N-CSR
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 811-21471
Nuveen Tax-Advantaged Total Return Strategy 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, 2008
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
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Annual Report
December 31, 2008
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Nuveen Investments
Closed-End Funds
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NUVEEN TAX-ADVANTAGED TOTAL RETURN STRATEGY FUND JTA
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Opportunities
for Capital Appreciation and Tax-Advantaged
Distributions
from a Portfolio of Value Equities and Senior Loans
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If you received your Nuveen Fund dividends and statements
from your financial advisor or brokerage account.
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OR
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www.nuveen.com/accountaccess
If you received your Nuveen Fund dividends and statements
directly from Nuveen.
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Chairmans
LETTER
TO
SHAREHOLDERS
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ï Robert
P.
Bremner ï Chairman
of the Board
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Dear Shareholders,
I write this letter in a time of continued uncertainty about the
current state of the U.S. financial system and pessimism about
the future of the global economy. Many have observed that the
conditions that led to the crisis have built up over time and
will complicate and extend the course of recovery. At the same
time, government officials in the U.S. and abroad have
implemented a wide range of programs to restore stability to the
financial system and encourage economic recovery. History
teaches us that these efforts will moderate the extent of the
downturn and hasten the inevitable recovery, even though it is
hard to envision that outcome in the current environment.
As you will read in this report, the continuing financial and
economic problems are weighing heavily on the values of
equities, real estate and fixed-income assets, and unfortunately
the performance of your Nuveen Fund has been similarly affected.
In addition to the financial statements, I hope that you will
carefully review the Portfolio Managers Comments, the
Common Share Distribution and Share Price Information and the
Performance Overview sections of this report. These comments
highlight each managers pursuit of investment strategies
that depend on thoroughly researched securities, diversified
portfolio holdings and well established investment disciplines
to achieve your Funds investment goals. The
Fund Board believes that a consistent focus on long-term
investment goals provides the basis for successful investment
over time and we monitor your Fund with that objective in mind.
Nuveen continues to work on resolving the auction rate preferred
shares situation, but the unsettled conditions in the credit
markets have slowed progress. Nuveen is actively pursuing a
number of solutions, all with the goal of providing liquidity
for preferred shareholders while preserving the potential
benefits of leverage for common shareholders. We appreciate the
patience you have shown as we have worked through the many
issues involved. Please consult the Nuveen website:
www.nuveen.com, for the most recent information.
On behalf of myself and 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
February 23, 2009
Portfolio Managers COMMENTS
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Nuveen Investments Closed-End Funds
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JTA
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The Fund features management by two affiliates of Nuveen
Investments. The Funds investments in dividend-paying
common and preferred stocks are managed by NWQ Investment
Management Company, LLC (NWQ), while the Funds investments
in senior corporate loans and other debt instruments are managed
by Symphony Asset Management, LLC (Symphony).
Jon Bosse, Chief Investment Officer of NWQ, leads the
Funds management team at that firm. He has more than
22 years of corporate finance and investment management
experience.
The Symphony team is led by Gunther Stein and Lenny Mason,
who have more than 25 years of combined investment
management experience, much of it in evaluating and purchasing
senior corporate loans and other high-yield debt.
Here Jon, Gunther and Lenny talk about general market
conditions, their management strategies and the performance of
the Fund for the twelve-month period ended December 31,
2008.
WHAT WERE THE
GENERAL ECONOMIC CONDITIONS AND MARKET TRENDS DURING THE
TWELVE-MONTH PERIOD ENDED DECEMBER 31, 2008?
The period was dominated by fears of an economic recession,
triggered or exacerbated by several significant developments.
The cascading effects of sub-prime mortgage defaults,
constrained liquidity in the capital markets, and limited
lending by many financial institutions caused many investors to
seek refuge in U.S. Treasury securities. These events forced
some financial firms to merge, restructure or go out of
business. At the same time, the U.S. government essentially took
over Fannie Mae and Freddie Mac, and also intervened on behalf
of the giant insurer AIG. By the end of 2008, the U.S. Treasury
had disbursed approximately $350 billion of capital to
financial institutions and others under the Troubled Assets
Relief Program, with indications that a like amount would be
distributed in 2009.
Another indicator of economic weakness was the U.S. unemployment
rate, which soared to 7.2% as of December 31, 2008,
compared with 4.9% one year earlier. Practically all segments of
the economy showed signs of slowing by the end of the period.
During the third quarter of 2008, gross domestic product
contracted to an annual rate of 0.5%, the biggest decrease since
2001. Preliminary reports for the fourth quarter showed a
contraction of 3.8%, the worst showing in more than
25 years. This was mainly the result of the first decline
in consumer
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.
spending since 1991 and an 18% drop in residential investment.
Fortunately, inflation was not a significant factor as the
Consumer Price Index rose just 0.1% in 2008. The Federal Reserve
cut the widely followed short-term fed funds rate seven times
during 2008, lowering the rate from 4.25% to
0-0.25% as
of year end.
The Dow Jones Industrial Average suffered its worst annual
decline since 1931 and the NASDAQ Composite suffered its worst
annual decline evereven greater than that experienced
during the retreat after the technology bubble in 2000. The
S&P 500 Index declined approximately 17% in October driven
by significant global weakness. This one month decline nearly
matched the entire 2008 year to date decline through
September. In November, the market continued its downward path,
falling another 17% until reaching a bottom in mid-November,
whereupon a 13% rally through the end of the year occurred. The
problems were spread broadly across all sectors and markets.
Spot prices for certain base metals (steel, aluminum, copper)
and crude oil declined as much as
50-70% in
the last six months of 2008.
The stress in the capital markets restricted the availability of
credit even to financially strong corporations and individuals.
While U.S. Treasury rates have approached zero at the short end
(and are nominally low across the yield curve), a number of
investment grade companies have had to pay close to double digit
yields to access the capital markets. This is exacerbating the
decline in economic activity, and has caused many companies to
revise their business forecasts downward. By the end of 2008,
the U.S. economy was experiencing a recession of uncertain depth
and duration. Many companies have announced that business
activity effectively hit a wall during the fourth
quarter. Global markets fell dramatically as well, with many
industries going from boom to bust in a period of a few months.
The belief that global diversification in non-correlated markets
would provide some downside protection was negated given the
magnitude of the economic and market disruption.
JTA invests across asset classes, but at all times has long
exposure to leveraged loans, many of which are rated below
investment grade. Throughout late 2007 these assets were under a
significant amount of price pressure. Initially, this was
catalyzed by the sub-prime mortgage contagion which virtually
shut down the structured credit market. This left the credit
market fragile coming into 2008, with the average price of the
leveraged loan market stood at roughly 94% of par. Spreads in
the loan and credit market drifted wider throughout the next
several months, with most of the price pressure prior to the
Lehman Brothers collapse in mid-September attributable to the
oversupply of debt relative to a growing risk aversion, rather
than to defaults or fundamental deterioration. Following the
bankruptcy filing of Lehman and the subsequent near-collapse of
the financial system, the market saw fundamental deterioration
and volatility begin to accelerate. Convertible bonds (which are
sensitive to both equity valuations and credit spreads) got hit
from both sides as the Merrill Lynch Convertible Bond Index fell
19% in the fourth quarter of 2008.
The systematic deleveraging which followed the Lehman Brothers
bankruptcy was primarily responsible for most of the weak
pricing in the senior loan market during the fourth quarter of
2008. Although the fundamental backdrop was clearly weakening,
forced selling of assets as a
result of margin calls and mutual fund redemptions combined with
deteriorating fundamentals to put continued stress on the market.
WHAT KEY
STRATEGIES WERE USED TO MANAGE THE FUND DURING THIS REPORTING
PERIOD?
Our performance for the period in the equity portion of the Fund
was extremely disappointing. We underperformed in a declining
market, despite having an investment philosophy and process that
focuses on downside protection. The market offered little or no
opportunity to mitigate the downward pressure on many of our
holdings, even for companies with no debt and reasonably healthy
businesses.
While all areas of the portfolio suffered losses, our stock
selection in the financial services sector was unfavorable
compared to the benchmark. We have maintained an underweight
position in the finance sector since the second half of 2007;
however, our insurance holdings Genworth Financial Inc. and
Hartford Financial Services Group suffered significant declines
during 2008. These stocks were adversely impacted by weak
investment portfolio returns and concerns that dislocations in
the credit markets will make it difficult for these companies to
raise additional capital. During the year we eliminated Genworth
Financial, but continue to maintain a position in Hartford
Financial as we believe the market has overly discounted the
negatives of this company. In early December, Hartford Financial
announced a stronger capital position than previously expected,
which propelled a strong rally in the shares. Also partially
offsetting the losses in the financial sector were strong gains
in a new position in MetLife, Inc.
In the senior loan portion of the Fund, we continued to focus on
fundamental asset selection in positioning our credit portfolios
for the longer-term. On this fundamental basis, we saw relative
value in senior secured bank loans as one of the more attractive
areas of the corporate credit market. In many cases, the market
saw senior bank loans trading at a higher implied yield than
subordinated debt of the same issuer. We believe these types of
relative value situations can create attractive investment
opportunities longer-term.
Throughout the year, we preferred to own the debt of larger
businesses that are less-cyclical in nature, particularly those
that are able to generate cash flow through market troughs.
These include hospital operators and utility and cable
companies, as well as others that are not directly dependent on
consumer discretionary spending.
Past performance is does not guarantee future results. Current
performance may be higher or lower than the data shown.
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 Performance Overview
for the Fund in this report.
1 The comparative benchmark designed to reflect the portfolio
composition of JTA is calculated by combining: 1) 56% of
the return of the Russell 3000 Value Index, which measures the
performance of those Russell 3000 Index companies with lower
price-to book ratios and lower forecasted growth values,
2) 16% of the return of the MSCI EAFE ex-Japan Value Index,
a capitalization weighted index that selects the lower 50% of
the
price-to-book
ranked value stocks traded in the developed markets of Europe,
Asia and the Far East, excluding Japan, 3) 8% 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, and 4) 20% of the return of the CSFB
Leveraged Loan Index, which consists of approximately
$150 billion of tradable term loans with at least one year
to maturity and rated BBB or lower. 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.
HOW DID THE FUND
PERFORM OVER THIS TWELVE-MONTH PERIOD?
The performance of JTA, as well as a comparative benchmark, is
presented in the accompanying table.
Average Annual Total
Returns on Common Share on Net Asset Value
For the twelve-month period ended 12/31/08
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1-Year
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JTA
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-55.29%
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Comparative
Benchmark1
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-37.75%
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For the twelve-month period ended December 31, 2008, the
common share net asset value of the Fund underperformed its
comparative benchmark. As noted earlier, many asset classes
performed poorly in 2008. This unfavorable environment is
reflected in the returns of the Fund and the benchmark shown
above. Additionally, the major factor in the significant
relative underperformance of the Fund, compared to that of the
unleveraged benchmark, was the Funds use of financial
leverage (see below).
Sector and stock selection also impacted Fund performance. In
addition to the financial holdings discussed previously, our
investments in the energy sector, including Chevron Corporation,
ConocoPhillips, Eni S.p.A. and Total S.A., were pressured by the
decline in oil and natural gas prices brought on by expectations
of slowing global economic growth. Slowing economic growth also
contributed to a decline in Union Pacific Corporation, although
we believe the medium- to long-term outlook for the company
remains favorable. Shares of Motorola Inc. declined due to
ongoing weakness in its handset division. However, we believe
new management is focused on addressing the challenges within
this division and we remain positive on the holding. CBS
Corporation and Gannett Company Inc. underperformed given the
current cyclical and secular decline in the advertising market.
We took advantage of the extreme dislocations in the market to
add a number of new investments to the portfolio in the latter
part of the year. We believe these companies, including Barrick
Gold Corporation, POSCO, and Travelers Companies Inc., possess
strong balance sheets and were not only attractively valued but
also have strong opportunities for future growth.
On the heels of a public capital raise, we also established a
new position in MetLife, Inc. Notwithstanding challenges within
the financial sector, we believe MetLife possesses one of the
best franchises in the life insurance industry. Its management
has demonstrated a superior record for making good acquisitions
and generating excellent returns on capital. As another example
of attempting to take advantage of a market dislocation, we
established a new position in Merck & Co. Inc. in
January 2009, shortly after the end of this reporting period. We
believe Merck offers a compelling valuation and a disciplined
management team that has not historically diluted shareholders.
In addition, in our opinion, the company has one of the best
track records in bringing a number of highly profitable new
drugs to market. Although the company is facing patent
expirations on several large drugs, it has much greater earnings
stability than most of its competitors.
We eliminated a number of equity portfolio holdings in the last
few months of the year, including several prior to significant
price declines. In early October, and weeks prior to the U.S.
Treasurys capital intervention on behalf of the company,
we eliminated our position in Citigroup, Inc. after Wells
Fargo & Company topped Citigroups government
assisted acquisition of Wachovias banking assets. We
believed that acquiring Wachovias assets would have
strengthened Citigroups financial position and that,
without those assets, Citigroup was in a weakened position. We
also eliminated our holding of Newell Rubbermaid Inc.,
notwithstanding its significant asset value, given that we
believed its debt level introduced greater risk for equity
holders. We sold International Paper Co. after the company
acquired Weyerhausers containerboard and recycling assets.
While the acquisition may fit strategically, we believed that
such a sizable acquisition, which resulted in a leveraged
balance sheet during a period of global economic uncertainty,
presented added risk. Other positions sold during the year
included American International Group Inc., Fannie Mae, Freddie
Mac, Genworth Financial Inc., IndyMac Bancorp Inc., Korea
Electric Power Corporation, KT Corporation, Telecom Italia
S.p.A. and Wachovia Corporation.
At year end, the portfolio continued its relative underweight
position in the finance sector. While many valuations in the
sector appear attractive, there is still risk and uncertainty
due to economic weakness and dysfunctional capital markets.
Although some losses on sub-prime mortgages are being
recognized, the financial markets are in the early stages of
determining/valuing the losses on commercial real estate, as
well as other commercial, industrial and various consumer loans.
We found more compelling risk/reward opportunities in other
sectors.
Another factor weighing on overall Fund performance last year
was the senior loan portfolio. While 2008 left little
opportunity to outperform the market on the long side, we were
able to select some positions which had the potential to
generate price appreciation in spite of the markets
general direction. These opportunities often had some short-term
catalyst, such as positive earnings announcements, debt
repayments or acquisitions. One such situation was Alltel, which
we purchased in front of news that Verizon would be acquiring
the company.
More generally, we were able to focus on companies with
defensive business positions in less-cyclical industries. On a
relative basis, these names tended to outperform the broader
markets as fundamental deterioration in the economy began.
Deleveraging in the financial markets created forced selling
across asset classes and was painful for investors forced to
sell assets or mark them to the market. In many cases this
deleveraging was funded through the sale of assets which had
relative liquidity, putting significant price pressure on many
of the Funds larger, more liquid, credit positions.
Although the current economic environment is clearly
challenging, in many cases the relative oversupply and
simultaneous sale of this debt have created what we believe are
attractive levels to own these assets for the longer term. In
the short-run, however, senior loans, which are mostly
non-investment grade and which have floating-rate coupons that
are based off short-term interest rates, have struggled. As the
market deteriorated, many investors sold senior loans in order
to raise cash to fund redemptions or to reduce leverage. The
resulting price pressure constrained
the overall performance of the Fund. Although we continue to
have conviction within this area of the market, this exposure
did not benefit returns in the short-run.
IMPACT OF THE
FUNDS CAPITAL STRUCTURE AND LEVERAGE STRATEGY ON
PERFORMANCE
In this generally unfavorable investment environment, the most
significant factor impacting the return of the Fund relative to
the comparative benchmark was the Funds use of financial
leverage. The Fund uses leverage because its managers believe
that, over time, leveraging provides opportunities for
additional income and total returns for common shareholders.
However, the use of leverage also can expose common shareholders
to additional risk especially when market conditions
are as unfavorable as they were during this period. As the
prices of most securities held by the Fund declined during the
year, the negative impact of these valuation changes on common
share net asset value and common shareholder total return was
magnified by the use of leverage.
RECENT
DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES
MARKETS
As noted in the last shareholder report, beginning in February
2008, more shares were submitted for sale in the regularly
scheduled auctions for the auction rate preferred shares issued
by these Funds than there were offers to buy. This meant that
these auctions failed to clear, and that many or all
of the Funds auction rate preferred shareholders who
wanted to sell their shares in these auctions were unable to do
so. This decline in liquidity in auction rate preferred shares
did not lower the credit quality of these shares, and auction
rate preferred shareholders unable to sell their shares received
distributions at the maximum rate applicable to
failed auctions, as calculated in accordance with the
pre-established terms of the auction rate preferred shares.
These developments generally have not affected the portfolio
management or investment policies of these Funds. However, one
continuing implication for common shareholders of these auction
failures is that the Funds cost of leverage will likely be
higher, at least temporarily, than it otherwise would have been
had the auctions continued to be successful. As a result, the
Funds future common share earnings may be lower than they
otherwise might have been.
As noted in the last shareholder report, the Funds Board
of Trustees has authorized a program to redeem a portion of the
Funds FundPreferred shares and replace these shares in the
Funds capital structure with borrowings.
As of December 31, 2008, the Fund has redeemed all
$78,000,000 of its outstanding FundNotes and $16,150,000 of its
outstanding FundPreferred shares (35.9% of the Funds
original $45,000,000 outstanding FundPreferred shares), at
liquidation value, using the proceeds provided through a prime
brokerage facility with a major bank and from portfolio sales.
For
up-to-date
information, please visit the Nuveen CEF Auction Rate Preferred
Resource Center at:
http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx.
Common Share
Distribution and Share Price
INFORMATION
The information below regarding your Funds distributions
is current as of December 31, 2008, and likely will vary
over time based on the Funds investment activities and
portfolio investment changes.
The Fund reduced its quarterly distribution to common
shareholders twice over the course of 2008. Some of the
important factors affecting the amount and composition of these
distributions are summarized below.
The Fund employs financial leverage through the issuance of
FundPreferred shares, as well as through bank borrowings.
Financial leverage provides the potential for higher earnings
(net investment income), total returns and distributions
over time, but as noted earlier also
increases the variability of common shareholders net asset
per share in response to changing market conditions. Over the
reporting period, the impact of financial leverage on the
Funds net asset value per share contributed positively to
the income return and detracted from the price return. The
overall impact of financial leverage detracted from the
Funds total return.
The Fund has a managed distribution program. The goal of this
program is to provide shareholders relatively consistent and
predictable cash flow by systematically converting the
Funds expected long-term return potential into regular
distributions. As a result, regular 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),
these estimates 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, 2008.
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.
2 The Fund elected to retain a portion of its realized long-term
capital gains for the tax years ended December 31, 2007 and
December 31, 2006, and pay required federal corporate
income taxes on these amounts. As reported on Form 2439,
Common shareholders on record date must include their pro-rata
share of these gains on their applicable federal tax returns,
and are entitled to take offsetting tax credits, for their
pro-rata share of the taxes paid by the Fund. The total returns
Including retained gain tax credit/refund include
the economic benefit to Common shareholders on record date of
these tax credits/refunds. The Fund had no retained capital
gains for the tax year ended December 31, 2008.
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As of 12/31/08 (Common Shares)
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JTA
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Inception date
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1/27/04
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Calendar year ended December 31, 2008:
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Per share distribution:
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From net investment income
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$0.70
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From short-term capital gains
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0.00
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From long-term capital gains
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0.21
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From return of capital
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0.80
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Total per share distribution
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$1.71
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Distribution rate on NAV
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18.15%
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Annualized total returns:
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Excluding retained gain tax
credit/refund2:
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1-Year on NAV
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-55.29%
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Since inception on NAV
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-6.69%
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Including retained gain tax
credit/refund2:
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1-Year on NAV
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-55.29%
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Since inception on NAV
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-5.79%
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COMMON SHARE
REPURCHASES AND SHARE PRICE INFORMATION
The Funds Board of Trustees approved an open-market share
repurchase program on July 30, 2008, under which the Fund
may repurchase up to 10% of its outstanding common shares. As of
December 31, 2008, the Fund has not repurchased any of its
common shares.
As of December 31, 2008, the Fund was trading at a -19.53%
discount to its common share NAV, compared with the average
discount of -12.07% for the entire twelve-month period.
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Fund Snapshot
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Common Share Price
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$7.58
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Common Share Net Asset Value
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$9.42
|
|
|
|
Premium/(Discount) to NAV
|
|
-19.53%
|
|
|
|
Current Distribution
Rate1
|
|
14.67%
|
|
|
|
Net Assets Applicable to
Common Shares ($000)
|
|
$131,546
|
|
|
|
|
|
|
Industries
|
|
|
(as a % of total investments)
|
|
|
Oil, Gas & Consumable Fuels
|
|
9.6%
|
|
|
|
Pharmaceuticals
|
|
9.4%
|
|
|
|
Insurance
|
|
8.3%
|
|
|
|
Aerospace & Defense
|
|
7.3%
|
|
|
|
Commercial Banks
|
|
7.3%
|
|
|
|
Media
|
|
6.4%
|
|
|
|
Electric Utilities
|
|
5.5%
|
|
|
|
Tobacco
|
|
5.1%
|
|
|
|
Commercial Services & Supplies
|
|
5.0%
|
|
|
|
Diversified Telecommunication Services
|
|
4.7%
|
|
|
|
Metals & Mining
|
|
3.7%
|
|
|
|
Communications Equipment
|
|
2.5%
|
|
|
|
Machinery
|
|
2.5%
|
|
|
|
Containers & Packaging
|
|
2.4%
|
|
|
|
Short-Term Investments
|
|
1.1%
|
|
|
|
Other
|
|
19.2%
|
|
|
|
|
|
|
|
JTA
Performance
OVERVIEW
|
|
|
Nuveen
Tax-Advantaged
Total Return
Strategy Fund
as
of December 31, 2008
|
Portfolio
Allocation (as a % of total
investments)
2007-2008
Distributions Per Share
|
|
|
Countries
|
|
|
(as a % of total investments)
|
|
|
United States
|
|
79.3%
|
|
|
|
France
|
|
5.3%
|
|
|
|
United Kingdom
|
|
4.8%
|
|
|
|
Italy
|
|
3.0%
|
|
|
|
Portugal
|
|
1.8%
|
|
|
|
Other
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
|
Average Annual
|
Total Return
|
(Inception 1/27/04)
|
|
|
On Share
|
|
|
|
|
Price
|
|
On NAV
|
1-Year
|
|
|
-60.54
|
%
|
|
|
-55.29%
|
|
|
|
|
|
|
|
|
Since
Inception
|
|
|
-10.98
|
%
|
|
|
-6.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Annual
|
Total
Return2
|
(Including retained gain
|
tax credit/refund)
|
|
|
On Share
|
|
|
|
|
Price
|
|
On NAV
|
1-Year
|
|
|
-60.54
|
%
|
|
|
-55.29%
|
|
|
|
|
|
|
|
|
Since
Inception
|
|
|
-9.95
|
%
|
|
|
-5.79%
|
|
|
|
|
|
|
|
|
Share Price
Performance Weekly
Closing Price
|
|
1
|
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.
|
|
2
|
As previously explained in the Common Share Distribution and
Share Price Information section of this report, the Fund elected
to retain a portion of its realized long-term capital gains for
the tax years ended December 31, 2007 and December 31,
2006, and pay required federal corporate income taxes on these
amounts. These standardized total returns include the economic
benefit to Common shareholders of record of this tax
credit/refund. The Fund had no retained capital gains for the
tax year ended December 31, 2008.
|
Report of INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Board of
Trustees and Shareholders
Nuveen Tax-Advantaged Total Return Strategy Fund
We have audited the accompanying statement of assets and
liabilities, including the portfolio of investments, of Nuveen
Tax-Advantaged Total Return Strategy Fund (the Fund)
as of December 31, 2008, 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, 2008, by correspondence with the custodian,
selling or agent banks and brokers or by other appropriate
auditing procedures where replies from selling or agent banks or
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 Total
Return Strategy Fund at December 31, 2008, 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 the financial highlights for each of the
periods indicated therein in conformity with US generally
accepted accounting principles.
Chicago, Illinois
February 26, 2009
|
|
|
|
|
JTA
|
|
Nuveen Tax-Advantaged Total Return
Strategy Fund
Portfolio of INVESTMENTS
|
|
|
|
|
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks 103.2% (70.0% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense 9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,500
|
|
|
Lockheed Martin Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,498,280
|
|
|
150,000
|
|
|
Raytheon Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,656,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Aerospace & Defense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,154,280
|
|
|
|
|
|
Commercial Banks 7.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164,400
|
|
|
JPMorgan Chase & Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,183,532
|
|
|
150,000
|
|
|
Wells Fargo & Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,422,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,605,532
|
|
|
|
|
|
Commercial Services & Supplies 6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
Pitney Bowes Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,917,999
|
|
|
|
|
|
Communications Equipment 3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,093,800
|
|
|
Motorola, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,845,534
|
|
|
|
|
|
Containers & Packaging 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
201,800
|
|
|
Packaging Corp. of America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,716,228
|
|
|
|
|
|
Diversified Telecommunication
Services 5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,500
|
|
|
AT&T Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,006,750
|
|
|
135,000
|
|
|
Verizon Communications Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,576,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Diversified Telecommunication Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,583,250
|
|
|
|
|
|
Electric Utilities 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,300
|
|
|
EDP Energias de Portugal, S.A., Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,570,110
|
|
|
|
|
|
Food Products 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,006
|
|
|
Kraft Foods Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,819,411
|
|
|
|
|
|
Household Products 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
Kimberly-Clark Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,164,400
|
|
|
|
|
|
Industrial Conglomerates 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175,000
|
|
|
General Electric Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,835,000
|
|
|
|
|
|
Insurance 10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
210,600
|
|
|
Hartford Financial Services Group, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,458,052
|
|
|
209,500
|
|
|
MetLife, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,303,170
|
|
|
69,000
|
|
|
Travelers Companies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,118,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,880,022
|
|
|
|
|
|
Machinery 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
Caterpillar Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,350,250
|
|
|
|
|
|
Media 2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
CBS Corporation, Class B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,638,000
|
|
|
168,100
|
|
|
Gannett Company Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,344,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,982,800
|
|
|
|
|
|
Metals & Mining 4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
Barrick Gold Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,647,440
|
|
|
41,000
|
|
|
POSCO, ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,085,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Metals & Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,732,690
|
|
|
|
|
|
Multi-Utilities 1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
139,090
|
|
|
United Utilities PLC, Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,505,706
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 14.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
Chevron Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,698,500
|
|
|
90,000
|
|
|
ConocoPhillips
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,662,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
|
|
|
|
Oil, Gas & Consumable Fuels (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
Eni S.p.A., Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,738,400
|
|
|
80,000
|
|
|
Total S.A., Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,424,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,522,900
|
|
|
|
|
|
Paper & Forest Products 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,200
|
|
|
Stora Enso Oyj, Sponsored ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,073,272
|
|
|
|
|
|
Pharmaceuticals 12.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,000
|
|
|
GlaxoSmithKline PLC, ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,366,880
|
|
|
300,000
|
|
|
Pfizer Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,313,000
|
|
|
180,000
|
|
|
Sanofi-Aventis, ADR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,788,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Pharmaceuticals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,468,680
|
|
|
|
|
|
Road & Rail 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,000
|
|
|
Union Pacific Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,198,800
|
|
|
|
|
|
Tobacco 7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,900
|
|
|
Altria Group, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,971,354
|
|
|
70,000
|
|
|
Lorillard Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,944,500
|
|
|
91,900
|
|
|
Philip Morris International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,998,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Tobacco
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,914,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks (cost $165,010,107)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135,841,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Description (1)
|
|
Coupon
|
|
|
|
|
|
Ratings (2)
|
|
|
Value
|
|
|
|
|
|
$25 Par (or similar) Preferred Securities 8.0%
(5.4% of Total Investments)
|
|
|
|
|
|
|
|
|
|
Capital Markets 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
Deutsche Bank Capital Funding Trust V
|
|
|
8.050%
|
|
|
|
|
|
|
|
Aa3
|
|
|
$
|
464,500
|
|
|
|
|
|
Commercial Banks 3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,005
|
|
|
Banco Santander Finance
|
|
|
6.500%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
829,934
|
|
|
20,000
|
|
|
Bank of America Corporation
|
|
|
8.200%
|
|
|
|
|
|
|
|
A+
|
|
|
|
405,000
|
|
|
15,000
|
|
|
Bank of America Corporation, Series D
|
|
|
6.204%
|
|
|
|
|
|
|
|
A1
|
|
|
|
225,450
|
|
|
25,000
|
|
|
Barclays Bank PLC
|
|
|
6.625%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
313,750
|
|
|
25,000
|
|
|
Credit Suisse
|
|
|
7.900%
|
|
|
|
|
|
|
|
Aa3
|
|
|
|
513,750
|
|
|
19,200
|
|
|
HSBC Holdings PLC
|
|
|
6.200%
|
|
|
|
|
|
|
|
A1
|
|
|
|
356,736
|
|
|
45,000
|
|
|
HSBC USA Inc.
|
|
|
6.500%
|
|
|
|
|
|
|
|
A
|
|
|
|
1,035,000
|
|
|
24,600
|
|
|
Royal Bank of Scotland Group PLC, Series M
|
|
|
6.400%
|
|
|
|
|
|
|
|
A1
|
|
|
|
217,956
|
|
|
20,000
|
|
|
Royal Bank of Scotland Group PLC
|
|
|
6.600%
|
|
|
|
|
|
|
|
A1
|
|
|
|
176,400
|
|
|
25,000
|
|
|
Wachovia Corporation
|
|
|
8.000%
|
|
|
|
|
|
|
|
A+
|
|
|
|
549,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commercial Banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,622,976
|
|
|
|
|
|
Diversified Financial Services 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
ING Group N.V.
|
|
|
7.200%
|
|
|
|
|
|
|
|
A
|
|
|
|
332,500
|
|
|
|
|
|
Electric Utilities 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
Alabama Power Company
|
|
|
5.625%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
566,408
|
|
|
5,400
|
|
|
Consolidated Edison Company of New York Inc.
|
|
|
5.000%
|
|
|
|
|
|
|
|
A3
|
|
|
|
459,054
|
|
|
30,400
|
|
|
Georgia Power Company
|
|
|
6.125%
|
|
|
|
|
|
|
|
N/A
|
|
|
|
729,600
|
|
|
5,000
|
|
|
Gulf Power Company
|
|
|
6.450%
|
|
|
|
|
|
|
|
BBB+
|
|
|
|
518,129
|
|
|
19,100
|
|
|
Mississippi Power Company
|
|
|
5.250%
|
|
|
|
|
|
|
|
A3
|
|
|
|
401,100
|
|
|
25,000
|
|
|
PPL Electric Utilities Corporation
|
|
|
6.250%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
506,250
|
|
|
5,000
|
|
|
Southern California Edison Company
|
|
|
6.125%
|
|
|
|
|
|
|
|
Baa2
|
|
|
|
413,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Electric Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,593,666
|
|
|
|
|
|
Insurance 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,900
|
|
|
Aegon N.V.
|
|
|
6.375%
|
|
|
|
|
|
|
|
A
|
|
|
|
313,577
|
|
|
22,800
|
|
|
Arch Capital Group Limited
|
|
|
8.000%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
453,264
|
|
|
20,500
|
|
|
Endurance Specialty Holdings Limited
|
|
|
7.750%
|
|
|
|
|
|
|
|
BBB
|
|
|
|
294,994
|
|
|
30,000
|
|
|
Prudential PLC
|
|
|
6.750%
|
|
|
|
|
|
|
|
A
|
|
|
|
409,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,471,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total $25 Par (or similar) Preferred Securities (cost
$14,250,364)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,485,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JTA
|
|
Nuveen Tax-Advantaged Total Return
Strategy Fund (continued)
Portfolio of INVESTMENTS
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
Coupon
|
|
|
Maturity (4)
|
|
|
Ratings (2)
|
|
|
Value
|
|
|
|
|
|
Variable Rate Senior Loan Interests 34.5%
(23.5% of Total Investments) (3)
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense 1.6%
|
$
|
777
|
|
|
Hexcel Corporation, Term Loan B
|
|
|
5.141%
|
|
|
|
3/01/12
|
|
|
|
BB+
|
|
|
$
|
656,846
|
|
|
1,575
|
|
|
Vought Aircraft Industries, Inc., Term Loan
|
|
|
2.970%
|
|
|
|
12/22/11
|
|
|
|
Ba3
|
|
|
|
1,149,574
|
|
|
364
|
|
|
Vought Aircraft Industries, Inc., Tranche B, Letter of
Credit
|
|
|
6.426%
|
|
|
|
12/22/10
|
|
|
|
Ba3
|
|
|
|
274,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,716
|
|
|
Total Aerospace & Defense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,080,965
|
|
|
|
|
|
Building Products 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
774
|
|
|
Armstrong World Industries, Inc., Tranche B, Term Loan
|
|
|
2.258%
|
|
|
|
10/02/13
|
|
|
|
BBB
|
|
|
|
650,262
|
|
|
|
|
|
Chemicals 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
876
|
|
|
Georgia Gulf Corporation, Term Loan
|
|
|
7.411%
|
|
|
|
10/03/13
|
|
|
|
Ba3
|
|
|
|
584,646
|
|
|
1,930
|
|
|
Rockwood Specialties Group, Inc., Term Loan E
|
|
|
3.546%
|
|
|
|
7/30/12
|
|
|
|
BB+
|
|
|
|
1,566,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,806
|
|
|
Total Chemicals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,151,393
|
|
|
|
|
|
Commercial Services & Supplies 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,092
|
|
|
Berry Plastics Holding Corporation, Term Loan
|
|
|
3.876%
|
|
|
|
4/03/15
|
|
|
|
BB
|
|
|
|
704,807
|
|
|
|
|
|
Containers & Packaging 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,901
|
|
|
Graham Packaging Company, L.P., Term Loan
|
|
|
5.499%
|
|
|
|
10/07/11
|
|
|
|
B+
|
|
|
|
1,384,293
|
|
|
175
|
|
|
Smurfit-Stone Container Corporation, Deposit-Funded Commitment
|
|
|
5.926%
|
|
|
|
11/01/10
|
|
|
|
BB
|
|
|
|
116,149
|
|
|
196
|
|
|
Smurfit-Stone Container Corporation, Term Loan B
|
|
|
4.032%
|
|
|
|
11/01/11
|
|
|
|
BB
|
|
|
|
130,217
|
|
|
370
|
|
|
Smurfit-Stone Container Corporation, Term Loan C
|
|
|
4.066%
|
|
|
|
11/01/11
|
|
|
|
BB
|
|
|
|
240,263
|
|
|
116
|
|
|
Smurfit-Stone Container Corporation, Tranche C1
|
|
|
3.438%
|
|
|
|
11/01/11
|
|
|
|
BB
|
|
|
|
75,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,758
|
|
|
Total Containers & Packaging
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,946,331
|
|
|
|
|
|
Diversified Consumer Services 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,960
|
|
|
Weight Watchers International, Inc., Term Loan B
|
|
|
5.688%
|
|
|
|
1/26/14
|
|
|
|
BB+
|
|
|
|
1,659,466
|
|
|
|
|
|
Diversified Telecommunication
Services 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,955
|
|
|
MetroPCS Wireless, Inc., Term Loan
|
|
|
5.500%
|
|
|
|
11/03/13
|
|
|
|
BB
|
|
|
|
1,578,663
|
|
|
|
|
|
Electric Utilities 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,702
|
|
|
Dynegy Holdings, Inc., Delayed Term Loan
|
|
|
1.970%
|
|
|
|
4/02/13
|
|
|
|
Ba1
|
|
|
|
1,289,362
|
|
|
294
|
|
|
Dynegy Holdings, Inc., Term Loan
|
|
|
1.970%
|
|
|
|
4/02/13
|
|
|
|
Ba1
|
|
|
|
222,818
|
|
|
1,975
|
|
|
TXU Corporation, Term Loan B2
|
|
|
5.591%
|
|
|
|
10/10/14
|
|
|
|
Ba3
|
|
|
|
1,378,385
|
|
|
990
|
|
|
TXU Corporation, Term Loan B3
|
|
|
5.368%
|
|
|
|
10/10/14
|
|
|
|
Ba3
|
|
|
|
690,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,961
|
|
|
Total Electric Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,581,485
|
|
|
|
|
|
Electrical Equipment 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,409
|
|
|
Sensus Metering Systems, Inc., Term Loan B1
|
|
|
4.134%
|
|
|
|
12/17/10
|
|
|
|
BB
|
|
|
|
1,232,609
|
|
|
|
|
|
Health Care Providers &
Services 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
462
|
|
|
IASIS Healthcare LLC, Delayed Term Loan
|
|
|
2.461%
|
|
|
|
3/14/14
|
|
|
|
Ba2
|
|
|
|
332,000
|
|
|
124
|
|
|
IASIS Healthcare LLC, Letter of Credit
|
|
|
0.361%
|
|
|
|
3/14/14
|
|
|
|
Ba2
|
|
|
|
88,978
|
|
|
1,334
|
|
|
IASIS Healthcare LLC, Term Loan
|
|
|
2.461%
|
|
|
|
3/14/14
|
|
|
|
Ba2
|
|
|
|
959,448
|
|
|
973
|
|
|
Quintiles Transnational Corporation, Term Loan B
|
|
|
3.459%
|
|
|
|
3/29/13
|
|
|
|
BB
|
|
|
|
792,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,893
|
|
|
Total Health Care Providers & Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,173,014
|
|
|
|
|
|
Hotels, Restaurants & Leisure 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,945
|
|
|
24 Hour Fitness Worldwide, Inc., Term Loan B
|
|
|
4.893%
|
|
|
|
6/08/12
|
|
|
|
Ba3
|
|
|
|
1,147,550
|
|
|
765
|
|
|
CBRL Group, Inc., Term Loan B1
|
|
|
4.694%
|
|
|
|
4/28/13
|
|
|
|
BB
|
|
|
|
461,494
|
|
|
92
|
|
|
CBRL Group, Inc., Term Loan B2
|
|
|
2.470%
|
|
|
|
4/28/13
|
|
|
|
BB
|
|
|
|
55,501
|
|
|
89
|
|
|
Travelport LLC, Letter of Credit
|
|
|
3.709%
|
|
|
|
8/23/13
|
|
|
|
Ba2
|
|
|
|
39,592
|
|
|
445
|
|
|
Travelport LLC, Term Loan
|
|
|
3.709%
|
|
|
|
8/23/13
|
|
|
|
Ba2
|
|
|
|
197,319
|
|
|
597
|
|
|
Venetian Casino Resort LLC, Delayed Term Loan
|
|
|
2.220%
|
|
|
|
5/23/14
|
|
|
|
B+
|
|
|
|
275,947
|
|
|
2,364
|
|
|
Venetian Casino Resort LLC, Term Loan
|
|
|
2.220%
|
|
|
|
5/23/14
|
|
|
|
B+
|
|
|
|
1,092,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,297
|
|
|
Total Hotels, Restaurants & Leisure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,270,097
|
|
|
|
|
|
Household Products 0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,101
|
|
|
Solo Cup Company, Term Loan
|
|
|
5.230%
|
|
|
|
2/27/11
|
|
|
|
B
|
|
|
|
908,232
|
|
|
|
|
|
Insurance 0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,156
|
|
|
Conseco, Inc., Term Loan
|
|
|
3.825%
|
|
|
|
10/10/13
|
|
|
|
B+
|
|
|
|
748,714
|
|
|
|
|
|
IT Services 2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,975
|
|
|
First Data Corporation, Term Loan B1
|
|
|
3.211%
|
|
|
|
9/24/14
|
|
|
|
BB
|
|
|
|
1,278,813
|
|
|
2,017
|
|
|
SunGard Data Systems, Inc., Term Loan B
|
|
|
4.017%
|
|
|
|
2/28/14
|
|
|
|
BB
|
|
|
|
1,393,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,992
|
|
|
Total IT Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,672,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
Coupon
|
|
|
Maturity (4)
|
|
|
Ratings (2)
|
|
|
Value
|
|
|
|
|
|
Machinery 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,000
|
|
|
Manitowoc Company, Term Loan
|
|
|
6.500%
|
|
|
|
11/06/14
|
|
|
|
BB+
|
|
|
$
|
1,418,000
|
|
|
|
|
|
Media 7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,970
|
|
|
CanWest Mediaworks LP, Term Loan
|
|
|
4.196%
|
|
|
|
7/10/15
|
|
|
|
Ba2
|
|
|
|
1,024,400
|
|
|
1,965
|
|
|
Cequel Communications LLC, Term Loan B
|
|
|
6.164%
|
|
|
|
11/05/13
|
|
|
|
BB
|
|
|
|
1,255,758
|
|
|
2,178
|
|
|
Charter Communications Operating Holdings LLC, Term Loan
|
|
|
5.064%
|
|
|
|
3/06/14
|
|
|
|
B+
|
|
|
|
1,611,720
|
|
|
1,960
|
|
|
Idearc, Inc., Term Loan
|
|
|
3.418%
|
|
|
|
11/17/14
|
|
|
|
B2
|
|
|
|
618,800
|
|
|
968
|
|
|
Metro-Goldwyn-Mayer
Studios, Inc., Term Loan B
|
|
|
4.241%
|
|
|
|
4/08/12
|
|
|
|
N/R
|
|
|
|
413,655
|
|
|
1,955
|
|
|
Neilsen Finance LLC, Term Loan
|
|
|
4.244%
|
|
|
|
8/09/13
|
|
|
|
Ba3
|
|
|
|
1,330,634
|
|
|
1,975
|
|
|
Tribune Company, Term Loan B, (5), (6)
|
|
|
5.250%
|
|
|
|
6/04/14
|
|
|
|
Caa3
|
|
|
|
564,286
|
|
|
341
|
|
|
Tribune Company, Term Loan X, (5), (6)
|
|
|
7.084%
|
|
|
|
6/04/09
|
|
|
|
Caa1
|
|
|
|
96,256
|
|
|
2,000
|
|
|
Univision Communications, Inc., Term Loan
|
|
|
2.711%
|
|
|
|
9/29/14
|
|
|
|
B2
|
|
|
|
822,222
|
|
|
2,128
|
|
|
WMG Acquisition Corporation, Term Loan
|
|
|
4.285%
|
|
|
|
2/28/11
|
|
|
|
BB
|
|
|
|
1,638,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,440
|
|
|
Total Media
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,376,032
|
|
|
|
|
|
Metals & Mining 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,015
|
|
|
Amsted Industries, Inc., Delayed Term Loan
|
|
|
4.136%
|
|
|
|
4/08/13
|
|
|
|
BB
|
|
|
|
624,069
|
|
|
1,398
|
|
|
Amsted Industries, Inc., Term Loan
|
|
|
6.407%
|
|
|
|
4/08/13
|
|
|
|
BB
|
|
|
|
859,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,413
|
|
|
Total Metals & Mining
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,483,538
|
|
|
|
|
|
Paper & Forest Products 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,727
|
|
|
Georgia-Pacific Corporation, Term Loan B
|
|
|
4.108%
|
|
|
|
12/21/12
|
|
|
|
BB+
|
|
|
|
1,418,965
|
|
|
|
|
|
Pharmaceuticals 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,140
|
|
|
Mylan Laboratories, Inc., Term Loan
|
|
|
4.977%
|
|
|
|
10/02/14
|
|
|
|
BB
|
|
|
|
1,836,547
|
|
|
|
|
|
Real Estate Management &
Development 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,320
|
|
|
LNR Property Corporation, Term Loan B
|
|
|
6.690%
|
|
|
|
7/12/11
|
|
|
|
BB
|
|
|
|
627,000
|
|
|
|
|
|
Road & Rail 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,767
|
|
|
Swift Transportation Company, Inc., Term Loan
|
|
|
5.832%
|
|
|
|
5/10/14
|
|
|
|
B+
|
|
|
|
646,379
|
|
|
|
|
|
Specialty Retail 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
TRU 2005 RE Holding Co I LLC, Term Loan
|
|
|
4.868%
|
|
|
|
12/08/09
|
|
|
|
B3
|
|
|
|
706,250
|
|
|
|
|
|
Textiles, Apparel & Luxury
Goods 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,395
|
|
|
HBI Branded Apparel Limited, Inc., Term Loan
|
|
|
5.266%
|
|
|
|
9/05/13
|
|
|
|
BB+
|
|
|
|
1,121,137
|
|
|
|
|
|
Trading Companies &
Distributors 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
912
|
|
|
Ashtead Group Public Limited Company, Term Loan
|
|
|
3.250%
|
|
|
|
8/31/11
|
|
|
|
Ba2
|
|
|
|
729,600
|
|
|
196
|
|
|
Brenntag Holdings GMBH & Co. KG, Acquisition Facility
|
|
|
5.071%
|
|
|
|
1/20/14
|
|
|
|
B+
|
|
|
|
143,836
|
|
|
804
|
|
|
Brenntag Holdings GMBH & Co. KG, Facility B2
|
|
|
5.071%
|
|
|
|
1/20/14
|
|
|
|
B+
|
|
|
|
588,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,912
|
|
|
Total Trading Companies & Distributors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,462,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
69,484
|
|
|
Total Variable Rate Senior Loan Interests (cost
$69,352,154)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,454,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount (000)
|
|
|
Description (1)
|
|
Coupon
|
|
|
Maturity
|
|
|
|
|
|
Value
|
|
|
|
|
|
Short-Term Investments 1.6% (1.1% of Total
Investments)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,046
|
|
|
Repurchase Agreement with Fixed Income Clearing Corporation,
dated 12/31/08, repurchase price $2,046,454, collateralized by
$1,330,000 U.S. Treasury Bonds, 8.875%, due 2/15/19, value
$2,092,489
|
|
|
0.010%
|
|
|
|
1/02/09
|
|
|
|
|
|
|
$
|
2,046,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Short-Term Investments (cost $2,046,453)
|
|
|
|
|
|
|
|
|
|
|
2,046,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments (cost $250,659,078) 147.3%
|
|
|
|
|
|
|
|
|
|
|
193,827,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings (26.6)% (7), (8)
|
|
|
|
|
|
|
|
|
|
|
(35,000,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets Less Liabilities 1.2%
|
|
|
|
|
|
|
|
|
|
|
1,569,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FundPreferred Shares, at Liquidation Value
(21.9)% (7)
|
|
|
|
|
|
|
|
|
|
|
(28,850,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Shares 100%
|
|
|
|
|
|
|
|
|
|
$
|
131,546,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JTA
|
|
Nuveen Tax-Advantaged Total Return
Strategy Fund (continued)
Portfolio of INVESTMENTS
December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
All percentages shown in the Portfolio of Investments are based
on net assets applicable to Common shares unless otherwise noted.
|
|
|
|
|
(2)
|
|
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.
|
|
|
|
|
(3)
|
|
Senior Loans generally pay interest at rates which are
periodically adjusted by reference to a base short-term,
floating lending rate plus an assigned fixed rate. These
floating lending rates are generally (i) the lending rate
referenced by the London Inter-Bank Offered Rate
(LIBOR), or (ii) the prime rate offered by one or
more major United States banks.
|
|
|
|
|
|
|
Senior Loans may be considered restricted in that the Fund
ordinarily is contractually obligated to receive approval from
the Agent Bank
and/or
Borrower prior to the disposition of a Senior Loan.
|
|
|
|
|
(4)
|
|
Senior Loans generally are subject to mandatory
and/or
optional prepayment. Because of these mandatory prepayment
conditions and because there may be significant economic
incentives for a Borrower to prepay, prepayments of Senior Loans
may occur. As a result, the actual remaining maturity of Senior
Loans held may be substantially less than the stated maturities
shown.
|
|
|
|
|
(5)
|
|
Non-income producing. Non-income producing, in the case of a
Senior Loan, generally denotes that the issuer has defaulted on
the payment of principal or interest or has filed for bankruptcy.
|
|
|
|
|
(6)
|
|
At or subsequent to December 31, 2008, this issue was under
the protection of the Federal Bankruptcy Court.
|
|
|
|
|
(7)
|
|
Borrowings and FundPreferred Shares, at Liquidation Value as a
percentage of Total Investments are 18.1% and 14.9%,
respectively.
|
|
|
|
|
(8)
|
|
The Fund may pledge up to 100% of its eligible investments in
the Portfolio of Investment as collateral for Borrowings. As of
December 31, 2008, investments with a value of $148,878,841
have been pledged as collateral for Borrowings.
|
|
|
|
|
N/A
|
|
Not applicable/not available.
|
|
|
|
|
N/R
|
|
Not rated.
|
|
|
|
|
ADR
|
|
American Depositary Receipt.
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
ASSETS & LIABILITIES
|
|
|
|
|
December 31, 2008
|
|
|
|
|
|
Assets
|
|
|
|
|
Investments, at value (cost $250,659,078)
|
|
$
|
193,827,256
|
|
Cash
|
|
|
1,305
|
|
Receivables:
|
|
|
|
|
Dividends
|
|
|
744,300
|
|
Interest
|
|
|
519,576
|
|
Investments sold
|
|
|
500,651
|
|
Reclaims
|
|
|
30,182
|
|
Other assets
|
|
|
35,734
|
|
|
|
|
|
|
Total assets
|
|
|
195,659,004
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Borrowings
|
|
|
35,000,000
|
|
Payable for FundPreferred shares dividends
|
|
|
1,306
|
|
Accrued expenses:
|
|
|
|
|
Management fees
|
|
|
95,892
|
|
Interest on borrowings
|
|
|
5,332
|
|
Other
|
|
|
160,079
|
|
|
|
|
|
|
Total liabilities
|
|
|
35,262,609
|
|
|
|
|
|
|
FundPreferred shares, at liquidation value
|
|
|
28,850,000
|
|
|
|
|
|
|
Net assets applicable to Common shares
|
|
$
|
131,546,395
|
|
|
|
|
|
|
Common shares outstanding
|
|
|
13,958,267
|
|
|
|
|
|
|
Net asset value per Common share outstanding (net assets
applicable to
Common shares, divided by Common shares outstanding)
|
|
$
|
9.42
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common shares consist of:
|
|
|
|
|
|
|
|
|
|
Common shares, $.01 par value per share
|
|
$
|
139,583
|
|
Paid-in surplus
|
|
|
268,800,525
|
|
Undistributed (Over-distribution of) net investment income
|
|
|
(180,360
|
)
|
Accumulated net realized gain (loss) from investments
|
|
|
(80,381,531
|
)
|
Net unrealized appreciation (depreciation) of investments
|
|
|
(56,831,822
|
)
|
|
|
|
|
|
Net assets applicable to Common shares
|
|
$
|
131,546,395
|
|
|
|
|
|
|
Authorized shares:
|
|
|
|
|
Common
|
|
|
Unlimited
|
|
FundPreferred
|
|
|
Unlimited
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
OPERATIONS
|
|
|
|
|
Year Ended December 31, 2008
|
|
|
|
|
|
Investment Income
|
|
|
|
|
Dividends (net of foreign tax withheld of $315,602)
|
|
$
|
13,111,761
|
|
Interest
|
|
|
5,414,424
|
|
|
|
|
|
|
Total investment income
|
|
|
18,526,185
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
Management fees
|
|
|
3,308,088
|
|
FundNotes and FundPreferred shares auction fees
|
|
|
175,259
|
|
FundNotes and FundPreferred shares dividend
disbursing agent fees
|
|
|
9,239
|
|
Shareholders servicing agent fees and expenses
|
|
|
926
|
|
Interest expense on borrowings and amortization of borrowing
costs
|
|
|
5,052,502
|
|
Custodians fees and expenses
|
|
|
136,557
|
|
Trustees fees and expenses
|
|
|
7,852
|
|
Professional fees
|
|
|
31,039
|
|
Shareholders reports printing and mailing
expenses
|
|
|
88,694
|
|
Stock exchange listing fees
|
|
|
9,466
|
|
Investor relations expense
|
|
|
65,461
|
|
Other expenses
|
|
|
27,850
|
|
|
|
|
|
|
Total expenses before custodian fee credit and expense
reimbursement
|
|
|
8,912,933
|
|
Custodian fee credit
|
|
|
(939
|
)
|
Expense reimbursement
|
|
|
(1,191,639
|
)
|
|
|
|
|
|
Net expenses
|
|
|
7,720,355
|
|
|
|
|
|
|
Net investment income
|
|
|
10,805,830
|
|
|
|
|
|
|
Realized and Unrealized Gain (Loss)
|
|
|
|
|
Net realized gain (loss) from investments
|
|
|
(73,871,997
|
)
|
Change in net unrealized appreciation (depreciation) of
investments
|
|
|
(108,432,470
|
)
|
|
|
|
|
|
Net realized and unrealized gain (loss)
|
|
|
(182,304,467
|
)
|
|
|
|
|
|
Distributions to FundPreferred Shareholders
|
|
|
|
|
From net investment income
|
|
|
(1,705,800
|
)
|
|
|
|
|
|
Decrease in net assets applicable to Common shares from
distributions to FundPreferred shareholders
|
|
|
(1,705,800
|
)
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from operations
|
|
$
|
(173,204,437
|
)
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
CHANGES in NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
12/31/08
|
|
|
12/31/07
|
Operations
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
10,805,830
|
|
|
$
|
12,502,412
|
|
Net realized gain (loss) from investments
(net of federal corporate income taxes of $0 and $2,900,000
respectively,
on long-term
capital gains retained)
|
|
|
(73,871,997
|
)
|
|
|
20,234,467
|
|
Change in net unrealized appreciation (depreciation) of
investments
|
|
|
(108,432,470
|
)
|
|
|
(37,324,738
|
)
|
Distributions to FundPreferred shareholders:
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(1,705,800
|
)
|
|
|
(643,144
|
)
|
From accumulated net realized gains
|
|
|
|
|
|
|
(1,511,526
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from operations
|
|
|
(173,204,437
|
)
|
|
|
(6,742,529
|
)
|
|
|
|
|
|
|
|
|
|
Distributions to Common Shareholders
|
|
|
|
|
|
|
|
|
From net investment income
|
|
|
(9,743,713
|
)
|
|
|
(11,433,362
|
)
|
From accumulated net realized gains
|
|
|
(2,902,935
|
)
|
|
|
(15,815,168
|
)
|
Tax return of capital
|
|
|
(11,159,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in net assets applicable to Common shares from
distributions to Common shareholders
|
|
|
(23,805,824
|
)
|
|
|
(27,258,530
|
)
|
|
|
|
|
|
|
|
|
|
Capital Share Transactions
|
|
|
|
|
|
|
|
|
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions
|
|
|
|
|
|
|
1,817,508
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions
|
|
|
|
|
|
|
1,817,508
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets applicable to Common
shares
|
|
|
(197,010,261
|
)
|
|
|
(32,183,551
|
)
|
Net assets applicable to Common shares at the beginning of year
|
|
|
328,556,656
|
|
|
|
360,740,207
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to Common shares at the end of year
|
|
$
|
131,546,395
|
|
|
$
|
328,556,656
|
|
|
|
|
|
|
|
|
|
|
Undistributed (Over-distribution of) net investment income at
the end of year
|
|
$
|
(180,360
|
)
|
|
$
|
(296,740
|
)
|
|
|
|
|
|
|
|
|
|
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Statement of
CASH FLOWS
|
|
|
|
|
Year Ended December 31, 2008
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net Increase (Decrease) in Net Assets Applicable to Common
Shares from Operations
|
|
$
|
(173,204,437
|
)
|
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
|
|
|
(89,711,083
|
)
|
Proceeds from sales and maturities of investments
|
|
|
181,702,140
|
|
Proceeds from (Purchases of) short-term investments, net
|
|
|
15,669,672
|
|
Amortization (Accretion) of premiums and discounts, net
|
|
|
(15,057
|
)
|
(Increase) Decrease in receivable for dividends
|
|
|
307,168
|
|
(Increase) Decrease in receivable for interest
|
|
|
370,350
|
|
(Increase) Decrease in receivable for investments sold
|
|
|
748,640
|
|
(Increase) Decrease in receivable for reclaims
|
|
|
104,554
|
|
(Increase) Decrease in other assets
|
|
|
(9,132
|
)
|
Increase (Decrease) in payable for investments purchased
|
|
|
(641,334
|
)
|
Increase (Decrease) in payable for FundPreferred shares dividends
|
|
|
(31,056
|
)
|
Increase (Decrease) in payable for federal corporate income tax
|
|
|
(2,900,000
|
)
|
Increase (Decrease) in accrued management fees
|
|
|
(141,130
|
)
|
Increase (Decrease) in accrued interest on borrowings
|
|
|
(730,189
|
)
|
Increase (Decrease) in accrued other liabilities
|
|
|
48,063
|
|
Increase (Decrease) in FundNotes interest payable
|
|
|
(46,947
|
)
|
Net realized (gain) loss from investments
|
|
|
73,871,997
|
|
Net realized (gain) loss from paydowns
|
|
|
(164,205
|
)
|
Change in net unrealized (appreciation) depreciation of
investments
|
|
|
108,432,470
|
|
Capital gains and return of capital distributions from
investments
|
|
|
678,750
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
114,339,234
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Increase (Decrease) in borrowings
|
|
|
2,000,000
|
|
Increase (Decrease) in FundPreferred shares
|
|
|
(16,150,000
|
)
|
Increase (Decrease) in FundNotes
|
|
|
(78,000,000
|
)
|
(Increase) Decrease in deferred FundNotes offering costs
|
|
|
1,617,895
|
|
Cash distributions paid to Common shareholders
|
|
|
(23,805,824
|
)
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(114,337,929
|
)
|
|
|
|
|
|
Net Increase (Decrease) in Cash
|
|
|
1,305
|
|
Cash at the beginning of year
|
|
|
|
|
|
|
|
|
|
Cash at the End of Year
|
|
$
|
1,305
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information
Cash paid for interest on FundNotes and borrowings (excluding
amortization of borrowing costs) during the fiscal year ended
December 31, 2008, was $4,054,009.
Cash paid for federal corporate income taxes attributable to tax
year ended December 31, 2007, was $2,900,000.
See accompanying notes to
financial statements.
|
|
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
|
|
|
1.
|
General
Information and Significant Accounting Policies
|
Nuveen Tax-Advantaged Total Return Strategy Fund (the
Fund) is a diversified, closed-end management
investment company registered under the Investment Company Act
of 1940, as amended. The Funds Common shares are listed on
the New York Stock Exchange and trade under the ticker symbol
JTA. The Fund was organized as a Massachusetts
business trust on October 1, 2003.
The Fund seeks to provide a high level of after-tax total return
consisting primarily of tax-advantaged dividend income and
capital appreciation by investing primarily in a portfolio of
dividend-paying common stocks that the Fund believes at the time
of investment are eligible to pay dividends that qualify for
favorable federal income taxation at rates applicable to
long-term capital gains (tax-advantaged dividends).
The Fund will also invest, to a more limited extent, in
preferred securities that are eligible to pay tax-advantaged
dividends, as well as senior loans (both secured and unsecured),
domestic corporate bonds, notes and debentures, convertible debt
securities, and other similar types of corporate instruments,
including high-yield debt securities, that are not eligible to
pay tax-advantaged dividends.
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 and senior loans 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 may 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,
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.
The senior loans in which the Fund invests are not listed on an
organized exchange and the secondary market for such investments
may be less liquid relative to markets for other fixed-income
securities. Consequently, the value of senior loans, determined
as described above, may differ significantly from the value that
would have been determined had there been an active market for
that senior loan.
Investment
Transactions
Investment transactions are recorded on a trade date basis.
Trade date for senior loans purchased in the primary
market is considered the date on which the loan
allocations are determined. Trade date for senior loans
purchased in the secondary market is the date on
which the transaction is entered into. 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, 2008, the Fund had no such
outstanding purchase commitments.
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 and fee income and amendment fees, if
any. Fee income consists primarily of amendment fees. Amendment
fees are earned as compensation for evaluating and accepting
changes to an original senior loan agreement and are recognized
when received.
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
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
shareholders, or alternatively, to
retain all or a portion of its net capital gains and pay federal
corporate income taxes on such retained gains. The Fund had no
retained capital gains for the tax year ended December 31,
2008. For the tax year ended December 31, 2007, the Fund
retained $8,285,714 of realized long-term capital gains and
accrued a provision for federal corporate income taxes of
$2,900,000, the net of which has been reclassified to Paid-in
surplus.
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). Further, 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 corporate 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.
FundNotes
During the period January 1, 2008 through April 28,
2008, the Fund had issued and outstanding 3,120 Series F
FundNotes, $25,000 stated value per share, that matured on
April 24, 2034. The interest rate paid by the Fund was
determined every seven days, pursuant to a dutch auction process
overseen by the auction agent, and was payable at the end of
each rate period. On April 28, 2008, the Fund redeemed all
$78 million of its outstanding FundNotes at liquidation
value. During the period January 1, 2008 through
April 28, 2008, the average daily balance of FundNotes was
$78,000,000 with an average interest rate (including
amortization of the FundNotes borrowing costs) of 3.43%.
FundPreferred
Shares
As of December 31, 2008, Fund has issued and outstanding
1,154 Series W FundPreferred shares, $25,000 stated value
per share, as a means of effecting financial leverage. The
dividend rate paid by the Fund is determined every seven days,
pursuant to a dutch auction process overseen by the auction
agent, and is payable at the end of each rate period.
Beginning in February 2008, more shares for sale were submitted
in the regularly scheduled auctions for the FundPreferred shares
issued by the Fund than there were offers to buy. This meant
that these auctions failed to clear, and that many
FundPreferred shareholders who wanted to sell their shares in
these auctions were unable to do so. FundPreferred shareholders
unable to sell their shares received distributions at the
maximum rate applicable to failed auctions as
calculated in accordance with the pre-established terms of the
FundPreferred shares.
These developments have generally not affected the management or
investment policies of the Fund. However, one implication of
these auction failures for Common shareholders is that the
Funds cost of leverage will likely be higher, at least
temporarily, than it otherwise would have been had the auctions
continued to be successful. As a result, the Funds future
Common share earnings may be lower than they otherwise would
have been.
As of December 31, 2008 the Fund has redeemed $16,150,000
of its outstanding FundPreferred shares at liquidation value.
Derivative
Financial Instruments
The Fund is authorized to invest in derivative financial
instruments or other transactions for the purpose of hedging the
portfolios exposure to common stock risk, high yield
credit risk, foreign currency exchange risk and the risk of
increases in interest rates.
Although the Fund is authorized to
invest in such financial instruments, and may do so in the
future, it did not invest in any such instruments during the
fiscal year ended December 31, 2008.
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.
Borrowing
Costs
Costs incurred by the Fund in connection with its borrowing of
FundNotes were recorded as a deferred charge amortizing over the
FundNotes 30 year life. Upon the Funds
redemption of all its outstanding FundNotes, the Fund recognized
as an expense all remaining deferred borrowing costs. Such
borrowing costs recognized by the Fund are included with
Interest expense and amortization of borrowing costs
on the Statement of Operations.
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.
|
|
2.
|
Fair Value
Measurements
|
During the current fiscal period, the Fund adopted the
provisions of Statement of Financial Accounting Standards
No. 157 (SFAS No. 157) Fair Value
Measurements. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosure about
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, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Investments
|
|
$
|
138,220,019
|
|
|
$
|
55,607,237
|
|
|
$
|
|
|
|
$
|
193,827,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Shares
On July 30, 2008, the Funds Board of Trustees
approved an open-market share repurchase program under which the
Fund may repurchase an aggregate of up to approximately 10% of
its outstanding Common shares. The Fund did not repurchase any
of its Common shares during the fiscal year ended
December 31, 2008.
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
Transactions in Common shares were as follows:
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
|
Year
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
12/31/08
|
|
|
12/31/07
|
|
Common shares issued to shareholders due to reinvestment of
distributions
|
|
|
|
|
|
|
70,333
|
|
|
|
|
|
|
|
|
|
|
FundPreferred
Shares
Transactions in FundPreferred shares were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
12/31/08
|
|
|
12/31/07
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
FundPreferred Series W shares redeemed
|
|
|
646
|
|
|
|
$16,150,000
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FundNotes
During the fiscal year ended December 31, 2008, the Fund
redeemed all 3,120 shares of its outstanding FundNotes.
|
|
4.
|
Investment
Transactions
|
Purchases and sales (including maturities but excluding
short-term investments) during the fiscal year ended
December 31, 2008, were as follows:
|
|
|
|
|
|
|
Purchases:
|
|
|
|
|
Investment securities
|
|
$
|
88,034,753
|
|
U.S. Government and agency obligations
|
|
|
1,676,330
|
|
|
|
|
|
|
Sales and maturities:
|
|
|
|
|
Investment securities
|
|
|
173,227,775
|
|
U.S. Government and agency obligations
|
|
|
8,474,365
|
|
|
|
|
|
|
|
|
5.
|
Income Tax
Information
|
The following information is presented on an income tax basis.
Differences between amounts for financial statement and federal
income tax purposes are primarily due to the treatment of
paydown gains and losses, recognition of premium amortization
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, 2008, the cost of investments was
$253,188,355.
Gross unrealized appreciation and gross unrealized depreciation
of investments at December 31, 2008, were as follows:
|
|
|
|
|
Gross unrealized:
|
|
|
|
|
Appreciation
|
|
$
|
21,474,871
|
|
Depreciation
|
|
|
(80,835,970
|
)
|
|
Net unrealized appreciation (depreciation) of investments
|
|
$
|
(59,361,099
|
)
|
|
|
|
|
|
The tax components of undistributed net ordinary income and net
long-term capital gains at December 31, 2008, 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, 2008 and December 31,
2007, was designated for purposes of the dividends paid
deduction as follows:
|
|
|
|
|
2008
|
|
|
|
|
|
|
|
Distributions from net ordinary income *
|
|
|
$11,480,569
|
|
Distributions from net long-term capital gains **
|
|
|
2,902,935
|
|
Tax return of capital
|
|
|
11,159,176
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
Distributions from net ordinary income *
|
|
|
$12,075,600
|
|
Distributions from net long-term capital gains
|
|
|
17,326,694
|
|
|
|
|
|
|
|
|
* |
Net ordinary income consists of net taxable income derived
from dividends, interest, and net short-term capital gains, if
any.
|
|
|
** |
The Fund hereby designates this amount paid during the fiscal
year ended December 31, 2008, as long-term capital gain
dividends pursuant to Internal Revenue Code
Section 852(b)(3).
|
At December 31, 2008, the Funds tax year end, the
Fund had an unused capital loss carryforward of $67,127,564
available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforward
will expire on December 31, 2016.
The Fund elected to defer net realized losses from investments
incurred from November 1, 2008 through December 31,
2008, the Funds tax year end, (post-October
losses) in accordance with federal income tax regulations.
Post-October capital losses of $10,772,243 are treated as having
arisen on the first day of the following fiscal year.
|
|
6.
|
Management Fees
and Other Transactions with Affiliates
|
The Funds management fee is separated into two
components a complex-level component, based on the
aggregate amount of all fund assets managed by Nuveen Asset
Management (the Adviser), a wholly owned subsidiary
of Nuveen Investments, Inc. (Nuveen), and a specific
fund-level component, based only on the amount of assets within
the Fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each
individual fund as well as from growth in the amount of
complex-wide assets managed by the Adviser.
The annual fund-level fee, payable monthly, is based upon the
average daily Managed Assets of the Fund as follows:
|
|
|
|
|
Average Daily Managed Assets
|
|
Fund-Level Fee Rate
|
For the first $500 million
|
|
|
.7000
|
%
|
For the next $500 million
|
|
|
.6750
|
|
For the next $500 million
|
|
|
.6500
|
|
For the next $500 million
|
|
|
.6250
|
|
For Managed Assets over $2 billion
|
|
|
.6000
|
|
|
|
|
|
|
The annual complex-level fee, payable monthly, which is additive
to the fund-level fee, for all Nuveen sponsored funds in the
U.S., is based on the aggregate amount of total fund assets
managed as stated in the following table. As of
December 31, 2008, the complex level fee rate was .2000%.
The complex-level fee schedule is as follows:
|
|
|
|
|
Complex-Level Asset Breakpoint
Level (1)
|
|
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
|
|
|
|
|
|
|
|
|
(1) |
The complex-level fee component of the management fee for the
funds is calculated based upon the aggregate daily net assets of
all Nuveen funds, with such daily net assets to include assets
attributable to preferred stock issued by or borrowings by such
funds (Managed Assets) but to exclude assets
attributable to investments in other Nuveen funds.
|
|
|
|
|
|
Notes to
FINANCIAL STATEMENTS
(continued)
|
The management fee compensates the Adviser for overall
investment advisory and administrative services and general
office facilities. The Adviser has entered into
Sub-Advisory Agreements with NWQ Investment Management Company,
LLC (NWQ) and Symphony Asset Management, LLC
(Symphony), both subsidiaries of Nuveen. NWQ manages
the portion of the Funds investment portfolio
allocated to dividend-paying common stocks including American
Depositary Receipts (ADRs). Symphony manages
the portion of the Funds investment portfolio allocated to
senior loans and other debt instruments. NWQ and Symphony are
compensated for their services to the Fund from the management
fee 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.
For the first eight years of the Funds operations, the
Adviser has agreed to reimburse the Fund, as a percentage of
average daily Managed Assets, for fees and expenses in the
amounts and for the time periods set forth below:
|
|
|
|
|
|
|
|
|
|
|
Year Ending
|
|
|
|
Year Ending
|
|
|
January 31,
|
|
|
|
January 31,
|
|
|
2004 *
|
|
|
.32
|
%
|
|
2009
|
|
|
.32
|
%
|
2005
|
|
|
.32
|
|
|
2010
|
|
|
.24
|
|
2006
|
|
|
.32
|
|
|
2011
|
|
|
.16
|
|
2007
|
|
|
.32
|
|
|
2012
|
|
|
.08
|
|
2008
|
|
|
.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
From the commencement of operations.
|
The Adviser has not agreed to reimburse the Fund for any portion
of its fees and expenses beyond January 31, 2012.
|
|
7.
|
Senior Loan
Commitments
|
Unfunded
Commitments
Pursuant to the terms of certain of the variable rate senior
loan agreements, the Fund may have unfunded senior loan
commitments. The Fund will maintain with its custodian, cash,
liquid securities and/or liquid senior loans having an aggregate
value at least equal to the amount of unfunded senior loan
commitments. At December 31, 2008, the Fund had no unfunded
senior loan commitments.
Participation
Commitments
With respect to the senior loans held in the Funds
portfolio, the Fund may: 1) invest in assignments; 2) act as a
participant in primary lending syndicates; or 3) invest in
participations. If the Fund purchases a participation of a
senior loan interest, the Fund would typically enter into a
contractual agreement with the lender or other third party
selling the participation, rather than directly with the
Borrower. As such, the Fund not only assumes the credit risk of
the Borrower, but also that of the Selling Participant or other
persons interpositioned between the Fund and the Borrower. At
December 31, 2008, there were no such outstanding
participation commitments.
|
|
8.
|
Borrowing
Arrangements
|
Revolving Credit
Agreement
On August 2, 2006, the Fund entered into a $33 million
revolving credit agreement with CITIBANK, N.A. On August 3,
2006, the Fund had borrowed the full $33 million maximum
allowed through April 7, 2008. On April 8, 2008, the
Fund paid down the entire borrowing. For the period
January 1, 2008, through April 7, 2008, the average
daily balance outstanding and average interest rate on these
borrowings were $33,000,000 and 3.51%, respectively.
Refinancings
On April 8, 2008, the Fund paid down its $33 million
revolving credit agreement described in the aforementioned
paragraph using $13 million of available cash and liquidity
from the Funds custodian bank in the amount of
$20 million. On April 9, 2008, the Fund entered into a
$104 million prime brokerage facility with Bank of America,
which was subsequently assigned to BNP Paribas Prime Brokerage,
Inc. During the period April 9, 2008, through
December 31, 2008, the Fund utilized up to the full
$104 million maximum allowed to redeem its $78 million
outstanding FundNotes at liquidation value, to repay its
custodian bank, to redeem a portion of its outstanding
FundPreferred shares at liquidation value and for investment in
portfolio securities. As of December 31, 2008, the
outstanding balance on this facility was $35 million. In
order to maintain the 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. For
the period April 9, 2008 through December 31, 2008 the
average daily balance outstanding and average interest rate on
these borrowings were $79,844,007 and 3.09%, respectively.
Interest is charged at LIBOR (London Inter-bank Offered Rate)
plus an agreed upon spread on the amount borrowed and an agreed
upon spread on the undrawn balance. In addition to interest, the
Fund also paid an up-front .15% one-time arrangement fee of the
total borrowing limit which was fully amortized and expensed as
of December 31, 2008.
Interest expense incurred on the drawn and undrawn balances and
the one-time arrangement fee are recognized as Interest
expense on borrowings and amortization of borrowing costs
on the Statement of Operations.
|
|
9.
|
New Accounting
Pronouncement
|
Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 161 (SFAS No. 161)
In March 2008, the FASB issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging
Activities. This standard is intended to enhance financial
statement disclosures for derivative instruments and hedging
activities and enable investors to understand: a) how and why a
fund uses derivative instruments, b) how derivative instruments
and related hedge items are accounted for, and c) how derivative
instruments and related hedge items affect a funds
financial position, results of operations and cash flows.
SFAS No. 161 is effective for financial statements
issued for fiscal years and interim periods beginning after
November 15, 2008. As of December 31, 2008, management
does not believe the adoption of SFAS No. 161 will
impact the financial statement amounts; however, additional
footnote disclosures may be required about the use of derivative
instruments and hedging items.
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
Net
|
|
|
Investment
|
|
|
from Capital
|
|
|
|
|
|
Investment
|
|
|
Capital
|
|
|
Return of
|
|
|
|
|
|
and
|
|
|
Ending
|
|
|
|
|
Common
|
|
|
|
|
|
Realized/
|
|
|
Income to
|
|
|
Gains to
|
|
|
|
|
|
Income to
|
|
|
Gains to
|
|
|
Capital to
|
|
|
|
|
|
FundPreferred
|
|
|
Common
|
|
|
|
|
Share
|
|
|
Net
|
|
|
Unrealized
|
|
|
FundPreferred
|
|
|
FundPreferred
|
|
|
|
|
|
Common
|
|
|
Common
|
|
|
Common
|
|
|
|
|
|
Share
|
|
|
Share
|
|
Ending
|
|
|
Net Asset
|
|
|
Investment
|
|
|
Gain
|
|
|
Share-
|
|
|
Share-
|
|
|
|
|
|
Share-
|
|
|
Share-
|
|
|
Share-
|
|
|
|
|
|
Underwriting
|
|
|
Net Asset
|
|
Market
|
|
|
Value
|
|
|
Income(a)
|
|
|
(Loss)(b)
|
|
|
holders
|
|
|
holders
|
|
|
Total
|
|
|
holders
|
|
|
holders
|
|
|
holders
|
|
|
Total
|
|
|
Discounts
|
|
|
Value
|
|
Value
|
Year Ended 12/31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
$23.54
|
|
|
|
$.77
|
|
|
|
$(13.06
|
)
|
|
|
$(.12
|
)
|
|
$
|
|
|
|
$
|
(12.41
|
)
|
|
|
$(.70
|
)
|
|
$
|
(.21
|
)
|
|
$
|
(.80
|
)
|
|
$
|
(1.71
|
)
|
|
$
|
|
|
|
$
|
9.42
|
|
|
$
|
7.58
|
|
2007
|
|
|
25.98
|
|
|
|
.90
|
|
|
|
(1.22
|
)
|
|
|
(.05
|
)
|
|
|
(.11
|
)
|
|
|
(.48
|
)
|
|
|
(.82
|
)
|
|
|
(1.14
|
)
|
|
|
|
|
|
|
(1.96
|
)
|
|
|
|
|
|
|
23.54
|
|
|
|
21.81
|
|
2006
|
|
|
22.33
|
|
|
|
.89
|
|
|
|
4.48
|
|
|
|
(.05
|
)
|
|
|
(.09
|
)
|
|
|
5.23
|
|
|
|
(.88
|
)
|
|
|
(.70
|
)
|
|
|
|
|
|
|
(1.58
|
)
|
|
|
|
*
|
|
|
25.98
|
|
|
|
27.09
|
|
2005
|
|
|
21.54
|
|
|
|
.83
|
|
|
|
1.76
|
|
|
|
(.05
|
)
|
|
|
(.05
|
)
|
|
|
2.49
|
|
|
|
(.78
|
)
|
|
|
(.91
|
)
|
|
|
|
|
|
|
(1.69
|
)
|
|
|
(.01
|
)
|
|
|
22.33
|
|
|
|
21.37
|
|
2004(c)
|
|
|
19.10
|
|
|
|
.67
|
|
|
|
2.69
|
|
|
|
(.03
|
)
|
|
|
|
|
|
|
3.33
|
|
|
|
(.67
|
)
|
|
|
(.10
|
)
|
|
|
|
|
|
|
(.77
|
)
|
|
|
(.12
|
)
|
|
|
21.54
|
|
|
|
19.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FundNotes at End of Period
|
|
|
FundPreferred Shares at End of Period
|
|
|
Borrowings at End of Period
|
|
|
|
|
|
|
|
|
|
Average Market
|
|
|
Asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
Value Per
|
|
|
Coverage Per
|
|
|
Aggregate
|
|
|
Liquidation
|
|
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
$25,000 of
|
|
|
$1,000 of
|
|
|
Amount
|
|
|
and Market
|
|
|
Asset
|
|
|
Amount
|
|
|
Asset
|
|
|
|
|
|
|
Outstanding
|
|
|
Principal
|
|
|
Principal
|
|
|
Outstanding
|
|
|
Value
|
|
|
Coverage
|
|
|
Outstanding
|
|
|
Coverage
|
|
|
|
|
|
|
(000)
|
|
|
Amount
|
|
|
Amount
|
|
|
(000)
|
|
|
Per Share
|
|
|
Per Share
|
|
|
(000)
|
|
|
Per $1,000
|
|
|
|
|
Year Ended 12/31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
28,850
|
|
|
$
|
25,000
|
|
|
$
|
138,992
|
|
|
$
|
35,000
|
|
|
$
|
5,583
|
|
|
|
|
|
2007
|
|
|
78,000
|
|
|
|
25,000
|
|
|
|
5,789
|
|
|
|
45,000
|
|
|
|
25,000
|
|
|
|
207,531
|
|
|
|
33,000
|
|
|
|
14,684
|
|
|
|
|
|
2006
|
|
|
78,000
|
|
|
|
25,000
|
|
|
|
6,202
|
|
|
|
45,000
|
|
|
|
25,000
|
|
|
|
225,411
|
|
|
|
33,000
|
|
|
|
15,659
|
|
|
|
|
|
2005
|
|
|
78,000
|
|
|
|
25,000
|
|
|
|
5,544
|
|
|
|
45,000
|
|
|
|
25,000
|
|
|
|
196,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004(c)
|
|
|
78,000
|
|
|
|
25,000
|
|
|
|
5,403
|
|
|
|
45,000
|
|
|
|
25,000
|
|
|
|
190,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Per share Net Investment Income is
calculated using the average daily shares method.
|
(b)
|
Net of federal corporate income
taxes on long-term capital gains retained by the Fund per share
as follows:
|
|
|
|
|
|
|
Long-Term
|
|
|
Capital Gains
|
|
|
Retained
|
Year Ended 12/31:
|
|
|
|
2008
|
|
|
N/A
|
2007
|
|
$
|
0.21
|
2006
|
|
|
.33
|
2005
|
|
|
N/A
|
2004(c)
|
|
|
N/A
|
|
|
|
|
|
|
(c) |
For the period January 27, 2004 (commencement of
operations) through December 31, 2004.
|
|
|
(d) |
Borrowings Interest Expense includes amortization of borrowing
costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
|
|
Ratios to Average
|
|
|
Ratios to Average
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to
|
|
|
Net Assets Applicable to
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Before
|
|
|
Common Shares After
|
|
|
|
|
|
Total Returns
|
|
|
|
|
|
Credit/Reimbursement
|
|
|
Credit/Reimbursement***
|
|
|
|
|
|
|
|
|
Based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Ending Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
|
|
|
Share
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
|
|
|
Net
|
|
|
Applicable to
|
|
|
|
|
|
Net
|
|
|
|
|
|
Net
|
|
|
Portfolio
|
|
|
Market
|
|
|
Asset
|
|
|
Common
|
|
|
|
|
|
Investment
|
|
|
|
|
|
Investment
|
|
|
Turnover
|
|
|
Value**
|
|
|
Value**
|
|
|
Shares (000)
|
|
|
Expenses
|
|
|
Income
|
|
|
Expenses
|
|
|
Income
|
|
|
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(60.54
|
)%
|
|
|
(55.29
|
)%
|
|
|
$131,546
|
|
|
|
3.74
|
%
|
|
|
4.03
|
%
|
|
|
3.24
|
%
|
|
|
4.53
|
%
|
|
|
24
|
%
|
|
|
|
(12.99
|
)
|
|
|
(2.38
|
)
|
|
|
328,557
|
|
|
|
3.10
|
|
|
|
2.99
|
|
|
|
2.64
|
|
|
|
3.45
|
|
|
|
25
|
|
|
|
|
35.52
|
|
|
|
24.19
|
|
|
|
360,740
|
|
|
|
2.79
|
|
|
|
3.28
|
|
|
|
2.34
|
|
|
|
3.73
|
|
|
|
25
|
|
|
|
|
20.00
|
|
|
|
11.93
|
|
|
|
309,452
|
|
|
|
2.26
|
|
|
|
3.36
|
|
|
|
1.81
|
|
|
|
3.81
|
|
|
|
26
|
|
|
|
|
.91
|
|
|
|
17.18
|
|
|
|
298,449
|
|
|
|
1.80
|
****
|
|
|
3.30
|
****
|
|
|
1.37
|
****
|
|
|
3.73
|
****
|
|
|
16
|
|
|
|
|
|
* |
Rounds to less than $.01 per share.
|
|
|
** |
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.
|
|
The Fund elected to retain a portion of its realized long-term
capital gains for the following tax years ended
December 31, (which is the fiscal year end for the Fund)
and pay required federal corporate income taxes on these
amounts. As reported on Form 2439, Common shareholders on
record date must include their pro-rata share of these gains on
their applicable federal tax returns, and are entitled to take
offsetting tax credits, for their pro-rata share of the taxes
paid by the Fund. The standardized total returns shown above do
not include the economic benefit to Common shareholders on
record date of these tax credits/refunds. The Funds
corresponding Total Return Based on Market Value and Common
Share Net Asset Value when these benefits are included are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Returns
|
|
|
Common
|
|
|
|
Based on
|
|
|
Shareholders
|
|
Based on
|
|
Common Share
|
|
|
of Record on
|
|
Market Value
|
|
Net Asset Value
|
Year Ended 12/31:
|
2008
|
|
|
N/A
|
|
|
|
(60.54
|
)%
|
|
|
(55.29
|
)%
|
2007
|
|
|
December 31
|
|
|
|
(12.18
|
)
|
|
|
(1.54
|
)
|
2006
|
|
|
December 29
|
|
|
|
37.15
|
|
|
|
25.75
|
|
2005
|
|
|
N/A
|
|
|
|
20.00
|
|
|
|
11.93
|
|
2004(c)
|
|
|
N/A
|
|
|
|
.91
|
|
|
|
17.18
|
|
|
|
|
|
***
|
After custodian fee credit and expense reimbursement, where
applicable.
|
****
|
Annualized.
|
|
|
|
The amounts shown are based on Common share equivalents.
|
|
|
|
Ratios do not reflect the effect of dividend payments to
FundPreferred shareholders.
|
|
|
|
Income ratios reflect income earned on assets attributable to
FundPreferred shares, FundNotes and borrowings, where applicable.
|
|
Each Ratio of Expenses to Average Net Assets Applicable to
Common Shares and each Ratio of Net Investment Income to Average
Net Assets Applicable to Common Shares includes the effect of
the interest expense paid on FundNotes and borrowings as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of FundNotes Interest Expense to
|
|
|
Ratio of Borrowings Interest Expense to Average
|
|
|
|
Average Net Assets Applicable to Common Shares(d)
|
|
|
Net Assets Applicable to Common Shares(d)
|
|
Year Ended 12/31:
|
2008
|
|
|
1.12
|
%
|
|
|
1.00
|
%
|
2007
|
|
|
1.11
|
|
|
|
.51
|
|
2006
|
|
|
1.11
|
|
|
|
.23
|
|
2005
|
|
|
.80
|
|
|
|
|
|
2004(c)
|
|
|
.37
|
****
|
|
|
|
|
|
|
|
|
N/A |
The Fund had no retained capital gains for the tax year ended
December 31, 2008, or for the tax years ended prior to
December 31, 2006.
|
See accompanying notes to the
financial statements.
Board Members
&
OFFICERS
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year First
|
|
|
|
Number of Portfolios
|
|
|
|
|
|
|
Elected or
|
|
Principal Occupation(s)
|
|
in Fund Complex
|
Name, Birthdate
|
|
|
|
Position(s) Held with
|
|
Appointed
|
|
Including other Directorships
|
|
Overseen by
|
and Address
|
|
|
|
the Fund
|
|
and
Term(1)
|
|
During Past 5 Years
|
|
Board Member
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDEPENDENT BOARD MEMBERS:
|
|
n ROBERT
P. BREMNER
|
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Chairman of
the Board
and Board member
|
|
1997
Class III
|
|
Private Investor and Management Consultant.
|
|
192
|
|
n JACK
B. EVANS
|
10/22/48
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Board member
|
|
1999
Class III
|
|
President, The Hall-Perrine Foundation, a private philanthropic
corporation (since 1996); Director and Vice Chairman, United
Fire Group, a publicly held company; Member of the Board of
Regents for the State of Iowa University System; Director,
Gazette Companies; Life Trustee of Coe College and Iowa College
Foundation; Member of the Advisory Council of the Department of
Finance in the Tippie College of Business, University of Iowa;
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.
|
|
192
|
|
n WILLIAM
C. HUNTER
|
3/6/48
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Board member
|
|
2004
Annual
|
|
Dean, Tippie College of Business, University of Iowa (since July
2006); 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 (since
1997), Credit Research Center at Georgetown University; Director
(since 2004) of Xerox Corporation; Director (since 2005), Beta
Gamma Sigma International Honor Society; Director, SS&C
Technologies, Inc. (May 2005-October 2005).
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year First
|
|
|
|
Number of Portfolios
|
|
|
|
|
|
|
Elected or
|
|
Principal Occupation(s)
|
|
in Fund Complex
|
Name, Birthdate
|
|
|
|
Position(s) Held with
|
|
Appointed
|
|
Including other Directorships
|
|
Overseen by
|
and Address
|
|
|
|
the Fund
|
|
and
Term(1)
|
|
During Past 5 Years
|
|
Board Member
|
|
INDEPENDENT BOARD MEMBERS (continued):
|
|
n DAVID
J. KUNDERT
|
10/28/42
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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.
|
|
192
|
|
n WILLIAM J. SCHNEIDER
|
9/24/44
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Board member
|
|
1997
Annual
|
|
Chairman, formerly, Senior Partner and Chief Operating Officer
(retired, 2004) of Miller-Valentine Partners Ltd., a real estate
investment company; Director, Dayton Development Coalition;
formerly, member, Business Advisory Council, Cleveland Federal
Reserve Bank.
|
|
192
|
|
n JUDITH M. STOCKDALE
|
12/29/47
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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).
|
|
192
|
|
n CAROLE
E. STONE
|
6/28/47
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Board member
|
|
2007
Class I
|
|
Director, Chicago Board Options Exchange (since 2006);
Commissioner, New York State Commission on Public Authority
Reform (since 2005); formerly, Chair New York Racing Association
Oversight Board
(2005-2007);
formerly, Director, New York State Division of the Budget
(2000-2004), Chair, Public Authorities Control Board (2000-2004)
and Director, Local Government Assistance Corporation
(2000-2004).
|
|
192
|
|
n TERENCE
J. TOTH
|
9/29/59
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Board member
|
|
2008
Class II
|
|
Director, Legal & General Investment Management (since
2008); Private Investor (since 2007); 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 Japan Board
(2004-2007), Northern Trust Securities Inc. Board (2003-2007)
and Northern Trust Hong Kong Board (1997-2004).
|
|
192
|
INTERESTED BOARD MEMBER:
|
|
n JOHN
P.
AMBOIAN(2)
|
6/14/61
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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, Rittenhouse Asset
Management, Nuveen Investments Advisors, Inc. formerly,
President (1999-2004) of Nuveen Advisory Corp. and Nuveen
Institutional Advisory
Corp.(3)
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Portfolios
|
|
|
|
|
|
|
Year First
|
|
Principal
|
|
in Fund Complex
|
Name, Birthdate
|
|
|
|
Position(s) Held with
|
|
Elected or
|
|
Occupation(s)
|
|
Overseen
|
and Address
|
|
|
|
the Fund
|
|
Appointed(4)
|
|
During Past 5 Years
|
|
by Officer
|
|
OFFICERS of the FUND:
|
|
n GIFFORD R. ZIMMERMAN
|
9/9/56
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Chief Administrative Officer
|
|
1988
|
|
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel of Nuveen Investments, LLC; Managing
Director (since 2002), Associate General Counsel and Assistant
Secretary, of Nuveen Asset Management; Vice President and
Assistant Secretary of NWQ Investment Management Company, LLC.
(since 2002), Nuveen Investments Advisers Inc. (since 2002),
Symphony Asset Management LLC, and NWQ Investment Management
Company, LLC (since 2003), 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, Associate General Counsel and
Assistant Secretary of Rittenhouse Asset Management, Inc. (since
2003); Managing Director (since 2004) and Assistant Secretary
(since 1994) of Nuveen Investments, Inc.; formerly, Managing
Director (2002-2004), General Counsel (1998-2004) and Assistant
Secretary of Nuveen Advisory Corp. and Nuveen Institutional
Advisory
Corp.(3);
Chartered Financial Analyst.
|
|
192
|
|
n WILLIAM
ADAMS IV
|
6/9/55
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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.
|
|
120
|
|
n CEDRIC H. ANTOSIEWICZ
|
1/11/62
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
|
|
2007
|
|
Managing Director, (since 2004) previously, Vice President
(1993-2004) of Nuveen Investments, LLC.
|
|
120
|
|
n MICHAEL
T. ATKINSON
|
2/3/66
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President and Assistant Secretary
|
|
2000
|
|
Vice President (since 2002) of Nuveen Investments, LLC; Vice
President of Nuveen Asset Management (since 2005).
|
|
192
|
|
n LORNA
C. FERGUSON
|
10/24/45
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
|
|
1998
|
|
Managing Director (since 2004), formerly, Vice President of
Nuveen Investments, LLC, Managing Director (since 2005) of
Nuveen Asset Management; Managing Director (2004-2005) formerly,
Vice President (1998-2004) of Nuveen Advisory Corp. and Nuveen
Institutional Advisory
Corp.(3)
|
|
192
|
|
n STEPHEN
D. FOY
|
5/31/54
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
and Controller
|
|
1998
|
|
Vice President (since 1993) and Funds Controller (since 1998) of
Nuveen Investments, LLC; formerly, Vice President and Funds
Controller (1998-2004) of Nuveen Investments, Inc.; Certified
Public Accountant.
|
|
192
|
|
n WALTER M. KELLY
|
2/24/70
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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.
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Portfolios
|
|
|
|
|
|
|
Year First
|
|
Principal
|
|
in Fund Complex
|
Name, Birthdate
|
|
|
|
Position(s) Held with
|
|
Elected or
|
|
Occupation(s)
|
|
Overseen
|
and Address
|
|
|
|
the Fund
|
|
Appointed(4)
|
|
During Past 5 Years
|
|
by Officer
|
|
OFFICERS of the FUND (continued):
|
|
n DAVID
J. LAMB
|
3/22/63
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
|
|
2000
|
|
Vice President (since 2000) of Nuveen Investments, LLC; Vice
President of Nuveen Asset Management (since 2005); Certified
Public Accountant.
|
|
192
|
|
n TINA
M. LAZAR
|
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
|
|
2002
|
|
Vice President of Nuveen Investments, LLC (since 1999); Vice
President of Nuveen Asset Management (since 2005).
|
|
192
|
|
n LARRY
W. MARTIN
|
7/27/51
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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 (since 2000), Assistant
Secretary and Assistant General Counsel (since 1998) of
Rittenhouse Asset Management, Inc.; Vice President and Assistant
Secretary of Nuveen Investments Advisers Inc. (since 2002); 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); formerly, Vice President and Assistant Secretary
of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp.(3)
|
|
192
|
|
n KEVIN
J. MCCARTHY
|
3/26/66
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
and Secretary
|
|
2007
|
|
Managing Director (since 2008), formerly, Vice President
(2007-2008), Nuveen Investments, LLC; Vice President, and
Assistant Secretary, Nuveen Asset Management, Rittenhouse Asset
Management, Inc., 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).
|
|
192
|
|
n JOHN
V. MILLER
|
4/10/67
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
Vice President
|
|
2007
|
|
Managing Director (since 2007), formerly, Vice President
(2002-2007) of Nuveen Asset Management and Nuveen Investments,
LLC; Chartered Financial Analyst.
|
|
192
|
|
n CHRISTOPHER
M. ROHRBACHER
|
8/1/71
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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).
|
|
192
|
|
n JAMES
F. RUANE
|
7/3/62
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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.
|
|
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Portfolios
|
|
|
|
|
|
|
Year First
|
|
Principal
|
|
in Fund Complex
|
Name, Birthdate
|
|
|
|
Position(s) Held with
|
|
Elected or
|
|
Occupation(s)
|
|
Overseen
|
and Address
|
|
|
|
the Fund
|
|
Appointed(4)
|
|
During Past 5 Years
|
|
by Officer
|
|
OFFICERS of the FUND (continued):
|
|
n MARK
L. WINGET
|
12/21/68
333 W. Wacker Drive
Chicago, IL 60606
|
|
ï
|
|
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).
|
|
192
|
|
|
(1)
|
Board Members serve three year terms, except for two board
members who are elected by the holders of Preferred Shares. 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,
except two board members are elected by the holders of Preferred
Shares to serve until the next 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)
|
Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.
were reorganized into Nuveen Asset Management, effective
January 1, 2005.
|
|
(4)
|
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.
|
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 Dividend Reinvestment Plan
Your Nuveen Closed-End Fund allows you to conveniently reinvest
dividends and/or capital gains 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 tax-free compounding. Just like dividends
or distributions in cash, there may be times when income or
capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does
not ensure a profit, nor does it protect you against loss in a
declining market.
Easy and
convenient
To make recordkeeping easy and convenient, each month
youll receive a statement showing your total dividends and
distributions, the date of investment, the shares acquired and
the price per share, and the total number of shares you own.
How shares are
purchased
The shares you acquire by reinvesting will either be purchased
on the open market or newly issued by the Fund. If the shares
are trading at or above net asset value at the time of
valuation, the Fund will issue new shares at the 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. Dividends and
distributions received to purchase shares in the open market
will normally be invested shortly after the dividend payment
date. No interest will be paid on dividends and 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 dividend or distribution had been paid in shares issued
by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those
charged on individual transactions.
Flexible
You may change your distribution option or withdraw from the
Plan at any time, should your needs or situation change. Should
you withdraw, you can receive a certificate for all whole shares
credited to your reinvestment account and cash payment for
fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your
name, or in the name of a brokerage firm, bank, or other
nominee. Ask your investment advisor if his or her firm will
participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer
the shares to another firm and continue to participate in the
Plan.
The Fund reserves the right to amend or terminate the Plan at
any time. Although the Fund reserves the right to amend the Plan
to include a service charge payable by the participants, there
is no direct service charge to participants in the Plan at this
time.
Call today to
start reinvesting dividends and/or 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
|
|
n
|
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.
|
|
n
|
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.
|
|
n
|
Current Distribution Rate (also known as Market Yield,
Dividend Yield or Current Yield): 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.
|
|
n
|
Net Asset Value (NAV): A Funds NAV per
common share is calculated by subtracting the liabilities of the
Fund (including any Preferred shares issued in order to leverage
the Fund) from its total assets and then dividing the remainder
by the number of common shares outstanding. Fund NAVs are
calculated at the end of each business day.
|
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
The Fund intends to repurchase and/or redeem shares of its own
common or preferred stock in the future at such times and in
such amounts as is deemed advisable. During the period covered
by this report, the Fund redeemed all 3,120 outstanding shares
of its FundNotes and 646 shares of its outstanding
preferred stock. Any future repurchases and/or redemptions will
be reported to shareholders in the next annual or semi-annual
report.
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, 2008, 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 Securities and Exchange Commission
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 Total Return Strategy Fund (JTA) hereby
designates 78.98% of dividends paid from net ordinary income as
dividends qualifying for the 70% dividends received deduction
for corporations and 100.00% 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.
Nuveen Investments:
SERVING
INVESTORS FOR
GENERATIONS
Since 1898, financial advisors and their clients have relied on
Nuveen Investments to provide dependable investment solutions.
For the past century, Nuveen Investments has adhered to the
belief that the best approach to investing is to apply
conservative risk-management principles to help minimize
volatility.
Building on this tradition, we today offer a range of high
quality equity and fixed-income solutions that are integral to a
well-diversified core portfolio. Our clients have come to
appreciate this diversity, as well as our continued adherence to
proven, long-term investing principles.
We offer many
different investing solutions for our clients different
needs.
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. Nuveen Investments markets
its growing range of specialized investment solutions under the
high-quality brands of HydePark, NWQ, Nuveen, Santa Barbara,
Symphony, Tradewinds and Winslow. In total, the Company managed
approximately $134 billion of assets on September 30,
2008.
Find out how we
can help you reach your financial goals.
To learn more about the products and services Nuveen Investments
offers, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information provided
carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors
should consider the investment objective and policies, risk
considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For 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
|
|
|
|
|
|
|
|
|
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
|
EAN-C-1208D
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 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, Chairman of the Audit Committee, 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 Total Return Strategy 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees Billed |
|
|
Audit-Related Fees |
|
|
Tax Fees |
|
|
All Other Fees |
|
Fiscal Year Ended |
|
to Fund1 |
|
|
Billed to Fund2 |
|
|
Billed to Fund3 |
|
|
Billed to Fund4 |
|
|
December 31, 2008 |
|
$ |
26,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage approved
pursuant to
pre-approval
exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007 |
|
$ |
24,600 |
|
|
$ |
0 |
|
|
$ |
1,000 |
|
|
$ |
1,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (Control Affiliate) 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, 2008 |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
Percentage approved
pursuant
to pre-approval exception |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007 |
|
$ |
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 de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the 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, 2008 |
|
$ |
1,800 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,800 |
|
December 31, 2007 |
|
$ |
2,650 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
2,650 |
|
Non-Audit Fees billed to Adviser for both fiscal year ends represent Tax Fees billed to Adviser
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 of Directors or Trustees has a separately designated
Audit Committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The
members of the audit committee are Robert P. Bremner, Jack B. Evans, David J.
Kundert and William J. Schneider.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Adviser has engaged NWQ Investment Management Company, LLC (NWQ) and
Symphony Asset Management, LLC (Symphony), as Sub-Advisers to provide
discretionary investment advisory services (NWQ and Symphony 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 and related duties in accordance with the Sub-Advisers policies and
procedures. The Adviser periodically will monitor each Sub-Advisers voting to
ensure that they are carrying out their duties. The Sub-Advisers proxy voting
policies and procedures are summarized as follows:
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.
SYMPHONY
Symphony Asset Management votes proxies with the objective of maximizing shareholder value for its
clients and in accordance with the firms Policies and Procedures for Proxy Voting. Symphonys
Proxy Voting Committee is responsible for establishing proxy voting guidelines; review and
oversight of the firms Policies and Procedures for Proxy Voting; oversight of day-to-day proxy
voting related activities; and, for overseeing the activities of proxy service providers utilized
by the firm.
Symphony has established guidelines for proxy voting based on the recommendations of an independent
third-party proxy service provider. Symphony utilizes one or more independent third-party service
providers to vote proxy in accordance with Symphonys guidelines. Service providers also provide
proxy voting related research material as required.
In its Policies and Procedures for Proxy Voting, Symphony specifies a process for identifying and
managing conflicts of interest in the proxy voting process so that votes are cast in the best
interests of clients. Conflicts of interest may arise from relationships Symphony has with its
clients, vendors and lenders. Symphony portfolio managers may change a proxy vote recommended by
the firms guidelines to resolve a conflict of interest or for other reasons in the best economic
interests of clients. Symphonys Proxy Voting Committee reviews vote changes.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Adviser has engaged
Symphony and NWQ as Sub-Advisers to provide discretionary investment advisory services with
respect to the registrants investments in senior loans and other debt instruments and equity
investments, respectively.
The following section provides information on the portfolio managers at each Sub-Adviser:
Symphony
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
Lenny Mason, CPA, Fixed-Income Portfolio Manager
Lenny is a Fixed-Income Portfolio Manager for Symphony. His
responsibilities include portfolio management for Symphonys high yield and bank loan strategies
and credit research for its fixed income strategies. Prior to joining Symphony in 2001, Lenny was a
Managing Director in FleetBostons Technology & Communications Group where he headed its
Structuring and Advisory Team. Before joining Fleet, Lenny worked for Wells Fargo Banks Corporate
Banking Group dealing primarily with leveraged transactions and for Coopers & Lybrand as an
auditor. Lenny has an MBA in Finance from the University of Chicago, a BS in Accounting from Babson
College. Lenny is a Certified Public Accountant.
Gunther Stein, Director of Fixed-Income Strategies
Gunther is a Principal and the Director of Fixed-Income Strategies at Symphony. He has close to 20 years
of investment and research experience. Gunther is
responsible for all of Symphonys fixed-income strategies, in addition to portfolio management,
trading, and research for the fixed-income funds. Prior to joining Symphony in 1999, Gunther was a
high-yield portfolio manager at Wells Fargo. Gunther joined Wells Fargo in 1993 as an associate in
its Loan Syndications & Leveraged Finance Group after completing its credit-management training
program. Previously, Gunther worked for First Interstate Bank as a euro-currency deposit trader. He
also worked for Standard Chartered Bank in Mexico City and Citibank Investment Bank in London.
Gunther received an MBA from the University of Texas at Austin and a BA in Economics from the
University of California at Berkeley.
Item 8(a)(2). OTHER ACCOUNTS MANAGED
Other Accounts Managed by Symphony
PMs
As of 12/31/08
|
|
|
|
|
|
|
|
|
|
|
Gunther Stein |
|
|
Lenny Mason |
|
(a) RICs |
|
|
|
|
|
|
|
|
Number of accts |
|
|
6 |
|
|
|
6 |
|
Assets |
|
$ |
749,877,432 |
|
|
$ |
749,877,432 |
|
|
|
|
|
|
|
|
|
|
(b) Other pooled accts |
|
|
|
|
|
|
|
|
Non-performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
9 |
|
|
|
9 |
|
|
Assets |
|
$ |
1,083,962,109 |
|
|
$ |
1,083,962,109 |
|
Performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
8 |
|
|
|
3 |
|
Assets |
|
$ |
922,363,055 |
|
|
$ |
107,241,962 |
|
|
|
|
|
|
|
|
|
|
(c) Other |
|
|
|
|
|
|
|
|
Non-performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
3 |
|
|
|
5 |
|
Assets |
|
$ |
2,799,086 |
|
|
$ |
3,139,992 |
|
Performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
1 |
|
|
|
|
|
Assets |
|
$ |
135,617,867 |
|
|
|
|
|
POTENTIAL MATERIAL CONFLICTS OF INTEREST
As described above, the portfolio manager
may manage other accounts with investment strategies
similar to the Fund, including other investment companies and separately managed accounts. Fees
earned by the Sub-Advisers may vary among these accounts and the portfolio managers may personally
invest in some but not all of these accounts. In addition, certain accounts may be subject to
performance-based fees. These factors could create conflicts of interest because a portfolio
manager may have incentives to favor certain accounts over others, resulting in other accounts
outperforming the Fund. A conflict may also exist if a portfolio manager identified a limited
investment opportunity that may be appropriate for more than one account, but the Fund is not able
to take full advantage of that opportunity due to the need to allocate that opportunity among
multiple accounts. In addition, the portfolio manger may execute transactions for another account
that may adversely impact the value of securities held by the Fund. However, the Sub-Advisers
believe that these risks are mitigated by the fact that accounts with like investment strategies
managed by a particular portfolio manager are generally managed in a similar fashion, subject to
exceptions to account for particular investment restrictions or policies applicable only to certain
accounts, differences in cash flows and account sizes, and other factors. In addition, each
Sub-Adviser has adopted trade allocation procedures that require equitable allocation of trade
orders for a particular security among participating accounts.
Item 8(a)(3). FUND MANAGER COMPENSATION
Symphony investment professionals receive competitive base salaries and participate in a bonus pool
which is tied directly to the firms operating income with a disproportionate amount paid to the
managers responsible for generating the alpha. The bonus paid to investment personnel is based on
acumen, overall contribution and strategy performance. However, there is no fixed formula which
guides bonus allocations. Bonuses are paid on an annual basis. In addition, investment
professionals may participate in an equity-based compensation pool.
Item 8(a)(4).
OWNERSHIP OF JTA SECURITIES AS OF DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
Gunther Stein
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
Lenny Mason
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
NWQ
Item 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
Jon D. Bosse, CFA, Chief Investment Officer, Co-President of NWQ, and Portfolio Manager
Prior to joining NWQ in 1996, Mr. Bosse spent ten years with ARCO Investment Management Company
where, in addition to managing a value-oriented fund, he was the Director of Equity Research.
Previously, he spent four years with ARCO in Corporate Finance. Mr. Bosse received his B.A. in
Economics from Washington University, St. Louis, where he was awarded the John M. Olin Award for
excellence in economics, and graduated summa cum laude. He received his M.B.A. from the Wharton
Business School, University of Pennsylvania. In addition, he received his Chartered Financial
Analyst designation in 1992 and is a member of the CFA Institute and the Los Angeles Society of
Financial Analysts.
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
|
|
|
|
|
|
|
|
|
|
|
Jon Bosse |
|
|
Michael Carne |
|
(a) RICs |
|
|
|
|
|
|
|
|
Number of accts |
|
|
6 |
|
|
|
1 |
|
Assets ($000s) |
|
$ |
686,562,673 |
|
|
$ |
53,629,260 |
|
|
|
|
|
|
|
|
|
|
(b) Other pooled accts |
|
|
|
|
|
|
|
|
Non-performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
12 |
|
|
|
0 |
|
Assets ($000s) |
|
$ |
1,083,676,885 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
(c) Other |
|
|
|
|
|
|
|
|
Non-performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
33,675 |
|
|
|
8,301 |
|
Assets ($000s) |
|
$ |
13,431,352,172 |
|
|
$ |
1,203,323,805 |
|
Performance fee accts |
|
|
|
|
|
|
|
|
Number of accts |
|
|
8 |
|
|
|
0 |
|
Assets ($000s) |
|
$ |
542,810,407 |
|
|
|
0 |
|
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:
|
|
|
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. 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:
|
|
Overall performance of client portfolios |
|
|
|
Objective review of stock recommendations and the quality of primary research |
|
|
|
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 JTA SECURITIES AS OF DECEMBER 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manager |
|
None |
|
|
$1 - $10,000 |
|
|
$10,001-$50,000 |
|
|
$50,001-$100,000 |
|
|
$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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Jon Bosse |
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X |
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Mike Carne |
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X |
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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, 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 Total Return Strategy 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 9, 2009
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 9, 2009
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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 9, 2009