NBD Nuveen Build America Bond Opportunity Fund of Beneficial Interest (delisted)

ITEM 1. REPORTS TO STOCKHOLDERS.

Average Annual Total Returns on Net Asset Value*

 

For periods ended 9/30/12

 

						Since
Fund		6-Month		1-Year		Inception**
NBB		7.68%		10.53%		13.84%
Barclays Build America Bond Index***		6.99%		11.58%		14.90%
NBD		7.22%		10.45%		19.09%
Barclays Build America Bond Index***		6.99%		11.58%		19.92%

SHARE REPURCHASES AND PRICE INFORMATION

 

Since the inception of the Funds’ repurchase programs, NBB and NBD have not repurchased any of their outstanding shares.

 

As of September 30, 2012, and during the six-month reporting period, the Funds’ share prices were trading at (-) discounts to their NAVs as shown in the accompanying table.

		9/30/12		Six-Month Average
Fund		(-)Discount		(-)Discount
NBB		(-)4.34%		(-)5.03%
NBD		(-)6.33%		(-)7.16%

NBB		Nuveen Build
Performance		America Bond
OVERVIEW		Fund
		as of September 30, 2012

Fund Snapshot
Share Price					$	21.40
Net Asset Value (NAV)					$	22.37
Premium/Discount to NAV						-4.34	%
Market Yield						6.08	%
Net Assets ($000)					$	591,919
Leverage
Regulatory Leverage						13.07	%
Effective Leverage						28.27	%
Average Annual Total Returns
(Inception 4/27/10)
			On Share Price			On NAV
6-Month (Cumulative)			9.36	%		7.68	%
1-Year			14.42	%		10.53	%
Since Inception			9.95	%		13.84	%
States 2
(as a % of total municipal bonds)
California						20.1	%
Illinois						11.8	%
New York						10.3	%
Texas						8.1	%
Ohio						5.3	%
South Carolina						4.6	%
Nevada						4.4	%
Georgia						3.7	%
Michigan						3.5	%
Washington						3.2	%
Louisiana						3.2	%
New Jersey						3.1	%
Tennessee						2.6	%
Virginia						2.6	%
Other						13.5	%
Portfolio Composition 2,3
(as a % of total investments)
Tax Obligation/Limited						22.8	%
Tax Obligation/General						21.7	%
Utilities						19.7	%
Transportation						17.1	%
Water and Sewer						13.6	%
Education and Civic Organizations						4.0	%
Short-Term Investments 4						0.0	%
Other						1.1	%
Build America Bond Allocation 2
(as a % of total municipal bonds)
Build America Bonds						96.6	%
Non-Build America Bonds						3.4	%

Nuveen Investments

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NBD		Nuveen Build
Performance		America Bond
OVERVIEW		Opportunity Fund
		as of September 30, 2012

Fund Snapshot
Share Price					$	22.05
Net Asset Value (NAV)					$	23.54
Premium/Discount to NAV						-6.33	%
Market Yield						5.80	%
Net Assets ($000)					$	169,578
Leverage
Regulatory Leverage						6.35	%
Effective Leverage						28.47	%
Average Annual Total Returns
(Inception 11/23/10)
			On Share Price			On NAV
6-Month (Cumulative)			8.27	%		7.22	%
1-Year			11.15	%		10.45	%
Since Inception			12.53	%		19.09	%
States 2
(as a % of total municipal bonds)
California						18.5	%
Illinois						13.3	%
New York						13.1	%
South Carolina						8.4	%
New Jersey						6.4	%
Texas						4.8	%
Colorado						4.2	%
Michigan						3.8	%
Ohio						3.5	%
Georgia						3.0	%
Massachusetts						2.8	%
Indiana						2.5	%
Virginia						2.4	%
Other						13.3	%
Portfolio Composition 2,3
(as a % of total investments)
Tax Obligation/Limited						30.5	%
Water and Sewer						17.6	%
Transportation						16.5	%
Tax Obligation/General						13.6	%
Utilities						13.5	%
Education and Civic Organizations						3.8	%
Short-Term Investments						0.5	%
Other						4.0	%
Build America Bond Allocation 2
(as a % of total municipal bonds)
Build America Bonds						97.0	%
Non-Build America Bonds						3.0	%

NBB		Shareholder Meeting Report
NBD		The annual meeting of shareholders was held on July 31, 2012, in the Lobby Conference Room, 333 West Wacker Drive, Chicago, IL 60606; at this meeting the shareholders were asked to vote on the election of Board Members.

			NBB			NBD
			Common shares			Common shares
Approval of the Board Members was reached as follows:
Robert P. Bremner
For			24,774,779			6,337,859
Withhold			335,089			158,208
Total			25,109,868			6,496,067
Jack B. Evans
For			24,782,297			6,337,191
Withhold			327,571			158,876
Total			25,109,868			6,496,067
William J. Schneider
For			24,784,257			6,341,835
Withhold			325,611			154,232
Total			25,109,868			6,496,067

Nuveen Investments

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		Nuveen Build America Bond Fund
NBB		Portfolio of Investments
		September 30, 2012 (Unaudited)

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Municipal Bonds – 124.1% (100.0% of Total Investments)
			Arizona – 2.6% (2.1% of Total Investments)
$	4,070		Downtown Phoenix Hotel Corporation, Arizona, Revenue Bonds, Subordinate Lien Series 2005C, 5.290%, 7/01/18 – FGIC Insured	No Opt. Call		A2	$	4,177,204
	10,000		Mesa, Arizona, Utility System Revenue Bonds, Series 2010, 6.100%, 7/01/34	7/20 at 100.00		Aa2		11,423,900
	14,070		Total Arizona					15,601,104
			California – 24.9% (20.1% of Total Investments)
	75		Bay Area Toll Authority, California, Revenue Bonds, San Francisco Bay Area Toll Bridge, Subordinate Lien, Build America Federally Taxable Bond Series 2010S-1, 6.793%, 4/01/30	No Opt. Call		A+		97,652
	500		California Infrastructure and Economic Development Bank, Revenue Bonds, University of California San Francisco Neurosciences Building, Build America Taxable Bond Series 2010B, 6.486%, 5/15/49	No Opt. Call		Aa2		622,030
	3,005		California State Public Works Board, Lease Revenue Bonds, Various Capital Projects, Build America Taxable Bond Series 2009G-2, 8.361%, 10/01/34	No Opt. Call		A2		3,851,959
	4,050		California State Public Works Board, Lease Revenue Bonds, Various Capital Projects, Build America Taxable Bond Series 2010A-2, 8.000%, 3/01/35	3/20 at 100.00		A2		4,494,285
	7,000		California State University, Systemwide Revenue Bonds, Build America Taxable Bond Series 2010B, 6.484%, 11/01/41	No Opt. Call		Aa2		8,709,050
	4,500		California State, General Obligation Bonds, Various Purpose Build America Taxable Bond Series 2010, 7.950%, 3/01/36	3/20 at 100.00		A1		5,411,925
	10,000		California State, General Obligation Bonds, Various Purpose, Build America Taxable Bond Series 2010, 7.600%, 11/01/40	No Opt. Call		A1		13,939,200
	1,500		City and County of San Francisco Redevelopment Financing Authority, California, Taxable Tax Allocation Revenue Bonds, San Francisco Redevelopment Projects, Series 2009F, 8.406%, 8/01/39	No Opt. Call		A		1,738,905
	15,000		Los Angeles Community College District, California, General Obligation Bonds, Build America Taxable Bonds, Series 2010, 6.600%, 8/01/42	No Opt. Call		Aa1		20,331,150
	10,000		Los Angeles Community College District, Los Angeles County, California, General Obligation Bonds, Series 2010, 6.600%, 8/01/42 (UB) (4)	No Opt. Call		Aa1		13,554,100
			Los Angeles County Public Works Financing Authority, California, Lease Revenue Bonds, Multiple Capital Projects I, Build America Taxable Bond Series 2010B:
	5,500		7.488%, 8/01/33	No Opt. Call		AA–		7,218,200
	17,500		7.618%, 8/01/40	No Opt. Call		AA–		23,751,350
	9,385		Los Angeles Department of Airports, California, Revenue Bonds, Los Angeles International Airport, Build America Taxable Bonds, Series 2009C, 6.582%, 5/15/39	No Opt. Call		AA–		12,331,890
	1,435		Los Angeles Department of Water and Power, California, Power System Revenue Bonds, Federally Taxable – Direct Payment – Build America Bonds, Series 2010D, 6.574%, 7/01/45	No Opt. Call		AA–		2,095,602
	2,000		Los Angeles Department of Water and Power, California, Water System Revenue Bonds, Tender Option Bond Trust T0003, 29.607%, 7/01/42 (IF) (4)	No Opt. Call		AA		6,811,300
	3,000		Oakland Redevelopment Agency, California, Subordinated Housing Set Aside Revenue Bonds, Federally Taxable Series 2011A-T, 7.500%, 9/01/19	No Opt. Call		A		3,421,110
	2,355		San Bernardino Community College District, California, General Obligation Bonds, Election of 2008, Build America Taxable Bond Series 2009C, 7.630%, 8/01/44	No Opt. Call		Aa2		3,091,597
	1,365		San Francisco City and County Public Utilities Commission, California, Water Revenue Bonds, Build America Taxable Bonds, Series 2010B, 6.000%, 11/01/40	No Opt. Call		AA–		1,687,823
	3,000		San Francisco City and County Public Utilities Commission, California, Water Revenue Bonds, Build America Taxable Bonds, Series 2010G, 6.950%, 11/01/50	No Opt. Call		AA–		4,277,040
	4,000		San Francisco City and County, California, Certificates of Participation, 525 Golden Gate Avenue, San Francisco Public Utilities Commission Office Project, Tender Option Bond Trust B001, 29.197%, 11/01/30 (IF)	No Opt. Call		AA–		6,252,400

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Nuveen Investments

 

 

 

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	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			California (continued)
			Stanton Redevelopment Agency, California, Consolidated Project Tax Allocation Bonds, Series 2011A:
$	275		6.500%, 12/01/17	No Opt. Call		A–	$	296,566
	295		6.750%, 12/01/18	No Opt. Call		A–		319,913
	2,505		University of California, General Revenue Bonds, Limited Project, Build America Taxable Bond Series 2010F, 5.946%, 5/15/45	No Opt. Call		Aa2		3,134,481
	108,245		Total California					147,439,528
			Colorado – 1.1% (0.9% of Total Investments)
	3,100		Denver School District 1, Colorado, General Obligation Bonds, Build America Taxable Bonds, Series 2009C, 5.664%, 12/01/33	No Opt. Call		Aa2		3,940,472
	2,000		Mesa State College, Colorado, Auxiliary Facilities Enterprise Revenue Bonds, Build America Taxable Bond Series 2010B, 6.746%, 5/15/42	No Opt. Call		Aa2		2,666,480
	5,100		Total Colorado					6,606,952
			Connecticut – 0.9% (0.7% of Total Investments)
	4,500		Harbor Point Infrastructure Improvement District, Connecticut, Special Obligation Revenue Bonds, Harbor Point Project, Federally Taxable – Issuer Subsidy – Recovery Zone Economic Development Bond Series 2010B, 12.500%, 4/01/39	4/20 at 100.00		N/R		5,312,565
			Florida – 1.0% (0.8% of Total Investments)
	5,000		Florida State Board of Education, Public Education Capital Outlay Bonds, Build America Taxable Bonds, Series 2010G, 5.750%, 6/01/35	6/19 at 100.00		AAA		5,604,200
			Georgia – 4.6% (3.7% of Total Investments)
	9,000		Georgia Municipal Electric Authority, Plant Vogtle Units 3 & 4 Project J Bonds, Taxable Build America Bonds Series 2010A, 6.637%, 4/01/57	No Opt. Call		A+		10,618,650
	15,000		Georgia Municipal Electric Authority, Plant Vogtle Units 3 & 4 Project P Bonds, Refunding Taxable Build America Bonds Series 2010A, 7.055%, 4/01/57	No Opt. Call		A–		16,461,150
	24,000		Total Georgia					27,079,800
			Illinois – 14.6% (11.8% of Total Investments)
	3,800		Chicago Transit Authority, Illinois, Sales Tax Receipts Revenue Bonds, Federally Taxable Build America Bonds, Series 2010B, 6.200%, 12/01/40	No Opt. Call		AA		4,305,628
	10,750		Chicago, Illinois, General Airport Revenue Bonds, O’Hare International Airport, Third Lien, Build America Taxable Bond Series 2010B, 6.845%, 1/01/38	1/20 at 100.00		A2		12,403,135
	11,390		Chicago, Illinois, Wastewater Transmission Revenue Bonds, Build America Taxable Bond Series 2010B, 6.900%, 1/01/40 (4)	No Opt. Call		AA		14,649,590
	10,070		Chicago, Illinois, Water Revenue Bonds, Taxable Second Lien Series 2010B, 6.742%, 11/01/40 (4)	No Opt. Call		AA		13,569,728
	16,890		Cook County, Illinois, General Obligation Bonds, Build America Taxable Bonds, Series 2010D, 6.229%, 11/15/34	No Opt. Call		AA		19,450,186
	500		Illinois Finance Authority, Revenue Bonds, Illinois Institute of Technology, Refunding Series 2006A, 6.100%, 4/01/15	10/12 at 100.00		Baa3		494,245
	14,000		Illinois State, General Obligation Bonds, Taxable Build America Bonds, Series 2010-3, 6.725%, 4/01/35	No Opt. Call		A		16,018,660
	4,430		Illinois Toll Highway Authority, Toll Highway Revenue Bonds, Build America Taxable Bonds, Senior Lien Series 2009A, 6.184%, 1/01/34	No Opt. Call		AA–		5,701,543
	71,830		Total Illinois					86,592,715
			Indiana – 0.9% (0.7% of Total Investments)
	5,000		Indiana University, Consolidated Revenue Bonds, Build America Taxable Bonds, Series 2010B, 5.636%, 6/01/35	6/20 at 100.00		Aaa		5,504,500
			Kentucky – 1.7% (1.4% of Total Investments)
	5,000		Kentucky Municipal Power Agency, Power Supply System Revenue Bonds, Prairie State Project, Tender Option Bond Trust B002, 29.546%, 9/01/37 – AGC Insured (IF)	9/20 at 100.00		AA–		7,687,250

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		Nuveen Build America Bond Fund (continued)
NBB		Portfolio of Investments

September 30, 2012 (Unaudited)

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Kentucky (continued)
$	1,950		Louisville and Jefferson County Metropolitan Sewer District, Kentucky, Sewer and Drainage System Revenue Bonds, Build America Taxable Bonds Series 2010A, 6.250%, 5/15/43	No Opt. Call		AA	$	2,578,505
	6,950		Total Kentucky					10,265,755
			Louisiana – 3.9% (3.2% of Total Investments)
	20,350		East Baton Rouge Sewerage Commission, Louisiana, Revenue Bonds, Build America Taxable Bonds, Series 2010B, 6.087%, 2/01/45 (UB) (4)	2/20 at 100.00		AA		23,236,037
			Maryland – 0.6% (0.5% of Total Investments)
	2,500		Maryland Transportation Authority, Transportation Facilities Projects Revenue Bonds, Build America Taxable Bonds, Series 2009B, 5.888%, 7/01/43	No Opt. Call		AA–		3,385,725
			Massachusetts – 0.9% (0.7% of Total Investments)
	2,000		Massachusetts, Transportation Fund Revenue Bonds, Accelerated Bridge Program, Tender Option Bond Trust T0004, 25.410%, 6/01/40 (IF) (4)	No Opt. Call		AAA		5,350,700
			Michigan – 4.4% (3.5% of Total Investments)
	12,650		Detroit City School District, Wayne County, Michigan, General Obligation Bonds, Build America Taxable Bond Series 2009B, 7.747%, 5/01/39	No Opt. Call		Aa2		16,153,924
	3,315		Michigan Tobacco Settlement Finance Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Taxable Turbo Series 2006A, 7.309%, 6/01/34	6/22 at 100.00		B2		2,670,962
	5,885		Wayne County Building Authority, Michigan, General Obligation Bonds, Jail Facilities, Federally Taxable Recovery Zone Economic Development Series 2010, 10.000%, 12/01/40	12/20 at 100.00		BBB+		7,021,570
	21,850		Total Michigan					25,846,456
			Missouri – 0.3% (0.2% of Total Investments)
	1,290		Curators of the University of Missouri, System Facilities Revenue Bonds, Build America Taxable Bonds, Series 2009A, 5.960%, 11/01/39	No Opt. Call		AA+		1,714,707
			Nevada – 5.4% (4.4% of Total Investments)
	8,810		Clark County, Nevada, Airport Revenue Bonds, Senior Lien Series 2009B, 6.881%, 7/01/42	7/19 at 100.00		Aa2		10,276,689
	1,730		Clark County, Nevada, Airport System Revenue, Taxable Direct Payment Build America Bonds, Senior Series 2010C, 6.820%, 7/01/45	No Opt. Call		Aa2		2,492,100
	8,800		Las Vegas Valley Water District, Nevada, Limited Tax General Obligation Bonds, Build America Taxable Bonds, Series 2009C, 7.013%, 6/01/39	No Opt. Call		AA+		12,026,256
	1,315		Las Vegas, Nevada, Certificates of Participation, City Hall Project, Build America Federally Taxable Bonds, Series 2009B, 7.800%, 9/01/39	9/19 at 100.00		AA–		1,548,084
	4,000		North Las Vegas, Nevada, General Obligation Water and Wastewater Improvement Bonds, Build America Taxable Bonds, Series 2010A, 6.572%, 6/01/40	No Opt. Call		A		4,673,560
	1,085		Reno, Nevada, 1999 Special Assessment District 2 Local Improvement Bonds, ReTRAC Project, Taxable Series 2006, 6.890%, 6/01/16	No Opt. Call		BBB		1,133,901
	25,740		Total Nevada					32,150,590
			New Jersey – 3.8% (3.1% of Total Investments)
	3,100		New Jersey Turnpike Authority, Revenue Bonds, Build America Taxable Bonds, Series 2009F, 7.414%, 1/01/40	No Opt. Call		A+		4,634,035
	12,505		New Jersey Turnpike Authority, Revenue Bonds, Build America Taxable Bonds, Series 2010A, 7.102%, 1/01/41	No Opt. Call		A+		18,043,715
	15,605		Total New Jersey					22,677,750
			New York – 12.7% (10.3% of Total Investments)
	25,000		Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, Build America Taxable Bonds, Series 2010D, 5.600%, 3/15/40 (UB) (4)	No Opt. Call		AAA		31,777,000
	5,000		Long Island Power Authority, New York, Electric System Revenue Bonds, Build America Taxable Bond Series 2010B, 5.850%, 5/01/41	No Opt. Call		A		5,792,750

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Nuveen Investments

 

 

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	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			New York (continued)
$	4,980		Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Build America Taxable Bonds, Series 2009A-1, 5.871%, 11/15/39	No Opt. Call		A	$	6,025,501
	2,595		New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Build America Taxable Bonds, Series 2010DD, 5.952%, 6/15/42	No Opt. Call		AA+		3,619,272
	2,025		New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Build America Taxable Bonds, Series 2010DD, 5.952%, 6/15/42 (UB) (4)	No Opt. Call		AA+		2,824,288
	1,595		New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Taxable Tender Option Bonds Trust T30001-2, 26.608%, 6/15/44 (IF)	No Opt. Call		AA+		4,621,194
	6,240		New York City Transitional Finance Authority, New York, Building Aid Revenue Bonds, Build America Taxable Bond Fiscal 2011 Series 2010S-1B, 6.828%, 7/15/40	No Opt. Call		AA–		8,379,010
	10,000		New York City Transitional Finance Authority, New York, Future Tax Secured Bonds, Build America Taxable Bonds, Series 2010G-1, 5.467%, 5/01/40 (4)	No Opt. Call		AAA		12,310,400
	57,435		Total New York					75,349,415
			Ohio – 6.6% (5.3% of Total Investments)
			American Municipal Power Inc., Ohio, Combined Hydroelectric Projects Revenue Bonds, Federally Taxable Build America Bonds, Series 2010B:
	10,000		7.834%, 2/15/41	No Opt. Call		A		14,301,300
	5,000		8.084%, 2/15/50	No Opt. Call		A		7,409,800
	15,000		Northeast Ohio Regional Sewer District, Wastewater Improvement Revenue Bonds, Build America Taxable Bonds, Series 2010, 6.038%, 11/15/40	11/20 at 100.00		AA+		17,476,650
	30,000		Total Ohio					39,187,750
			Oregon – 3.0% (2.4% of Total Investments)
	4,000		Oregon Department of Administrative Services, Certificates of Participation, Federally Taxable Build America Bonds, Tender Option Bond Trust TN-011, 26.524%, 5/01/35 (IF) (4)	5/20 at 100.00		AA		6,536,600
	9,660		Warm Springs Reservation Confederated Tribes, Oregon, Tribal Economic Development Bonds, Hydroelectric Revenue Bonds, Pelton Round Butte Project, Refunding Series 2009A, 8.250%, 11/01/19	No Opt. Call		A3		11,322,583
	13,660		Total Oregon					17,859,183
			Pennsylvania – 0.9% (0.7% of Total Investments)
	2,250		Commonwealth Financing Authority, Pennsylvania, State Appropriation Lease Bonds, Build America Taxable Bonds, Series 2009D, 6.218%, 6/01/39	No Opt. Call		AA		2,809,215
	2,000		Pennsylvania State, General Obligation Bonds, Build America Taxable Bonds, Third Series 2010B, 5.850%, 7/15/30	7/20 at 100.00		AA+		2,294,660
	4,250		Total Pennsylvania					5,103,875
			South Carolina – 5.8% (4.6% of Total Investments)
	15,000		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Series 2010C, 6.454%, 1/01/50	No Opt. Call		AA–		20,854,495
	205		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Tender Option Bond Trust T30002, 29.291%, 1/01/50 (IF)	No Opt. Call		AA–		605,058
	8,985		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Series 2010C, 6.454%, 1/01/50 (UB)	No Opt. Call		AA–		12,491,846
	24,190		Total South Carolina					33,951,399
			Tennessee – 3.2% (2.6% of Total Investments)
	15,000		Metropolitan Government Nashville & Davidson County Convention Center Authority, Tennessee, Tourism Tax Revenue Bonds, Build America Taxable Bonds, Series 2010A-2, 7.431%, 7/01/43	No Opt. Call		A1		18,997,650

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		Nuveen Build America Bond Fund (continued)
NBB		Portfolio of Investments

September 30, 2012 (Unaudited)

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Texas – 10.1% (8.1% of Total Investments)
$	9,940		Dallas Convention Center Hotel Development Corporation, Texas, Hotel Revenue Bonds, Build America Taxable Bonds, Series 09B, 7.088%, 1/01/42	No Opt. Call		A+	$	12,099,863
	10,000		North Texas Tollway Authority, System Revenue Bonds, Subordinate Lien Taxable Revenue Bonds, Federally Taxable Build America Bonds, Series 2010-B2, 8.910%, 2/01/30	2/20 at 100.00		Baa3		11,777,800
	15,000		North Texas Tollway Authority, System Revenue Bonds, Taxable Build America Bond Series 2009B, 6.718%, 1/01/49	No Opt. Call		A2		20,747,250
	5,000		San Antonio, Texas, General Obligation Bonds, Build America Taxable Bonds, Series 2010B, 6.038%, 8/01/40	8/20 at 100.00		AAA		5,822,400
	7,015		Texas State, General Obligation Bonds, Transportation Commission, Build America Taxable Bonds, Series 2009A, 5.517%, 4/01/39	No Opt. Call		Aaa		9,285,264
	46,955		Total Texas					59,732,577
			Utah – 1.9% (1.5% of Total Investments)
	5,000		Central Utah Water Conservancy District, Utah, Revenue Bonds, Federally Taxable Build America Bonds, Series 2010A, 5.700%, 10/01/40	4/20 at 100.00		AA+		5,326,250
	5,415		Midvale Redevelopment Agency, Utah, Tax Increment and Sales Tax Revenue Bonds, Federally Taxable Build America Bonds, Series 2010, 6.250%, 5/01/34 – AGM Insured	5/20 at 100.00		AA–		5,830,872
	10,415		Total Utah					11,157,122
			Vermont – 1.1% (0.9% of Total Investments)
	5,000		University of Vermont and State Agricultural College, Revenue Bonds, Build America Bonds Series 2010, 6.428%, 10/01/44	No Opt. Call		Aa3		6,523,500
			Virginia – 3.2% (2.6% of Total Investments)
	10,000		Metropolitan Washington DC Airports Authority, Virginia, Dulles Toll Road Revenue Bonds, Dulles Metrorail Capital Improvement Project, Build America Taxable Bonds, Series 2010D, 8.000%, 10/01/47	No Opt. Call		BBB		12,385,600
	4,300		Metropolitan Washington DC Airports Authority, Virginia, Dulles Toll Road Revenue Bonds, Series 2009D, 7.462%, 10/01/46 – AGC Insured	No Opt. Call		BBB+		5,187,864
	1,705		Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset Backed Bonds, Refunding Senior Lien Series 2007A1, 6.706%, 6/01/46	12/13 at 100.00		B2		1,159,178
	16,005		Total Virginia					18,732,642
			Washington – 4.0% (3.2% of Total Investments)
	5,000		Grays Harbor County Public Utility District 1, Washington, Electric System Revenue Bonds, Taxable Build America Bonds – Direct Payment, Series 2010A, 6.707%, 7/01/40	No Opt. Call		A1		6,099,150
	5,000		Mason County Public Utility District 3, Washington, Electric Revenue Bonds, Build America Taxable Bonds, Series 2010B, 6.347%, 12/01/40	6/20 at 100.00		Aa3		5,401,350
	2,505		Okanogan County Public Utility District 1, Washington, Electric System Revenue Bonds, Build America Taxable Bonds – Direct Payment, Series 2010B, 6.046%, 12/01/40	No Opt. Call		A1		3,055,424
	4,000		Seattle, Washington, Municipal Light and Power Revenue Bonds, Federally Taxable Build America Bonds, Tender Option Bond Trust T0001, 24.289%, 2/01/40 (IF) (4)	No Opt. Call		Aa2		8,997,000
	16,505		Total Washington					23,552,924
$	573,445		Total Municipal Bonds (cost $619,427,978)					734,517,121

18

Nuveen Investments

 

 

---

 

 

	Principal
	Amount (000)		Description (1)	Coupon		Maturity		Value
			Short-Term Investments – 0.0% (0.0% of Total Investments)
$	189		Repurchase Agreement with State Street Bank, dated 9/28/12, repurchase price $189,204, collateralized by $195,000 U.S. Treasury Notes, 0.375%, due 4/15/15, value $195,728	0.010%		10/01/12	$	189,203
			Total Short-Term Investments (cost $189,203)					189,203
			Total Investments (cost $619,617,181) – 124.1%					734,706,324
			Borrowings – (15.0)% (5), (6)					(89,000,000	)
			Floating Rate Obligations – (9.0)%					(53,090,000	)
			Other Assets Less Liabilities – (0.1)% (7)					(696,964	)
			Net Assets Applicable to Common Shares – 100%				$	591,919,360

 

Investments in Derivatives at September 30, 2012

Swaps outstanding:

Counterparty		Notional Amount			Fund Pay/Receive Floating Rate			Floating Rate Index			Fixed Rate (Annualized		)	Fixed Rate Payment Frequency			Effective Date (8)			Termination Date			Unrealized Appreciation (Depreciation) (7)
Barclays Bank PLC		$	60,500,000			Receive			1-Month USD-LIBOR			1.450	%		Monthly			10/01/14			10/01/18		$	(471,631	)
JPMorgan			19,200,000			Receive			1-Month USD-LIBOR			1.193			Monthly			3/21/11			3/21/14			(277,189	)
Morgan Stanley			19,200,000			Receive			1-Month USD-LIBOR			2.064			Monthly			3/21/11			3/21/16			(1,106,207	)
Morgan Stanley			60,500,000			Receive			1-Month USD-LIBOR			1.764			Monthly			10/01/14			12/01/19			(735,502	)
Morgan Stanley			135,000,000			Receive			3-Month USD-LIBOR			3.035			Semi-Annually			2/21/14			2/21/41			(7,669,166	)
																							$	(10,259,695	)

 

(1)		All percentages shown in the Portfolio of Investments are based on net assets unless otherwise noted.
(2)		Optional Call Provisions: 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. Certain mortgage-backed securities may be subject to periodic principal paydowns.
(3)		Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.
(4)		Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives and/or inverse floating rate transactions.
(5)		Borrowings as a percentage of Total Investments is 12.1%.
(6)		The Fund segregates 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings.
(7)		Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as noted within Investments in Derivatives at September 30, 2012.
(8)		Effective date represents the date on which both the Fund and Counterparty commence interest payment accruals on each forward swap contract.
N/R		Not rated.
(IF)		Inverse floating rate investment.
(UB)		Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities for more information.
USD-LIBOR		United States Dollar-London Inter-Bank Offered Rate.

 

See accompanying notes to financial statements.

Nuveen Investments

19

 

 

---

 

		Nuveen Build America Bond Opportunity Fund
NBD		Portfolio of Investments
		September 30, 2012 (Unaudited)

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Municipal Bonds – 111.4% (99.5% of Total Investments)
			California – 20.7% (18.4% of Total Investments)
$	1,030		Bay Area Toll Authority, California, Revenue Bonds, San Francisco Bay Area Toll Bridge, Subordinate Lien, Build America Federally Taxable Bond Series 2010S-1, 7.043%, 4/01/50	No Opt. Call		A+	$	1,506,911
	1,500		California State Public Works Board, Lease Revenue Bonds, Various Capital Projects, Build America Taxable Bond Series 2009G-2, 8.361%, 10/01/34	No Opt. Call		A2		1,922,775
	2,000		Los Angeles Community College District, Los Angeles County, California, General Obligation Bonds, Tender Option Bond Trust TN027, 29.762%, 8/01/49 (IF) (4)	No Opt. Call		Aa1		5,698,400
	3,000		Los Angeles County Public Works Financing Authority, California, Lease Revenue Bonds, Multiple Capital Projects I, Build America Taxable Bond Series 2010B, 7.618%, 8/01/40	No Opt. Call		AA–		4,071,660
	2,650		Los Angeles Department of Airports, California, Revenue Bonds, Los Angeles International Airport, Build America Taxable Bonds, Series 2009C, 6.582%, 5/15/39	No Opt. Call		AA–		3,482,100
	2,000		Los Angeles Department of Water and Power, California, Water System Revenue Bonds, Tender Option Bond Trust T0003, 29.607%, 7/01/42 (IF) (4)	No Opt. Call		AA		6,811,300
	1,000		Oakland Redevelopment Agency, California, Subordinated Housing Set Aside Revenue Bonds, Federally Taxable Series 2011A-T, 7.500%, 9/01/19	No Opt. Call		A		1,140,370
	2,175		San Diego County Regional Transportation Commission, California, Sales Tax Revenue Bonds, Build America Taxable Bonds Series 2010A, 5.911%, 4/01/48	No Opt. Call		AAA		2,962,589
	2,000		San Francisco City and County, California, Certificates of Participation, 525 Golden Gate Avenue, San Francisco Public Utilities Commission Office Project, Tender Option Bond Trust B001, 29.197%, 11/01/41 (IF)	No Opt. Call		AA–		3,126,200
	315		Stanton Redevelopment Agency, California, Consolidated Project Tax Allocation Bonds, Series 2011A, 7.000%, 12/01/19	No Opt. Call		A–		345,209
	3,000		The Regents of the University of California, Medical Center Pooled Revenue Bonds, Build America Taxable Bonds, Series 2010H, 6.548%, 5/15/48	No Opt. Call		Aa2		3,977,190
	20,670		Total California					35,044,704
			Colorado – 4.7% (4.2% of Total Investments)
	4,000		Colorado State Bridge Enterprise Revenue Bonds, Federally Taxable Build America Series 2010A, 6.078%, 12/01/40	No Opt. Call		AA		5,228,200
	2,000		Regional Transportation District, Colorado, Sales Tax Revenue Bonds, FasTracks Project, Build America Series 2010B, 5.844%, 11/01/50	No Opt. Call		AA+		2,762,860
	6,000		Total Colorado					7,991,060
			Connecticut – 0.7% (0.6% of Total Investments)
	1,000		Harbor Point Infrastructure Improvement District, Connecticut, Special Obligation Revenue Bonds, Harbor Point Project, Federally Taxable – Issuer Subsidy – Recovery Zone Economic Development Bond Series 2010B, 12.500%, 4/01/39	4/20 at 100.00		N/R		1,180,570
			District of Columbia – 0.6% (0.5% of Total Investments)
	800		District of Columbia, Income Tax Secured Revenue Bonds, Build America Taxable Bonds, Series 2009E, 5.591%, 12/01/34 (4)	No Opt. Call		AAA		1,006,968
			Georgia – 3.3% (3.0% of Total Investments)
	2,000		Georgia Municipal Electric Authority, Plant Vogtle Units 3 & 4 Project J Bonds, Taxable Build America Bonds Series 2010A, 6.637%, 4/01/57	No Opt. Call		A+		2,359,700
	3,000		Georgia Municipal Electric Authority, Plant Vogtle Units 3 & 4 Project P Bonds, Refunding Taxable Build America Bonds Series 2010A, 7.055%, 4/01/57	No Opt. Call		A–		3,292,230
	5,000		Total Georgia					5,651,930

20

Nuveen Investments

 

 

---

 

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Illinois – 14.8% (13.2% of Total Investments)
$	3,575		Chicago Transit Authority, Illinois, Sales Tax Receipts Revenue Bonds, Federally Taxable Build America Bonds, Series 2010B, 6.200%, 12/01/40	No Opt. Call		AA	$	4,050,690
	1,000		Chicago, Illinois, General Airport Revenue Bonds, O’Hare International Airport, Third Lien, Build America Taxable Bond Series 2010B, 6.845%, 1/01/38	1/20 at 100.00		A2		1,153,780
	5,080		Chicago, Illinois, Wastewater Transmission Revenue Bonds, Build America Taxable Bond Series 2010B, 6.900%, 1/01/40 (4)	No Opt. Call		AA		6,533,790
	3,000		Chicago, Illinois, Water Revenue Bonds, Taxable Second Lien Series 2010B, 6.742%, 11/01/40 (4)	No Opt. Call		AA		4,042,620
	1,000		Cook County, Illinois, General Obligation Bonds, Build America Taxable Bonds, Series 2010D, 6.229%, 11/15/34	No Opt. Call		AA		1,151,580
	500		Illinois Finance Authority, Revenue Bonds, Illinois Institute of Technology, Refunding Series 2006A, 6.100%, 4/01/15	10/12 at 100.00		Baa3		494,245
	2,000		Illinois State, General Obligation Bonds, Build America Taxable Bonds, Series 2010-5, 7.350%, 7/01/35	No Opt. Call		A		2,419,620
	4,110		Illinois Toll Highway Authority, Toll Highway Revenue Bonds, Build America Taxable Bonds, Senior Lien Series 2009A, 6.184%, 1/01/34	No Opt. Call		AA–		5,289,693
	20,265		Total Illinois					25,136,018
			Indiana – 2.7% (2.4% of Total Investments)
	3,480		Indianapolis Local Public Improvement Bond Bank, Indiana, Build America Taxable Bonds, Series 2010B-2, 6.116%, 1/15/40	No Opt. Call		AA+		4,648,132
			Kentucky – 2.3% (2.1% of Total Investments)
	3,000		Louisville and Jefferson County Metropolitan Sewer District, Kentucky, Sewer and Drainage System Revenue Bonds, Build America Taxable Bonds Series 2010A, 6.250%, 5/15/43	No Opt. Call		AA		3,966,930
			Massachusetts – 3.1% (2.8% of Total Investments)
	2,000		Massachusetts, Transportation Fund Revenue Bonds, Accelerated Bridge Program, Tender Option Bond Trust T0004, 25.410%, 6/01/40 (IF) (4)	No Opt. Call		AAA		5,350,700
			Michigan – 4.3% (3.8% of Total Investments)
	3,000		Detroit City School District, Wayne County, Michigan, General Obligation Bonds, Build America Taxable Bond Series 2010B, 6.845%, 5/01/40	5/20 at 100.00		Aa2		3,241,680
	2,000		Michigan Tobacco Settlement Finance Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Taxable Turbo Series 2006A, 7.309%, 6/01/34	6/22 at 100.00		B2		1,611,440
	2,000		Wayne County Building Authority, Michigan, General Obligation Bonds, Jail Facilities, Federally Taxable Recovery Zone Economic Development Series 2010, 10.000%, 12/01/40	12/20 at 100.00		BBB+		2,386,260
	7,000		Total Michigan					7,239,380
			Mississippi – 1.9% (1.7% of Total Investments)
	2,585		Mississippi State, General Obligation Bonds, Build America Taxable Bond Series 2010F, 5.245%, 11/01/34	No Opt. Call		AA+		3,147,832
			Missouri – 1.1% (1.0% of Total Investments)
	250		Curators of the University of Missouri, System Facilities Revenue Bonds, Build America Taxable Bonds, Series 2009A, 5.960%, 11/01/39	No Opt. Call		AA+		332,308
	1,150		Curators of the University of Missouri, System Facilities Revenue Bonds, Build America Taxable Bonds, Series 2010, 5.792%, 11/01/41	No Opt. Call		AA+		1,502,372
	1,400		Total Missouri					1,834,680
			Nevada – 2.5% (2.2% of Total Investments)
	1,950		Clark County, Nevada, Airport Revenue Bonds, Senior Lien Series 2009B, 6.881%, 7/01/42	7/19 at 100.00		Aa2		2,274,636
	1,340		Clark County, Nevada, Airport System Revenue, Taxable Direct Payment Build America Bonds, Senior Series 2010C, 6.820%, 7/01/45	No Opt. Call		Aa2		1,930,297
	3,290		Total Nevada					4,204,933

Nuveen Investments

21

 

 

---

 

 

		Nuveen Build America Bond Opportunity Fund (continued)
NBD		Portfolio of Investments

September 30, 2012 (Unaudited)

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			New Jersey – 7.1% (6.4% of Total Investments)
$	3,055		New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Build America Bonds Issuer Subsidy Program, Series 2010C, 5.754%, 12/15/28	No Opt. Call		A+	$	3,649,381
	4,000		New Jersey Turnpike Authority, Revenue Bonds, Build America Taxable Bonds, Series 2010A, 7.102%, 1/01/41	No Opt. Call		A+		5,771,680
	2,070		Rutgers State University, New Jersey, Revenue Bonds, Build America Taxable Bond Series 2010H, 5.665%, 5/01/40	No Opt. Call		AA		2,649,621
	9,125		Total New Jersey					12,070,682
			New York – 14.6% (13.1% of Total Investments)
	2,000		Dormitory Authority of the State of New York, State Personal Income Tax Revenue Bonds, Tender Option Bond Trust B004, 24.069%, 3/15/40 (IF)	No Opt. Call		AAA		4,710,800
	2,025		Metropolitan Transportation Authority, New York, Transportation Revenue Bonds, Federally Taxable Issuer Subsidy Build America Bonds, Series 2010A, 6.668%, 11/15/39	11/33 at 100.00		A		2,673,972
	3,000		New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Build America Taxable Bonds, Fiscal 2011 Series AA, 5.440%, 6/15/43 (4)	No Opt. Call		AA+		3,861,180
	2,000		New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Second Generation Resolution, Taxable Tender Option Bonds Trust T30001-2, 26.608%, 6/15/44 (IF)	No Opt. Call		AA+		5,794,600
	3,500		New York City Transitional Finance Authority, New York, Building Aid Revenue Bonds, Build America Taxable Bond Fiscal 2011 Series 2010S-1B, 6.828%, 7/15/40	No Opt. Call		AA–		4,699,765
	2,500		New York City, New York, General Obligation Bonds, Federally Taxable Build America Bonds, Series 2010-F1, 6.646%, 12/01/31	12/20 at 100.00		AA		3,072,800
	15,025		Total New York					24,813,117
			North Carolina – 1.0% (0.9% of Total Investments)
	1,400		North Carolina Turnpike Authority, Triangle Expressway System State Annual Appropriation Revenue Bonds, Federally Taxable Issuer Subsidy Build America Bonds, Series 2009B, 6.700%, 1/01/39	1/19 at 100.00		AA		1,625,834
			Ohio – 3.9% (3.5% of Total Investments)
	3,000		American Municipal Power Inc., Ohio, Meldahl Hydroelectric Projects Revenue Bonds, Federally Taxable Build America Bonds, Series 2010B, 7.499%, 2/15/50	No Opt. Call		A		4,119,330
	2,150		Northeast Ohio Regional Sewer District, Wastewater Improvement Revenue Bonds, Build America Taxable Bonds, Series 2010, 6.038%, 11/15/40	11/20 at 100.00		AA+		2,504,987
	5,150		Total Ohio					6,624,317
			Pennsylvania – 1.8% (1.6% of Total Investments)
	2,500		Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, Build America Taxable Bonds, Series 2010B, 5.511%, 12/01/45	No Opt. Call		Aa3		3,012,050
			South Carolina – 9.4% (8.4% of Total Investments)
	2,000		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Series 2010C, 6.454%, 1/01/50	No Opt. Call		AA–		2,780,600
	205		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Tender Option Bond Trust T30002, 29.291%, 1/01/50 (IF)	No Opt. Call		AA–		605,058
	8,985		South Carolina Public Service Authority, Electric System Revenue Bonds, Santee Cooper, Federally Taxable Build America Series 2010C, 6.454%, 1/01/50 (UB)	No Opt. Call		AA–		12,491,846
	11,190		Total South Carolina					15,877,504
			Tennessee – 2.1% (1.9% of Total Investments)
	3,000		Metropolitan Government Nashville & Davidson County Convention Center Authority, Tennessee, Tourism Tax Revenue Bonds, Build America Taxable Bonds, Subordinate Lien Series 2010B, 6.731%, 7/01/43	No Opt. Call		Aa2		3,600,660

22

Nuveen Investments

 

 

---

 

 

	Principal			Optional Call
	Amount (000)		Description (1)	Provisions (2)		Ratings (3)		Value
			Texas – 5.4% (4.8% of Total Investments)
$	1,810		Board of Regents, University of Texas System, Financing System Revenue Bonds, Build America Taxable Bonds, Series 2009B, 6.276%, 8/15/41	8/19 at 100.00		AAA	$	2,155,022
	2,000		Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue Bonds, Build America Taxable Bonds, Series 2009B, 5.999%, 12/01/44	No Opt. Call		AA+		2,761,020
	2,000		Dallas Convention Center Hotel Development Corporation, Texas, Hotel Revenue Bonds, Build America Taxable Bonds, Series 09B, 7.088%, 1/01/42	No Opt. Call		A+		2,434,580
	1,500		North Texas Tollway Authority, System Revenue Bonds, Subordinate Lien Taxable Revenue Bonds, Federally Taxable Build America Bonds, Series 2010-B2, 8.910%, 2/01/30	2/20 at 100.00		Baa3		1,766,670
	7,310		Total Texas					9,117,292
			Virginia – 2.7% (2.4% of Total Investments)
	2,110		Metropolitan Washington DC Airports Authority, Virginia, Dulles Toll Road Revenue Bonds, Series 2009D, 7.462%, 10/01/46 – AGC Insured	No Opt. Call		BBB+		2,545,673
	3,000		Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset Backed Bonds, Refunding Senior Lien Series 2007A1, 6.706%, 6/01/46	12/13 at 100.00		B2		2,039,610
	5,110		Total Virginia					4,585,283
			Washington – 0.7% (0.6% of Total Investments)
	1,000		Washington State Convention Center Public Facilities District, Lodging Tax Revenue Bonds, Build America Taxable Bond Series 2010B, 6.790%, 7/01/40	No Opt. Call		Aa3		1,237,260
$	137,300		Total Municipal Bonds (cost $140,863,918)					188,967,836
	Principal
	Amount (000)		Description (1)	Coupon		Maturity		Value
			Short-Term Investments – 0.6% (0.5% of Total Investments)
$	941		Repurchase Agreement with State Street Bank, dated 9/28/12, repurchase price $940,711, collateralized by $960,000 U.S. Treasury Notes, 0.375%, due 4/15/15, value $963,583	0.010%		10/01/12	$	940,710
			Total Short-Term Investments (cost $940,710)					940,710
			Total Investments (cost $141,804,628) – 112.0%					189,908,546
			Borrowings – (6.8)% (5), (6)					(11,500,000	)
			Floating Rate Obligations – (4.2)%					(7,190,000	)
			Other Assets Less Liabilities – (1.0)% (7)					(1,640,804	)
			Net Assets Applicable to Common Shares – 100%				$	169,577,742

Nuveen Investments

23

 

 

---

 

 

		Nuveen Build America Bond Opportunity Fund (continued)
NBD		Portfolio of Investments

September 30, 2012 (Unaudited)

 

Investments in Derivatives at September 30, 2012

Swaps outstanding:

Counterparty		Notional Amount			Fund Pay/Receive Floating Rate			Floating Rate Index			Fixed Rate (Annualized)			Fixed Rate Payment Frequency			Effective Date (8)			Termination Date			Unrealized Appreciation (Depreciation) (7)
Barclays Bank PLC		$	11,200,000			Receive			1-Month USD-LIBOR			2.240	%		Monthly			12/17/10			12/17/15		$	(676,140	)
Barclays Bank PLC			14,750,000			Receive			1-Month USD-LIBOR			1.450			Monthly			10/01/14			10/01/18			(114,984	)
Barclays Bank PLC			20,000,000			Receive			3-Month USD-LIBOR			2.863			Semi-Annually			2/14/13			2/14/42			(943,378	)
Morgan Stanley			11,200,000			Receive			1-Month USD-LIBOR			1.295			Monthly			12/17/10			12/17/13			(150,739	)
Morgan Stanley			14,750,000			Receive			1-Month USD-LIBOR			1.875			Monthly			10/01/14			6/01/20			(200,785	)
Morgan Stanley			15,000,000			Receive			3-Month USD-LIBOR			3.035			Semi-Annually			2/21/14			2/21/41			(852,130	)
Morgan Stanley			18,000,000			Receive			3-Month USD-LIBOR			3.098			Semi-Annually			1/24/14			1/24/41			(1,285,570	)
																							$	(4,223,726	)

(1)		All percentages shown in the Portfolio of Investments are based on net assets unless otherwise noted.
(2)		Optional Call Provisions: 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. Certain mortgage-backed securities may be subject to periodic principal paydowns.
(3)		Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.
(4)		Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives and/or inverse floating rate transactions.
(5)		Borrowings as a percentage of Total Investments is 6.1%.
(6)		The Fund segregates 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings.
(7)		Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as noted within Investments in Derivatives at September 30, 2012.
(8)		Effective date represents the date on which both the Fund and Counterparty commence interest payment accruals on each forward swap contract.
N/R		Not rated.
(IF)		Inverse floating rate investment.
(UB)		Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities for more information.
USD-LIBOR		United States Dollar-London Inter-Bank Offered Rate.

 

See accompanying notes to financial statements.

 

24

Nuveen Investments

 

 

 

---

 

 

		Statement of
		Assets & Liabilities
		September 30, 2012 (Unaudited)

			Build America			Build America
			Bond			Bond Opportunity
			(NBB	)		(NBD	)
Assets
Investments, at value (cost $619,617,181 and $141,804,628, respectively)		$	734,706,324		$	189,908,546
Receivable for interest			12,851,345			3,465,330
Other assets			81,435			13,527
Total assets			747,639,104			193,387,403
Liabilities
Borrowings			89,000,000			11,500,000
Floating rate obligations			53,090,000			7,190,000
Unrealized depreciation on swaps			10,259,695			4,223,726
Payable for dividends			2,723,472			696,673
Accrued expenses:
Interest on borrowings			61,349			6,541
Management fees			392,857			116,987
Trustees fees			15,296			1,013
Other			177,075			74,721
Total liabilities			155,719,744			23,809,661
Net assets		$	591,919,360		$	169,577,742
Shares outstanding			26,461,985			7,205,250
Net asset value per share outstanding		$	22.37		$	23.54
Net assets consist of:
Shares, $.01 par value per share		$	264,620		$	72,053
Paid-in surplus			504,137,904			137,235,389
Undistributed (Over-distribution of) net investment income			(463,484	)		(4,517	)
Accumulated net realized gain (loss)			(16,849,128	)		(11,605,375	)
Net unrealized appreciation (depreciation)			104,829,448			43,880,192
Net assets		$	591,919,360		$	169,577,742
Authorized shares			Unlimited			Unlimited

 

See accompanying notes to financial statements.

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		Statement of
		Operations

Six Months Ended September 30, 2012 (Unaudited)

			Build America			Build America
			Bond			Bond Opportunity
			(NBB	)		(NBD	)
Investment Income		$	20,675,222		$	5,612,785
Expenses
Management fees			2,327,389			761,509
Shareholder servicing agent fees and expenses			580			1,445
Interest expense			556,816			65,704
Custodian’s fees and expenses			42,764			13,161
Trustees’ fees and expenses			8,804			2,257
Professional fees			55,332			31,945
Shareholder reporting expenses			34,651			10,479
Stock exchange listing fees			4,227			4,227
Investor relations expense			37,965			9,705
Other expenses			18,229			3,233
Total expenses before custodian fee credit			3,086,757			903,665
Custodian fee credit			(11	)		(270	)
Net expenses			3,086,746			903,395
Net investment income (loss)			17,588,476			4,709,390
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments			4,579,752			633,857
Swaps			(265,237	)		(168,419	)
Change in net unrealized appreciation (depreciation) of:
Investments			36,778,298			12,623,400
Swaps			(15,486,693	)		(6,194,422	)
Net realized and unrealized gain (loss)			25,606,120			6,894,416
Net increase (decrease) in net assets from operations		$	43,194,596		$	11,603,806

 

See accompanying notes to financial statements.

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		Statement of
		Changes in Net Assets (Unaudited)

		Build America Bond (NBB)						Build America Bond Opportunity (NBD)
		Six Months Ended 9/30/12			Year Ended 3/31/12			Six Months Ended 9/30/12			Year Ended 3/31/12
Operations
Net investment income (loss)		$	17,588,476		$	36,070,542		$	4,709,390		$	10,464,282
Net realized gain (loss) from:
Investments			4,579,752			10,354,784			633,857			5,446,504
Swaps			(265,237	)		(28,929,551	)		(168,419	)		(17,195,666	)
Change in net unrealized appreciation (depreciation) of:
Investments			36,778,298			92,493,528			12,623,400			32,826,692
Swaps			(15,486,693	)		(6,130,055	)		(6,194,422	)		1,817,779
Net increase (decrease) in net assets from operations			43,194,596			103,859,248			11,603,806			33,359,591
Distributions to Shareholders
From net investment income			(17,226,752	)		(36,927,700	)		(4,604,155	)		(10,753,836	)
Decrease in net assets from distributions to shareholders			(17,226,752	)		(36,927,700	)		(4,604,155	)		(10,753,836	)
Net increase (decrease) in net assets			25,967,844			66,931,548			6,999,651			22,605,755
Net assets at the beginning of period			565,951,516			499,019,968			162,578,091			139,972,336
Net assets at the end of period		$	591,919,360		$	565,951,516		$	169,577,742		$	162,578,091
Undistributed (Over-distribution of) net investment income at the end of period		$	(463,484	)	$	(825,208	)	$	(4,517	)	$	(109,752	)

 

See accompanying notes to financial statements.

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		Statement of
		Cash Flows

Six Months Ended September 30, 2012 (Unaudited)

			Build America			Build America
			Bond			Bond Opportunity
			(NBB	)		(NBD	)
Cash Flows from Operating Activities:
Net Increase (Decrease) in Net Assets from Operations		$	43,194,596		$	11,603,806
Adjustments to reconcile the net increase (decrease) in net assets from operations to net cash provided by (used in) operating activities:
Purchases of investments			(86,057,067	)		(15,143,295	)
Proceeds from sales and maturities of investments			40,527,012			4,429,803
Proceeds from (Purchases of) short-term investments, net			826,330			(940,710	)
Proceeds from (Payments for) swap contracts, net			(265,237	)		(168,419	)
Amortization (Accretion) of premiums and discounts, net			162,146			(3,929	)
(Increase) Decrease in:
Receivable for interest			(584,148	)		(140,009	)
Other assets			(40,188	)		16,117
Increase (Decrease) in:
Accrued interest on borrowings			25,297			6,541
Accrued management fees			9,510			2,274
Accrued trustees fees			2,579			26
Accrued other expenses			(25,695	)		(5,695	)
Net realized (gain) loss from:
Investments			(4,579,752	)		(633,857	)
Swaps			265,237			168,419
Change in net unrealized (appreciation) depreciation of:
Investments			(36,778,298	)		(12,623,400	)
Swaps			15,486,693			6,194,422
Net cash provided by (used in) operating activities			(27,830,985	)		(7,237,906	)
Cash Flows from Financing Activities:
Increase (Decrease) in Borrowings			45,000,000			11,500,000
Cash distributions paid to shareholders			(17,169,015	)		(4,563,237	)
Net cash provided by (used in) financing activities			27,830,985			6,936,763
Net Increase (Decrease) in Cash			—			(301,143	)
Cash at the beginning of period			—			301,143
Cash at the End of Period		$	—		$	—

 

Supplemental Disclosure of Cash Flow Information

 

Cash paid for interest (excluding borrowing costs) was $395,594 and $23,400 for Build America Bond (NBB) and Build America Bond Opportunity (NBD), respectively.

 

See accompanying notes to financial statements.

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		Financial
		Highlights (Unaudited)
	Selected data for a Common share outstanding throughout each period:

 

					Investment Operations									Less Distributions
		Beginning Net Asset Value			Net Investment Income (Loss)		(a)	Net Realized/ Unrealized Gain (Loss)			Total			Net Investment Income			Capital Gains			Total			Offering Costs			Ending Net Asset Value			Ending Market Value
Build America Bond (NBB)
Year Ended 3/31:
2013(g)		$	21.39		$	.66		$	.97		$	1.63		$	(.65	)	$	—		$	(.65	)	$	—		$	22.37		$	21.40
2012			18.86			1.36			2.57			3.93			(1.40	)		—			(1.40	)		—			21.39			20.18
2011(e)			19.10			1.19			(.22	)		.97			(1.17	)		—			(1.17	)		(0.04	)		18.86			18.06
Build America Bond Opportunity (NBD)
Year Ended 3/31:
2013(g)			22.56			.65			.97			1.62			(.64	)		—			(.64	)		—			23.54			22.05
2012			19.43			1.45			3.17			4.62			(1.49	)		—			(1.49	)		—			22.56			20.97
2011(f)			19.10			.47			.28			.75			(.38	)		—			(.38	)		(0.04	)		19.43			18.63

		Borrowings at the End of Period
		Aggregate Amount Outstanding (000)			Asset Coverage Per $1,000
Build America Bond (NBB)
Year Ended 3/31:
2013(g)		$	89,000		$	7,651
2012			44,000			13,863
2011(e)			44,000			12,341
Build America Bond Opportunity (NBD)
Year Ended 3/31:
2013(g)			11,500			15,746
2012			—			—
2011(f)			—			—

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						Ratios/Supplemental Data
	Total Returns								Ratios to Average Net Assets(c)
	Based on Market Value	(b)		Based on Net Asset Value	(b)		Ending Net Assets (000	)		Expenses	(d)		Net Investment Income (Loss	)		Portfolio Turnover Rate
	9.36	%		7.68	%	$	591,919			1.06	%*		6.02	%*		6	%
	19.92			21.29			565,952			1.05			6.63			18
	(3.99	)		4.90			499,020			1.11	*		6.70	*		100
	8.27			7.22			169,578			1.07	*		5.60	*		2
	21.00			24.34			162,578			.97			6.74			7
	(4.96	)		3.73			139,972			.87	*		6.90	*		77

 

(a)	Per share Net Investment Income (Loss) is calculated using the average daily shares method.
(b)	Total Return Based 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. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized.
	Total Return Based on Net Asset Value is the combination of changes in net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized.
(c)	Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable.
(d)	The expense ratios reflect, among other things, interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose trusts for the self-deposited inverse floaters held by the Fund, and/or all interest expense paid and other costs related to borrowings, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, Inverse Floating Rate Securities and in Footnote 8 – Borrowing Arrangements, respectively, as follows:

Build America Bond (NBB)
Year Ended 3/31:
2013(g)			.19	%*
2012			.18
2011(e)			.24	*
Build America Bond Opportunity (NBD)
Year Ended 3/31:
2013(g)			.08	%*
2012			—
2011(f)			—

 

(e)	For the period April 27, 2010 (commencement of operations) through March 31, 2011.
(f)	For the period November 23, 2010 (commencement of operations) through March 31, 2011.
(g)	For the six months ended September 30, 2012.
*	Annualized.

 

See accompanying notes to financial statements.

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		Notes to
		Financial Statements (Unaudited)

 

1. General Information and Significant Accounting Policies

 

General Information

The funds covered in this report and their corresponding New York Stock Exchange (“NYSE”) symbols are Nuveen Build America Bond Fund (NBB) and Nuveen Build America Bond Opportunity Fund (NBD) (each a “Fund” and collectively, the “Funds”). The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end, registered investment companies.

 

Each Fund’s primary investment objective is to provide current income through investments in taxable municipal securities. Each Fund’s secondary investment objective is to seek enhanced portfolio value and total return. The Funds seek to achieve their investment objectives by investing primarily in a diversified portfolio of taxable municipal securities known as Build America Bonds (or “BABs”), which make up 80% of their managed assets (as defined in Footnote 7 – Management Fees and Other Transactions with Affiliates). BABs are taxable municipal securities that include bonds issued by state and local governments to finance capital projects such as public schools, roads, transportation infrastructure, bridges, ports and public buildings, among others, pursuant to the American Recovery and Reinvestment Act of 2009, which offer municipal issuers a federal subsidy equal to 35% of a bond’s interest payments. Under normal circumstances, the Funds may invest 20% of their managed assets in securities other than BABs, including taxable and tax-exempt municipal securities, U.S. Treasury and other U.S. government agency securities. At least 80% of each Fund’s managed assets will be invested in securities that are investment grade quality at the time of purchase, as rated by at least one independent rating agency or judged to be of comparable quality by Nuveen Asset Management, LLC (the “Sub-Adviser”), a wholly-owned subsidiary of Nuveen Fund Advisors, Inc. (the “Adviser”), a wholly-owned subsidiary of Nuveen Investments, Inc. (Nuveen). In addition, each Fund will use an integrated leverage and hedging strategy that the Fund has the potential to enhance income and risk-adjusted total return over time. Each Fund may employ leverage instruments such as borrowings, including loans from certain financial institutions, and portfolio investments that have the economic effect of leverage, including investments in inverse floating rate securities. Each Fund’s overall goal is to outperform over time the Barclays Build America Bond Index, an unleveraged index representing the BABs market, while maintaining a comparable overall level of interest rate risk.

 

The BAB program expired on December 31, 2010, and was not renewed. Build America Bond (NBB) and Build American Bond Opportunity (NBD) each have contingent term provisions stating that if there are no new issuances of BABs or similarly U.S. Treasury-subsidized taxable municipal bonds for any twenty-four month period ending on or before December 31, 2014, Build America Bond (NBB) and Build American Bond Opportunity (NBD) will terminate on or around June 30, 2020, and December 31, 2020, respectively.

 

Significant Accounting Policies

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 (“U.S. GAAP”).

 

Investment Valuation

Prices of municipal bonds and swap contracts are provided by a pricing service approved by the Funds’ Board of Trustees. These securities are generally classified as Level 2 for fair value measurement purposes. The pricing service establishes a security’s fair value using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service may consider information about a security, its issuer, or market activity provided by the Adviser. These securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs.

 

Repurchase agreements are valued at contract amount plus accrued interest, which approximates market value. These securities are generally classified as Level 2.

 

Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Funds’ Board of Trustees or its designee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; debt securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund’s net asset value (as may be

 

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the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security’s fair value. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for it in a current sale. A variety of factors may be considered in determining the fair value of such securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Funds’ Board of Trustees or its designee.

 

Refer to Footnote 2 – Fair Value Measurements for further details on the leveling of securities held by the Funds as of the end of the reporting period.

 

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method, which is the same basis used for federal income tax purposes. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to earmark securities in the Funds’ portfolios with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At September 30, 2012, the Funds had no such outstanding purchase commitments.

 

Investment Income

Investment income, which reflects the amortization of premiums and includes accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also reflects paydown gains and losses, if any.

 

Professional Fees

Professional fees presented on the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment, or to pursue other claims or legal actions on behalf of Fund shareholders.

 

Income Taxes

Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its 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.

 

For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

Dividends and Distributions to Shareholders

Dividends to shareholders are declared monthly. Net realized capital gains from investment transactions, if any, are distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.

 

Distributions to shareholders 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. GAAP.

 

Inverse Floating Rate Securities

Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond’s par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an “inverse floater”) that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates’ holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond’s downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond’s value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond.

 

A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an “externally-deposited inverse floater”), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a “self-deposited inverse floater”). The inverse floater held by a Fund gives the Fund

 

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		Notes to
		Financial Statements (Unaudited) (continued)

 

the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as “(IF) – Inverse floating rate investment.” An investment in a self-deposited inverse floater is accounted for as a financing transaction. In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as “(UB) – Underlying bond of an inverse floating rate trust reflected as a financing transaction,” with the Fund accounting for the short-term floating rate certificates issued by the trust as “Floating rate obligations” on the Statement of Assets and Liabilities. In addition, the Fund reflects in “Investment Income” the entire earnings of the underlying bond and the related interest paid to the holders of the short-term floating rate certificates as a component of “Interest expense” on the Statement of Operations.

 

During the six months ended September 30, 2012, each Fund invested in externally-deposited inverse floaters and/or self-deposited inverse floaters.

 

Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a “recourse trust” or “credit recovery swap”) (such agreements referred to herein as “Recourse Trusts”) with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates issued by the trust plus any shortfalls in interest cash flows. Under these agreements, a Fund’s potential exposure to losses related to or on inverse floaters may increase beyond the value of a Fund’s inverse floater investments as a Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates. At period end, any such shortfall is recognized as “Unrealized depreciation on Recourse Trusts” on the Statement of Assets and Liabilities.

 

At September 30, 2012, each Fund’s maximum exposure to externally-deposited Recourse Trusts was as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Maximum exposure to Recourse Trusts		$	91,190,000		$	40,810,000

The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters for the Funds during the six months ended September 30, 2012, were as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Average floating rate obligations outstanding		$	53,090,000		$	7,190,000
Average annual interest rate and fees			0.67	%		0.65	%

 

Swap Contracts

Each Fund is authorized to enter into interest rate swap and forward interest rate swap contracts (“swap contracts”) consistent with their investment objectives and policies to reduce, increase or otherwise alter its risk profile or to alter its portfolio characteristics (i.e. duration, yield curve positioning and credit quality), and is subject to interest rate risk in the normal course of pursuing its investment objectives. Each Fund’s use of swap contracts is intended to help the Fund manage the duration of its portfolio, its interest cost of leverage and its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund’s interest rate sensitivity with that of the broader market.

 

Interest rate swap contracts involve each Fund’s agreement with the counterparty to pay or receive a fixed rate payment in exchange for the counterparty receiving or paying a variable rate payment. Forward interest rate swap transactions involve a Fund’s agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying a Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the “effective date”). The amount of the payment obligation on a swap contract is based on the notional amount and the termination date of the swap (which is akin to a bond’s maturity). The value of a Fund’s swap commitment will increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap’s termination date increase or decrease. Swap contracts are valued daily. Upon entering into an interest rate swap (and beginning on the effective date for a forward interest rate swap), each Fund accrues the fixed rate payment expected to be paid or received and the variable rate payment expected to be received or paid on a daily basis, and recognizes the daily change in the market value of the Fund’s contractual rights and obligations under the contracts. The net amount recorded on these transactions, for each counterparty, is recognized on the Statement of Assets and Liabilities as a component of “Unrealized appreciation or depreciation on swaps, net” with the change during the fiscal period recognized on the Statement of Operations as a component of “Change in net unrealized appreciation (depreciation) of swaps.”

 

Each Fund may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a swap contract is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Once periodic payments are settled in cash, they are combined with the net realized gain or loss recorded upon the termination of the swap contracts.

 

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For tax purposes, periodic payments are treated as ordinary income or expense. Net realized gains and losses on swap contracts during the fiscal period are recognized on the Statement of Operations as a component of “Net realized gain (loss) from swaps.”

 

During the six months ended September 30, 2012, each Fund entered into swap contracts to reduce the duration of its portfolio as well as to fix its interest cost of leverage. The average notional amount of swap contracts outstanding during the six months ended September 30, 2012, was as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Average notional amount of swap contracts outstanding*		$	213,733,333		$	85,233,333

 

*	Includes both interest rate and forward interest rate swap contracts. The average notional amount is calculated based on the outstanding notional at the beginning of the fiscal year and at the end of each fiscal quarter within the current fiscal year.

 

Refer to Footnote 3 – Derivative Instruments and Hedging Activities for further details on swap contract activity.

 

Market and Counterparty Credit Risk

In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their carrying value as recorded on the Statement of Assets and Liabilities. Futures contracts, when applicable, expose a Fund to minimal counterparty credit risk as they are exchange traded and the exchange’s clearinghouse, which is counterparty to all exchange traded futures, guarantees the futures contracts against default.

 

Each Fund helps manage counterparty credit risk 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 counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the predetermined threshold amount.

 

Zero Coupon Securities

Each Fund is authorized to invest in zero coupon securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically.

 

Repurchase Agreements

In connection with transactions in repurchase agreements, it is each Fund’s policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the counterparty defaults, and the fair value of the collateral declines, realization of the collateral may be delayed or limited.

 

Custodian Fee Credit

Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund’s cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which a Fund overdraws its account at the custodian bank.

 

Indemnifications

Under the Funds’ organizational documents, their officers and 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. GAAP 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. Actual results may differ from those estimates.

 

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		Notes to
		Financial Statements (Unaudited) (continued)

 

2. Fair Value Measurements

Fair value is defined as the price that the Funds would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

 

Level 1 –	Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2 –	Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 –	Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).

 

The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of each Fund’s fair value measurements as of the end of the reporting period:

Build America Bond (NBB)			Level 1			Level 2			Level 3			Total
Long-Term Investments*:
Municipal Bonds		$	—		$	734,517,121		$	—		$	734,517,121
Short-Term Investments:
Repurchase Agreements			—			189,203			—			189,203
Derivatives:
Swaps**			—			(10,259,695	)		—			(10,259,695	)
Total		$	—		$	724,446,629		$	—		$	724,446,629
Build America Bond Opportunity (NBD)			Level 1			Level 2			Level 3			Total
Long-Term Investments*:
Municipal Bonds		$	—		$	188,967,836		$	—		$	188,967,836
Short-Term Investments:
Repurchase Agreements			—			940,710			—			940,710
Derivatives:
Swaps**			—			(4,223,726	)		—			(4,223,726	)
Total		$	—		$	185,684,820		$	—		$	185,684,820

 

*	Refer to the Fund’s Portfolio of Investments for state classifications.
**	Represents net unrealized appreciation (depreciation) as reported in the Fund’s Portfolio of Investments.

 

The Nuveen funds’ Board of Directors/Trustees is responsible for the valuation process and has delegated the oversight of the daily valuation process to the Adviser’s Valuation Committee. The Valuation Committee, pursuant to the valuation policies and procedures adopted by the Board of Directors/Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the funds’ pricing policies, and reporting to the Board of Directors/Trustees.  The Valuation Committee is aided in its efforts by the Adviser’s dedicated Securities Valuation Team, which is responsible for administering the daily valuation process and applying fair value methodologies as approved by the Valuation Committee.  When determining the reliability of independent pricing services for investments owned by the funds, the Valuation Committee, among other things, conducts due diligence reviews of the pricing services and monitors the quality of security prices received through various testing reports conducted by the Securities Valuation Team.

 

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding

 

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any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

 

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors/Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such testing and fair valuation occurrences are reported to the Board of Directors/Trustees.

 

3. Derivative Instruments and Hedging Activities

The Funds record derivative instruments at fair value with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’ investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes. For additional information on the derivative instruments in which each Fund was invested during and at the end of the reporting period, refer to the Portfolios of Investments, Financial Statements and Footnote 1 – General Information and Significant Accounting Policies.

 

The following tables present the fair value of all derivative instruments held by the Funds as of September 30, 2012, the location of these instruments on the Statement of Assets and Liabilities and the primary underlying risk exposure.

Build America Bond (NBB)

Location on the Statement of Assets and Liabilities

Asset Derivatives

Liability Derivatives

Underlying

Derivative

Risk Exposure

Instrument

Location

Value

Location

Value

Interest Rate

Swaps

—

$ —

Unrealized depreciation

on swaps

$(10,259,695

)

Build America Bond Opportunity (NBD)

Location on the Statement of Assets and Liabilities

Asset Derivatives

Liability Derivatives

Underlying

Derivative

Risk Exposure

Instrument

Location

Value

Location

Value

Interest Rate

Swaps

—

$ —

Unrealized depreciation

on swaps

$ (4,223,726

)

The following tables present the amount of net realized gain (loss) and change in net unrealized appreciation (deprecation) recognized for the six months ended September 30, 2012, on derivative instruments, as well as the primary risk exposure associated with each.

		Build			Build America
			America			Bond
			Bond			Opportunity
Net Realized Gain (Loss) from Swaps			(NBB	)		(NBD	)
Risk Exposure
Interest Rate		$	(265,237	)	$	(168,419	)
			Build		Build America
			America			Bond
			Bond			Opportunity
Change in Net Unrealized Appreciation (Depreciation) of Swaps			(NBB	)		(NBD	)
Risk Exposure
Interest Rate		$	(15,486,693	)	$	(6,194,422	)

 

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		Notes to
		Financial Statements (Unaudited) (continued)

 

4. Fund Shares

Since the inception of the Funds’ repurchase programs, the Funds have not repurchased any of their outstanding shares.

 

Transactions in shares were as follows:

Build

Build America

America

Bond

Bond

Opportunity

(NBB)

(NBD)

Six Months

Year

Six Months

Year

Ended

Ended

Ended

Ended

9/30/12

3/31/12

9/30/12

3/31/12

Shares issued to shareholders due to reinvestment of distributions

—

—

—

—

 

5. Investment Transactions

Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the six months ended September 30, 2012, were as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Purchases		$	86,057,067		$	15,143,295
Sales and maturities			40,527,012			4,429,803

 

6. 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 timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds.

 

At September 30, 2012, the cost and unrealized appreciation (depreciation) of investments (excluding investments in derivatives), as determined on a federal income tax basis, were as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Cost of investments		$	566,449,051		$	134,657,998
Gross unrealized:
Appreciation		$	115,442,836		$	48,060,211
Depreciation			(279,467	)		(3,566	)
Net unrealized appreciation (depreciation) of investments		$	115,163,369		$	48,056,645

 

Permanent differences, primarily due to federal taxes paid and notional principal contracts reclassifications, resulted in reclassifications among the Funds’ components of net assets at March 31, 2012, the Funds’ last tax year end, as follows:

			Build		Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Paid-in surplus		$	(23,188	)	$	(24,833	)
Undistributed (Over-distribution of) net investment income			(515,379	)		(365,806	)
Accumulated net realized gain (loss)			538,567			390,639

 

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Nuveen Investments

 

 

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The tax components of undistributed net ordinary income and net long-term capital gains at March 31, 2012, the Funds’ last tax year end, were as follows:

			Build		Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Undistributed net ordinary income*		$	2,400,192		$	664,044
Undistributed net long-term capital gains			—			—

 

*	Net ordinary income consists of net taxable income derived from dividends, interest and net short-term capital gains, if any. Undistributed net ordinary income (on a tax basis) has not been reduced for the dividend declared on March 1, 2012, and paid on April 2, 2012.

 

The tax character of distributions paid during the Funds’ last tax year ended March 31, 2012, was designated for purposes of the dividends paid deduction as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Distributions from net ordinary income*		$	37,152,627		$	10,894,339
Distributions from net long-term capital gains			—			—

 

*	Net ordinary income consists of net taxable income derived from dividends, interest, and net short-term capital gains, if any.

During the Funds’ last tax year ended March 31, 2012, the following Fund utilized its capital loss carryforwards as follows:

			Build
			America
			Bond
			(NBB	)
Utilized capital loss carryforwards		$	294,209

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), capital losses incurred by the Funds after December 31, 2010 will not be subject to expiration. Capital losses incurred that will be carried forward under the provisions of the Act are as follows:

		Build America
			Bond
			Opportunity
			(NBD	)
Post-enactment losses:
Short-term		$	318,228
Long-term			—

The Funds have elected to defer losses incurred from November 1, 2011 through March 31, 2012, the Funds’ last tax year end, in accordance with federal income tax rules. These losses are treated as having arisen on the first day of the current fiscal year. The Funds have elected to defer losses as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Post-October capital losses		$	21,911,366		$	11,752,585
Late-year ordinary losses			—			—

 

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		Notes to
		Financial Statements (Unaudited) (continued)

 

7. Management Fees and Other Transactions with Affiliates

Each Fund’s management fee consists of two components – a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing structure enables Fund shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.

 

The annual fund-level fee for each Fund, payable monthly, is calculated according to the following schedule:

Average Daily Managed Assets*			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 managed assets over $2 billion			.3875
The annual complex-level fee for each Fund, payable monthly, is calculated according to the following schedule:
Complex-Level Managed Asset Breakpoint Level*			Effective Rate at Breakpoint Level
$55 billion			.2000	%
$56 billion			.1996
$57 billion			.1989
$60 billion			.1961
$63 billion			.1931
$66 billion			.1900
$71 billion			.1851
$76 billion			.1806
$80 billion			.1773
$91 billion			.1691
$125 billion			.1599
$200 billion			.1505
$250 billion			.1469
$300 billion			.1445

 

*

For the fund-level and complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes the funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen Funds that constitute “eligible assets.” Eligible assets do not include assets attributable to investments in other Nuveen Funds or assets in excess of $2 billion added to the Nuveen Fund complex in connection with the Adviser’s assumption of the management of the former First American Funds effective January 1, 2011. As of September 30, 2012, the complex-level fee rate for these Funds was .1695%.

 

The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Adviser is responsible for each Fund’s overall strategy and asset allocation decisions. The Adviser has entered into sub-advisory agreements with the Sub-Adviser, under which the Sub-Adviser manages the investment portfolios of the Funds. The Sub-Adviser is compensated for its services to the Funds from the management fees paid to the Adviser.

 

The Funds pay no compensation directly to those of its trustees who are affiliated with the Adviser or to its officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables 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.

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Nuveen Investments

 

 

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8. Borrowing Arrangements

As part of their investment strategies the Funds have each entered into a committed secured 364-day line of credit (“Borrowings”) with its custodian bank to employ leverage. Each Fund’s maximum commitment amount under these Borrowings is as follows:

			Build		Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Maximum commitment amount		$	100,000,000		$	25,000,000

Build America Bond Opportunity (NBD) began to draw on its Borrowings on September 10, 2012.

As of September 30, 2012, each Fund’s outstanding balance on its Borrowings was as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)
Outstanding balance on Borrowings		$	89,000,000		$	11,500,000

During the six months ended September 30, 2012, the average daily balance outstanding and average annual interest rate on each Fund’s Borrowings were as follows:

		Build			Build America
			America			Bond
			Bond			Opportunity
			(NBB	)		(NBD	)*
Average daily balance outstanding		$	49,163,934		$	11,500,000
Average annual interest rate			0.97	%		0.97	%

 

*	For the period September 10, 2012 through September 30, 2012.

 

In order to maintain these Borrowings, the Funds must meet certain collateral, asset coverage and other requirements. Borrowings outstanding are fully secured by securities held in each Fund’s portfolio of investments. Interest expense incurred on the Borrowings for each Fund is calculated at a rate per annum equal to the higher of the overnight Federal Funds rate plus .80% or the overnight London Inter-bank Offered Rate (LIBOR) plus .80%.

 

In addition to the interest expense, the Funds each pay a .15% per annum facility fee, based on the maximum commitment amount of the Borrowings through the renewal date.

 

On May 23, 2012, Build America Bond (NBB) entered into a new 364-day secured line of credit, at which time the maximum commitment amount decreased from $125 million to $100 million. The Fund paid a one-time closing fee of .10% on the maximum commitment amount of the Borrowings, which will be fully expensed through the expiration date of the Borrowings on May 22, 2013. All other terms of the Borrowings remain unchanged.

 

Borrowings outstanding are recognized as “Borrowings” on the Statement of Assets and Liabilities. Interest expense and fees incurred on each Fund’s borrowed amount and undrawn balance is recognized as a component of “Interest expense” on the Statement of Operations.

 

9. New Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11 (“ASU No. 2011-11”) to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting (“netting”) on the Statement of Assets and Liabilities. This information will enable users of the entity’s financial statements to evaluate the effect or potential effect of netting arrangements on the entity’s financial position. ASU No. 2011-11 is effective prospectively during interim or annual periods beginning on or after January 1, 2013.  At this time, management is evaluating the implications of this guidance and the impact it will have to the financial statements amounts and footnote disclosures, if any.

 

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Annual Investment Management

Agreement Approval Process (Unaudited)

 

The Board of Trustees (each, a “Board” and each Trustee, a “Board Member” ) of the Funds, including the Board Members who are not parties to the Funds’ advisory or sub-advisory agreements or “interested persons” of any such parties (the “Independent Board Members” ), is responsible for approving the advisory agreements (each, an “Investment Management Agreement” ) between each Fund and Nuveen Fund Advisors, Inc. (the “Advisor” ) and the sub-advisory agreements (each, a “Sub-Advisory Agreement” ) between the Advisor and Nuveen Asset Management, LLC (the “Sub-Advisor” ) (the Investment Management Agreements and the Sub-Advisory Agreements are referred to collectively as the “Advisory Agreements” ) and their periodic continuation. Pursuant to the Investment Company Act of 1940, as amended (the “1940 Act” ), the Board is required to consider the continuation of the Advisory Agreements on an annual basis. Accordingly, at an in-person meeting held on May 21-23, 2012 (the “May Meeting” ), the Board, including a majority of the Independent Board Members, considered and approved the continuation of the Advisory Agreements for the Funds for an additional one-year period.

 

In preparation for its considerations at the May Meeting, the Board requested and received extensive materials prepared in connection with the review of the Advisory Agreements. The materials provided a broad range of information regarding the Funds, the Advisor and the Sub-Advisor (the Advisor and the Sub-Advisor are collectively, the “Fund Advisers” and each, a “Fund Adviser” ). As described in more detail below, the information provided included, among other things, a review of Fund performance, including Fund investment performance assessments against peer groups and appropriate benchmarks, a comparison of Fund fees and expenses relative to peers, a description and assessment of shareholder service levels for the Funds, a summary of the performance of certain service providers, a review of product initiatives and shareholder communications and an analysis of the Advisor’s profitability with comparisons to comparable peers in the managed fund business. As part of its annual review, the Board also held a separate meeting on April 18-19, 2012, to review the Funds’ investment performance and consider an analysis provided by the Advisor of the Sub-Advisor which generally evaluated the Sub-Advisor’s investment team, investment mandate, organizational structure and history, investment philosophy and process, performance of the applicable Fund, and significant changes to the foregoing. As a result of its review of the materials and discussions, the Board presented the Advisor with questions and the Advisor responded.

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The materials and information prepared in connection with the annual review of the Advisory Agreements supplement the information and analysis provided to the Board during the year. In this regard, throughout the year, the Board, acting directly or through its committees, regularly reviews the performance and various services provided by the Advisor and the Sub-Advisor. The Board meets at least quarterly as well as at other times as the need arises. At its quarterly meetings, the Board reviews reports by the Advisor which include, among other things, Fund performance, a review of the investment teams and reports on compliance, regulatory matters and risk management. The Board also meets with key investment personnel managing the Fund portfolios during the year. In October 2011, the Board also created two new standing committees (the Open-end Fund Committee and the Closed-end Fund Committee) to assist the full Board in monitoring and gaining a deeper insight into the distinctive issues and business practices of open-end and closed-end funds.

 

In addition, the Board continues its program of seeking to have the Board Members or a subset thereof visit each sub-advisor to the Nuveen funds at least once over a multiple year rotation, meeting with key investment and business personnel. In this regard, the Board visited with the Sub-Advisor’s municipal team in Minneapolis in September 2011, and with the Sub-Advisor’s municipal team in Chicago in November 2011. Further, an ad hoc committee of the Board visited the then-current transfer agents of the Nuveen funds in 2011 and the audit committee of the Board visited the various pricing agents for the Nuveen funds in January 2012. The Board considers factors and information that are relevant to its annual consideration of the renewal of the Advisory Agreements at the meetings held throughout the year. Accordingly, the Board considers the information provided and knowledge gained at these meetings when performing its annual review of the Advisory Agreements. The Independent Board Members are assisted throughout the process by independent legal counsel who provided materials describing applicable law and the duties of directors or trustees in reviewing advisory contracts and met with the Independent Board Members in executive sessions without management present. In addition, it is important to recognize that the management arrangements for the Nuveen funds are the result of many years of review and discussion between the Independent Board Members and fund management and that the Board Members’ conclusions may be based, in part, on their consideration of fee arrangements and other factors developed in previous years.

 

The Board considered all factors it believed relevant with respect to each Fund, including among other factors: (a) the nature, extent and quality of the services provided by the Fund Advisers, (b) the investment performance of the Fund and Fund Advisers, (c) the advisory fees and costs of the services to be provided to the Fund and the profitability of the Fund Advisers, (d) the extent of any economies of scale, (e) any benefits derived by the Fund Advisers from the relationship with the Fund and (f) other factors. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund’s Advisory Agreements. The

 

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43

 

 

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Annual Investment Management Agreement

Approval Process (Unaudited) (continued)

 

Independent Board Members did not identify any single factor as all important or controlling. The Independent Board Members’ considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below.

 

A. Nature, Extent and Quality of Services

In considering renewal of the Advisory Agreements, the Independent Board Members considered the nature, extent and quality of the Fund Adviser’s services, including advisory services and the resulting Fund performance and administrative services. The Independent Board Members further considered the overall reputation and capabilities of the Advisor and its affiliates, the commitment of the Advisor to provide high quality service to the Funds, their overall confidence in the Advisor’s integrity and the Advisor’s responsiveness to questions and concerns raised by them. The Independent Board Members reviewed materials outlining, among other things, the Fund Adviser’s organization and business; the types of services that the Fund Adviser or its affiliates provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives Nuveen had taken for the applicable fund product line.

 

In considering advisory services, the Board recognized that the Advisor provides various oversight, administrative, compliance and other services for the Funds and the Sub-Advisor generally provides the portfolio investment management services to the Funds. In reviewing the portfolio management services provided to each Fund, the Board reviewed the materials provided by the Nuveen Investment Services Oversight Team analyzing, among other things, the Sub-Advisor’s investment team and changes thereto, organization and history, assets under management, Fund objectives and mandate, the investment team’s philosophy and strategies in managing the Fund, developments affecting the Sub-Advisor or Fund and Fund performance. The Independent Board Members also reviewed portfolio manager compensation arrangements to evaluate each Fund Adviser’s ability to attract and retain high quality investment personnel, preserve stability, and reward performance but not provide an inappropriate incentive to take undue risks. In addition, the Board considered the Advisor’s execution of its oversight responsibilities over the Sub-Advisor. Given the importance of compliance, the Independent Board Members also considered Nuveen’s compliance program, including the report of the chief compliance officer regarding the Funds’ compliance policies and procedures; the resources dedicated to compliance; and the record of compliance with the policies and procedures.

 

In addition to advisory services, the Board considered the quality and extent of administrative and other non-investment advisory services the Advisor and its affiliates provide to the Funds, including product management, investment services (such as oversight of investment policies and procedures, risk management, and pricing), fund administration, oversight of service providers, shareholder services and communications, administration of Board relations, regulatory and portfolio compliance, legal

 

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support, managing leverage and promoting an orderly secondary market for common shares. The Board further recognized Nuveen’s additional investments in personnel, including in compliance and risk management.

 

In reviewing the services provided, the Board also reviewed materials describing various notable initiatives and projects the Advisor performed in connection with the closed-end fund product line. These initiatives included completion of the refinancing of auction rate preferred securities; efforts to eliminate product overlap with fund mergers; elimination of the insurance mandate on several funds; ongoing services to manage leverage that has become increasingly complex; continued secondary market offerings, share repurchases and other support initiatives for certain funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted Nuveen’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. Nuveen’s support services included, among other things: continuing communications concerning the refinancing efforts related to auction rate preferred securities; supporting and promoting munifund term preferred shares (MTP) including by launching a microsite dedicated to MTP shares; sponsoring and participating in conferences; communicating with closed-end fund analysts covering the Nuveen funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing a closed-end fund website.

 

Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided to the respective Funds under each applicable Advisory Agreement were satisfactory.

 

B. The Investment Performance of the Funds and Fund Advisers

The Board, including the Independent Board Members, reviewed and considered the performance history of each Fund over various time periods. The Board reviewed, among other things, each Fund’s historic investment performance as well as information comparing the Fund’s performance information with that of other funds (the “Performance Peer Group” ) based on data compiled by Nuveen that was provided by an independent provider of mutual fund data and with recognized and/or customized benchmarks ( i.e., benchmarks derived from multiple recognized benchmarks).

 

The Board reviewed reports, including a comprehensive analysis of the Funds’ performance and the applicable investment team. In this regard, the Board reviewed each Fund’s total return information compared to its Performance Peer Group for the quarter and one-year periods ending December 31, 2011, as well as performance information reflecting the first quarter of 2012. In addition, the Board reviewed each Fund’s total return information compared to recognized and/or customized benchmarks for the quarter and one-year periods ending December 31, 2011, as well as performance information reflecting the first quarter of 2012.

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Annual Investment Management Agreement

Approval Process (Unaudited) (continued)

 

The Independent Board Members also reviewed historic premium and discount levels, including a summary of actions taken to address or discuss other developments affecting the secondary market discounts of various funds. This information supplemented the fund performance information provided to the Board at each of its quarterly meetings.

 

In reviewing performance comparison information, the Independent Board Members recognized that the usefulness of the comparisons of the performance of certain funds with the performance of their respective Performance Peer Group may be limited because the Performance Peer Group may not adequately represent the objectives and strategies of the applicable funds or may be limited in size or number. In this regard, the Independent Board Members noted that the Performance Peer Group of each Fund was classified as having significant differences from the respective Fund based on various considerations such as special fund objectives, potential investable universe and the composition of the peer set ( e.g., the number and size of competing funds and number of competing managers). The Independent Board Members also noted that the investment experience of a particular shareholder in the Nuveen funds will vary depending on when such shareholder invests in the applicable fund, the class held (if multiple classes are offered in a fund) and the performance of the fund (or respective class) during that shareholder’s investment period. In addition, although the performance below reflects the performance results for the time periods ending as of the most recent calendar year end (unless otherwise indicated), the Board also recognized that selecting a different ending time period may derive different results. Furthermore, while the Board is cognizant of the relevant performance of a fund’s peer set and/or benchmark(s), the Board evaluated fund performance in light of the respective fund’s investment objectives, investment parameters and guidelines and recognized that the objectives, investment parameters and guidelines of peers and/or benchmarks may differ to some extent, thereby resulting in differences in performance results. Nevertheless, with respect to any Nuveen funds that the Board considers to have underperformed their peers and/or benchmarks from time to time, the Board monitors such funds closely and considers any steps necessary or appropriate to address such issues.

 

As noted above, each Fund had significant differences from its respective Performance Peer Group. Therefore, the Independent Board Members considered the Funds’ performance compared to their benchmarks. In this regard, the Independent Board Members noted that although each Fund underperformed its respective benchmark for the one-year period, each Fund was relatively new with a shorter performance history available, thereby limiting the ability to make a meaningful assessment of performance. Notwithstanding the foregoing, based on their review, the Independent Board Members determined that each Fund’s investment performance had been satisfactory.

 

C.   Fees, Expenses and Profitability

 

1. Fees and Expenses

The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund’s gross management fees, net management fees

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and net expense ratios in absolute terms as well as compared to the fee and expenses of a comparable universe of funds provided by an independent fund data provider (the “Peer Universe” ) and any expense limitations.

 

The Independent Board Members further reviewed the methodology regarding the construction of the applicable Peer Universe. In reviewing the comparisons of fee and expense information, the Independent Board Members took into account that in certain instances various factors such as: the limited size and particular composition of the Peer Universe (including the inclusion of other Nuveen funds in the peer set); expense anomalies; changes in the funds comprising the Peer Universe from year to year; levels of reimbursement or fee waivers; the timing of information used; and the differences in the type and use of leverage may impact the comparative data, thereby limiting somewhat the ability to make a meaningful comparison with peers.

 

In reviewing the fee schedule for a Fund, the Independent Board Members also considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain closed-end funds launched since 1999). In reviewing fees and expenses (excluding leverage costs and leveraged assets), the Board considered the expenses and fees to be higher if they were over 10 basis points higher, slightly higher if they were approximately 6 to 10 basis points higher, in line if they were within approximately 5 basis points higher than the peer average and below if they were below the peer average of the Peer Universe. In reviewing the reports, the Board noted that the overwhelming majority of the Nuveen funds were at, close to or below their peer set average based on the net total expense ratio.

 

The Independent Board Members noted that the Funds each had net management fees and net expense ratios (including fee waivers and expense reimbursements) below their respective peer averages.

 

Based on their review of the fee and expense information provided, the Independent Board Members determined that each Fund’s management fees were reasonable in light of the nature, extent and quality of services provided to the Fund.

 

2. Comparisons with the Fees of Other Clients

The Independent Board Members further reviewed information regarding the nature of services and range of fees offered by the Advisor to other clients, including municipal separately managed accounts and passively managed exchange traded funds (ETFs) sub-advised by the Advisor. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that

 

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Annual Investment Management Agreement

Approval Process (Unaudited) (continued)

 

the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the various products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees.

 

In considering the fees of the Sub-Advisor, the Independent Board Members also considered the pricing schedule or fees that the Sub-Advisor charges for similar investment management services for other Nuveen funds, funds of other sponsors (if any), and other clients (such as retail and/or institutional managed accounts).

 

3. Profitability of Fund Advisers

In conjunction with their review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities and its financial condition. The Independent Board Members reviewed the revenues and expenses of Nuveen’s advisory activities for the last two calendar years, the allocation methodology used in preparing the profitability data and an analysis of the key drivers behind the changes in revenues and expenses that impacted profitability in 2011. The Independent Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Independent Board Members noted that they have an Independent Board Member serve as a point person to review and keep them apprised of changes to the profitability analysis and/or methodologies during the year. The Independent Board Members also considered Nuveen’s revenues for advisory activities, expenses, and profit margin compared to that of various unaffiliated management firms with comparable assets under management (based on asset size and asset composition).

 

In reviewing profitability, the Independent Board Members recognized the Advisor’s continued investment in its business to enhance its services, including capital improvements to investment technology, updated compliance systems, and additional personnel in compliance, risk management, and product development as well as its ability to allocate resources to various areas of the Advisor as the need arises. In addition, in evaluating profitability, the Independent Board Members also recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser’s particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen’s methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent

 

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Board Members recognized Nuveen’s investment in its fund business. Based on their review, the Independent Board Members concluded that the Advisor’s level of profitability for its advisory activities was reasonable in light of the services provided.

 

With respect to sub-advisers affiliated with Nuveen, including the Sub-Advisor, the Independent Board Members reviewed the sub-adviser’s revenues, expenses and profitability margins (pre- and post-tax) for its advisory activities and the methodology used for allocating expenses among the internal sub-advisers. Based on their review, the Independent Board Members were satisfied that the Sub-Advisor’s level of profitability was reasonable in light of the services provided.

 

In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to a Fund Adviser by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) the Fund Adviser and its affiliates receive, or are expected to receive, that are directly attributable to the management of the Funds, if any. See Section E below for additional information on indirect benefits a Fund Adviser may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Independent Board Members determined that the advisory fees and expenses of the respective Fund were reasonable.

 

D. Economies of Scale and Whether Fee Levels Reflect These Economies of Scale

With respect to economies of scale, the Independent Board Members have recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base, although economies of scale are difficult to measure and predict with precision, particularly on a fund-by-fund basis. One method to help ensure the shareholders share in these benefits is to include breakpoints in the advisory fee schedule. Generally, management fees for funds in the Nuveen complex are comprised of a fund-level component and a complex-level component, subject to certain exceptions. Accordingly, the Independent Board Members reviewed and considered the applicable fund-level breakpoints in the advisory fee schedules that reduce advisory fees as asset levels increase. Further, the Independent Board Members noted that although closed-end funds may from time-to-time make additional share offerings, the growth of their assets will occur primarily through the appreciation of such funds’ investment portfolio.

 

In addition to fund-level advisory fee breakpoints, the Board also considered the Funds’ complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex are generally reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen’s costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base. In addition, with the acquisition of the funds previously

 

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Annual Investment Management Agreement

Approval Process (Unaudited) (continued)

 

advised by FAF Advisors, Inc., the Board noted that a portion of such funds’ assets at the time of acquisition were deemed eligible to be included in the complex-wide fee calculation in order to deliver fee savings to shareholders in the combined complex and such funds were subject to differing complex-level fee rates.

 

Based on their review, the Independent Board Members concluded that the breakpoint schedules and complex-wide fee arrangement were acceptable and reflect economies of scale to be shared with shareholders when assets under management increase.

 

E. Indirect Benefits

In evaluating fees, the Independent Board Members received and considered information regarding potential “fall out” or ancillary benefits the respective Fund Adviser or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Independent Board Members considered any revenues received by affiliates of the Advisor for serving as co-manager in initial public offerings of new closed-end funds as well as revenues received in connection with secondary offerings.

 

In addition to the above, the Independent Board Members considered whether the Fund Advisers received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to the Fund Adviser in managing the assets of the Funds and other clients. The Independent Board Members recognized that each Fund Adviser has the authority to pay a higher commission in return for brokerage and research services if it determines in good faith that the commission paid is reasonable in relation to the value of the brokerage and research services provided and may benefit from such soft dollar arrangements. Similarly, the Board recognized that the research received pursuant to soft dollar arrangements by a Fund Adviser may also benefit a Fund and shareholders to the extent the research enhances the ability of the Fund Adviser to manage the Fund. The Independent Board Members noted that the Fund Advisers’ profitability may be somewhat lower if they did not receive the research services pursuant to the soft dollar arrangements and had to acquire such services directly.

 

Based on their review, the Independent Board Members concluded that any indirect benefits received by a Fund Adviser as a result of its relationship with the Funds were reasonable and within acceptable parameters.

 

F. Other Considerations

The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of each Advisory Agreement are fair and reasonable, that the respective Fund Adviser’s fees are reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed.

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Reinvest Automatically,
Easily and Conveniently

 

Nuveen makes reinvesting easy. A phone call is all it takes to set up your reinvestment account.

 

Nuveen Closed-End Funds Automatic Reinvestment Plan

 

Your Nuveen Closed-End Fund allows you to conveniently reinvest 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 compounding. Just like distributions in cash, there may be times when income or capital gains taxes may be payable on 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 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 greater of the net asset value or 95% of 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. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund’s shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares’ net asset value or 95% of the shares’ market value on the last business day immediately prior to the purchase date. Distributions received to purchase shares in the open market will normally be invested shortly after the distribution payment date. No interest will be paid on distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may

 

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Reinvest Automatically,

Easily and Conveniently (continued)

 

exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the 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.

 

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.

 

Call today to start reinvesting distributions

 

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.

 

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Glossary of Terms
Used in this Report

■	Auction Rate Bond: An auction rate bond is a security whose interest payments are adjusted periodically through an auction process, which process typically also serves as a means for buying and selling the bond. Auctions that fail to attract enough buyers for all the shares offered for sale are deemed to have “failed,” with current holders receiving a formula-based interest rate until the next scheduled auction.
■	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 market-value-weighted average of the effective maturity dates of the individual securities including cash. In the case of a bond that has been advance-refunded to a call date, the effective maturity is the date on which the bond is scheduled to be redeemed using the proceeds of an escrow account. In most other cases the effective maturity is the stated maturity date of the security.
■	Barclays Build America Bond Index: An unleveraged index that comprises all direct pay Build America Bonds that are SEC-regulated, taxable, dollar-denominated and have at least one year to final maturity, at least $250 million par amount outstanding, and are determined to be investment grade by Barclays. Index returns assume reinvestment of distributions, but do not reflect any applicable sales charges or management fees.
■	Effective Leverage: Effective leverage is a Fund’s effective economic leverage, and includes both regulatory leverage (see below) and the leverage effects of certain derivative investments in the Fund’s portfolio. Currently, the leverage effects of Tender Option Bond (TOB) inverse floater holdings are included in effective leverage values, in addition to any regulatory leverage.
■	Forward Interest Rate Swap: A contractual agreement between two counterparties under which one party agrees to make periodic payments to the other for an agreed period of time based on a fixed rate, while the other party agrees to make periodic payments based on a floating rate of interest based on an underlying index. Alternatively, both series of cashflows to be exchanged could be calculated using floating rates of interest but floating rates that are based upon different underlying indices.
■	Inverse Floating Rate Securities: Inverse floating rate securities, also known as inverse floaters or tender option bonds (TOBs), are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond’s par amount or market value, and (b) issues an inverse floating rate

 

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Glossary of Terms

Used in this Report (continued)

 

	certificate (sometimes referred to as an “inverse floater”) to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates’ holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond’s downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond’s value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis.
■	Leverage: Using borrowed money to invest in securities or other assets, seeking to increase the return of an investment or portfolio.
■	Leverage-Adjusted Duration: Duration is a measure of the expected period over which a bond’s principal and interest will be paid, and consequently is a measure of the sensitivity of a bond’s or bond Fund’s value to changes when market interest rates change. Generally, the longer a bond’s 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): The net market value of all securities held in a portfolio.
■	Net Asset Value (NAV) Per Share: The market value of one share of a mutual fund or closed-end fund. For a Fund, the NAV is calculated daily by taking the Fund’s total assets (securities, cash, and accrued earnings), subtracting the Fund’s liabilities, and dividing by the number of shares outstanding.
■	Pre-Refunding: Pre-Refunding, also known as advanced refundings or refinancings, is a procedure used by state and local governments to refinance municipal bonds to lower interest expenses. The issuer sells new bonds with a lower yield and uses the proceeds to buy U.S. Treasury securities, the interest from which is used to make payments on the higher-yielding bonds. Because of this collateral, pre-refunding generally raises a bond’s credit rating and thus its value.
■	Regulatory Leverage: Regulatory Leverage consists of preferred shares issued by or borrowings of a Fund. Both of these are part of a Fund’s capital structure. Regulatory leverage is sometimes referred to as “‘40 Act Leverage” and is subject to asset coverage limits set in the Investment Company Act of 1940.
■	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.
■	Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. Tax-exempt income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically.

 

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Additional Fund Information

 

Board of Trustees

John P. Amboian

Robert P. Bremner

Jack B. Evans

William C. Hunter

David J. Kundert

William J. Schneider

Judith M. Stockdale

Carole E. Stone

Virginia L. Stringer

Terence J. Toth

Fund Manager

Nuveen Fund Advisors, Inc.

333 West Wacker Drive

Chicago, IL 60606

Custodian

State Street Bank

& Trust Company

Boston, MA

Transfer Agent and

Shareholder Services

State Street Bank

& Trust Company

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

 

Quarterly Portfolio of Investments and Proxy Voting Information

 

You may obtain (i) each Fund’s quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen’s website 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 (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 100 F Street NE, Washington, D.C. 20549.

 

CEO Certification Disclosure

 

Each Fund’s Chief Executive Officer has submitted to the New York Stock Exchange (NYSE) the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual.

 

Each Fund has filed with the SEC the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.

 

Share Information

 

Each Fund intends to repurchase shares of its own common stock in the future at such times and in such amounts as is deemed advisable. During the period covered by this report, the Funds did not repurchase any of their common shares.

 

Any future repurchases will be reported to shareholders in the next annual or semi-annual report.

 

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Nuveen Investments:

Serving Investors for Generations

 

Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality equity and fixed-income solutions designed to be integral components of a well-diversified core portfolio.

 

Focused on meeting investor needs.

Nuveen Investments provides high-quality investment services designed to help secure the long-term goals of institutional and individual investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets a wide range of specialized investment solutions which provide investors access to capabilities of its high-quality boutique investment affiliates—Nuveen Asset Management, Symphony Asset Management, NWQ Investment Management Company, Santa Barbara Asset Management, Tradewinds Global Investors, Winslow Capital Management and Gresham Investment Management. In total, Nuveen Investments managed $220 billion as of September 30, 2012.

 

Find out how we can help you.

To learn more about how the products and services of Nuveen Investments may be able to help you meet your financial goals, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Investors should consider the investment objective and policies, risk considerations, charges and expenses of any investment carefully. Where applicable, be sure to obtain a prospectus, which contains this and other relevant information. To obtain a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money.

 

Learn more about Nuveen Funds at: www.nuveen.com/cef

Distributed by

Nuveen Securities, LLC

333 West Wacker Drive

Chicago, IL 60606

www.nuveen.com

ESA-C-0912D

 

 

 

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