nvcsr
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment
Company Act file number 811-22058
Nuveen Tax-Advantaged Dividend Growth Fund
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
(Address of principal executive offices) (Zip code)
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
(Name and address of agent for service)
Registrants telephone number, including area code: (312) 917-7700
Date of
fiscal year end: December 31
Date of
reporting period: December 31, 2009
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
(OMB) control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS
TO SHAREHOLDERS
Closed-End Funds
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Nuveen Investments
Closed-End Funds
Tax-Advantaged
Distributions with the Potential for
Dividend Growth, Capital
Appreciation and Reduced Overall Risk
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Annual Report
December 31, 2009
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Nuveen Tax-Advantaged
Dividend Growth
Fund
JTD
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Chairmans
Letter to Shareholders
Dear
Shareholder,
The financial markets in which your Fund operates continue to
reflect the larger economic crosscurrents. The illiquidity that
infected global credit markets over the last year continues to
recede but there is concern about the impact of a reduction in
official liquidity support programs. The major institutions that
are the linchpin of the international financial system have
strengthened their capital structures, but many still struggle
with losses in their various portfolios. Global trends include
increasing trade and concern about the ability of the
U.S. government to address its substantial budgetary
deficits.
While the fixed-income and equity markets have recovered from
the lows recorded in late 2008 and early 2009, identifying those
developments that will define the future is never easy, and
rarely is it more difficult than at present. A fundamental
component of a successful investment program is a commitment to
remain focused on long-term investment goals even during periods
of heightened market uncertainty. Another component is to
re-evaluate investment disciplines and tactics and to confirm
their validity following periods of extreme volatility and
market dislocation, such as we have recently experienced. Your
Board carried out an intensive review of investment performance
with these objectives in mind during April and May of 2009 as
part of the annual management contract renewal process. I
encourage you to read the description of this process in the
Annual Investment Management Agreement Approval Process section
of this report. Confirming the appropriateness of a long term
investment strategy is as important for our shareholders as it
is for our professional investment managers. For that reason, I
again encourage you to remain in communication with your
financial consultant on this subject.
In September 2009, Nuveen completed the refinancing at par of
all the auction rate preferred shares (ARPS) issued by its
taxable closed-end funds. On October 15, 2009, Nuveen
announced the first successful offering of an issue of MuniFund
Term Preferred Shares. This new form of preferred securities
joins the Variable Rate Demand Preferred securities as vehicles
for refinancing existing ARPS. By the beginning of December
2009, six of the leveraged municipal closed-end funds had
redeemed all of their outstanding ARPS. Nuveen remains committed
to resolving the issues connected with outstanding auction rate
preferred shares. Please consult the Nuveen web site for the
most recent information on this issue and all recent
developments on your Nuveen Funds at: www.nuveen.com.
On behalf of the other members of your Funds Board, we
look forward to continuing to earn your trust in the months and
years ahead.
Sincerely,
Robert P. Bremner
Chairman of the Board and Lead Independent Director
February 22, 2010
Portfolio
Managers Comments
Nuveen
Tax-Advantaged Dividend Growth Fund (JTD)
The Funds investment portfolio is managed by three
affiliates of Nuveen Investments: Santa Barbara Asset Management
LLC oversees the Funds dividend-growth equity strategy,
while the Funds income-oriented strategy is managed by NWQ
Investment Management Company, LLC. The Fund also employs an
index call option strategy managed by Nuveen Asset Management
(NAM).
Certain statements in this report are forward-looking
statements. Discussions of specific investments are for
illustration only and are not intended as recommendations of
individual investments. The forward-looking statements and other
views expressed herein are those of the portfolio managers as of
the date of this report. Actual future results or occurrences
may differ significantly from those anticipated in any
forward-looking statements and the views expressed herein are
subject to change at any time, due to numerous market and other
factors. The Fund disclaims any obligation to update publicly or
revise any forward-looking statements or views expressed
herein.
James Boothe, CFA, serves as portfolio manager for the
dividend-growth equity strategy. He has 30 years of
investment management experience and joined Santa Barbara in
2002. The income-oriented investment team at NWQ is led by
Michael Carne, CFA. Michael has more than 20 years of investment
experience and joined NWQ in 2002. Rob Guttschow, CFA, and John
Gambla, CFA, oversee the call option strategy. Rob has been with
NAM since 2004, and John joined the firm in 1993.
Here James, Michael, Rob and John talk about general economic
and market conditions, their management strategies and the
performance of the Fund for the twelve-month period ended
December 31, 2009.
What were the
general market conditions during the twelve month period ending
December 31, 2009?
The general market conditions during the past twelve months were
among the most fluctuating and challenging on record. The
financial crisis that began to accelerate in the last half of
2008 was in full force by the first quarter of 2009. For the
first time since the 1930s, the United States, United Kingdom,
Germany and Japan experienced recessions simultaneously.
In response, the U.S. government enacted a $787 billion
economic stimulus plan early in 2009, and provided additional
funds for large financial institutions under the Troubled Asset
Relief Program (TARP) started in 2008. The Federal Reserve
maintained a fed funds target range of zero to 0.25%, its lowest
level in history. In addition, the Fed announced in March that
it would buy $300 billion in long-term U.S. Treasury
securities in an effort to support private credit markets and up
to an additional $750 billion (for a total of $1.25
trillion) in agency mortgage-backed securities to bolster the
housing market. The government also took steps to prevent the
collapse of the American auto industry.
By the second quarter of 2009, some positive signals began to
emerge. Most major banks seemed to have raised sufficient
capital to survive in the downturn, with several of them even
appearing to thrive. Domestic equity markets, as measured by the
Standard & Poors (S&P) 500 Stock Index, rocketed
up from the lows experienced in March. Bond investors seemed
more willing to hold municipal and corporate securities, causing
the pricing relationships between these issues and U.S. Treasury
securities to adjust closer to historical
norms. However, the unemployment rate at year end was over 10%
and the general credit markets were still constricted,
suggesting that the road to recovery would not be quick or easy.
For the full year, the S&P 500 Index posted a return of
26.46% with most major bond indexes also showing positive
performance. It was also the first year since 2003 in which
stocks that did not pay dividends had the highest returns within
the S&P 500.
As a group, companies within the S&P 500 Index reduced
dividend payments by about 21%, the largest decline since 1938.
These cuts came primarily from large companies such as General
Electric and the major banks. It is noteworthy that over 150
companies in the S&P 500 Index increased their dividends in
2009.
Within the preferred securities market, 2009 began with
extremely negative investor sentiment. Secondary market
liquidity had almost stopped completely, the new issue market
was non-existent and several large financial institutions saw
their preferred securities downgraded to junk status. However,
the market situation improved very rapidly in March, as the
Feds quantitative easing programs kept interest rates low
and the U.S. Treasury completed its stress tests of systemic
financial institutions. The Merrill Lynch Tax-Advantaged
Preferreds Index (MLDRD) posted a return of 21.3% over the
second half of 2009, and a 12.4% return for the full year.
What key
strategies were used to manage the Fund during this twelve-month
period?
Under normal circumstances, the Fund invests primarily in
dividend-paying common stocks of mid- to large-cap companies. To
a lesser extent, the Fund also invests in the preferred stocks
of mid- to large-cap companies, and will write (sell) call
options on various equity market indices. Under normal market
circumstances, the Fund will invest at least 80% of its Managed
Assets in securities that are eligible to pay tax-advantaged
dividends.
Despite considerable market uncertainty during the period, our
overall investment strategy did not change. We sought to produce
a portfolio that had a greater yield and less price volatility
than the S&P 500 Index by focusing on companies that are
growing their dividends.
For the equity portion for the Funds portfolio, we worked
to reduce the overall volatility of the portfolio by
underweighting our holdings in the information technology sector
relative to the market benchmark. This helped lower the
portfolios volatility during the period.
It should be noted that the qualified dividend income provisions
of the federal tax code are set to expire on December 31,
2010. In the event those provisions are not extended, dividends
now referred to as qualified dividends would be
taxed at normal marginal rates beginning in 2011.
In the fixed-income portion of the Funds portfolio, we
focused primarily on purchasing tax-advantaged preferred stocks
using a disciplined,
bottom-up,
research-driven approach using both fundamental valuation and
qualitative measures. In particular, we looked for undervalued
companies where a catalyst, such as a management change,
industry
consolidation or a company restructuring, might lead to better
value recognition or improved profitability.
From time to time over the year, the Fund also sold S&P 500
Index call options with average expirations between 30 and
90 days.
How did the Fund
perform over this period?
The performance of JTD, as well as a comparative benchmark and
general market index, is presented in the accompanying table.
Average Annual
Total Returns on Common Share Net Asset Value
For periods ended 12/31/09
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One-Year
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Since Inception*
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JTD
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26.65%
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6.01%
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Comparative
Benchmark1
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23.45%
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11.13%
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S&P 500 Stock
Index2
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26.46%
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9.19%
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Fund since inception returns are from 6/26/07. Comparative
Benchmark and S&P 500 Index returns are from 6/30/07.
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For the twelve-month period through December 31, 2009, the
Fund outperformed both its comparative benchmark and the general
stock market index.
In the equity portion of the Fund, Southern Copper Corp. and
Alcon, Inc. were two of the best performing stocks. Southern
Copper benefited from rising copper prices that bottomed in
December 2008 and rallied throughout 2009, based on growing
demand from China. Alcon, the largest eye care company, rose due
to a large improvement in earnings and growing rumors that
Novartis might buy out the company.
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Past performance does not guarantee future results. Current
performance may be higher or lower than the data shown.
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Returns do not reflect the deduction of taxes that shareholders
may have to pay on Fund distributions or upon the sale of Fund
shares. For additional information, see the individual
Performance Overview for your Fund in this report.
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1
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Comparative benchmark performance is a blended return consisting
of: 1) 50% of the return of the S&P 500 Stock Index,
an unmanaged Index generally considered representative of the
U.S. Stock Market, 2) 25% of the return the CBOE S&P
500 BuyWrite Index (BXM) which is designed to track the
performance of a hypothetical buy-write strategy on the S&P
500 Index, and 3) 25% of the return of the Merrill Lynch
DRD (dividends received deduction) Preferred Index, which
consists of investment-grade, DRD-eligible, exchange-traded
preferred stocks with one year or more to maturity. Index
returns are not leveraged, and do not include the effects of any
sales charges or management fees. It is not possible to invest
directly in an index.
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The S&P 500 Stock Index is an unmanaged Index generally
considered representative of the U.S. stock market. Index
returns do not reflect the effects of any sales charges or
management fees. It is not possible to invest directly in an
index.
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Our common equity holdings in U.S. Bancorp and PNC Financial
Services constrained performance, as their dividends were cut in
the first quarter. Also detracting from performance was Hudson
City Bancorp. In 2008, this was one of a handful of banks that
was up during the large market decline. In 2009, investors
favored higher risk banks that borrowed money from the TARP
program over higher quality banks with solid balance sheets.
The preferred market saw very weak performance in the first
quarter as the credit crisis continued. Widespread downgrades
early in the year took nearly half of the preferred market to
below investment grade by year-end, according to either
Moodys or S&P. However, weak early returns were
followed by robust results over the rest of 2009, which provided
an overall benefit for the Fund.
During the year, the option strategy performed as expected by
reducing the overall volatility of the Fund on an absolute basis
and adding incremental total return during down markets,
especially early in the year. Conversely, the strategy
constrained returns to a degree in the strong market environment
over the last three quarters of 2009.
IMPACT OF THE
FUNDS CAPITAL STRUCTURE AND LEVERAGE STRATEGY ON
PERFORMANCE
One important factor impacting the return of the Fund relative
to the comparative index and benchmark was the Funds use
of financial leverage through bank borrowings. The Fund uses
leverage because its managers believe that, over time,
leveraging provides
opportunities for additional income and total return for common
shareholders. However, use of leverage also can expose common
shareholders to additional volatility. For example, as the
prices of securities held by a Fund decline, the negative impact
of these valuation changes on common share net asset value and
common shareholder total return is magnified by the use of
leverage. Conversely, leverage may enhance common share returns
during periods when the prices of securities held by the Fund
generally are rising.
Leverage made a significant positive contribution to the
Funds return during 2009.
Common Share
Distribution
and Share Price Information
The following information regarding your Funds
distributions is current as of December 31, 2009, and
likely will vary over time based on the Funds investment
activities and portfolio investment value changes.
Over the course of 2009, the Fund reduced its quarterly
distribution to common shareholders during March and
subsequently increased its quarterly dividend during December.
Some of the important factors affecting the amount and
composition of these distributions are summarized below.
The Fund employs financial leverage through the use of bank
borrowings. Financial leverage provides the potential for higher
earnings (net investment income), total returns and
distributions over time, but also increases the variability of
common shareholders net asset value per share in response
to changing market conditions. During the current reporting
period, the Funds financial leverage contributed
positively to common share income and common share net asset
value price return.
The Fund has a managed distribution program. The goal of this
program is to provide common shareholders with relatively
consistent and predictable cash flow by systematically
converting the Funds expected long-term return potential
into regular distributions. As a result, regular common share
distributions throughout the year are likely to include a
portion of expected long-term gains (both realized and
unrealized), along with net investment income.
Important points to understand about the managed distribution
program are:
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The Fund seeks to establish a relatively stable common share
distribution rate that roughly corresponds to the projected
total return from its investment strategy over an extended
period of time. However, you should not draw any conclusions
about the Funds past or future investment performance from
its current distribution rate.
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Actual common share returns will differ from projected long-term
returns (and therefore the Funds distribution rate), at
least over shorter time periods. Over a specific timeframe, the
difference between actual returns and total distributions will
be reflected in an increasing (returns exceed distributions) or
a decreasing (distributions exceed returns) Fund net asset value.
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Each distribution is expected to be paid from some or all of the
following sources:
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net investment income (regular interest and dividends),
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realized capital gains, and
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unrealized gains, or, in certain cases, a return of principal
(non-taxable
distributions).
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A
non-taxable
distribution is a payment of a portion of the Funds
capital. When the Funds returns exceed distributions, it
may represent portfolio gains generated, but not realized as a
taxable capital gain. In periods when the Funds returns
fall short of distributions, the shortfall will represent a
portion of your original principal, unless the shortfall is
offset during other time periods over the life of your
investment (previous or subsequent) when the Funds total
return exceeds distributions.
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Because distribution source estimates are updated during the
year based on the Funds performance and forecast for its
current fiscal year (which is the calendar year for the Fund),
estimates on the nature of your distributions provided at the
time the distributions are paid may differ from both the tax
information reported to you in your Funds IRS Form 1099
statement provided at year end, as well as the ultimate economic
sources of distributions over the life of your investment.
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The following table provides information regarding the
Funds common share distributions and total return
performance for the fiscal year ended December 31, 2009.
This information is intended to help you better understand
whether the Funds returns for the specified time period
were sufficient to meet the Funds distributions.
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As of 12/31/09 (Common
Shares)
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JTD
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Inception date
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6/26/07
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Calendar year ended December 31, 2009:
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Per share distribution:
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From net investment income
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$0.49
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From long-term capital gains
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0.00
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From short-term capital gains
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0.00
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Tax return of capital
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0.52
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Total per share distribution
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$1.01
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Distribution rate on NAV
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7.78%
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Average annual total returns:
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1-Year on NAV
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26.65%
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Since inception on NAV
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-6.01%
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The qualified dividend income provisions of the federal tax code
are set to expire on December 31, 2010. In the event that
Congress does not extend these provisions, beginning in calendar
2011, dividends previously referred to as qualified
dividends would be taxed at normal marginal tax rates.
Common Share
Repurchases and Share Price Information
As of December 31, 2009, the Fund has cumulatively
repurchased 300,800 common shares, representing approximately
2.1% of the Funds total common shares outstanding.
During the twelve-month reporting period, the Fund repurchased
203,900 common shares at a weighted average price and weighted
average discount per common share of $10.58 and 13.89%,
respectively.
As of December 31, 2009, the Fund was trading at a -11.01%
discount to its common share NAV, compared with an average
-22.57% discount for the entire twelve-month period.
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JTD
Performance
OVERVIEW
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Nuveen
Tax-Advantaged
Dividend
Growth Fund
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as
of December 31, 2009
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Fund Snapshot
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Common Share Price
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$11.56
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Common Share Net Asset Value
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$12.99
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Premium/(Discount) to NAV
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-11.01%
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Current Distribution
Rate1
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9.00%
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Net Assets Applicable to
Common Shares ($000)
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$189,012
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Average Annual Total Return
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(Inception 6/26/07)
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On Share Price
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On NAV
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1-Year
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47.97%
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26.65%
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Since Inception
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-10.42%
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-6.01%
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Industries
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(as a % of total
investments)2
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Commercial Banks
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9.7%
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Insurance
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6.2%
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Oil, Gas & Consumable Fuels
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6.1%
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Diversified Financial Services
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6.0%
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Electric Utilities
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5.0%
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Health Care Equipment & Supplies
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4.3%
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Thrifts & Mortgage Finance
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4.1%
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Diversified Telecommunication Services
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4.0%
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Tobacco
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3.9%
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Capital Markets
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3.5%
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Media
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3.3%
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Commercial Services & Supplies
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2.7%
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Metals & Mining
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2.3%
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Computers & Peripherals
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2.3%
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Semiconductors & Equipment
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2.3%
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Consumer finance
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2.3%
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Beverages
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2.2%
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Pharmaceuticals
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2.2%
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Gas Utilities
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2.1%
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Communications Equipment
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2.1%
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Software
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2.1%
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Electrical Equipment
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2.0%
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Hotels, Restaurants & Leisure
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2.0%
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Textiles, Apparel & Luxury Goods
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2.0%
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Investment Companies
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1.0%
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Short-Term Investments
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1.8%
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Other
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12.5%
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Portfolio
Allocation (as a % of total
investments)2
2008-2009
Distributions Per Common Share
Common Share
Price PerformanceWeekly
Closing Price
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1
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Current Distribution Rate is based on the Funds current
annualized quarterly distribution divided by the Funds
current market price. The Funds quarterly distributions to
its shareholders may be comprised of ordinary income, net
realized capital gains and, if at the end of the calendar year
the Funds cumulative net ordinary income and net realized
gains are less than the amount of the Funds distributions,
a return of capital for tax purposes.
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2
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Excluding call options written.
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Report of INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
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The Board of
Trustees and Shareholders
Nuveen Tax-Advantaged Dividend Growth Fund
We have audited the accompanying statement of assets and
liabilities, including the portfolio of investments, of Nuveen
Tax-Advantaged Dividend Growth Fund (the Fund) as of
December 31, 2009, and the related statements of operations
and cash flows for the year then ended, the statements of
changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial
highlights are the responsibility of the Funds management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Funds internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting
principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our
procedures included confirmation of securities owned as of
December 31, 2009, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where
replies from brokers were not received. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Nuveen Tax-Advantaged
Dividend Growth Fund at December 31, 2009, the results of
its operations and cash flows for the year then ended, the
changes in its net assets for each of the two years in the
period then ended, and financial highlights for each of the
periods indicated therein in conformity with US generally
accepted accounting principles.
Chicago, Illinois
February 24, 2010
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JTD
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Nuveen Tax-Advantaged Dividend
Growth Fund
Portfolio of INVESTMENTS
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December 31, 2009
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
Common Stocks 89.9% (72.7% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense 2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,638
|
|
|
Raytheon Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,309,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverages 2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,945
|
|
|
Coca-Cola
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,183,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets 2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,725
|
|
|
BlackRock Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,276,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks 3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,653
|
|
|
Cullen/Frost Bankers, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,832,650
|
|
|
147,800
|
|
|
U.S. Bancorp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,326,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,159,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services & Supplies 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147,505
|
|
|
Waste Management, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,987,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications Equipment 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,435
|
|
|
QUALCOMM, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,969,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computers & Peripherals 2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,310
|
|
|
International Business Machines Corporation (IBM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,407,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,820
|
|
|
JPMorgan Chase & Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,201,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication
Services 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,403
|
|
|
AT&T Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,056,696
|
|
|
52,570
|
|
|
Telefonica S.A., Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,390,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Diversified Telecommunication Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,447,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Utilities 4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,642
|
|
|
Exelon Corporation (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,185,325
|
|
|
78,304
|
|
|
FPL Group, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,136,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Electric Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,321,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electrical Equipment 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111,761
|
|
|
Emerson Electric Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,761,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Utilities 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,642
|
|
|
EQT Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,991,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health Care Equipment &
Supplies 5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,095
|
|
|
Alcon, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,110,463
|
|
|
61,605
|
|
|
Becton, Dickinson and Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,858,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Equipment & Supplies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,968,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,379
|
|
|
YUM! Brands, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,594,324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Household Products 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,765
|
|
|
Procter & Gamble Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,472,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,625
|
|
|
AFLAC Incorporated (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,838,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT Services 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,848
|
|
|
Paychex, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,438,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,013
|
|
|
PACCAR Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,990,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media 3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
178,300
|
|
|
Shaw Communication Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,667,631
|
|
|
97,910
|
|
|
Thomson Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,157,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,825,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
Metals & Mining 2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164,910
|
|
|
Southern Copper Corporation (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,427,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,850
|
|
|
Chevron Corporation (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,531,728
|
|
|
113,670
|
|
|
EnCana Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,681,771
|
|
|
84,453
|
|
|
Royal Dutch Shell PLC, Class A, ADR (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,076,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,289,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,280
|
|
|
Abbott Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,144,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Semiconductors & Equipment 2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
184,154
|
|
|
Microchip Technology Incorporated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,351,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
157,850
|
|
|
Microsoft Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,812,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty Retail 1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,940
|
|
|
Sherwin-Williams Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,510,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles, Apparel & Luxury
Goods 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62,605
|
|
|
VF Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,585,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thrifts & Mortgage Finance 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
325,503
|
|
|
Hudson City Bancorp, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,469,156
|
|
|
346,948
|
|
|
New York Community Bancorp, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,034,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Thrifts & Mortgage Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,503,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tobacco 4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,669
|
|
|
Lorillard Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,947,704
|
|
|
85,789
|
|
|
Philip Morris International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,134,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tobacco
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,081,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks (cost $166,592,566)
|
|
|
169,850,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
|
|
|
Ratings (3)
|
|
|
Value
|
|
|
|
|
|
$25 Par (or similar) Preferred
Securities 22.1% (18.0% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
Automobiles 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,600
|
|
|
Daimler Finance NA LLC, Structured Asset Trust Unit Repackaging,
Series DCX
|
|
|
|
|
|
|
7.000%
|
|
|
|
|
|
|
|
A3
|
|
|
$
|
995,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Markets 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
Credit Suisse
|
|
|
|
|
|
|
7.900%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
1,284,000
|
|
|
41,250
|
|
|
Deutsche Bank Capital Funding Trust V
|
|
|
|
|
|
|
8.050%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
1,039,088
|
|
|
22,000
|
|
|
Deutsche Bank Capital Funding Trust IX
|
|
|
|
|
|
|
6.625%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
461,780
|
|
|
8,750
|
|
|
Deutsche Bank Contingent Capital Trust III
|
|
|
|
|
|
|
7.600%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
207,638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,992,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks 5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,550
|
|
|
Banco Santander Finance
|
|
|
|
|
|
|
10.500%
|
|
|
|
|
|
|
|
A2
|
|
|
|
2,967,129
|
|
|
25,000
|
|
|
Barclays Bank PLC
|
|
|
|
|
|
|
8.125%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
621,500
|
|
|
50,000
|
|
|
Barclays Bank PLC
|
|
|
|
|
|
|
7.100%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
1,104,500
|
|
|
32,300
|
|
|
Barclays Bank PLC
|
|
|
|
|
|
|
6.625%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
656,659
|
|
|
75,000
|
|
|
BB&T Capital Trust VI
|
|
|
|
|
|
|
9.600%
|
|
|
|
|
|
|
|
A2
|
|
|
|
2,131,500
|
|
|
15,000
|
|
|
BB&T Capital Trust VII
|
|
|
|
|
|
|
8.100%
|
|
|
|
|
|
|
|
A2
|
|
|
|
387,750
|
|
|
20,000
|
|
|
HSBC Holdings PLC
|
|
|
|
|
|
|
8.125%
|
|
|
|
|
|
|
|
A−
|
|
|
|
522,000
|
|
|
18,100
|
|
|
HSBC Holdings PLC
|
|
|
|
|
|
|
6.200%
|
|
|
|
|
|
|
|
A2
|
|
|
|
387,159
|
|
|
9,199
|
|
|
National City Capital Trust IV
|
|
|
|
|
|
|
8.000%
|
|
|
|
|
|
|
|
Baa1
|
|
|
|
229,791
|
|
|
40,744
|
|
|
PNC Capital Trust
|
|
|
|
|
|
|
7.750%
|
|
|
|
|
|
|
|
Baa1
|
|
|
|
1,034,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,042,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Services & Supplies 0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,250
|
|
|
Pitney Bowes International Holdings, 144A
|
|
|
|
|
|
|
6.125%
|
|
|
|
|
|
|
|
A3
|
|
|
|
1,217,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Finance 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
HSBC Finance Corporation
|
|
|
|
|
|
|
6.360%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
516,000
|
|
|
54,800
|
|
|
HSBC USA Inc.
|
|
|
|
|
|
|
6.500%
|
|
|
|
|
|
|
|
A
|
|
|
|
1,336,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,852,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JTD
|
|
|
Nuveen Tax-Advantaged Dividend Growth
Fund (continued)
Portfolio of INVESTMENTS
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
|
|
|
Ratings (3)
|
|
|
Value
|
|
|
|
|
|
Diversified Financial Services 3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
Bank of America Corporation
|
|
|
|
|
|
|
8.200%
|
|
|
|
|
|
|
|
BB
|
|
|
$
|
604,250
|
|
|
50,000
|
|
|
Citigroup Capital Trust VIII
|
|
|
|
|
|
|
6.950%
|
|
|
|
|
|
|
|
Baa3
|
|
|
|
1,037,500
|
|
|
18,200
|
|
|
Fleet Capital Trust VIII
|
|
|
|
|
|
|
7.200%
|
|
|
|
|
|
|
|
Baa3
|
|
|
|
403,494
|
|
|
46,800
|
|
|
ING Groep N.V.
|
|
|
|
|
|
|
8.500%
|
|
|
|
|
|
|
|
Ba1
|
|
|
|
1,028,196
|
|
|
50,000
|
|
|
ING Groep N.V.
|
|
|
|
|
|
|
7.200%
|
|
|
|
|
|
|
|
Ba1
|
|
|
|
962,500
|
|
|
60,000
|
|
|
ING Groep N.V.
|
|
|
|
|
|
|
7.050%
|
|
|
|
|
|
|
|
Ba1
|
|
|
|
1,113,600
|
|
|
38,900
|
|
|
MBNA Corporation, Capital Trust D
|
|
|
|
|
|
|
8.125%
|
|
|
|
|
|
|
|
Baa3
|
|
|
|
950,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Diversified Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,100,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric Utilities 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
American Electric Power
|
|
|
|
|
|
|
8.750%
|
|
|
|
|
|
|
|
Baa3
|
|
|
|
702,250
|
|
|
13,000
|
|
|
BGE Capital Trust II
|
|
|
|
|
|
|
6.200%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
289,250
|
|
|
5,700
|
|
|
DTE Energy Trust I
|
|
|
|
|
|
|
7.800%
|
|
|
|
|
|
|
|
Baa3
|
|
|
|
148,143
|
|
|
4,200
|
|
|
Entergy Louisiana LLC
|
|
|
|
|
|
|
7.600%
|
|
|
|
|
|
|
|
A
|
|
|
|
108,108
|
|
|
25,000
|
|
|
Entergy Texas Inc.
|
|
|
|
|
|
|
7.875%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
675,000
|
|
|
19,800
|
|
|
FPC Capital I
|
|
|
|
|
|
|
7.100%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
504,504
|
|
|
10,000
|
|
|
Southern California Edison Company, Series C
|
|
|
|
|
|
|
6.000%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
877,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Electric Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,305,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Products 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
HJ Heinz Finance Company, 144A
|
|
|
|
|
|
|
8.000%
|
|
|
|
|
|
|
|
BB+
|
|
|
|
2,080,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance 3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,701
|
|
|
Aegon N.V.
|
|
|
|
|
|
|
6.875%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
145,395
|
|
|
41,774
|
|
|
Aegon N.V.
|
|
|
|
|
|
|
6.375%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
746,084
|
|
|
67,100
|
|
|
Arch Capital Group Limited, Series B
|
|
|
|
|
|
|
7.875%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
1,674,145
|
|
|
21,800
|
|
|
Arch Capital Group Limited
|
|
|
|
|
|
|
8.000%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
545,435
|
|
|
31,044
|
|
|
Endurance Specialty Holdings Limited
|
|
|
|
|
|
|
7.750%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
709,045
|
|
|
19,600
|
|
|
Genworth Financial Inc., Series A
|
|
|
|
|
|
|
5.250%
|
|
|
|
|
|
|
|
BB+
|
|
|
|
977,550
|
|
|
25,000
|
|
|
Phoenix Companies Inc.
|
|
|
|
|
|
|
7.450%
|
|
|
|
|
|
|
|
B1
|
|
|
|
461,250
|
|
|
75,000
|
|
|
Prudential Financial Inc.
|
|
|
|
|
|
|
9.000%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
1,991,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,250,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,800
|
|
|
Viacom Inc.
|
|
|
|
|
|
|
6.850%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
977,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Multi-Utilities 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
Dominion Resources Inc.
|
|
|
|
|
|
|
8.375%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
685,000
|
|
|
32,500
|
|
|
Scana Corporation
|
|
|
|
|
|
|
7.700%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
857,512
|
|
|
25,000
|
|
|
Xcel Energy Inc.
|
|
|
|
|
|
|
7.600%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Multi-Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,207,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate Investment Trust 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
Kimco Realty Corporation, Series G
|
|
|
|
|
|
|
7.750%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
613,750
|
|
|
72,500
|
|
|
Vornado Realty LP
|
|
|
|
|
|
|
7.875%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
1,763,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Real Estate Investment Trust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,377,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,600
|
|
|
Telephone and Data Systems Inc.
|
|
|
|
|
|
|
7.600%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
628,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total $25 Par (or similar) Preferred Securities (cost
$40,494,993)
|
|
|
42,026,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
|
|
|
Ratings (3)
|
|
|
Value
|
|
|
|
|
|
Convertible Preferred Securities 2.3% (1.9%
of Total Investments)
|
|
|
|
|
|
|
|
|
|
Commercial Banks 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,720
|
|
|
Sovereign Capital Trust IV, Convertible Security
|
|
|
|
|
|
|
4.375%
|
|
|
|
|
|
|
|
BBB+
|
|
|
$
|
663,040
|
|
|
1,787
|
|
|
Wells Fargo & Company, Convertible Bond
|
|
|
|
|
|
|
7.500%
|
|
|
|
|
|
|
|
A
|
|
|
|
1,640,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,303,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,400
|
|
|
CitiGroup Inc., Convertible
|
|
|
|
|
|
|
7.500%
|
|
|
|
|
|
|
|
N/A
|
|
|
|
2,024,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Convertible Preferred Securities (cost $4,065,969)
|
|
|
4,327,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
Maturity
|
|
|
Ratings (3)
|
|
|
Value
|
|
|
|
|
|
Corporate Bonds 1.9% (1.6% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
Commercial Banks 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,000
|
|
|
Zions Bancorp.
|
|
|
|
|
|
|
7.750%
|
|
|
|
9/23/14
|
|
|
|
BBB
|
|
|
$
|
883,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Finance 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
Discover Financial Services
|
|
|
|
|
|
|
10.250%
|
|
|
|
7/15/19
|
|
|
|
BBB
|
|
|
|
1,756,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
Genworth Financial Inc.
|
|
|
|
|
|
|
8.625%
|
|
|
|
12/15/16
|
|
|
|
BBB
|
|
|
|
1,038,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,500
|
|
|
Total Corporate Bonds (cost $3,384,406)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,678,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
Maturity
|
|
|
Ratings (3)
|
|
|
Value
|
|
|
|
|
|
Capital Preferred Securities 3.8% (3.0% of
Total Investments)
|
|
|
|
|
|
|
|
|
|
Commercial Banks 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
City National Capital Trust I
|
|
|
|
|
|
|
9.625%
|
|
|
|
2/01/40
|
|
|
|
A3
|
|
|
$
|
1,064,830
|
|
|
1,250
|
|
|
Wells Fargo & Company, Series K
|
|
|
|
|
|
|
7.980%
|
|
|
|
N/A
|
(4)
|
|
|
A
|
|
|
|
1,259,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,324,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Finance 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
Capital On Capital V, Cumulative Trust Preferred Securities
|
|
|
|
|
|
|
10.250%
|
|
|
|
8/15/39
|
|
|
|
Baa2
|
|
|
|
1,165,515
|
|
|
500
|
|
|
Capital One Capital VI
|
|
|
|
|
|
|
8.875%
|
|
|
|
5/15/40
|
|
|
|
Baa2
|
|
|
|
536,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,701,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
BAC Capital Trust XIV
|
|
|
|
|
|
|
5.630%
|
|
|
|
12/31/49
|
|
|
|
BB
|
|
|
|
697,500
|
|
|
1,000
|
|
|
JP Morgan Chase & Company
|
|
|
|
|
|
|
7.900%
|
|
|
|
N/A
|
(4)
|
|
|
BBB+
|
|
|
|
1,034,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Diversified Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,732,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance 0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
MetLife Inc.
|
|
|
|
|
|
|
10.750%
|
|
|
|
8/01/39
|
|
|
|
BBB
|
|
|
|
1,234,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Preferred Securities (cost $6,019,640)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,992,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
Investment Companies 1.2% (1.0% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
Flaherty and Crumrine/Claymore Preferred Securities Income Fund
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,235,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Companies (cost $1,951,837)
|
|
|
2,235,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
|
|
|
Coupon
|
|
|
Maturity
|
|
|
|
|
|
Value
|
|
|
|
|
|
Short-Term Investments 2.2% (1.8% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,163
|
|
|
Repurchase agreement with State Street Bank, dated 12/31/09,
repurchase price $4,162,773, collateralized by $4,250,000
U.S. Treasury Bills, 0.000%, due 6/03/10, value $4,246,600
|
|
|
|
|
|
|
0.000%
|
|
|
|
1/04/10
|
|
|
|
|
|
|
$
|
4,162,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Short-Term Investments (cost $4,162,773)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,162,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments (cost $226,672,184) 123.4%
|
|
|
233,273,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JTD
|
|
|
Nuveen Tax-Advantaged Dividend Growth
Fund (continued)
Portfolio of INVESTMENTS
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Notional
|
|
|
Expiration
|
|
|
Strike
|
|
|
|
|
Contracts
|
|
|
Type
|
|
|
|
|
Amount (5)
|
|
|
Date
|
|
|
Price
|
|
|
Value
|
|
|
|
|
|
Call Options Written (0.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(100
|
)
|
|
S&P 500 INDEX
|
|
|
|
|
|
$
|
(11,500,000
|
)
|
|
|
1/16/10
|
|
|
$
|
1,150
|
|
|
$
|
(28,000
|
)
|
|
(100
|
)
|
|
S&P 500 INDEX
|
|
|
|
|
|
|
(11,750,000
|
)
|
|
|
1/16/10
|
|
|
|
1,175
|
|
|
|
(7,750
|
)
|
|
(150
|
)
|
|
S&P 500 INDEX
|
|
|
|
|
|
|
(17,625,000
|
)
|
|
|
2/20/10
|
|
|
|
1,175
|
|
|
|
(103,500
|
)
|
|
(150
|
)
|
|
S&P 500 INDEX
|
|
|
|
|
|
|
(18,000,000
|
)
|
|
|
3/20/10
|
|
|
|
1,200
|
|
|
|
(123,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(500
|
)
|
|
Total Call Options Written (premiums received $583,000)
|
|
|
|
|
|
|
(58,875,000
|
)
|
|
|
|
|
|
|
|
|
|
|
(262,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings (23.0)% (6), (7)
|
|
|
(43,500,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets Less Liabilities (0.3)%
|
|
|
(499,652
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Shares 100%
|
|
$
|
189,012,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
All percentages shown in the Portfolio of Investments are based
on net assets applicable to Common shares unless otherwise noted.
|
|
|
|
|
(2)
|
|
Investment, or portion of investment, has been pledged to
collateralize the net payment obligations under call options
written.
|
|
|
|
|
(3)
|
|
Ratings (not covered by the report of independent registered
public accounting firm): Using the higher of Standard &
Poors Group (Standard & Poors) or
Moodys Investor Service, Inc. (Moodys)
rating. Ratings below BBB by Standard & Poors or Baa
by Moodys are considered to be below investment grade.
|
|
|
|
|
(4)
|
|
Perpetual security. Maturity date is not applicable.
|
|
|
|
|
(5)
|
|
For disclosure purposes, Notional Amount is calculated by
multiplying the Number of Contracts by the Strike Price by 100.
|
|
|
|
|
(6)
|
|
Borrowings as a percentage of Total Investments is 18.6%.
|
|
|
|
|
(7)
|
|
The Fund may pledge up to 100% of its eligible investments in
the Portfolio of Investments as collateral for Borrowings. As of
December 31, 2009, investments with a value of $92,813,064 have
been pledged as collateral for Borrowings.
|
|
|
|
|
N/A
|
|
Not applicable.
|
|
|
|
|
ADR
|
|
American Depositary Receipt.
|
|
|
|
|
144A
|
|
Investment is exempt from registration under Rule 144A of the
Securities Act of 1933, as amended. These investments may only
be resold in transactions exempt from registration which are
normally those transactions with qualified institutional buyers.
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
ASSETS & LIABILITIES
|
|
|
|
|
|
December 31, 2009
|
|
|
|
|
|
Assets
|
|
|
|
|
Investments, at value (cost $226,672,184)
|
|
$
|
233,273,968
|
|
Receivables:
|
|
|
|
|
Dividends
|
|
|
284,917
|
|
Interest
|
|
|
262,133
|
|
Reclaims
|
|
|
46,129
|
|
Other assets
|
|
|
17,328
|
|
|
|
|
|
|
Total assets
|
|
|
233,884,475
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Cash overdraft
|
|
|
813,542
|
|
Borrowings
|
|
|
43,500,000
|
|
Call options written, at value (premiums received $583,000)
|
|
|
262,250
|
|
Accrued expenses:
|
|
|
|
|
Interest on borrowings
|
|
|
5,165
|
|
Management fees
|
|
|
194,776
|
|
Other
|
|
|
96,676
|
|
|
|
|
|
|
Total liabilities
|
|
|
44,872,409
|
|
|
|
|
|
|
Net assets applicable to Common shares
|
|
$
|
189,012,066
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
14,554,440
|
|
|
|
|
|
|
Net asset value per Common share outstanding (net assets
applicable to Common shares, divided by Common shares
outstanding)
|
|
$
|
12.99
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common shares consist of:
|
|
|
|
|
|
|
|
|
|
Common shares, $.01 par value per share
|
|
$
|
145,544
|
|
Paid-in surplus
|
|
|
248,697,139
|
|
Undistributed (Over-distribution of) net investment income
|
|
|
(174,457
|
)
|
Accumulated net realized gain (loss) from investments, foreign
currency, call options written and derivative transactions
|
|
|
(66,578,694
|
)
|
Net unrealized appreciation (depreciation) of investments, call
options written and derivative transactions
|
|
|
6,922,534
|
|
|
|
|
|
|
Net assets applicable to Common shares
|
|
$
|
189,012,066
|
|
|
|
|
|
|
Authorized shares:
|
|
|
|
|
Common
|
|
|
Unlimited
|
|
FundPreferred
|
|
|
Unlimited
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
OPERATIONS
|
|
|
|
|
|
Year Ended December 31, 2009
|
|
|
|
|
|
Investment Income
|
|
|
|
|
Dividends (net of foreign tax withheld of $176,560)
|
|
$
|
9,426,921
|
|
Interest
|
|
|
885,787
|
|
|
|
|
|
|
Total investment income
|
|
|
10,312,708
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Management fees
|
|
|
2,092,891
|
|
Shareholders servicing agent fees and expenses
|
|
|
506
|
|
Interest expense on borrowings
|
|
|
860,444
|
|
Custodians fees and expenses
|
|
|
47,141
|
|
Trustees fees and expenses
|
|
|
6,595
|
|
Professional fees
|
|
|
32,227
|
|
Shareholders reports printing and mailing
expenses
|
|
|
79,976
|
|
Stock exchange listing fees
|
|
|
9,219
|
|
Investor relations expense
|
|
|
41,646
|
|
Other expenses
|
|
|
19,668
|
|
|
|
|
|
|
Total expenses before custodian fee credit
|
|
|
3,190,313
|
|
Custodian fee credit
|
|
|
(13
|
)
|
|
|
|
|
|
Net expenses
|
|
|
3,190,300
|
|
|
|
|
|
|
Net investment income
|
|
|
7,122,408
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
Net realized gain (loss) from:
|
|
|
|
|
Investments and foreign currency
|
|
|
(33,760,509
|
)
|
Call options written
|
|
|
(3,235,051
|
)
|
Change in net unrealized appreciation (depreciation) of:
|
|
|
|
|
Investments and foreign currency
|
|
|
68,562,521
|
|
Call options written
|
|
|
1,822,100
|
|
|
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
33,389,061
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from operations
|
|
$
|
40,511,469
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
Year
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
12/31/09
|
|
|
12/31/08
|
|
Operations
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
7,122,408
|
|
|
$
|
7,241,188
|
|
Net realized gain (loss) from:
|
|
|
|
|
|
|
|
|
Investments and foreign currency
|
|
|
(33,760,509
|
)
|
|
|
(36,093,112
|
)
|
Call options written
|
|
|
(3,235,051
|
)
|
|
|
10,185,989
|
|
Change in net unrealized appreciation (depreciation) of:
|
|
|
|
|
|
|
|
|
Investments and foreign currency
|
|
|
68,562,521
|
|
|
|
(58,745,472
|
)
|
Call options written
|
|
|
1,822,100
|
|
|
|
(3,425,090
|
)
|
Distributions to FundPreferred shareholders:
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
|
|
|
|
(491,826
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from operations
|
|
|
40,511,469
|
|
|
|
(81,328,323
|
)
|
|
|
|
|
|
|
|
|
|
Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(7,207,326
|
)
|
|
|
(6,923,922
|
)
|
Tax return of capital
|
|
|
(7,635,669
|
)
|
|
|
(14,387,121
|
)
|
|
|
|
|
|
|
|
|
|
Decrease in net assets applicable to Common shares from
distributions to Common shareholders
|
|
|
(14,842,995
|
)
|
|
|
(21,311,043
|
)
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
Common shares repurchased
|
|
|
(2,127,807
|
)
|
|
|
|
|
FundPreferred shares offering cost adjustments
|
|
|
|
|
|
|
(78,908
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions
|
|
|
(2,127,807
|
)
|
|
|
(78,908
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares
|
|
|
23,540,667
|
|
|
|
(102,718,274
|
)
|
Net assets applicable to Common shares at the beginning of year
|
|
|
165,471,399
|
|
|
|
268,189,673
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common shares at the end of year
|
|
$
|
189,012,066
|
|
|
$
|
165,471,399
|
|
|
|
|
|
|
|
|
|
|
Undistributed (Over-distribution of) net investment income at
the end of year
|
|
$
|
(174,457
|
)
|
|
$
|
(177,986
|
)
|
|
|
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
CASH FLOWS
|
|
|
|
Year Ended December 31, 2009
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net Increase (Decrease) in Net Assets Applicable to Common
Shares from Operations
|
|
$
|
40,511,469
|
|
Adjustments to reconcile the net increase (decrease) in net
assets applicable to Common shares from operations to net cash
provided by (used in) operating activities:
|
|
|
|
|
Purchases of investments
|
|
|
(109,429,600
|
)
|
Proceeds from sales and maturities of investments
|
|
|
131,309,787
|
|
Proceeds from (Purchases of) short-term investments, net
|
|
|
6,930,516
|
|
Proceeds from closed foreign currency spot contracts
|
|
|
758
|
|
Cash paid for terminated call options written
|
|
|
(12,065,280
|
)
|
Premiums received on call options written
|
|
|
6,933,700
|
|
Amortization (Accretion) of premiums and discounts, net
|
|
|
(160,923
|
)
|
(Increase) Decrease in receivable for dividends
|
|
|
178,885
|
|
(Increase) Decrease in receivable for interest
|
|
|
(138,303
|
)
|
(Increase) Decrease in receivable for reclaims
|
|
|
(26,156
|
)
|
(Increase) Decrease in other assets
|
|
|
(7,856
|
)
|
Increase (Decrease) in accrued interest on borrowings
|
|
|
(2,659
|
)
|
Increase (Decrease) in accrued management fees
|
|
|
14,175
|
|
Increase (Decrease) in accrued other liabilities
|
|
|
(2,192
|
)
|
Net realized (gain) loss from investments and foreign currency
|
|
|
33,760,509
|
|
Net realized (gain) loss from call options written
|
|
|
3,235,051
|
|
Change in net unrealized (appreciation) depreciation of
investments and foreign currency
|
|
|
(68,562,521
|
)
|
Change in net unrealized (appreciation) depreciation of call
options written
|
|
|
(1,822,100
|
)
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
30,657,260
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Increase (Decrease) in borrowings
|
|
|
(14,500,000
|
)
|
Increase (Decrease) in cash overdraft balance
|
|
|
813,542
|
|
Cost of Common shares repurchased
|
|
|
(2,127,807
|
)
|
Cash distributions paid to Common shareholders
|
|
|
(14,842,995
|
)
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(30,657,260
|
)
|
|
|
|
|
|
Net Increase (Decrease) in Cash
|
|
|
|
|
Cash at the beginning of year
|
|
|
|
|
|
|
|
|
|
Cash at the End of Year
|
|
$
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
Cash paid for interest on borrowings during the fiscal year
ended December 31, 2009, was $863,103.
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
|
|
|
|
|
|
|
1. General
Information and Significant Accounting Policies
Nuveen Tax-Advantaged Dividend Growth Fund (the
Fund) is a closed-end management investment company
registered under the Investment Company Act of 1940, as amended.
The Funds shares are listed on the New York Stock Exchange
(NYSE) and trade under the ticker symbol JTD. The
Fund was organized as a Massachusetts business trust on
February 22, 2007.
The Funds investment objective is to provide an attractive
level of tax-advantaged distributions and capital appreciation
by investing in dividend-paying equity securities consisting
primarily of common stocks of mid- to large-cap companies that
have attractive dividend income and the potential for future
dividend growth and capital appreciation. The Fund will also
invest in preferred stocks of mid- to large-cap companies and
other fixed-income securities, and to a limited extent, write
(sell) call options on various equity market indices. The
qualified dividend income provisions of the tax code are set to
expire on December 31, 2010. In the event that Congress
does not extend these provisions, beginning in calendar 2011,
dividends previously referred to as qualified
dividends would be taxed at normal marginal tax rates.
In June 2009, the Financial Accounting Standards Board (FASB)
established the FASB Accounting Standards
Codificationtm
(the Codification) as the single source of
authoritative accounting principles recognized by the FASB in
the preparation of financial statements in conformity with
generally accepted accounting principles (GAAP). The
Codification supersedes existing non-grandfathered, non-SEC
accounting and reporting standards. The Codification did not
change GAAP but rather organized it into a hierarchy where all
guidance within the Codification carries an equal level of
authority. The Codification became effective for financial
statements issued for interim and annual periods ending after
September 15, 2009. The Codification did not have a
material effect on the Funds financial statements.
The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial
statements in accordance with US generally accepted accounting
principles.
Investment
Valuation
Exchange-listed securities are generally valued at the last
sales price on the securities exchange on which such securities
are primarily traded. Securities traded on a securities exchange
for which there are no transactions on a given day or securities
not listed on a securities exchange are valued at the mean of
the closing bid and asked prices. Securities traded on NASDAQ
are valued at the NASDAQ Official Closing Price. The prices of
fixed-income securities are generally provided by an independent
pricing service approved by the Funds Board of Trustees.
When market price quotes are not readily available, the pricing
service or, in the absence of a pricing service for a particular
investment or derivative instrument, the Board of Trustees of
the Fund, or its designee may establish fair value using a wide
variety of market data including 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 obligors credit characteristics considered
relevant. Short-term investments are valued at amortized cost,
which approximates value.
Index options are generally valued at the average of the closing
bid and asked quotations. The close of trading of index options
traded on the Chicago Board Options Exchange normally occurs at
4:15 Eastern Time (ET), which is different from the normal 4:00
ET close of the NYSE (the time of day as of which the
Funds NAV is calculated). Under normal market
circumstances, closing index option quotations are considered to
reflect the index option contract values as of the close of the
NYSE and will be used to value the option contracts. However, a
significant change in the S&P 500 futures contracts between
the NYSE close and the options market close will be considered
as an indication that closing market quotations for index
options do not reflect the value of the contracts as of the
stock market close. In the event of such a significant change,
the Board of Trustees, or its designee, will determine a value
for the options. Any such valuation will likely take into
account any information that may be available about the actual
trading price of the affected option as of 4:00 ET, and if no
such information is reliably available, the valuation of the
option may take into account various option pricing
methodologies, as determined to be appropriate under the
circumstances.
Investment
Transactions
Investment transactions are recorded on a trade date basis.
Realized gains and losses from investment transactions are
determined on the specific identification method. 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 Fund has
instructed the custodian to segregate assets with a current
value at least equal to the amount of the when-issued/delayed
delivery purchase commitments. At December 31, 2009, the
Fund had no such outstanding purchase commitments.
|
|
|
|
|
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
Investment
Income
Dividend income is recorded on the ex-dividend date or, for
foreign securities, when information is available. Interest
income, which includes the amortization of premiums and
accretion of discounts for financial reporting purposes, is
recorded on an accrual basis. Interest income also includes
paydown gains and losses, if any.
Income
Taxes
The Fund intends to comply with the requirements of Subchapter M
of the Internal Revenue Code applicable to regulated investment
companies. The Fund intends to distribute substantially all of
its investment company taxable income to shareholders. In any
year when the Fund realizes net capital gains, the Fund may
choose to distribute all or a portion of its net capital gains
to shareholders, or alternatively, to retain all or a portion of
its net capital gains and pay federal corporate income taxes on
such retained gains.
For all open tax years and all major taxing jurisdictions,
management of the Fund 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 Fund 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 Common Shareholders
Distributions to Common 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 US generally accepted accounting
principles.
The Fund makes quarterly cash distributions to Common
shareholders of a stated dollar amount per share. Subject to
approval and oversight by the Funds Board of Trustees, the
Fund seeks to maintain a stable distribution level designed to
deliver the
long-term
return potential of the Funds investment strategy through
regular quarterly distributions (a Managed Distribution
Program). Total distributions during a calendar year
generally will be made from the Funds net investment
income, net realized capital gains and net unrealized capital
gains in the Funds portfolio, if any. The portion of
distributions paid from net unrealized gains, if any, would be
distributed from the Funds assets and would be treated by
shareholders as a non-taxable distribution for tax purposes. In
the event that total distributions during a calendar year exceed
the Funds total return on net asset value, the difference
will be treated as a return of capital for tax purposes and will
reduce net asset value per share. If the Funds total
return on net asset value exceeds total distributions during a
calendar year, the excess will be reflected as an increase in
net asset value per share. The final determination of the source
and character of all distributions for the fiscal year are made
after the end of the fiscal year and are reflected in the
accompanying financial statements.
FundPreferred
Shares
The Fund is authorized to issue auction rate preferred shares
(FundPreferred) . On April 23, 2008, the Fund
redeemed all $36,000,000 of its outstanding 1,440 Series T,
FundPreferred shares, at liquidation value.
Foreign Currency
Transactions
The Fund is authorized to engage in foreign currency exchange
transactions, including foreign currency forward, futures,
options and swap contracts. To the extent that the Fund invests
in securities
and/or
contracts that are denominated in a currency other than
U.S. dollars, the Fund will be subject to currency risk,
which is the risk that an increase in the U.S. dollar
relative to the foreign currency will reduce returns or
portfolio value. Generally, when the U.S. dollar rises in
value against a foreign currency, the Funds investments
denominated in that currency will lose value because its
currency is worth fewer U.S. dollars; the opposite effect
occurs if the U.S. dollar falls in relative value.
Investments and other assets and liabilities denominated in
foreign currencies are converted into U.S. dollars on a
spot (i.e. cash) basis at the spot rate prevailing in the
foreign currency exchange market at the time of valuation.
Purchases and sales of investments and dividend and interest
income denominated in foreign currencies are translated into
U.S. dollars on the respective dates of such transactions.
The books and records of the Fund are maintained in
U.S. dollars. Foreign currencies, investments and other
assets and liabilities are translated into U.S. dollars at
4:00 p.m. ET. Investments and income and expenses are
translated on the respective dates of such transactions. Net
realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and
losses between trade date and settlement date of the
transactions, foreign currency transactions, and the difference
between the amounts of interest and dividends recorded on the
books of a Fund and the amounts actually received.
The realized and unrealized gains or losses resulting from
changes in foreign currency exchange rates are recognized as a
component of Net realized gain (loss) from investments and
foreign currency and Change in net unrealized
appreciation (depreciation) of investments and foreign
currency on the Statement of Operations, when applicable.
Options
Transactions
The Fund is subject to equity price risk in the normal course of
pursuing its investment objectives and is authorized to purchase
and write (sell) call and put options on securities, futures,
swaps (swaptions) or currencies in an attempt to
manage this and other possible risks. The purchase of put
options
involves the risk of loss of all or
a part of the cash paid for the options. Put options purchased
are accounted for in the same manner as portfolio securities.
The risk associated with purchasing put options is limited to
the premium paid. When the Fund writes an option, an amount
equal to the net premium received (the premium less commission)
is recognized as a component of Call options written, at
value on the Statement of Assets and Liabilities and is
subsequently adjusted to reflect the current value of the
written option until the option expires or the Fund enters into
a closing purchase transaction. The changes in value of the
options written during the reporting period are recognized as
Change in net unrealized appreciation (depreciation) of
call options written on the Statement of Operations. When
a call or put option expires or the Fund enters into a closing
purchase transaction, the difference between the net premium
received and any amount paid at expiration or on executing a
closing purchase transaction, including commission, is
recognized as Net realized gain (loss) from call options
written or on the Statement of Operations. The Fund, as a
writer of an option, has no control over whether the underlying
instrument may be sold (called) or purchased (put) and as a
result bears the risk of an unfavorable change in the market
value of the instrument underlying the written option. There is
the risk the Fund may not be able to enter into a closing
transaction because of an illiquid market.
The Fund did not purchase call or put options during the fiscal
year ended December 31, 2009. The average notional amount
of call options written during the fiscal year ended
December 31, 2009, was $(52,175,000).
Refer to Footnote 3 Derivative Instruments and
Hedging Activities for further details on call options written.
Market and
Counterparty Credit Risk
In the normal course of business the 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
the Fund to counterparty credit risk, consist principally of
cash due from counterparties on forward, option and swap
transactions. The extent of the Funds 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 expose the Fund to
minimal counterparty credit risk as they are exchange traded and
the exchanges clearinghouse, which is counterparty to all
exchange traded futures, guarantees the futures contracts
against default.
The Fund helps manage counterparty credit risk by entering into
agreements only with counterparties Nuveen Asset Management (the
Adviser), a wholly-owned subsidiary of Nuveen
Investments Inc. (Nuveen), 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 the Fund with a value approximately equal to
the amount of any unrealized gain above a pre-determined
threshold. Reciprocally, when the Fund has an unrealized loss,
the Fund has instructed the custodian to pledge assets of the
Fund 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.
Repurchase
Agreements
In connection with transactions in repurchase agreements, it is
the Funds 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 seller
defaults, and the fair value of the collateral declines,
realization of the collateral may be delayed or limited.
Custodian Fee
Credit
The Fund has an arrangement with the custodian bank whereby
certain custodian fees and expenses are reduced by net credits
earned on the Funds 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 the Fund overdraws its account at the
custodian bank.
Indemnifications
Under the Funds organizational documents, its officers and
trustees are indemnified against certain liabilities arising out
of the performance of their duties to the Fund. In addition, in
the normal course of business, the Fund enters 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
Fund that have not yet occurred. However, the Fund has not had
prior claims or losses pursuant to these contracts and expects
the risk of loss to be remote.
Use of
Estimates
The preparation of financial statements in conformity with US
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases
in net assets applicable to Common shares from operations during
the reporting period. Actual results may differ from those
estimates.
|
|
|
|
|
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
|
|
2.
|
Fair Value
Measurements
|
In determining the value of the Funds investments, various
inputs are used. These inputs are summarized in the three broad
levels listed below:
|
|
|
|
|
Level 1
|
|
|
|
Quoted prices in active markets for identical securities.
|
Level 2
|
|
|
|
Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risk, etc.).
|
Level 3
|
|
|
|
Significant unobservable inputs (including managements
assumptions in determining the fair value of investments).
|
The inputs or methodology used for valuing securities are not an
indication of the risk associated with investing in those
securities. The following is a summary of the Funds fair
value measurements as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
|
|
$
|
169,850,119
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
169,850,119
|
|
Preferred Securities*
|
|
|
37,656,773
|
|
|
|
15,690,155
|
|
|
|
|
|
|
|
53,346,928
|
|
Corporate Bonds
|
|
|
|
|
|
|
3,678,948
|
|
|
|
|
|
|
|
3,678,948
|
|
Investment Companies
|
|
|
2,235,200
|
|
|
|
|
|
|
|
|
|
|
|
2,235,200
|
|
Short-Term Investments
|
|
|
4,162,773
|
|
|
|
|
|
|
|
|
|
|
|
4,162,773
|
|
Call Options Written
|
|
|
(262,250
|
)
|
|
|
|
|
|
|
|
|
|
|
(262,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
213,642,615
|
|
|
$
|
19,369,103
|
|
|
$
|
|
|
|
$
|
233,011,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Preferred Securities includes Convertible Preferred Securities,
$25 Par (or similar) Preferred Securities and Capital
Preferred Securities held by the Fund at the end of the
reporting period, if any.
|
3. Derivative
Instruments and Hedging Activities
During the current fiscal period, the Fund adopted amendments to
authoritative guidance under GAAP on disclosures about
derivative instruments and hedging activities. This guidance is
intended to enhance financial statement disclosures for
derivative instruments and hedging activities and enable
investors to better understand: a) how and why a fund uses
derivative instruments; b) how derivative instruments are
accounted for; and c) how derivative instruments affect a
funds financial position, results of operations and cash
flows, if any. The Fund records 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, under
this guidance they are considered to be non-hedge transactions
for financial reporting purposes. For additional information on
the derivative instruments in which the Fund was invested during
and at the end of the reporting period, refer to the Portfolio
of Investments, Financial Statements and Footnote 1
General Information and Significant Accounting Policies.
The following table presents the fair value of all derivative
instruments held by the Fund as of December 31, 2009, the
location of these instruments on the Statement of Assets and
Liabilities, and the primary underlying risk exposure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location on the Statement of Assets and Liabilities
|
|
|
Derivative
|
|
Asset Derivatives
|
|
Liability Derivatives
|
Underlying Risk
Exposure
|
|
Instrument
|
|
Location
|
|
Value
|
|
Location
|
|
Value
|
Equity Price
|
|
|
Options
|
|
|
|
|
$
|
|
|
|
Call options written, at value
|
|
$
|
262,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present the amount of net realized gain
(loss) and change in net unrealized appreciation (depreciation)
recognized for the fiscal year ended December 31, 2009, on
derivative instruments, as well as the primary risk exposure
associated with each.
|
|
|
|
|
Net Realized Gain (Loss) from
Call Options Written
|
|
|
Risk Exposure
|
|
|
|
|
Equity Price
|
|
|
$(3,235,051)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net Unrealized
Appreciation (Depreciation) of Call Options Written
|
Risk Exposure
|
|
|
|
|
Equity Price
|
|
$
|
1,822,100
|
|
|
|
|
|
|
4. Fund
Shares
Common shares
Transactions in Common shares were as follows:
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
Year
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
12/31/09
|
|
|
12/31/08
|
|
Common shares repurchased
|
|
|
(203,900
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average:
|
|
|
|
|
|
|
|
|
Price per Common share repurchased
|
|
$
|
10.58
|
|
|
$
|
|
|
Discount per Common share repurchased
|
|
|
13.89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FundPreferred
Shares
On April 23, 2008, the Fund redeemed all $36,000,000 of its
outstanding FundPreferred shares, at liquidation value.
5. Investment
Transactions
Purchases and sales (including maturities but excluding
short-term investments and call options written) during the
fiscal year ended December 31, 2009, aggregated
$109,429,600 and $131,309,787, respectively.
Transactions in call options written during the fiscal year
ended December 31, 2009, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Premiums
|
|
|
|
Contracts
|
|
|
Received
|
|
Outstanding, beginning of year
|
|
|
600
|
|
|
$
|
2,479,400
|
|
Options written
|
|
|
3,400
|
|
|
|
6,933,700
|
|
Options terminated in closing purchase transactions
|
|
|
(3,400
|
)
|
|
|
(8,684,300
|
)
|
Options expired
|
|
|
(100
|
)
|
|
|
(145,800
|
)
|
|
|
|
|
|
|
|
|
|
Outstanding, end of year
|
|
|
500
|
|
|
$
|
583,000
|
|
|
|
|
|
|
|
|
|
|
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 the recognition of
unrealized gain or loss for tax
(mark-to-market)
on option contracts, timing differences in the recognition of
income and timing differences in recognizing certain gains and
losses on investment transactions. To the extent that
differences arise that are permanent in nature, such amounts are
reclassified within the capital accounts on the Statement of
Assets and Liabilities presented in the annual report, based on
their federal tax basis treatment; temporary differences do not
require reclassification. Temporary and permanent differences do
not impact the net asset value of the Fund.
At December 31, 2009, the cost of investments (excluding
call options written) was $228,014,901.
Gross unrealized appreciation and gross unrealized depreciation
of investments (excluding call options written) at
December 31, 2009, were as follows:
|
|
|
|
|
Gross unrealized:
|
|
|
|
|
Appreciation
|
|
$
|
18,261,647
|
|
Depreciation
|
|
|
(13,002,580
|
)
|
|
|
|
|
|
Net unrealized appreciation (depreciation) of investments
|
|
$
|
5,259,067
|
|
|
|
|
|
|
The tax components of undistributed net ordinary income and net
long-term capital gains at December 31, 2009, the
Funds tax year end, were as follows:
|
|
|
|
|
Undistributed net ordinary income *
|
|
$
|
|
|
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.
|
The tax character of distributions paid during the Funds
tax years ended December 31, 2009 and December 31,
2008, was designated for purposes of the dividends paid
deduction as follows:
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Distributions from net ordinary income *
|
|
$
|
7,207,326
|
|
Tax return of capital
|
|
|
7,635,669
|
|
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
Distributions from net ordinary income *
|
|
$
|
7,449,839
|
|
Tax return of capital
|
|
|
14,387,121
|
|
|
|
|
|
|
|
|
* |
Net ordinary income consists of net taxable income derived from
dividends, interest, and net short-term capital gains, if any.
|
|
|
|
|
|
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
At December 31, 2009, the Funds tax year end, the
Fund had an unused capital loss carryforward available for
federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforward will expire as
follows:
|
|
|
|
|
Expiration:
|
|
|
|
|
December 31, 2015
|
|
$
|
1,545,737
|
|
December 31, 2016
|
|
|
20,855,290
|
|
December 31, 2017
|
|
|
42,037,884
|
|
|
|
|
|
|
Total
|
|
$
|
64,438,911
|
|
|
|
|
|
|
The Fund elected to defer net realized losses from investments
incurred from November 1, 2009 through December 31,
2009, the Funds tax year end, (post-October
losses) in accordance with federal income tax regulations.
Post-October losses are treated as having arisen on the first
day of the following fiscal year:
|
|
|
|
|
Post-October capital losses
|
|
$
|
558,974
|
|
Post-October currency losses
|
|
|
148
|
|
|
|
|
|
|
7. Management
Fees and Other Transactions with Affiliates
The Funds management fee is separated into two
components a fund-level fee, based only on the
amount of assets within the Fund, and a complex-level fee, based
on the aggregate amount of all fund assets managed by the
Adviser. This pricing structure enables Fund shareholders to
benefit from growth in the assets within the Fund as well as
from growth in the amount of complex-wide assets managed by the
Adviser.
The annual fund-level fee, payable monthly, is calculated
according to the following schedule:
|
|
|
|
|
Average Daily Managed
Assets*
|
|
Fund-Level Fee Rate
|
For the first $500 million
|
|
|
.8000
|
%
|
For the next $500 million
|
|
|
.7750
|
|
For the next $500 million
|
|
|
.7500
|
|
For the next $500 million
|
|
|
.7250
|
|
For Managed Assets over $2 billion
|
|
|
.7000
|
|
|
|
|
|
|
The annual complex-level fee, payable monthly, which is additive
to the fund-level fee, is calculated according to the following
schedule:
|
|
|
|
|
Complex-Level 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
|
|
|
|
|
|
|
|
|
* |
The complex-level fee is calculated based upon the aggregate
daily managed assets of all Nuveen funds, with such daily
managed assets defined separately for each fund in its
management agreement, but excluding assets attributable to
investments in other Nuveen funds. For the complex-level and
fund-level fees, daily managed assets include 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 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 trusts issuance of floating
rate securities, subject to an agreement by the Adviser to limit
the amount of such assets for determining managed assets in
certain circumstances. As of December 31, 2009, the
complex-level fee rate was .1887%.
|
The management fee compensates the Adviser for overall
investment advisory and administrative services and general
office facilities. The Adviser is responsible for the overall
investment strategy and asset allocation decisions. The Adviser
has entered into
Sub-Advisory
Agreements with Santa Barbara Asset Management, LLC (Santa
Barbara), and NWQ Investment Management Company, LLC
(NWQ), both subsidiaries of Nuveen. Santa Barbara
manages the portion of the Funds investment portfolio
allocated to dividend-paying equity securities. NWQ manages the
portion of the Funds investment portfolio allocated to
preferred securities and other fixed-income securities. The
Adviser is also responsible for the writing of index
call options on various equity
market indices, if any. Santa Barbara and NWQ are compensated
for their services to the Fund from the management fees paid to
the Adviser.
The Fund pays 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 Fund 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.
8. Borrowing
Arrangements
Management determined that leveraging the Fund with debt as a
replacement for FundPreferred shares continued to benefit the
Funds shareholders. The Fund has entered into a
$63 million prime brokerage facility (amended from
$94 million) with BNP Paribas Prime Brokerage, Inc.
(BNP). As of December 31, 2009, the outstanding
balance on this facility was $43.5 million. For the fiscal
year ended December 31, 2009, the average daily balance
outstanding and average interest rate on these borrowings were
$45,645,205 and 1.64%, respectively.
In order to maintain this borrowing facility, the Fund must meet
certain collateral, asset coverage and other requirements.
Borrowings outstanding are fully secured by securities held in
the Funds Portfolio of Investments. Interest is charged on
the borrowings at 3-Month LIBOR (London Inter-bank Offered Rate)
plus .95% on the amount borrowed and .50% on the undrawn balance.
Interest expense incurred on the borrowed and undrawn balances
are recognized as Interest expense on borrowings on
the Statement of Operations.
9. New
Accounting Pronouncements
On January 21, 2010, FASB issued changes to the
authoritative guidance under GAAP for fair value measurements.
The objective of which is to provide guidance on how investment
assets and liabilities are to be valued and disclosed.
Specifically, the amendment requires reporting entities to
disclose i) the input and valuation techniques used to
measure fair value for both recurring and nonrecurring fair
value measurements, for both Level 2 and level 3
positions, ii) transfers between all levels (including
Level 1 and Level 2) on a gross basis (i.e., transfers
out must be disclosed separately from transfers in) as well as
the reason(s) for the transfer and iii) purchases, sales,
issuances and settlements in the Level 3 rollforward must
be shown on a gross basis rather than as one net number. The
effective date of the amendment is for interim and annual
periods beginning after December 15, 2009, however, the
requirement to provide the Level 3 activity for purchases,
sales, issuances and settlements on a gross basis will be
effective for interim and annual periods beginning after
December 15, 2010. At this time the Fund is evaluating the
implications of this guidance and the impact it will have to the
financial statement amounts and footnote disclosures, if any.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
Selected data for a Common share outstanding throughout each
period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Operations
|
|
|
Less Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from Net
|
|
|
Distributions
|
|
|
|
|
|
Net
|
|
|
|
|
|
Tax
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
|
|
|
Beginning
|
|
|
|
|
|
|
|
|
Investment
|
|
|
from Capital
|
|
|
|
|
|
Investment
|
|
|
Capital
|
|
|
Return of
|
|
|
|
|
|
and
|
|
|
Ending
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
Net
|
|
|
Income to
|
|
|
Gains to
|
|
|
|
|
|
Income to
|
|
|
Gains to
|
|
|
Capital to
|
|
|
|
|
|
FundPreferred
|
|
|
Common
|
|
|
|
|
|
|
Share
|
|
|
Net
|
|
|
Realized/
|
|
|
FundPreferred
|
|
|
FundPreferred
|
|
|
|
|
|
Common
|
|
|
Common
|
|
|
Common
|
|
|
|
|
|
Share
|
|
|
Share
|
|
|
Ending
|
|
|
|
Net Asset
|
|
|
Investment
|
|
|
Unrealized
|
|
|
Share-
|
|
|
Share-
|
|
|
|
|
|
Share-
|
|
|
Share-
|
|
|
Share-
|
|
|
|
|
|
Underwriting
|
|
|
Net Asset
|
|
|
Market
|
|
|
|
Value
|
|
|
Income(a)
|
|
|
Gain (Loss)
|
|
|
holders
|
|
|
holders
|
|
|
Total
|
|
|
holders
|
|
|
holders
|
|
|
holders
|
|
|
Total
|
|
|
Discounts
|
|
|
Value
|
|
|
Value
|
|
Year Ended 12/31:
|
2009
|
|
$
|
11.21
|
|
|
$
|
.48
|
|
|
$
|
2.31
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
2.79
|
|
|
$
|
(0.49
|
)
|
|
$
|
|
|
|
$
|
(0.52
|
)
|
|
$
|
(1.01
|
)
|
|
$
|
|
|
|
$
|
12.99
|
|
|
$
|
11.56
|
|
2008
|
|
|
18.17
|
|
|
|
.49
|
|
|
|
(5.97
|
)
|
|
|
(.03
|
)
|
|
|
|
|
|
|
(5.51
|
)
|
|
|
(.47
|
)
|
|
|
|
|
|
|
(.97
|
)
|
|
|
(1.44
|
)
|
|
|
(.01
|
)
|
|
|
11.21
|
|
|
|
8.68
|
|
2007(b)
|
|
|
19.10
|
|
|
|
.31
|
|
|
|
(.30
|
)
|
|
|
(.04
|
)
|
|
|
|
|
|
|
(.03
|
)
|
|
|
(.28
|
)
|
|
|
|
|
|
|
(.54
|
)
|
|
|
(.82
|
)
|
|
|
(.08
|
)
|
|
|
18.17
|
|
|
|
16.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FundPreferred Shares at End of Period
|
|
|
Borrowings at End of Period
|
|
|
|
Aggregate
|
|
|
Liquidation
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
Amount
|
|
|
and Market
|
|
|
Asset
|
|
|
Amount
|
|
|
Asset
|
|
|
|
Outstanding
|
|
|
Value
|
|
|
Coverage
|
|
|
Outstanding
|
|
|
Coverage
|
|
|
|
(000)
|
|
|
Per Share
|
|
|
Per Share
|
|
|
(000)
|
|
|
Per $1,000
|
|
Year Ended 12/31:
|
2009
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
43,500
|
|
|
$
|
5,345
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,000
|
|
|
|
3,853
|
|
2007(b)
|
|
|
36,000
|
|
|
|
25,000
|
|
|
|
211,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
Highlights
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Returns
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Common
|
|
|
Ending
|
|
|
Ratios to Average Net Assets
|
|
|
|
|
|
|
|
|
|
Share
|
|
|
Net Assets
|
|
|
Applicable to Common Shares
|
|
|
|
|
|
|
Based on
|
|
|
Net
|
|
|
Applicable to
|
|
|
|
|
|
Net
|
|
|
Portfolio
|
|
|
|
Market
|
|
|
Asset
|
|
|
Common
|
|
|
|
|
|
Investment
|
|
|
Turnover
|
|
|
|
Value*
|
|
|
Value*
|
|
|
Shares (000)
|
|
|
Expenses
|
|
|
Income
|
|
|
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47.97
|
%
|
|
|
26.65
|
%
|
|
$
|
189,012
|
|
|
|
1.94
|
%
|
|
|
4.32
|
%
|
|
|
52
|
%
|
|
|
|
(40.24
|
)
|
|
|
(31.99
|
)
|
|
|
165,471
|
|
|
|
2.31
|
|
|
|
3.16
|
|
|
|
52
|
|
|
|
|
(14.37
|
)
|
|
|
(.70
|
)
|
|
|
268,190
|
|
|
|
1.19
|
**
|
|
|
3.21
|
**
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
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 takes 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 Common
Share Net Asset Value is the combination of changes in Common
share net asset value, reinvested dividend income at net asset
value and reinvested capital gains distributions at net asset
value, if any. 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 Funds 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.
|
|
**
|
|
Annualized.
|
|
|
|
|
|
The amounts shown are based on
Common share equivalents.
|
|
|
Ratios do not reflect
the effect of dividend payments to FundPreferred shareholders.
|
|
|
Net Investment Income
ratios reflect income earned and expenses incurred on assets
attributable to FundPreferred shares and/or borrowings, where
applicable.
|
|
|
Each ratio includes the
effect of the interest expense paid on borrowings as follows:
|
|
|
|
|
|
Ratio of Borrowings Interest
Expense to Average
|
|
Net Assets Applicable to Common Shares(c)
|
|
Year Ended 12/31:
|
2009
|
|
|
.52
|
%
|
2008
|
|
|
.93
|
|
2007(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Per share Net Investment Income is
calculated using the average daily shares method.
|
(b)
|
|
For the period June 26, 2007
(commencement of operations) through December 31, 2007.
|
(c)
|
|
Borrowings Interest Expense
includes amortization of borrowing costs. Borrowing costs were
fully amortized and expensed as of December 31, 2008.
|
See accompanying notes to
financial statements.
The management of the Fund, including general supervision of the
duties performed for the Fund by the Adviser, is the
responsibility of the Board Members of the Fund. The number of
board members of the Fund is currently set at nine. None of the
board members who are not interested persons of the
Fund (referred to herein as independent board
members) has ever been a director or employee of, or
consultant to, Nuveen or its affiliates. The names and business
addresses of the board members and officers of the Fund, their
principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other
directorships they hold are set forth below.
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
Including other Directorships
|
|
in Fund Complex
|
|
|
|
|
|
Appointed
|
|
During Past 5 Years
|
|
Overseen by
|
|
|
|
|
|
and
Term(1)
|
|
|
|
Board Member
|
|
|
INDEPENDENT BOARD MEMBERS:
|
|
n ROBERT
P. BREMNER
|
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Chairman of
the Board
and Board Member
|
|
1997
Class III
|
|
Private Investor and Management Consultant; Treasurer and
Director, Humanities Council of Washington, D.C.
|
|
199
|
|
n JACK
B. EVANS
|
10/22/48
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
1999
Class III
|
|
President, The Hall-Perrine Foundation, a private philanthropic
corporation (since 1996); Director and Chairman, United Fire
Group, a publicly held company; President Pro Tem of the
Board of Regents for the State of Iowa University System;
Director, Gazette Companies; Life Trustee of Coe College and the
Iowa College Foundation; formerly, Director, Alliant Energy;
formerly, Director, Federal Reserve Bank of Chicago; formerly,
President and Chief Operating Officer, SCI Financial Group,
Inc., a regional financial services firm.
|
|
199
|
|
n WILLIAM
C. HUNTER
|
3/6/48
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
2004
Class I
|
|
Dean, Tippie College of Business, University of Iowa (since
2006); Director (since 2004) of Xerox Corporation; Director
(since 2005), Beta Gamma Sigma International Honor Society;
formerly, Dean and Distinguished Professor of Finance, School of
Business at the University of Connecticut (2003-2006);
previously, Senior Vice President and Director of Research at
the Federal Reserve Bank of Chicago (1995-2003); Director,
SS&C Technologies, Inc. (May 2005-October 2005); formerly,
Director (1997-2007), Credit Research Center at Georgetown
University.
|
|
199
|
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
Including other Directorships
|
|
in Fund Complex
|
|
|
|
|
|
Appointed
|
|
During Past 5 Years
|
|
Overseen by
|
|
|
|
|
|
and
Term(1)
|
|
|
|
Board Member
|
|
INDEPENDENT BOARD MEMBERS (continued):
|
|
|
|
|
|
|
|
|
|
|
|
n DAVID
J. KUNDERT
|
10/28/42
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
2005
Class II
|
|
Director, Northwestern Mutual Wealth Management Company; retired
(since 2004) as Chairman, JPMorgan Fleming Asset Management,
President and CEO, Banc One Investment Advisors Corporation, and
President, One Group Mutual Funds; prior thereto, Executive Vice
President, Banc One Corporation and Chairman and CEO, Banc One
Investment Management Group; Member, Board of Regents, Luther
College; member of the Wisconsin Bar Association; member of
Board of Directors, Friends of Boerner Botanical Gardens; member
of Investment Committee, Greater Milwaukee Foundation.
|
|
199
|
|
n WILLIAM J. SCHNEIDER
|
9/24/44
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
1997
Class III
|
|
Chairman of Miller-Valentine Partners Ltd., a real estate
investment company; formerly, Senior Partner and Chief Operating
Officer (retired, 2004) of Miller-Valentine Group; member,
University of Dayton Business School Advisory Council; member,
Dayton Philharmonic Orchestra Association formerly, member,
Business Advisory Council, Cleveland Federal Reserve Bank;
formerly, Director, Dayton Development Coalition.
|
|
199
|
|
n JUDITH M. STOCKDALE
|
12/29/47
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
1997
Class I
|
|
Executive Director, Gaylord and Dorothy Donnelley Foundation
(since 1994); prior thereto, Executive Director, Great Lakes
Protection Fund (from 1990 to 1994).
|
|
199
|
|
n CAROLE
E. STONE
|
6/28/47
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
2007
Class I
|
|
Director, Chicago Board Options Exchange (since 2006); Director,
C2 Options Exchange, Incorporated (since 2009); Commissioner,
New York State Commission on Public Authority Reform (since
2005); formerly, Chair, New York Racing Association Oversight
Board
(2005-2007).
|
|
199
|
|
n TERENCE
J. TOTH
|
9/29/59
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
2008
Class II
|
|
Director, Legal & General Investment Management America,
Inc. (since 2008); Managing Partner, Musso Capital Management
(since 2008); CEO and President, Northern Trust Investments
(2004-2007); Executive Vice President, Quantitative Management
& Securities Lending (2004-2007); prior thereto, various
positions with Northern Trust Company (since 1994); Member:
Goodman Theatre Board (since 2004); Chicago Fellowship Boards
(since 2005), University of Illinois Leadership Council Board
(since 2007) and Catalyst Schools of Chicago Board (since 2008);
formerly Member: Northern Trust Mutual Funds Board (2005-2007),
Northern Trust Investments Board (2004-2007), Northern Trust
Japan Board (2004-2007), Northern Trust Securities Inc. Board
(2003-2007) and Northern Trust Hong Kong Board (1997-2004).
|
|
199
|
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
Including other Directorships
|
|
in Fund Complex
|
|
|
|
|
|
Appointed
|
|
During Past 5 Years
|
|
Overseen by
|
|
|
|
|
|
and
Term(1)
|
|
|
|
Board Member
|
|
INTERESTED BOARD MEMBER:
|
|
n JOHN
P.
AMBOIAN(2)
|
6/14/61
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Board Member
|
|
2008
Class II
|
|
Chief Executive Officer (since July 2007) and Director (since
1999) of Nuveen Investments, Inc.; Chief Executive Officer
(since 2007) of Nuveen Asset Management, Nuveen Investments
Advisors, Inc.
|
|
199
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
During Past 5 Years
|
|
in Fund Complex
|
|
|
|
|
|
Appointed(3)
|
|
|
|
Overseen by
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
OFFICERS of the FUND:
|
|
n GIFFORD R. ZIMMERMAN
|
9/9/56
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Chief
Administrative
Officer
|
|
1988
|
|
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel of Nuveen Investments, LLC; Managing
Director, Associate General Counsel and Assistant Secretary, of
Nuveen Asset Management (since 2002); and of Symphony Asset
Management LLC, (since 2003); Vice President and Assistant
Secretary of NWQ Investment Management Company, LLC. (since
2002), Nuveen Investments Advisers Inc. (since 2002), Tradewinds
Global Investors, LLC, and Santa Barbara Asset Management,
LLC (since 2006), Nuveen HydePark Group LLC and Nuveen
Investment Solutions, Inc. (since 2007); Managing Director
(since 2004) and Assistant Secretary (since 1994) of Nuveen
Investments, Inc.; Chartered Financial Analyst.
|
|
199
|
|
n WILLIAM
ADAMS IV
|
6/9/55
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2007
|
|
Executive Vice President of Nuveen Investments, Inc.; Executive
Vice President, U.S. Structured Products of Nuveen
Investments, LLC, (since 1999), prior thereto, Managing Director
of Structured Investments.
|
|
123
|
|
n MARK
J.P. ANSON
|
6/10/59
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2009
|
|
President and Executive Director of Nuveen Investments, Inc.
(since 2007); President of Nuveen Investments Institutional
Services Group LLC (since 2007); previously, Chief Executive
Officer of the British Telecom Pension Scheme (2006-2007) and
Chief Investment Officer of Calpers (1999-2006); PhD, Chartered
Financial Analyst Chartered Alternative Investment Analyst,
Certified Public Accountant, Certified Management Accountant and
Certified Internal Auditor.
|
|
199
|
|
n CEDRIC H. ANTOSIEWICZ
|
1/11/62
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2007
|
|
Managing Director, (since 2004) previously, Vice President
(1993-2004) of Nuveen Investments, LLC.
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
During Past 5 Years
|
|
in Fund Complex
|
|
|
|
|
|
Appointed(3)
|
|
|
|
Overseen by
|
|
|
|
|
|
|
|
|
|
Officer
|
|
OFFICERS of the FUND (continued):
|
|
|
|
|
|
|
|
|
|
|
|
n NIZIDA
ARRIAGA
|
6/1/68
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2009
|
|
Vice President (since 2007) of Nuveen Investments, LLC;
previously, Portfolio Manager, Allstate Investments, LLC
(1996-2006); Chartered Financial Analyst.
|
|
199
|
|
n MICHAEL
T. ATKINSON
|
2/3/66
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President and Assistant Secretary
|
|
2000
|
|
Vice President (since 2002) of Nuveen Investments, LLC; Vice
President of Nuveen Asset Management (since 2005).
|
|
199
|
|
n MARGO
L. COOK
|
4/11/64
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2009
|
|
Executive Vice President (since Oct 2008) of Nuveen Investments,
Inc.; previously, Head of Institutional Asset Management
(2007-2008) of Bear Stearns Asset Management; Head of
Institutional Asset Mgt (1986-2007) of Bank of NY Mellon;
Chartered Financial Analyst.
|
|
199
|
|
n LORNA
C. FERGUSON
|
10/24/45
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
1998
|
|
Managing Director (since 2004) of Nuveen Investments, LLC and
Managing Director (since 2005) of Nuveen Asset Management.
|
|
199
|
|
n STEPHEN
D. FOY
|
5/31/54
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Controller
|
|
1998
|
|
Vice President (since 1993) and Funds Controller (since 1998) of
Nuveen Investments, LLC; Vice President (since 2005) of Nuveen
Asset Management; Certified Public Accountant.
|
|
199
|
|
n SCOTT
S. GRACE
|
8/20/70
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Treasurer
|
|
2009
|
|
Managing Director, Corporate Finance & Development,
Treasurer (since September 2009) of Nuveen Investments,
LLC, formerly, Treasurer (2006-2009), Senior Vice President
(2008-2009), previously, Vice President (2006-2008) of Janus
Capital Group, Inc,; formerly. Senior Associate in Morgan
Stanleys Global Financial Services Group (2000-2003);
Chartered Accountant Designation.
|
|
199
|
|
n WILLIAM
T. HUFFMAN
|
5/7/69
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2009
|
|
Chief Operating Officer, Municipal Fixed Income (since 2008) of
Nuveen Asset Management; previously, Chairman, President and
Chief Executive Officer (2002-2007) of Northern Trust Global
Advisors, Inc. and Chief Executive Officer (2007) of Northern
Trust Global Investments Limited; Certified Public Accountant.
|
|
134
|
|
n WALTER M. KELLY
|
2/24/70
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Chief Compliance
Officer and
Vice President
|
|
2003
|
|
Senior Vice President (since 2008), Vice President
(2006-2008)
formerly, Assistant Vice President and Assistant General Counsel
(2003-2006) of Nuveen Investments, LLC; Vice President (since
2006) and Assistant Secretary (since 2008) of Nuveen Asset
Management.
|
|
199
|
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
During Past 5 Years
|
|
in Fund Complex
|
|
|
|
|
|
Appointed(3)
|
|
|
|
Overseen by
|
|
|
|
|
|
|
|
|
|
Officer
|
|
OFFICERS of the FUND (continued):
|
|
|
|
|
|
|
|
|
|
|
|
n DAVID
J. LAMB
|
3/22/63
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2000
|
|
Senior Vice President (since 2009), formerly, Vice President
(2000-2009) of Nuveen Investments, LLC; Vice President (since
2005) of Nuveen Asset Management; Certified Public Accountant.
|
|
199
|
|
n TINA
M. LAZAR
|
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2002
|
|
Senior Vice President (since 2009), formerly, Vice President of
Nuveen Investments, LLC (1999-2009); Vice President of Nuveen
Asset Management (since 2005).
|
|
199
|
|
n LARRY
W. MARTIN
|
7/27/51
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Assistant Secretary
|
|
1988
|
|
Vice President, Assistant Secretary and Assistant General
Counsel of Nuveen Investments, LLC; Vice President (since
2005) and Assistant Secretary of Nuveen Investments, Inc.; Vice
President (since 2005) and Assistant Secretary (since 1997) of
Nuveen Asset Management; Vice President and Assistant Secretary
of Nuveen Investments Advisers Inc. (since 2002); NWQ Investment
Management Company, LLC (since 2002), Symphony Asset Management
LLC (since 2003), Tradewinds Global Investors, LLC,
Santa Barbara Asset Management LLC (since 2006) and of
Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc.
(since 2007).
|
|
199
|
|
n KEVIN
J. MCCARTHY
|
3/26/66
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Secretary
|
|
2007
|
|
Managing Director (since 2008), formerly, Vice President
(2007-2008), Nuveen Investments, LLC; Managing Director (since
2008), formerly, Vice President, and Assistant Secretary, Nuveen
Asset Management, and Nuveen Investment Holdings, Inc.; Vice
President (since 2007) and Assistant Secretary, Nuveen
Investment Advisers Inc., Nuveen Investment Institutional
Services Group LLC, NWQ Investment Management Company, LLC,
Tradewinds Global Investors LLC, NWQ Holdings, LLC, Symphony
Asset Management LLC, Santa Barbara Asset Management LLC,
Nuveen HydePark Group, LLC and Nuveen Investment Solutions, Inc.
(since 2007); prior thereto, Partner, Bell, Boyd & Lloyd
LLP (1997-2007).
|
|
199
|
|
n JOHN
V. MILLER
|
4/10/67
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2007
|
|
Chief Investment Officer and Managing Director (since 2007),
formerly, Vice President (2002-2007) of Nuveen Asset Management
and Managing Director (since 2007), formerly, Vice President
(2002-2007) of Nuveen Investments, LLC; Chartered Financial
Analyst.
|
|
134
|
|
n GREGORY
MINO
|
1/4/71
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
|
|
2009
|
|
Vice President of Nuveen Investments, LLC (since 2008);
previously, Director (2004-2007) and Executive Director
(2007-2008) of UBS Global Asset Management; previously, Vice
President (2000-2003) and Director (2003-2004) of Merrill Lynch
Investment Managers; Chartered Financial Analyst.
|
|
199
|
|
|
|
|
|
|
|
|
|
|
|
Name, Birthdate
|
|
|
Position(s) Held with
|
|
Year First
|
|
Principal Occupation(s)
|
|
Number of Portfolios
|
and Address
|
|
|
the Fund
|
|
Elected or
|
|
During Past 5 Years
|
|
in Fund Complex
|
|
|
|
|
|
Appointed(3)
|
|
|
|
Overseen by
|
|
|
|
|
|
|
|
|
|
Officer
|
|
OFFICERS of the FUND (continued):
|
|
|
|
|
|
|
|
|
|
|
|
n CHRISTOPHER
M. ROHRBACHER
|
8/1/71
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Assistant
Secretary
|
|
2008
|
|
Vice President, Nuveen Investments, LLC (since 2008); Vice
President and Assistant Secretary, Nuveen Asset Management
(since 2008); prior thereto, Associate, Skadden, Arps, Slate
Meagher & Flom LLP (2002-2008).
|
|
199
|
|
n JAMES
F. RUANE
|
7/3/62
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Assistant
Secretary
|
|
2007
|
|
Vice President, Nuveen Investments, LLC (since 2007); prior
thereto, Partner, Deloitte & Touche USA LLP
(2005-2007),
formerly, senior tax manager (2002-2005); Certified Public
Accountant.
|
|
199
|
|
n MARK
L. WINGET
|
12/21/68
333 W. Wacker Drive
Chicago, IL 60606
|
|
|
Vice President
and Assistant
Secretary
|
|
2008
|
|
Vice President, Nuveen Investments, LLC (since 2008); Vice
President and Assistant Secretary, Nuveen Asset Management
(since 2008); prior thereto, Counsel, Vedder Price P.C.
(1997-2007).
|
|
199
|
|
|
(1)
|
Board Members serve three year terms. The Board of Trustees is
divided into three classes, Class I, Class II, and
Class III, with each being elected to serve until the third
succeeding annual shareholders meeting subsequent to its
election or thereafter in each case when its respective
successors are duly elected or appointed. The first year elected
or appointed represents the year in which the Board Member was
first elected or appointed to any fund in the Nuveen Complex.
|
|
(2)
|
Mr. Amboian is an interested trustee because of his
position with Nuveen Investments, Inc. and certain of its
subsidiaries, which are affiliates of the Nuveen Funds.
|
|
(3)
|
Officers serve one year terms through July of each year. The
year first elected or appointed represents the year in which the
Officer was first elected or appointed to any fund in the Nuveen
Complex.
|
Annual Investment
Management
Agreement Approval Process
The Investment Company Act of 1940, as amended (the
1940 Act), provides, in substance, that each
investment advisory agreement between a fund and its investment
adviser (including
sub-advisers)
will continue in effect from year to year only if its
continuance is approved at least annually by the funds
board members, including by a vote of a majority of the board
members who are not parties to the advisory agreement or
interested persons of any parties (the
Independent Board Members), cast in person at
a meeting called for the purpose of considering such approval.
In connection with such approvals, the funds board members
must request and evaluate, and the investment adviser is
required to furnish, such information as may be reasonably
necessary to evaluate the terms of the advisory agreement.
Accordingly, at a meeting held on May
27-29, 2009
(the May Meeting), the Board of Trustees (the
Board and each Trustee, a Board
Member) of the Fund, including a majority of the
Independent Board Members, considered and approved the
continuation of the advisory and
sub-advisory
agreements for the Fund for an additional one-year period. These
agreements include the investment advisory agreement between
Nuveen Asset Management (NAM) and the Fund
and the
sub-advisory
agreements between NAM and NWQ Investment Management Company,
LLC (NWQ) and NAM and Santa Barbara Asset
Management, LLC (Santa Barbara and, together
with NWQ, the
Sub-Advisers).
In preparation for their considerations at the May Meeting, the
Board also held a separate meeting on April
21-22, 2009
(the April Meeting). Accordingly, the factors
considered and determinations made regarding the renewals by the
Independent Board Members include those made at the April
Meeting.
In addition, in evaluating the advisory agreement (the
Investment Management Agreement) and
sub-advisory
agreements (each, a
Sub-advisory
Agreement, and the Investment Management Agreement and
Sub-advisory
Agreements are each an Advisory Agreement),
the Independent Board Members reviewed a broad range of
information relating to the Fund, NAM and the
Sub-Advisers
(NAM and the
Sub-Advisers
are each a Fund Adviser), including
absolute performance, fee and expense information for the Fund
as well as comparative performance, fee and expense information
for a comparable peer group of funds, the performance
information of recognized
and/or
customized benchmarks (as applicable) of the Fund, the
profitability of Nuveen for its advisory activities (which
includes its wholly owned subsidiaries other than Winslow
Capital Management, Inc. (Winslow Capital),
which was recently acquired in December 2008), and other
information regarding the organization, personnel, and services
provided by the respective Fund Adviser. The Independent
Board Members also met quarterly as well as at other times as
the need arose during the year and took into account the
information provided at such meetings and the knowledge gained
therefrom. Prior to approving the renewal of the Advisory
Agreements, the Independent Board Members reviewed the foregoing
information with their independent legal counsel and with
management, reviewed materials from independent legal counsel
describing applicable law and their duties in reviewing advisory
contracts, and met with independent legal counsel in private
sessions without management present. The Independent Board
Members considered the legal advice provided by independent
legal counsel and relied upon their knowledge of the
Fund Adviser, its services and the Fund resulting from
their meetings and other interactions throughout the year and
their own business judgment in determining the factors to be
considered in evaluating the Advisory Agreements. Each Board
Member may have accorded different weight to the various factors
in reaching his or her conclusions with respect to the
Funds Advisory Agreements. The 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 Advisers services, including
advisory services and administrative services. The Independent
Board Members reviewed materials outlining, among other things,
the Fund Advisers organization
and business; the types of services
that the Fund Adviser or its affiliates provide and are
expected to provide to the Fund; the performance record of the
Fund (as described in further detail below); and any initiatives
Nuveen had taken for the applicable fund product line.
In reviewing the services provided and the initiatives
undertaken during the past year, the Independent Board Members
recognized the severe market turmoil experienced in the capital
markets during recent periods, including sustained periods of
high volatility, credit disruption and government intervention.
The Independent Board Members considered the
Fund Advisers efforts, expertise and other actions
taken to address matters as they arose that impacted the Fund.
The Independent Board Members recognized the role of the
Investment Services group which, among other things, monitors
the various positions throughout the Nuveen fund complex to
identify and address any systematic risks. In addition, the
Capital Markets Committee of NAM provides a multi-departmental
venue for developing new policies to mitigate any risks. The
Independent Board Members further recognized NAMs
continuous review of the Nuveen funds investment
strategies and mandates in seeking to continue to refine and
improve the investment process for the funds, particularly in
light of market conditions. With respect to closed-end funds
that issued auction rate preferred shares
(ARPs) or that otherwise utilize leverage,
the Independent Board Members noted, in particular, NAMs
efforts in refinancing the preferred shares of such funds frozen
by the collapse of the auction rate market and managing leverage
during a period of rapid market declines, particularly for the
non-equity funds. Such efforts included negotiating and
maintaining the availability of bank loan facilities and other
sources of credit used for investment purposes or to satisfy
liquidity needs, liquidating portfolio securities during
difficult times to meet leverage ratios, and seeking alternative
forms of debt and other leverage that may over time reduce
financing costs associated with ARPs and enable the funds that
have issued ARPs to restore liquidity to ARPs holders. The
Independent Board Members also noted Nuveens continued
commitment and efforts to keep investors and financial advisers
informed as to its progress with the ARPs through, among other
things, conference calls, emails, press releases, information
posted on its website, and telephone calls and in-person
meetings with financial advisers. In addition to the foregoing,
the Independent Board Members also noted the additional services
that NAM or its affiliates provide to closed-end funds,
including, in particular, Nuveens continued commitment to
supporting the secondary market for the common shares of its
closed-end funds through a variety of programs designed to raise
investor and analyst awareness and understanding of closed-end
funds. These efforts include maintaining an investor relations
program to provide timely information and education to financial
advisers and investors; providing advertising and marketing for
the closed-end funds; maintaining websites; and providing
educational seminars.
As part of their review, the Independent Board Members also
evaluated the background, experience and track record of the
Fund Advisers investment personnel. In this regard,
the Independent Board Members considered any changes in the
personnel, and the impact on the level of services provided to
the Fund, if any. The Independent Board Members also reviewed
information regarding portfolio manager compensation
arrangements to evaluate the Fund Advisers ability to
attract and retain high quality investment personnel, preserve
stability, and reward performance but not provide an incentive
for taking undue risks.
In addition to advisory services, the Independent Board Members
considered the quality of administrative services provided by
NAM and its affiliates including product management, fund
administration, oversight of service providers, shareholder
services, administration of Board relations, regulatory and
portfolio compliance and legal support. Given the importance of
compliance, the Independent Board Members considered NAMs
compliance program, including the report of the chief compliance
officer regarding the Funds compliance policies and
procedures.
The Independent Board Members also considered NAMs
oversight of the performance, business activities and compliance
of the
Sub-Advisers.
In that regard, the Independent Board Members reviewed an
evaluation of each
Sub-Adviser
from NAM. The evaluation also included information relating to
the respective
Sub-Advisers
organization, operations, personnel, assets under management,
investment philosophy, strategies and techniques in managing the
Fund, developments affecting each
Sub-Adviser,
and an analysis of each
Sub-Adviser.
As described in further detail below, the Board considered the
performance of the portion of the investment portfolio for which
each
Sub-Adviser
is responsible. The Board also recognized that the
Sub-advisory
Agreements were essentially agreements for portfolio management
services only and the
Sub-Advisers
were not expected to supply other significant administrative
services to the Fund. As part of their oversight, the
Independent Board Members also continued their program of
seeking to visit each
sub-adviser
to the Nuveen funds at least once over a multiple year rotation,
meeting with key investment and business personnel. In this
regard, the Independent Board Members met with each
Sub-Adviser
in February 2009. The Independent Board Members
Annual Investment Management
Agreement Approval Process
(continued)
noted that NAM recommended the
renewal of the
Sub-advisory
Agreements and considered the basis for such recommendations and
any qualifications in connection therewith.
Based on their review, the Independent Board Members found that,
overall, the nature, extent and quality of services provided
(and expected to be provided) to the Fund under the Investment
Management Agreement or
Sub-advisory
Agreement, as applicable, were satisfactory.
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B.
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The Investment
Performance of the Fund and Fund Advisers
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The Board considered the investment performance of the Fund,
including the Funds historic performance as well as its
performance compared to funds with similar investment objectives
(the Performance Peer Group) based on data
provided by an independent provider of mutual fund data as well
as recognized
and/or
customized benchmarks. The Independent Board Members reviewed
performance information including, among other things, total
return information compared with the Funds Performance
Peer Group and recognized
and/or
customized benchmarks for the quarter- and one-year periods
ending December 31, 2008 and for the same periods ending
March 31, 2009. The Independent Board Members also reviewed
performance information of the Nuveen funds managed by each
particular
Sub-Adviser
in the aggregate ranked by peer group and the performance of
such funds, in the aggregate, relative to their benchmark. The
Independent Board Members also reviewed, among other things, the
returns of each sleeve of the Fund relative to the benchmark of
each sleeve and the overall benchmark for the Fund for the year
2008. This information supplemented the Fund performance
information provided to the Board at each of its quarterly
meetings.
In comparing a funds performance with that of its
Performance Peer Group, the Independent Board Members took into
account that the closest Performance Peer Group in certain
instances may not adequately reflect the respective funds
investment objectives and strategies thereby hindering a
meaningful comparison of the funds performance with that
of the Performance Peer Group. The Independent Board Members
further considered the performance of the Fund in the context of
the volatile market conditions during the past year, and their
impact on various asset classes and the portfolio management of
the Fund.
Based on their review and factoring in the severity of market
turmoil in 2008, the Independent Board Members determined that
the Funds investment performance over time had been
satisfactory.
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C.
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Fees, Expenses
and Profitability
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1. Fees and
Expenses
The Board evaluated the management fees and expenses of the Fund
reviewing, among other things, the Funds gross management
fees, net management fees and total expense ratios (before and
after expense reimbursements
and/or
waivers) in absolute terms as well as compared to the fee and
expenses of a comparable universe of unaffiliated funds based on
data provided by an independent fund data provider (the
Peer Universe) and in certain cases, to a
more focused subset of funds in the Peer Universe (the
Peer Group).
The Independent Board Members further reviewed data regarding
the construction of the applicable Peer Universe and Peer Group.
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 asset level of a fund
relative to peers, the size and particular composition of the
Peer Universe or Peer Group, the investment objectives of the
peers, expense anomalies, changes in the funds comprising the
Peer Universe or Peer Group from year to year, levels of
reimbursement and the timing of information used may impact the
comparative data, thereby limiting the ability to make a
meaningful comparison. The Independent Board Members also
considered, among other things, the differences in the use and
type of leverage compared to the peers. In reviewing the fee
schedule for the 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).
Based on their review of the fee and expense information
provided, the Independent Board Members determined that the
Funds management fees and net total expense ratio 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 fee rates offered by NAM to
other clients. Such clients include separately managed accounts
(both retail and institutional accounts) and funds that are not
offered by Nuveen but are
sub-advised
by one of Nuveens investment management teams. In
evaluating the comparisons of fees, the Independent Board
Members noted that the fee rates charged to the Fund 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 Fund. 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 the range of services provided to the Fund (as
discussed above) is much more extensive than that provided to
separately managed accounts. Given the inherent differences in
the products, particularly the extensive services provided to
the Fund, the Independent Board Members believe such facts
justify the different levels of fees.
In considering the fees of the
Sub-Advisers,
the Independent Board Members also considered the pricing
schedule or fees that each
Sub-Adviser
charges for similar investment management services for other
fund sponsors or clients (such as retail
and/or
institutional managed accounts) as applicable.
3. Profitability
of Fund Advisers
In conjunction with its review of fees, the Independent Board
Members also considered the profitability of Nuveen for its
advisory activities (which incorporated Nuveens
wholly-owned affiliated
sub-advisers
other than Winslow Capital) and its financial condition. The
Independent Board Members reviewed the revenues and expenses of
Nuveens advisory activities for the last two 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 2008. In
addition, the Independent Board Members reviewed information
regarding the financial results of Nuveen for 2008 based on its
Form 8-K
filed on March 31, 2009. 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
had also appointed an Independent Board Member 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 Nuveens revenues for advisory activities,
expenses, and profit margin compared to that of various
unaffiliated management firms with similar amounts of assets
under management and relatively comparable asset composition
prepared by Nuveen.
In reviewing profitability, the Independent Board Members
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 advisers particular business mix,
capital costs, types of funds managed and expense allocations.
Notwithstanding the foregoing, the Independent Board Members
reviewed Nuveens methodology and assumptions for
allocating expenses across product lines to determine
profitability. In reviewing profitability, the Independent Board
Members recognized Nuveens investment in its fund
business. Based on their review, the Independent Board Members
concluded that Nuveens level of profitability for its
advisory activities 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 Fund 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 Fund, if any. See
Section E below for additional information on indirect
benefits the Fund Adviser may receive as a result of its
relationship with the Fund. Based on their review of the overall
fee arrangements of the Fund, the Independent Board Members
determined that the advisory fees and expenses of the Fund were
reasonable.
Annual Investment Management
Agreement Approval Process
(continued)
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D.
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Economies of
Scale and Whether Fee Levels Reflect These Economies of
Scale
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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. In this regard, 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. While economies of scale result when costs
can be spread over a larger asset base, the Independent Board
Members also recognized that the asset levels generally declined
in 2008 due to, among other things, the market downturn.
Accordingly, for funds with a reduction in assets under
management, advisory fee levels may have increased as
breakpoints in the fee schedule were no longer surpassed.
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 generally are 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
Nuveens 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. Generally, the
complex-wide pricing reduces Nuveens revenue because total
complex fund assets have consistently grown in prior years. As
noted, however, total fund assets declined in 2008 resulting in
a smaller downward adjustment of revenues due to complex-wide
pricing compared to the prior year.
Based on their review, the Independent Board Members concluded
that the breakpoint schedules and complex-wide fee arrangement
(as applicable) were acceptable and reflect economies of scale
to be shared with shareholders when assets under management
increase.
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 the
Fund. In this regard, the Independent Board Members considered
revenues received by affiliates of NAM for serving as agent at
Nuveens trading desk.
In addition to the above, the Independent Board Members
considered whether the Fund Adviser received any benefits
from soft dollar arrangements whereby a portion of the
commissions paid by the Fund for brokerage may be used to
acquire research that may be useful to the Fund Adviser in
managing the assets of the Fund and other clients. With respect
to NAM, the Independent Board Members noted that NAM does not
currently have any soft dollar arrangements; however, to the
extent certain bona fide agency transactions that occur on
markets that traditionally trade on a principal basis and
riskless principal transactions are considered as generating
commissions, NAM intends to comply with the
applicable safe harbor provisions. With respect to the
Sub-Advisers,
the Independent Board Members considered that each
Sub-Adviser
may benefit from its soft dollar arrangements pursuant to which
the respective
Sub-Adviser
receives research from brokers that execute the Funds
portfolio transactions. The Independent Board Members further
noted that the
Sub-Advisers
profitability may be lower if they were required to pay for this
research with hard dollars.
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 Fund were reasonable and
within acceptable parameters.
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 the Investment Management Agreement
and
Sub-advisory
Agreements are fair and reasonable, that the respective
Fund Advisers fees are reasonable in light of the
services provided to the Fund and that the Investment Management
Agreement and the
Sub-advisory
Agreements be renewed.
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, youll 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 quarter
youll 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 Funds 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 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. Should
you withdraw, you can receive a certificate for all whole shares
credited to your reinvestment account and cash payment for
fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your
name, or in the name of a brokerage firm, bank, or other
nominee. Ask your financial 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.
Glossary of Terms
Used in this Report
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n
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Average Annual Total Return: This is a commonly
used method to express an investments performance over a
particular, usually multi-year time period. It expresses the
return that would have been necessary each year to equal the
investments 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.
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n
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Collateralized Debt Obligations (CDOs):
Collateralized debt obligations are a type of asset-backed
security constructed from a portfolio of fixed-income assets.
CDOs usually are divided into different tranches having
different ratings and paying different interest rates. Losses,
if any, are applied in reverse order of seniority and so junior
tranches generally offer higher coupons to compensate for added
default risk.
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n
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Current Distribution Rate: Current distribution
rate is based on the Funds current annualized quarterly
distribution divided by the Funds current market price.
The Funds quarterly distributions to its shareholders may
be comprised of ordinary income, net realized capital gains and,
if at the end of the calendar year the Funds cumulative
net ordinary income and net realized gains are less than the
amount of the Funds distributions, a tax return of capital.
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n
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Net Asset Value (NAV): A Funds NAV per
common share is calculated by subtracting the liabilities of the
Fund (including any debt or preferred shares issued in order to
leverage the Fund) from its total assets and then dividing the
remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
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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
Terence J. Toth
Fund
Manager
Nuveen Asset Management
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) the Funds quarterly portfolio of
investments, (ii) information regarding how the Fund voted
proxies relating to portfolio securities held during the most
recent
twelve-month
period ended June 30, 2009, and (iii) a description of
the policies and procedures that the Fund 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 Nuveens 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 SECs 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 SECs
Public Reference Section at 100 F Street NE, Washington,
D.C. 20549.
CEO Certification
Disclosure
The Funds 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.
The 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.
Distribution
Information
Nuveen Tax-Advantaged Dividend Growth Fund (JTD) hereby
designates 80.08% of dividends paid from net ordinary income as
dividends qualifying for the 70% dividends received deduction
for corporations and 100% qualified dividend income for
individuals under Section 1 (h)(11) of the Internal
Revenue Code. The actual qualified dividend income distributions
will be reported to shareholders on Form 1099-DIV which will be
sent to shareholders shortly after calendar year end.
Common Share
Information
The 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 Fund
repurchased shares of its common stock as shown in the
accompanying table.
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Common Shares
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Repurchased
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203,900
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Any future repurchases will be reported to shareholders in the
next annual or semi-annual report.
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 is a global investment management firm that
seeks to help secure
the long-term goals of institutions and high net worth investors
as well as the consultants and financial advisors who serve
them. We market our growing range of specialized investment
solutions under the high-quality brands of HydePark, NWQ,
Nuveen, Santa Barbara, Symphony, Tradewinds and Winslow
Capital. In total, Nuveen Investments managed approximately
$141 billion of assets on September 30, 2009.
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
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Share prices
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Fund details
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Daily financial news
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Investor education
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Interactive planning tools
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Distributed by
Nuveen Investments, LLC
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
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EAN-J-1209D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrants principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at
www.nuveen.com/CEF/Info/Shareholder/. (To view the
code, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The
registrants Board of Directors or Trustees (Board) determined that the registrant
has at least one audit committee financial expert (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrants audit committee
financial expert is Jack B. Evans, who is
independent for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser (SCI). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the CFO) and
actively supervised the CFOs preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCIs financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Tax-Advantaged Dividend Growth Fund
The following tables show the amount of fees that Ernst & Young LLP, the Funds
auditor, billed to the Fund during the Funds last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the pre-approval exception). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committees
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUNDS AUDITOR BILLED TO THE FUND
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Audit Fees Billed |
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All Other Fees |
Fiscal Year Ended |
|
to Fund 1 |
|
Billed to Fund 2 |
|
Billed to Fund 3 |
|
Billed to Fund 4 |
|
December 31, 2009 |
|
$ |
22,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage approved
pursuant to
pre-approval
exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008 |
|
$ |
22,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage approved
pursuant to
pre-approval
exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
1 |
|
Audit Fees are the aggregate fees billed for professional services for the audit
of the Funds annual financial statements and services provided in connection with statutory and
regulatory filings or engagements. |
|
2 |
|
Audit Related Fees are the aggregate fees billed for assurance and related services
reasonably related to the performance of the audit or review of financial statements and are not
reported under Audit Fees. |
|
3 |
|
Tax Fees are the aggregate fees billed for professional services for tax advice, tax
compliance, and tax planning. |
|
4 |
|
All Other Fees are the aggregate fees billed for products and services for agreed
upon procedures engagements performed for leveraged funds. |
SERVICES THAT THE FUNDS AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management (NAM or the Adviser), and any entity controlling,
controlled by or under common control with NAM that
provides ongoing services to the Fund (Affiliated Fund Service Provider), for
engagements directly related to the Funds operations and financial reporting,
during the Funds last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committees attention, and
the Committee (or its delegate) approves the services before the Funds audit is
completed.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees |
|
Tax Fees Billed to |
|
All Other Fees |
|
|
Billed to Adviser and |
|
Adviser and |
|
Billed to Adviser |
|
|
Affiliated Fund |
|
Affiliated Fund |
|
and Affiliated Fund |
Fiscal Year Ended |
|
Service Providers |
|
Service Providers |
|
Service Providers |
|
December 31, 2009 |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage approved
pursuant to
pre-approval
exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008 |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage approved
pursuant to
pre-approval
exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Funds last two full fiscal years for non-audit
services. The Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Funds operations and financial reporting (except for those
subject to the pre-approval exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Funds last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLPs independence.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Audit Fees |
|
|
|
|
|
|
|
|
|
|
billed to Adviser and |
|
|
|
|
|
|
|
|
|
|
Affiliated Fund Service |
|
Total Non-Audit Fees |
|
|
|
|
|
|
|
|
Providers (engagements |
|
billed to Adviser and |
|
|
|
|
|
|
|
|
related directly to the |
|
Affiliated Fund Service |
|
|
|
|
Total Non-Audit Fees |
|
operations and financial |
|
Providers (all other |
|
|
Fiscal Year Ended |
|
Billed to Fund |
|
reporting of the Fund) |
|
engagements) |
|
Total |
|
December 31, 2009 |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
December 31, 2008 |
|
$ |
1,800 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,800 |
|
Non-Audit Fees billed to Fund for both fiscal year ends represent Tax Fees and All Other
Fees billed to Fund in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Funds independent accountants and (ii) all audit and non-audit services
to be performed by the Funds independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrants Board has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, David J.
Kundert, William J. Schneider and Terence J. Toth.
ITEM 6. SCHEDULE OF INVESTMENTS.
|
(a) |
|
See Portfolio of Investments in Item 1. |
|
|
(b) |
|
Not
applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES.
Nuveen Asset Management (NAM) is the registrants investment adviser (NAM is also referred to as
the Adviser). NAM, as Adviser, provides discretionary investment advisory services. NAM is
responsible for the selection and on-going monitoring of the Funds investment portfolio, managing
the Funds business affairs and providing certain clerical, bookkeeping and administrative
services. The Adviser has engaged NWQ Investment Management Company, LLC (NWQ) and Santa Barbara
Asset Management (Santa Barbara) as Sub-Advisers to provide discretionary investment advisory
services (NWQ and Santa Barbara are also collectively referred to as Sub-Advisers). As part of
these services, the Adviser has also delegated to each Sub-Adviser the full responsibility for
proxy voting on securities held in its portfolio and related duties in accordance with the
Sub-Advisers policy and procedures. The Adviser periodically will monitor each Sub-Advisers
voting to ensure that they are carrying out their duties. The Advisers and Sub-Advisers proxy
voting policies and procedures are summarized as follows:
NAM
The registrant invests its assets primarily in fixed income securities and cash management
securities. In the rare event that a fixed income issuer were to issue a proxy or that the
registrant were to receive a proxy issued by a cash management security, NAM would either engage an
independent third party to determine how the proxy should be voted or vote the proxy with the
consent, or based on the instructions, of the registrants Board of Trustees or its representative.
A member of NAMs legal department would oversee the administration of the voting, and ensure that
records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form
N-PX, and the results provided to the registrants Board of Trustees and made available to
shareholders as required by applicable rules.
NWQ
With respect to NWQ, NWQs Proxy Voting Committee (the Committee) is responsible for supervision
of the proxy voting process, including identification of material conflicts of interest involving
NWQ and the proxy voting process in respect of securities owned on behalf of clients, and
circumstances when NWQ may deviate from its policies and procedures. Unless otherwise determined by
the Committee, NWQ will cause proxies to be voted consistent with the recommendations or guidelines
of an independent third party proxy service or other third party, and in most cases, votes
generally in accordance with the recommendations of RiskMetrics Group (formerly ISS) on the voting
of proxies relating to securities held on behalf of clients accounts. Unless otherwise restricted,
NWQs Committee reserves the right to override the specific recommendations in any situation where
it believes such recommendation is not in its clients best interests. NWQs Committee oversees the
identification of material conflicts of interest, and where such matter is covered by the
recommendations or guidelines of a
third party proxy service, it shall cause proxies to be voted in accordance with the applicable
recommendation or guidelines, to avoid such conflict. If a material conflict of interest matter is
not covered by the third party service provider recommendations, NWQ may (i) vote in accordance
with the recommendations of an alternative independent third party or (ii) disclose the conflict to
the client, and with their consent, make the proxy voting determination and document the basis for
such determination.
NWQ generally does not intend to vote proxies associated with the securities of any issuer if as a
result of voting, the issuer restricts such securities from being transacted for a period (this
occurs for issuers in a few foreign countries), or where the voting would in NWQs judgment result
in some other financial, legal, regulatory disability or burden to NWQ or the client (such as
imputing control with respect to the issuer). Likewise, the Committee may determine not to recall
securities on loan if negative consequences of such recall outweigh benefits of voting in the
particular instance, or expenses and inconvenience of such recall outweigh benefits, in NWQs
judgment.
SANTA BARBARA
The Fund is responsible for voting proxies on securities held in its portfolio. When the Fund
receives a proxy, the decision regarding how to vote such proxy will be made by the Sub-Adviser
responsible for the assets to which the proxy relates in accordance with that Sub-Advisers proxy
voting procedures.
With respect to Santa Barbara, the Fund has granted to Santa Barbara the authority to vote proxies
on its behalf with respect to the assets managed by Santa Barbara. A senior member of Santa Barbara
is responsible for oversight of the Funds proxy voting process. Santa Barbara also uses the
services of RiskMetrics Group (formerly ISS) (RiskMetrics). Santa Barbara reviews RiskMetrics
recommendations and frequently follows the RiskMetrics recommendations. However, on selected
issues, Santa Barbara may not vote in accordance with the RiskMetrics recommendations when it
believes that specific RiskMetrics recommendations are not in the best economic interest of the
Fund. If Santa Barbara manages the assets of a company or its pension plan and any of Santa
Barbaras clients hold any securities of that company, Santa Barbara will vote proxies relating to
such companys securities in accordance with the RiskMetrics recommendations to avoid any conflict
of interest. If a client requests Santa Barbara to follow specific voting guidelines or additional
guidelines, Santa Barbara will review the request and inform the client only if Santa Barbara is
not able to follow the clients request.
Santa Barbara has adopted the RiskMetrics Proxy Voting Guidelines. While these guidelines are not
intended to be all-inclusive, they do provide guidance on Santa Barbaras general voting policies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Nuveen Asset Management (NAM) is the registrants investment adviser (NAM is also referred to as
the Adviser.) NAM, as Adviser, provides discretionary investment advisory services. NAM is
responsible for the selection and on-going monitoring of the Funds investment portfolio, managing
the Funds business affairs and providing certain clerical, bookkeeping and administrative
services. The Adviser has engaged NWQ Investment Management Company, LLC (NWQ), and
Santa Barbara Asset Management (Santa Barbara) as Sub-Advisers to provide discretionary
investment advisory services (NWQ and Santa Barbara are also collectively referred to as
Sub-Advisers). The following section provides information on the portfolio managers at the
Adviser as well as each Sub-Adviser:
NAM
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
Messrs. Rob A. Guttschow, CFA and John Gambla, CFA are primarily responsible for the day-to-day
management of the registrants portfolio (Portfolio Manager) since 2007.
Mr. Guttschow is a Managing Director of Nuveen HydePark Group, LLC (HydePark) and Nuveen Asset
Management (NAM), both affiliates of Nuveen Investments. Mr. Guttschow joined NAM in May 2004 to
develop and implement a derivative overlay capability. Mr. Guttschow then joined Nuveen HydePark
Group LLC in September 2007, while retaining his Managing Director status with Nuveen Asset
Management. Mr. Guttschow was a Managing Director and Senior Portfolio Manager at Lotsoff Capital
Management (LCM) from 1993 until 2004. While at LCM, Mr. Guttschow managed a variety of taxable
fixed income portfolios and enhanced equity index products totaling $1.5 billion. Mr. Guttschow is
a Chartered Financial Analyst (CFA) and a member of the Association for Investment Management
Research. He has served as a member of the TRIAD group for the Investment Analyst Society of
Chicago. Education: University of Illinois at Urbana/Champaign, B.S., M.B.A., CFA.
Mr. Gambla is a Managing Director of Nuveen HydePark Group LLC and a Managing Director at NAM, both
affiliates of Nuveen Investments, since 2007. He is responsible for designing and maintaining
equity and alternative investment portfolios. Prior to this, he was a Senior Trader and
Quantitative Specialist for NAM (since 2003), and a Portfolio Manager for Nuveens closed-end fund
managed account. Additional responsibilities included quantitative research and product
development. Mr. Gambla joined Nuveen in 1992 as an Assistant Portfolio Manager. In 1993, he
became a lead Portfolio Manager responsible for seven closed-end and open-end bond funds totaling
$1.5 billion. In 1998, he became Manager of Defined Portfolio Advisory which provided fundamental
research, quantitative research and trading for Nuveens $11 billion of equity and fixed-income
Unit Trusts. Prior to his career with Nuveen, he was a Financial Analyst with Abbott Laboratories.
He is a Chartered Financial Analyst, Certified Financial Risk Manager, and a member of Phi Beta
Kappa. Education: University of Illinois, B.A., B.S., University of Chicago, M.B.A.
Item 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS AS OF 12/31/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(iii) Number of Other Accounts and |
|
|
(ii) Number of Other Accounts Managed |
|
Assets for Which Advisory Fee is |
|
|
and Assets by Account Type |
|
Performance-Based |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Other |
|
|
|
|
Registered |
|
Other Pooled |
|
|
|
|
|
|
|
|
|
Registered |
|
Pooled |
|
|
(i) Name of |
|
Investment |
|
Investment |
|
Other |
|
Investment |
|
Investment |
|
Other |
Portfolio Manager |
|
Companies |
|
Vehicles |
|
Accounts |
|
Companies |
|
Vehicles |
|
Accounts |
Rob A. Guttschow, CFA |
|
|
8 |
|
|
844.76mm |
|
|
1 |
|
|
0.924mm |
|
|
22 |
|
|
539.7mm |
|
|
|
|
|
|
1 |
|
|
16.2mm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Gambla, CFA |
|
|
8 |
|
|
844.76mm |
|
|
1 |
|
|
0.924mm |
|
|
24 |
|
|
539.7mm |
|
|
|
|
|
|
1 |
|
|
16.2mm |
|
|
|
|
POTENTIAL MATERIAL CONFLICTS OF INTEREST
The simultaneous management of the Fund and the other registered investment companies noted above
by the Portfolio Managers may present actual or apparent conflicts of interest with respect to the
allocation and aggregation of securities orders placed on behalf of the Fund and the other
accounts.
The Adviser has adopted several policies that address potential conflicts of interest, including
best execution and trade allocation policies that are designed to ensure (1) that portfolio
management is seeking the best price for portfolio securities under the circumstances, (2) fair and
equitable allocation of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a non-preferential manner,
such that allocations are not based upon account performance, fee structure or preference of the
portfolio manager. In addition, the Adviser has adopted a Code of Conduct that sets forth policies
regarding conflicts of interest.
Item 8(a)(3). FUND MANAGER COMPENSATION |
Compensation. Each Portfolio Managers compensation consists of three basic elementsbase
salary, cash bonus and long-term incentive compensation. The Advisers compensation strategy is to
annually compare overall compensation, including these three elements, to the market in order to
create a compensation structure that is competitive and consistent with similar financial services
companies. As discussed below, several factors are considered in determining each Portfolio
Managers total compensation. In any year these factors may include, among others, the
effectiveness of the investment strategies recommended by the Portfolio Managers investment team,
the investment performance of the accounts managed by the Portfolio Managers, and the overall
performance of Nuveen Investments, Inc. (the parent company of the Adviser). Although investment
performance is a factor in determining each Portfolio Managers compensation, it is not necessarily
a decisive factor..
Base salary. Each Portfolio Manager is paid a base salary that is set at a level determined by the
Adviser in accordance with its overall compensation strategy discussed above. The Adviser is not
under any current contractual obligation to increase a Portfolio Managers base salary.
Cash bonus. Each Portfolio Manager is also eligible to receive an annual cash bonus. The level of
this bonus is based upon evaluations and determinations made by each Portfolio Managers
supervisors. These reviews and evaluations often take into account a number of factors, including
the effectiveness of the investment strategies recommended to the Advisers investment team, the
performance of the accounts for which he serves as portfolio manager relative to any benchmarks
established for those accounts, his effectiveness in communicating investment performance to
stockholders and their representatives, and his contribution to the Advisers investment process
and to the execution of investment strategies. The cash bonus component is also impacted by the
overall performance of Nuveen Investments, Inc. in achieving its business objectives.
Long-term incentive compensation. Each Portfolio Manager is eligible to receive two forms of long
term incentive compensation. One form is tied to the successful revenue growth of the Nuveen
HydePark Group LLC. The second form of long term compensation is tied to the success of Nuveen
Investments, Inc and its ability to grow its business as a private company. In connection with the
acquisition of Nuveen Investments, Inc., by a group of investors lead by Madison Dearborn Partners,
LLC in November 2007, certain employees, including portfolio managers, received profit interests in
Nuveens parent. These profit interests entitle the holders to participate in the appreciation in
the value of Nuveen beyond the issue date and vest over five to seven years, or earlier in the case
of a liquidity event. In addition, in July 2009, Nuveen Investments created and funded a trust, as
part of a newly established incentive program, which purchased shares of certain Nuveen Mutual
Funds and awarded such shares, subject to vesting, to certain employees, including portfolio
managers.
Item 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Portfolio Manager |
|
None |
|
$1 $10,000 |
|
$10,001 $50,000 |
|
$50,001 $100,000 |
|
$100,001 $500,000 |
|
$500,001
$1,000,000 |
|
Over $1,000,000 |
Rob Guttschow
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
John Gambla
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
NWQ
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES |
Michael Carne, CFA, Managing Director and Fixed Income Portfolio Manager
Prior to joining NWQ in 2002, Mr. Carne managed institutional, private client fixed income and
balanced portfolios for over ten years. During this time, he held assignments as Director of
Global Fixed Income at ING Aeltus, as Chief Investment Officer of a Phoenix Home Life affiliate and
was a principal in Carne, OBrient, Ferry & Roth, LLC. Mr. Carne graduated from the University of
Massachusetts with a B.B.A. degree in Finance and received his M.B.A. from Harvard University. He
earned the designation of Chartered Financial Analyst in 1989.
Item 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS |
In addition to managing the Income Oriented Strategy, Mr. Carne is also primarily responsible for
the day-to-day portfolio management of the following accounts. Information is provided as of
December 31, 2009 unless otherwise indicated:
|
|
|
|
|
|
|
|
|
Type of Account Managed |
|
Number of Accounts |
|
Assets* |
Registered Investment Company |
|
|
3 |
|
|
$ |
83,958,199 |
|
Other Pooled Investment |
|
|
0 |
|
|
$ |
0 |
|
Other Accounts |
|
|
7,460 |
|
|
$ |
1,308,123,528 |
|
|
|
|
* |
|
None of the assets in these accounts are subject to an advisory fee based on performance. |
POTENTIAL MATERIAL CONFLICTS OF INTEREST
Actual or apparent conflicts of interest may arise when a portfolio manager has day-to-day
management responsibilities with respect to more than one account. More specifically, portfolio
managers who manage multiple accounts are presented with the following potential conflicts, which
is not intended to be an exhaustive list:
|
|
|
The management of multiple accounts may result in a portfolio manager devoting
unequal time and attention to the management of each account. NWQ seeks to manage
such competing interests for the time and attention of portfolio managers by
having portfolio managers focus on a particular investment discipline. Most
accounts managed by a portfolio manager in a particular investment strategy are
managed using the same investment models. |
|
|
|
If a portfolio manager identifies a limited investment opportunity which
may be suitable for more than one account, an account may not be able to take full
advantage
of that opportunity due to an allocation of filled purchase or sale orders across
all eligible accounts. To deal with these situations, NWQ has adopted procedures for allocating portfolio transactions
across multiple accounts. |
|
|
|
With respect to many of its clients accounts, NWQ determines which broker to
use to execute transaction orders, consistent with its duty to seek best
execution of the transaction. However, with respect to certain other accounts, NWQ
may be limited by the client with respect to the selection of brokers or may be
instructed to direct trades through a particular broker. In these cases, NWQ may
place separate, non-simultaneous, transactions for a Fund and other accounts which
may temporarily affect the market price of the security or the execution of the
transactions, or both, to the detriment of the Fund or the other accounts. |
|
|
|
|
The Fund is subject to different regulation than other pooled investment
vehicles and other accounts managed by the portfolio managers. As a consequence of
this difference in regulatory requirements, the Fund may not be permitted to
engage in all the investment techniques or transactions or to engage in these
transactions to the same extent as the other accounts managed by the portfolio
managers. Finally, the appearance of a conflict of interest may arise where NWQ
has an incentive, such as a performance-based management fee, which relates to the
management of some accounts, with respect to which a portfolio manager has
day-to-day management responsibilities. |
NWQ has adopted certain compliance procedures which are designed to address these types of
conflicts common among investment managers. However, there is no guarantee that such procedures
will detect each and every situation in which a conflict arises.
In addition, Merrill Lynch & Co., Inc. (Merrill Lynch), which was acquired by Bank of America
Corporation (Bank of America, and together with their affiliates, ML/BofA), are indirect
investors in Nuveen. While we do not believe that ML/BofA are affiliates of NWQ for purposes of
the Investment Company Act of 1940, NWQ may determine to impose certain trading limitations in
connection with ML/BofA broker-dealers.
Item 8(a)(3). FUND MANAGER COMPENSATION
NWQ offers a highly competitive compensation structure with the purpose of attracting and retaining
the most talented investment professionals. These professionals are rewarded through a combination
of cash and long-term incentive compensation as determined by the firms executive committee.
Total cash compensation (TCC) consists of both a base salary and an annual bonus that can be a
multiple of the base salary. The firm annually benchmarks TCC to prevailing industry norms with
the objective of achieving competitive levels for all contributing professionals.
Available bonus pool compensation is primarily a function of the firms overall annual
profitability. Individual bonuses are based primarily on the following:
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Overall performance of client portfolios |
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Objective review of stock recommendations and the quality of primary research |
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Subjective review of the professionals contributions to portfolio strategy, teamwork,
collaboration and work ethic |
To further strengthen our incentive compensation package and to create an even stronger alignment
to the long-term success of the firm, NWQ has made available to most investment professionals
equity participation opportunities, the values of which are determined by the increase in
profitability of NWQ over time.
Finally, some of our investment professionals have received additional remuneration as
consideration for signing employment agreements. These agreements range from retention agreements
to long-term employment contracts with significant non-solicitation and, in some cases, non-compete
clauses.
Item 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2009
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Name of Portfolio Manager |
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None |
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$1 $10,000 |
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$10,001 $50,000 |
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$50,001 $100,000 |
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$100,001 $500,000 |
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$500,001 $1,000,000 |
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Over $1,000,000 |
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Michael Carne |
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X |
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Santa Barbara
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHY
Mr. James Boothe, CFA, joined Santa Barbara in 2002 with over 20 years of investment management
experience. He was a portfolio manager with USAA Investment Management. Prior to that Mr. Boothe
was a portfolio manager / analyst at San Juan Asset Management. He has a BBA from Kent State
University and a MBA in finance from Loyola Marymount University. Mr. Boothe has earned the CFA
Institutes Chartered Financial Analyst designation.
Item 8(a)(2). OTHER ACCOUNTS MANAGED
In addition to managing the Dividend Growth Equity Strategy, Mr. Boothe is also primarily
responsible for the day-to-day portfolio management of the following accounts. Information is
provided as of December 31, 2009 unless otherwise indicated:
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Type of Account Managed |
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Number of Accounts |
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Assets* |
Registered Investment Company |
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2 |
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$ |
106,577,688.20 |
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Other Pooled Investment |
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$ |
0 |
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Other Accounts |
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941 |
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$ |
392,019,841.43 |
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* |
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None of the assets in these accounts are subject to an advisory fee
based on performance. |
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** |
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The fees received by NAM for this pooled investment account are
performance based. |
Material Conflicts of Interest. Actual or apparent conflicts of interest may arise when a portfolio
manager has day-to-day management responsibilities with respect to more than one account. More
specifically, a portfolio manager who manages multiple accounts is presented with the following
potential conflicts:
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The management of multiple accounts may result in a portfolio manager
devoting unequal time and attention to the management of each account.
Santa Barbara seeks to manage such competing interests for the time
and attention of portfolio managers by having portfolio managers focus
on a particular investment discipline. Most accounts managed by a
portfolio manager in a particular investment strategy are managed
using the same investment models. |
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If a portfolio manager identifies a limited investment opportunity
that may be suitable for more than one account, an account may not be
able to take full advantage of that opportunity due to an allocation
of filled purchase or sale orders across all eligible accounts. To
deal with these situations, Santa Barbara has adopted procedures for
allocating portfolio transactions across multiple accounts. |
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With respect to many of its clients accounts, Santa Barbara
determines which broker to use to execute transaction orders,
consistent with its duty to seek best execution of the transaction.
However, with respect to certain other accounts, Santa Barbara may be
limited by the client with respect to the selection of brokers or may
be instructed to direct trades through a particular broker. In these
cases, Santa Barbara may place separate, non-simultaneous,
transactions for a Fund and other accounts, which may temporarily
affect the market price of the security or the execution of the
transaction, or both, to the detriment of the Fund or the other
accounts. |
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The Fund is subject to different regulation than the other pooled
investment vehicles and other accounts managed by the portfolio
manager. As a consequence of this difference in regulatory
requirements, the Fund may not be permitted to engage in all the
investment techniques or transactions or to engage in these
transactions to the same extent as the other accounts managed by the
portfolio manager. Finally, the appearance of a conflict of interest
may arise where Santa Barbara has an incentive, such as a
performance-based management fee, which relates to the management of
some accounts, with respect to which a portfolio manager has
day-to-day management responsibilities. |
In addition, Merrill Lynch & Co., Inc. (Merrill Lynch), which was acquired by Bank of America
Corporation (Bank of America, and together with their affiliates, ML/BofA), are indirect
investors in Nuveen. While we do not believe that ML/BofA are affiliates of SBAM for purposes of
the Investment Company Act of 1940, SBAM may determine to impose certain trading limitations in
connection with ML/BofA broker-dealers.
Santa Barbara has adopted certain compliance procedures that are designed to address these types of
conflicts common among investment managers. However, there is no guarantee that such procedures
will detect each and every situation in which a conflict arises.
Item 8(a)(3). FUND MANAGER COMPENSATION
Salary and Cash Bonus. With respect to Santa Barbara, Mr. Boothe participates in a highly
competitive compensation structure with the purpose of attracting and retaining the most talented
investment professionals and rewarding them through a total compensation program as determined by
Santa Barbaras executive committee. The total compensation consists of both a base salary and any
annual bonus that can be a multiple of the base salary. Mr. Boothes performance is formally
evaluated annually and based on a variety of factors. Bonus compensation is primarily a function of
Santa Barbaras overall annual profitability and Mr. Boothes contribution as measured by the
overall investment performance of client portfolios in the strategies he manages relative the
strategys general benchmark for one-, three- and five-year periods as well as an objective review
of stock recommendations and the quality of primary research and subjective review of Mr. Boothes
contributions to portfolio strategy, team work, collaboration and work ethic.
Item 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2009
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Name of Portfolio Manager |
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None |
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$1 $10,000 |
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$10,001 $50,000 |
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$50,001 $100,000 |
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$100,001 $500,000 |
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$500,001 $1,000,000 |
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Over $1,000,000 |
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James Boothe |
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X |
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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
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(b) |
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(c) |
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(d)* |
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(a) |
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Average |
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Total Number of Shares |
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Maximum Number (or |
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Total Number of |
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Price |
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(or Units) Purchased as |
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Approximate Dollar Value) of |
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Shares (or |
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Paid Per |
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Part of Publicly |
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Shares (or Units) That May Yet |
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Units) |
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Share (or |
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Announced Plans or |
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be Purchased Under the Plans or |
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Period* |
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Purchased |
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Unit) |
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Programs |
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Programs |
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January 1-31, 2009 |
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0 |
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0 |
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1,475,000 |
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February 1-28, 2009 |
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0 |
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0 |
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1,475,000 |
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March 1-31, 2009 |
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0 |
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0 |
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1,475,000 |
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April 1-30, 2009 |
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0 |
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0 |
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1,475,000 |
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May 1-31, 2009 |
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0 |
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0 |
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1,475,000 |
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June 1-30, 2009 |
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18,400 |
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$ |
10.68 |
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18,400 |
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1,456,600 |
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July 1-31, 2009 |
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13,900 |
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$ |
8.90 |
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13,900 |
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1,442,700 |
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August 1-31, 2009 |
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8,500 |
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$ |
10.06 |
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8,500 |
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1,434,200 |
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September 1-30, 2009 |
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0 |
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0 |
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1,434,200 |
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October 1-31, 2009 |
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88,000 |
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$ |
10.80 |
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88,000 |
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1,382,000 |
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November 1-30, 2009 |
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67,500 |
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$ |
10.62 |
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67,500 |
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1,314,500 |
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December 1-31, 2009 |
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7,600 |
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$ |
10.20 |
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7,600 |
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1,306,900 |
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Total |
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203,900 |
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* |
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The registrants repurchase program, which authorized the repurchase of 1,475,000 shares, was
announced August 7, 2008. On October 3, 2009, the program was reauthorized for a maximum
repurchase amount of 1,470,000 shares. Any repurchases made by the registrant pursuant to the
program were made through open-market transactions. |
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrants Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
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(a) |
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The registrants principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrants disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the 1940 Act) (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of this report that
includes the disclosure required by this paragraph, based on their
evaluation of the controls and procedures required by Rule 30a-3(b)
under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Securities Exchange Act of 1934, as amended (the
Exchange Act) (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
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(b) |
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There were no changes in the registrants internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrants
internal control over financial reporting. |
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrants website at
www.nuveen.com/CEF/Info/Shareholder/ and
there were no amendments during the period covered by this report. (To view the
code, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed filed for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
Nuveen Tax-Advantaged Dividend Growth Fund
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By (Signature and Title) |
/s/ Kevin J. McCarthy
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Kevin J. McCarthy |
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Vice President and Secretary |
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Date:
March 10, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
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By (Signature and Title) |
/s/ Gifford R. Zimmerman
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Gifford R. Zimmerman |
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Chief Administrative Officer
(principal executive officer) |
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Date:
March 10, 2010
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By (Signature and Title) |
/s/ Stephen D. Foy
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Stephen D. Foy |
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Vice President and Controller
(principal financial officer) |
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Date:
March 10, 2010