proceeds from shares issued to shareholders due to reinvestment of distributions 65,320 -- ------------- ------------- Net increase in net assets derived from capital share transactions 65,320 -- ------------- ------------- Net increase (decrease) in net assets (1,623,069) 4,385,279 Net assets at beginning of year 144,986,804 140,601,525 ------------- ------------- Net assets at end of year $ 143,363,735 $ 144,986,804 ============= ============= Balance of undistributed net investment income at end of year $ 348,240 $ 440,587 ============= ============= See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES At May 31, 1996, the Fund covered in this report and its corresponding New York Stock Exchange symbol is Nuveen Select Maturities Municipal Fund (NIM). The Fund has invested in a diversified, investment-grade quality portfolio of municipal obligations with intermediate characteristics having an initial average effective maturity of approximately ten years. In assembling and managing its portfolio, the Fund has purchased municipal obligations having remaining effective maturities of no more than fifteen years, that in the opinion of the Fund's investment adviser, represent the best value in terms of the balance between yield and capital preservation currently available from the intermediate sector of the municipal market. The Fund's investment adviser, Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, will actively monitor the effective maturities of the Fund's investments in response to prevailing market conditions, and will adjust its portfolio consistent with its investment policy of maintaining an average effective remaining maturity for the Fund's portfolio of between eight and twelve years. The Fund is registered under the Investment Company Act of 1940 as a closed-end, diversified management investment company. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements in accordance with generally accepted accounting principles. Securities Valuation Portfolio securities for which market quotations are readily available are valued at the mean between the quoted bid and asked prices or the yield equivalent. Portfolio securities for which market quotations are not readily available are valued at fair value by consistent application of methods determined in good faith by the Board of Trustees. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are traded and valued at amortized cost. 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 be settled a month or more after the transaction date. The securities so purchased are subject to market fluctuation during this period. The Fund has instructed the custodian to segregate assets in a separate account with a current value at least equal to its purchase commitments. At May 31, 1996, there were no such purchase commitments in the Fund. Interest Income Interest income is determined on the basis of interest accrued, adjusted for amortization of premiums and accretion of discounts on long-term debt securities when required for federal income tax purposes. Federal Income Taxes The Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies by distributing to shareholders all of its tax-exempt net investment income, in addition to any significant amounts of net realized capital gains from investments and/or market discount realized upon the sale of securities. The Fund currently considers significant net realized capital gains and/or market discount as amounts in excess of $.001 per share. Furthermore, the Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, to retain such tax-exempt status when distributed to shareholders of the Fund. All income dividends paid during the year ended May 31, 1996, have been designated Exempt Interest Dividends which are entirely exempt from federal income taxes. Dividends and Distributions to Shareholders Net investment income is declared as a dividend monthly and payment is made or reinvestment is credited to shareholder accounts after month-end. Net realized capital gains from securities transactions are distributed to shareholders not less frequently than annually only to the extent they exceed available capital loss carryovers. Distributions to shareholders of net investment income and net realized capital gains are recorded on the ex-dividend date. The amount and timing of such distributions are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. Accordingly, temporary over-distributions as a result of these differences may result and will be classified as either distributions in excess of net investment income or distributions in excess of net realized gains, if applicable. Derivative Financial Instruments In October 1994, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 119 Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments which prescribes disclosure requirements for transactions in certain derivative financial instruments including futures, forward, swap, and option contracts, and other financial instruments with similar characteristics. Although the Fund is authorized to invest in such financial instruments, and may do so in the future, the Fund did not make any such investments during the year ended May 31, 1996. Use of Estimates The preparation of financial statements in conformity with 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 from operations during the reporting period. 2. FUND SHARES The Fund issued 5,489 shares due to reinvestment of distribution during the year ended May 31, 1996. There were no share transactions during the year ended May 31, 1995. 3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in municipal securities and temporary municipal investments during the year ended May 31, 1996, were as follows:
PURCHASES Investments in municipal securities $36,217,514 Temporary municipal investments 13,800,000 SALES AND MATURITIES Investments in municipal securities 37,501,986 Temporary municipal investments 12,800,000 ========== At May 31, 1996, the identified cost of investments owned for federal income tax purposes was the same as the cost for financial reporting purposes.
4. DISTRIBUTIONS TO SHAREHOLDERS On June 3, 1996, the Fund declared a dividend distribution of $.0540 per share from its ordinary income which was paid July 1, 1996, to shareholders of record on June 15, 1996. 5. UNREALIZED APPRECIATION (DEPRECIATION) Gross unrealized appreciation and gross unrealized depreciation of investments at May 31, 1996, were as follows:
Gross unrealized: Appreciation $ 4,982,572 Depreciation (457,474) ----------- Net unrealized appreciation $ 4,525,098 =========== 6. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the Fund's investment management agreement with the Adviser, the Fund pays to the Adviser an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net asset value of the Fund: AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE For the first $125,000,000 .5 of 1% For the next $125,000,000 .4875 of 1 For the next $250,000,000 .475 of 1 For the next $500,000,000 .4625 of 1 For the next $1,000,000,000 .45 of 1 For net assets over $2,000,000,000 .4375 of 1 The fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Fund pays no compensation directly to those Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Fund from the Adviser.
7. COMPOSITION OF NET ASSETS At May 31, 1996, net assets consisted of:
Common shares, $.01 par value per share $ 123,706 Paid-in surplus 138,037,346 Balance of undistributed net investment income 348,240 Accumulated net realized gain from investment transactions 329,345 Net unrealized appreciation of investments 4,525,098 ------------ Net assets $143,363,735 ============ Authorized shares: Common Unlimited ============
8. INVESTMENT COMPOSITION The Fund invests in municipal securities which include general obligation, escrowed and revenue bonds. At May 31, 1996, the revenue sources by municipal purpose for these investments, expressed as a percent of total investments, were as follows:
Revenue Bonds: Housing Facilities 17% Electric Utilities 16 Health Care Facilities 13 Pollution Control Facilities 9 Educational Facilities 8 Transportation 8 Lease Rental Facilities 4 Water/Sewer Facilities 1 Other 8 General Obligation Bonds 13 Escrowed Bonds 3 --- 100% === In addition, 32% of the long-term and intermediate-term investments owned by the Fund are either backed by insurance issued by several private insurers or are backed by an escrow or trust containing U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest in the event of default. Such insurance or escrow, however, does not guarantee the market value of the municipal securities or the value of the Fund's shares. All of the temporary investments in short-term municipal securities have credit enhancements (letters of credit, guarantees or insurance) issued by third party domestic or foreign banks or other institutions. For additional information regarding each investment security, refer to the Portfolio of Investments of the Fund.
FINANCIAL HIGHLIGHTS SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
Operating performance Net realized & Net asset unrealized Dividends value Net gain (loss) from net Distributions beginning investment from investment from net of period income investments++ income realized gains Year Ended 5/31, 1996 $11.730 $.641 $(.090) $(.648) $(.043) 1995 11.370 .643 .387 (.648) (.022)** 1994 11.710 .616 (.275) (.646) (.035) 9/18/92 to 5/31/93 11.300 .392 .455 (.322) -- Total Per share investment Total Organization Net asset market return return on and value end value end on market net asset offering costsof period of period value+ value+ Year Ended 5/31, 1996 $ -- $11.590 $11.125 6.14% 4.76% 1995 -- 11.730 11.125 7.67 9.51 1994 -- 11.370 11.000 (1.90) 2.86 9/18/92 to 5/31/93 (.115) 11.710 11.875 1.74 6.54 Ratios/Supplemental data Ratio of net Net assets Ratio of investment end of expenses income Portfolio period (in to average to average turnover thousands) net assets net assets rate Year Ended 5/31, 1996 $143,364 .63% 5.45% 25% 1995 144,987 .65 5.64 38 1994 140,602 .72 5.26 11 9/18/92 to 5/31/93 91,599 .75* 5.11* 25 * Annualized. ** The amount shown reflects a distribution in excess of net realized gains from investment transactions of $.006 per share. + Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in stock price per share. Total Return on Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in net asset value per share. ++ Net of taxes, if applicable.
REPORT OF INDEPENDENT AUDITORS The Boards of Trustees and Shareholders Nuveen Select Maturities Municipal Fund We have audited the accompanying statement of net assets, including the portfolio of investments, of Nuveen Select Maturities Municipal Fund as of May 31, 1996, and the related statements of operations, changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the respon sibility of the Fund's 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 generally accepted auditing standards. 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. Our procedures included confirmation of investments owned as of May 31, 1996, by correspondence with the custodian. 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 position of Nuveen Select Maturities Municipal Fund at May 31, 1996, and the results of its operations, changes in its net assets and financial highlights for the periods indicated therein in conformity with generally accepted accounting principles. Ernst & Young LLP Chicago, Illinois July 12, 1996 Your investment partners Photographic image of John Nuveen, Sr., founder of Nuveen. For nearly 100 years, Nuveen has earned its reputation as a tax-free income specialist by focusing on municipal bonds. Since 1898, John Nuveen & Co. Incorporated has worked to bring together the various participants in the municipal bond industry and build strong partnerships that benefit all concerned. Investors, financial advisers, municipal officials, investment bankers--Nuveen believes that forging relationships within these groups based on trust and value is the key to successful investing. As the oldest and largest municipal bond special ist in the United States, Nuveen's investment bankers work with issuers to understand and meet their needs in structuring and selling their bond issues. Nuveen also works closely with financial advisers around the country, including brokerage firms, banks, insurance companies, and independent financial planners, to bring the benefits of tax-free investing to you. These advisers are experts at identifying your needs and recommending the best solutions for your situation. Together we make a powerful team, helping you create a successful investment plan that meets your needs today and in the future. John Nuveen & Co. Incorporated 333 West Wacker Drive Chicago, Illinois 60606-1286 ETF1-JULY 96 -----END PRIVACY-ENHANCED MESSAGE-----