ThZeal - The Zeal

N-CSRS 1 file001.txt NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNI FUND 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 811-6265 --------------------- Nuveen Pennsylvania Investment Quality Municipal 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) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: April 30 ------------------ Date of reporting period: October 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 STOCKHOLDERS. SEMI-ANNUAL REPORT | Nuveen Investments October 31, 2008 | MUNICIPAL CLOSED-END FUNDS Photo of: Small child NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC. NQJ NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC. NNJ NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND NXJ NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUJ NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND NQP NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 NPY NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND NXM NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NVY IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Man working on computer LIFE IS COMPLEX. NUVEEN MAKES THINGS E-simple. It only takes a minute to sign up for e-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready--no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report and save it on your computer if you wish. FREE E-REPORTS RIGHT TO YOUR E-MAIL! www.investordelivery.com If you receive your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR www.nuveen.com/accountaccess If you receive your Nuveen Fund dividends and statements directly from Nuveen. Logo: NUVEEN Investments Photo of: Robert P. Bremner Chairman's LETTER TO SHAREHOLDERS | Robert P. Bremner | Chairman of the Board Dear Shareholders, I'd like to use my initial letter to you to accomplish several things. First, I want to report that after fourteen years of service on your Fund's Board, including the last twelve as chairman, Tim Schwertfeger retired from the Board in June. The Board has elected me to replace him as the chairman, the first time this role has been filled by someone who is not an employee of Nuveen Investments. Electing an independent chairman marks a significant milestone in the management of your Fund, and it aligns us with what is now considered a "best practice" in the fund industry. Further, it demonstrates the independence with which your Board has always acted on your behalf. Following Tim will not be easy. During my eleven previous years on the Nuveen Fund Board, I found that Tim always set a very high standard by combining insightful industry and market knowledge and sound, clear judgment. While the Board will miss his wise counsel, I am certain we will retain the primary commitment Tim shared with all of us - an unceasing dedication to creating and retaining value for Nuveen Fund shareholders. This focus on value over time is a touchstone that I and all the other Board members will continue to use when making decisions on your behalf. Second, I also want to report that we are very fortunate to welcome two new Board members to our team. John Amboian, the current chairman and CEO of Nuveen Investments, has replaced Tim as Nuveen's representative on the Board. John's presence will allow the independent Board members to benefit not only from his leadership role at Nuveen but also his broad understanding of the fund industry and Nuveen's role within it. We also added Terry Toth as an independent director. A former CEO of the Northern Trust Company's asset management group, Terry will bring extensive experience in the fund industry to our deliberations. Third, on behalf of the entire Board, I would like you to know that we are closely monitoring the unprecedented market developments and their distressing impact on the Funds. We believe that these Funds continue to be actively and constructively managed for the long term and at the same time we are very aware that these are trying times for our investors. We appreciate the patience you have shown with the Board and with Nuveen Investments as they manage your investment through this extremely difficult period. Fourth, again on behalf of the entire Board, I would like to acknowledge the effort the whole Nuveen organization is making to resolve the auction rate preferred share situation in a satisfactory manner. As you know, we are actively pursuing a number of possible 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've worked through the many difficulties involved. Finally, I urge you to take the time to review the Portfolio Manager's Comments, the Common Share Dividend and Share Price Information, and the Performance Overview sections of this report. All of us are grateful that you have chosen Nuveen Investments as a partner as you pursue your financial goals, and, on behalf of myself and the other members of your Fund's Board, let me say we look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Robert P. Bremner Robert P. Bremner Chairman of the Board December 23, 2008 Portfolio Manager's COMMENTS Nuveen Investments Municipal Closed-End Funds | NQJ, NNJ, NXJ, NUJ, NQP, NPY, NXM, NVY Portfolio manager Cathryn Steeves discusses key investment strategies and the six-month performance of the Nuveen New Jersey and Pennsylvania Funds. Cathryn, who joined Nuveen in 1996, assumed portfolio management responsibility for these eight Funds in 2006. WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN NEW JERSEY AND PENNSYLVANIA FUNDS DURING THE SIX-MONTH REPORTING PERIOD ENDED OCTOBER 31, 2008? During this period, stress in the financial markets resulted in increased price volatility for many securities, reduced liquidity and a general flight to quality. In this turbulent environment, we took a defensive approach to managing the Funds, focusing on managing duration(1) risk, preserving and enhancing liquidity, as appropriate, and remaining invested for the long term. As events unfolded, we carefully monitored the municipal bond market for attractive purchase opportunities, using a fundamental approach to find undervalued sectors and individual credits with the potential to perform well over the long term. One area of focus in the New Jersey Funds was buying high-quality bonds with longer maturities that could help to maintain and extend the Funds' durations and had the potential to enhance yields and returns overtime. In the Pennsylvania Funds, we purchased both higher and lower quality health care bonds and higher coupon housing securities that were very attractively priced. To provide liquidity for purchases, we selectively sold holdings with shorter durations. We also monitored the types of credits and bond structures that were attractive to the retail market and took advantage of strong bids to sell such bonds into solid retail demand. In addition, some of our new purchases were funded by reinvesting the proceeds from called or matured bonds, especially in the Pennsylvania Funds. As a key dimension of risk management, we employed a disciplined approach to duration positioning as an important component of our overall strategy. As part of this approach, we used inverse floating rate securities(2) in all of the Funds except NUJ, NVY and NXM during this period. Inverse floaters typically provide the dual benefit of bringing the Funds' durations closer to our strategic target and enhancing their income-generation capabilities. NNJ and NVY also invested in certain types of (1) Duration is a measure of a bond's price sensitivity as interest rates change, with longer duration bonds displaying more sensitivity to these changes than bonds with shorter durations. (2) An inverse floating rate security is a financial instrument designed to pay long-term tax-exempt interest at a rate that varies inversely with a short-term tax-exempt interest rate index. For the Nuveen Funds, the index typically used is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index (previously referred to as the Bond Market Association Index or BMA). Inverse floaters, including those inverse floating rate securities in which the Funds invested during this reporting period, are further defined within the Notes to Financial Statements and Glossary of Terms Used in This Report sections of this shareholder report. Discussions of specific investments are for illustrative purposes only and are not intended as recommendations of individual investments. The views expressed in this commentary represent those of the portfolio manager as of the date of this report and are subject to change at any time, based on market conditions and other factors. The Funds disclaim any obligation to advise shareholders of such changes. 4 derivative instruments in an effort to lengthen duration and help manage common share net asset value (NAV) volatility while trying to minimize any negative impact on income streams or common share dividends over the short term. As of October 31, 2008, we continued to use inverse floaters in NQJ, NNJ, NXJ, NQP and NPY, and the derivatives remained in place in NNJ and NVY. HOW DID THE FUNDS PERFORM? Individual results for the Nuveen New Jersey and Pennsylvania Funds, as well as relevant index and peer group information, are presented in the accompanying table. Annualized Total Returns on Common Share Net Asset Value* For periods ended 10/31/08 Six-Month 1-Year 5-Year 10-Year New Jersey Funds NQJ -12.43% -12.56% 1.55% 3.66% NNJ -10.59% -10.28% 1.57% 3.92% NXJ -13.62% -14.28% 1.32% N/A NUJ -13.79% -14.38% 1.66% N/A Pennsylvania Funds NQP -13.60% -14.11% 0.58% 3.09% NPY -15.21% -16.57% -0.04% 3.07% NXM -14.66% -15.32% 0.93% N/A NVY -12.52% -13.26% 1.39% N/A Lipper Other States Municipal Debt Funds Average(3) -13 01% -13.59% 1.15% 3.31% Barclays Capital Municipal Bond Index(4) -4.70% - 3.30% 2.73% 4.14% S&P National Municipal Bond Index(5) -5.19% -4.15% 2.75% N/A For the six months ended October 31, 2008, the cumulative returns on common share NAV for NQJ, NNJ and NVY exceeded the average return for the Lipper Other States Municipal Debt Funds Average, while the remaining five Funds lagged this return. All of the Funds underperformed the Barclays Capital Municipal Bond Index and Standard & Poor's (S&P) National Municipal Bond Index. *Six-month returns are cumulative; returns for one-year, five-year and ten-year are annualized. Past performance is not predictive of 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 individual Performance Overview for your Fund in this report. (3) The Lipper Other States Municipal Debt Funds Average is calculated using the returns of all closed-end funds in this category for each period as follows: 6 months, 46 funds; 1 year, 46 funds; 5 years, 46 funds; and 10 years, 18 funds. Fund and Lipper returns assume reinvestment of dividends. Shareholders should note that the performance of the Lipper Other States category represents the overall average of returns for funds from 10 different states with a wide variety of municipal market conditions, making direct comparisons less meaningful. (4) The Barclays Capital (formerly Lehman Brothers) Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. Results for the Barclays Capital index do not reflect any expenses. (5) The Standard & Poor's (S&P) National Municipal Bond Index is an unleveraged, market value-weighted index designed to measure the performance of the investment-grade U.S. municipal bond market. 5 Key management factors that influenced the Funds' returns during this period included duration positioning, the use of inverse floaters, credit exposure and sector allocations. In addition, a major factor affecting each Fund's performance over this period was the use of leverage. The impact of leverage is discussed in more detail on page seven. Over the course of this reporting period, we saw the yield curve steepen, as interest rates at the short end of the curve declined and longer-term rates generally rose, especially during September and October. Given these changes in the interest rate environment, bonds in the Barclays Capital Municipal Bond Index with maturities of ten years or less generally outperformed the market as a whole and bonds maturing in one to four years benefited the most. In general, these shorter bonds outperformed credits with longer maturities, while bonds having the longest maturities (twenty-two years and longer) posted the worst returns. Among the New Jersey Funds, NQJ and NNJ had shorter durations than NXJ and NUJ, which benefited their performances relative to the latter two Funds. In NPY, which had the longest duration among the four Pennsylvania Funds, the impact of duration positioning caused the performance of this Fund to trail that of the other three. As mentioned earlier, all of the Funds except NUJ, NXM and NVY used inverse floaters during this period to help bring their durations closer to our strategic target and enhance income-generation capabilities. In general, these inverse floaters had a negative impact on performance. This resulted from the fact that the inverse floaters effectively increased the Funds' exposure to longer maturity bonds at a time when shorter maturities were in favor in the market. Credit exposure was also an important factor in performance during these past six months. Because risk-averse investors generally sought higher quality investments as disruptions in the financial markets deepened, bonds with higher credit quality ratings typically performed very well. At the same time, bonds rated BBB or below and non-rated bonds generally posted poor returns. As of October 31, 2008, the New Jersey Funds had weightings of bonds rated BBB or lower and non-rated bonds ranging from 13% to 22%, while the Pennsylvania Funds' allocations totaled approximately 10% to 20%. While the exposure to lower-rated credits had a negative impact on the Funds for this period, the overall higher credit quality of NNJ and NQP was a relatively positive factor in these Funds' six-month performances. Sectors of the market that generally contributed positively to the Funds' performances included general and limited tax obligation issues and resource recovery credits. Pre-refunded bonds(6), which are usually backed by U.S. Treasury securities, were one of the top performing segments of the market, due primarily to their shorter effective maturities, higher credit quality, and perceived safety. Among these Funds, NQP and NVY had the largest allocations of pre-refunded bonds as of October 31, 2008, while NXM held the smallest allocation. (6) Pre-refundings, also known as advance refundings or refinancings, occur when an issuer sells new bonds and uses the proceeds to fund principal and interest payments of older existing bonds. This process often results in lower borrowing costs for bond issuers. 6 In general, bonds that carried any credit risk, regardless of sector, posted weak performance. Revenue bonds as a whole, and the industrial development and housing sectors in particular, underperformed the general municipal market. The performance of the New Jersey Funds was helped during this period by the fact that they had underweighted the housing sector. Next to the industrial development revenue sector, zero coupon bonds were among the worst performing categories in the municipal market. The health care sector also performed poorly, as did lower-rated bonds backed by the 1998 master tobacco settlement agreement. IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE In addition to the factors mentioned above, one of the primary factors negatively impacting the six-month returns of these Funds relative to those of the unleveraged Barclays Capital Municipal Bond Index and S&P National Municipal Bond Index was the Funds'use of financial leverage. While leverage offers opportunities to generate additional income and total returns for common shareholders, the benefits provided by leveraging are influenced by the price movements of the bonds in each Fund's portfolio. During this period, as yields on longer-term bonds rose and their prices correspondingly fell, declining valuations had a negative effect on performance that was magnified by the use of leverage. In addition, at various points during the six-month period, the Funds' borrowing costs were relatively high, negatively impacting their total returns. RECENT DEVELOPMENTS IN THE MARKET ENVIRONMENT Beginning in October, the nation's financial institutions and financial markets--including the municipal bond market--experienced significant turmoil. Reductions in demand decreased valuations of municipal bonds across all credit ratings, especially those with lower credit ratings, and this generally reduced the Funds' net asset values. The municipal market is one in which dealer firms make markets in bonds on a principal basis using their proprietary capital, and during the recent market turmoil these firms'capital was severely constrained. As a result, some firms were unwilling to commit their capital to purchase and to serve as a dealer for municipal bonds. This reduction in dealer involvement in the market was accompanied by significant net selling pressure by investors, particularly with respect to lower-rated municipal bonds, as institutional investors generally removed money from the municipal bond market, at least in part because of their need to reduce the leveraging of their municipal investments. This de-leveraging was in part driven by the overall reduction in the amount of financing available for such leverage, the increased costs of such leverage financing, and the need to reduce leverage levels that had recently increased due to the decline in municipal bond prices. 7 Municipal bond prices were further negatively impacted by concerns that the need for further de-leveraging and a supply overhang as a large amount of new issues were postponed would cause selling pressure to persist for a period of time. In addition to falling prices, these market conditions resulted in greater price volatility of municipal bonds; wider credit spreads (i.e., lower quality bonds fell in price more than higher quality bonds); significantly reduced liquidity (i.e., the ability to sell bonds at a price close to their carrying value), particularly for lower quality bonds; and a lack of price transparency (i.e., the ability to accurately determine the price at which a bond would likely trade). Reduced liquidity was most pronounced in mid-October, and although liquidity improved considerably over ensuing weeks, it may reoccur if financial turmoil persists or worsens. RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES As mentioned earlier, another factor that had an impact on the performance of these Funds was their position in bonds backed by municipal bond insurers that experienced downgrades in their credit ratings. During the period covered by this report, ACA, AMBAC, CIFG, FGIC, MBIA, RAAI and SYNCORA (formerly XLCA) experienced one or more rating reductions by at least one or more rating agencies. Subsequent to the reporting period, AMBAC, MBIA and SYNCORA experienced further rating reductions while AGCand FSA received their first rating reduction by at least one rating agency. At the time this report was prepared, at least one rating agency has placed each of these insurers except AGC on "negative outlook" or "negative credit watch," which may presage one or more rating reductions for such insurer or insurers in the future. As concern increased about the balance sheets of these insurers, prices on bonds insured by these companies - especially those bonds with weaker underlying credits - declined, detracting from the Funds' performance. By the end of this period, most insured bond's were being valued according to their fundamentals as if they were uninsured. On the whole, the holdings of all of our Funds continued to be well diversified not only between insured and uninsured bonds, but also within the insured bond category. It is important to note that municipal bonds historically have had a very low rate of default. RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES MARKETS Beginning in February 2008, more shares for sale were submitted 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 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 8 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. At the time this report was prepared, the Funds' managers could not predict when future auctions might succeed in attracting sufficient buyers for the shares offered, if ever. The Funds' managers are working diligently to refund the auction preferred shares, and have made progress in these efforts, but at present there is no assurance that these efforts will succeed. These developments generally do not affect the management or investment policies of these Funds. 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. On June 11, 2008, Nuveen announced the Fund Board's approval of plans to use tender option bonds (TOBs), also known as floating rate securities, to refinance a portion of the municipal Funds' outstanding auction rate preferred shares, for which auctions have been failing for several months. This plan included an initial phase of approximately $1 billion in forty-one Funds. As of October 31, 2008, none of the Funds included in this shareholder report had issued par redemption notices for their auction rate preferred shares. On August 7, 2008, four Nuveen municipal Funds (none of which are included in this shareholder report) issued par redemption notices for all outstanding shares of their auction rate preferred shares totaling $569.9 million. These redemptions were achieved through the issuance of variable rate demand preferred shares (VRDP) in conjunction with the proceeds from the creation of TOBs. For current, up-to-date information, please visit the Nuveen CEF Auction Rate Preferred Resource Center at: http://www.nuveen.com/ResourceCenter/AuctionRatePreferred.aspx. 9 Common Share Dividend and Share Price INFORMATION During the six-month period ended October 31, 2008, there was one dividend increase in NQP, NPY, NXM and NVY, while the dividends of NQJ, NXJ and NUJ remained stable throughout the reporting period. In NNJ, however, the cost of leverage-related borrowing remained higher than in the other Funds. This impacted the incremental income available for dividends and led to one dividend cut in this Fund, effective October 2008. All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of October 31, 2008, all of the Funds in this report except NPY had negative UNII balances for financial statement purposes and positive UNII balances, based upon our best estimate, for tax purposes. NPY had a positive UNII balance for financial statement purposes and a positive UNII balance, based upon our best estimate, for tax purposes. The Funds' Board of Directors/Trustees approved an open-market share repurchase program on July 10, 2007, for NQP and NPY and on July 30, 2008, for NQJ, NNJ, NXJ, NUJ, NXM and NVY under which each Fund may repurchase up to 10% of its common shares. As of October 31, 2008, NQP and NPY had cumulatively repurchased 139,900 and 156,100 common shares, respectively, representing approximately 0.9% and 1.0% of each Fund's' total common shares outstanding, respectively. 10 As of October 31, 2008, the Funds' common share prices were trading at discounts to their common share NAVs as shown in the accompanying chart: 10/31/08 Six-Month Discount Average Discount NQJ -15.42% - 10.19% NNJ -15.09% - 10.36% NXJ -14.89% - 10.30% NUJ -10.45% - 7.06% NQP -15.17% - 12.12% NPY -17.84% - 12.91% NXM -10.63% - 9.40% NVY -16.42% - 9.79% 11 NQJ Performance OVERVIEW Nuveen New Jersey Investment Quality Municipal Fund, Inc. as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1) AAA/U.S. Guaranteed 32% AA 40% A 10% BBB 11% BB or Lower 1% N/R 6% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(3) Nov 0.0545 Dec 0.0545 Jan 0.0545 Feb 0.0545 Mar 0.0545 Apr 0.0545 May 0.0545 Jun 0.0545 Jul 0.0545 Aug 0.0545 Sep 0.0545 Oct 0.0545 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.19 13.19 13.03 12.46 12.63 12.89 13.0601 12.79 12.62 12.94 13.382 13.59 13.33 13.67 13.68 13.7 12.85 12.78 12.59 13 12.65 12.61 12.99 12.89 12.99 12.97 13.13 13.1 13.248 13.24 13.36 13.25 13.37 13.08 12.94 12.8799 12.76 12.83 12.85 12.44 12.59 12.67 12.68 12.71 12.76 12.76 12.66 12.15 11.2 10.79 8.1 9.54 10.7101 10/31/08 10.31 FUND SNAPSHOT ------------------------------------ Common Share Price $10.31 ------------------------------------ Common Share Net Asset Value $12.19 ------------------------------------ Premium/(Discount) to NAV -15.42% ------------------------------------ Market Yield 6.34% ------------------------------------ Taxable-Equivalent Yield(2) 9.41% ------------------------------------ Net Assets Applicable to Common Shares ($000) $249,796 ------------------------------------ Average Effective Maturity on Securities (Years) 15.95 ------------------------------------ Leverage-Adjusted Duration 13.22 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -19.07% -12.43% ------------------------------------ 1-Year -17.65% -12.56% ------------------------------------ 5-Year -1.94% 1.55% ------------------------------------ 10-Year 0.61% 3.66% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ Tax Obligation/Limited 22.6% ------------------------------------ Transportation 16.8% ------------------------------------ U.S. Guaranteed 14.2% ------------------------------------ Health Care 14.0% ------------------------------------ Education and Civic Organizations 10.9% ------------------------------------ Water and Sewer 5.6% ------------------------------------ Tax Obligation/General 4.8% ------------------------------------ Other 11.1% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.6%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (3) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0299 per share. 12 NNJ Performance OVERVIEW Nuveen New Jersey Premium Income Municipal Fund, Inc. as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1),(2) AAA/U.S. Guaranteed 33% AA 42% A 12% BBB 9% BB or Lower 1% N/R 3% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(4) Nov 0.0545 Dec 0.0545 Jan 0.0545 Feb 0.0545 Mar 0.0545 Apr 0.0545 May 0.0545 Jun 0.0545 Jul 0.0545 Aug 0.0545 Sep 0.0545 Oct 0.0515 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.6 13.52 13.27 12.95 12.92 13.196 13.35 13.34 13.05 13.3 13.85 14.08 13.71 14.1 13.96 14.05 13.3 13.14 13.12 13.21 12.97 13.09 13.14 13.3 13.28 13.34 13.48 13.48 13.6 13.58 13.64 13.61 13.597 13.21 13.01 13.01 13 13.07 12.95 12.85 12.78 12.977 12.97 12.8 13.14 13.12 12.85 12.86 11.75 11.15 8.24 9.78 10.85 10/31/08 10.86 FUND SNAPSHOT ------------------------------------ Common Share Price $10.86 ------------------------------------ Common Share Net Asset Value $12.79 ------------------------------------ Premium/(Discount) to NAV -15.09% ------------------------------------ Market Yield 5.69% ------------------------------------ Taxable-Equivalent Yield(3) 8.44% ------------------------------------ Net Assets Applicable to Common Shares ($000) $154,101 ------------------------------------ Average Effective Maturity on Securities (Years) 14.35 ------------------------------------ Leverage-Adjusted Duration 12.69 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/17/92) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -17.31% -10.59% ------------------------------------ 1-Year -15.32% -10.28% ------------------------------------ 5-Year -1.47% 1.57% ------------------------------------ 10-Year 1.82% 3.92% ------------------------------------ INDUSTRIES (as a % of total investments)(2) ------------------------------------ Tax Obligation/Limited 27.0% ------------------------------------ U.S. Guaranteed 17.2% ------------------------------------ Health Care 12.7% ------------------------------------ Transportation 12.3% ------------------------------------ Education and Civic Organizations 9.8% ------------------------------------ Water and Sewer 9.0% ------------------------------------ Tax Obligation/General 6.5% ------------------------------------ Other 5.5% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Excluding derivative transactions. (3) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.6%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (4) The Fund paid shareholders capital gains and net ordinary income distributions in December 2007 of $0.0413 and $0.0008 per share, respectively. 13 NXJ Performance OVERVIEW Nuveen New Jersey Dividend Advantage Municipal Fund as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1) AAA/U.S. Guaranteed 25% AA 37% A 16% BBB 16% BB or Lower 2% N/R 4% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(3) Nov 0.055 Dec 0.055 Jan 0.055 Feb 0.055 Mar 0.055 Apr 0.055 May 0.055 Jun 0.055 Jul 0.055 Aug 0.055 Sep 0.055 Oct 0.055 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.52 13.41 13.08 12.7 12.88 12.95 13.15 12.92 12.89 12.93 13.64 13.7 13.46 13.74 13.5 13.7 12.9 12.9 12.6 12.98 12.62 12.39 12.798 12.96 13.02 13 13 13.2 13.36 13.25 13.27 13.37 13.3 12.94 12.85 12.65 12.65 12.63 12.62 12.5 12.58 12.55 12.55 12.44 12.68 12.56 12.48 11.95 11.03 10.618 8.1 9.74 10.3 10/31/08 10.23 FUND SNAPSHOT ------------------------------------ Common Share Price $10.23 ------------------------------------ Common Share Net Asset Value $12.02 ------------------------------------ Premium/(Discount) to NAV -14.89% ------------------------------------ Market Yield 6.45% ------------------------------------ Taxable-Equivalent Yield(2) 9.57% ------------------------------------ Net Assets Applicable to Common Shares ($000) $79,085 ------------------------------------ Average Effective Maturity on Securities (Years) 16.01 ------------------------------------ Leverage-Adjusted Duration 14.35 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -19.78% -13.62% ------------------------------------ 1-Year -20.26% -14.28% ------------------------------------ 5-Year -1.96% 1.32% ------------------------------------ Since Inception 0.68% 3.38% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ Tax Obligation/Limited 23.2% ------------------------------------ U.S. Guaranteed 16.0% ------------------------------------ Health Care 14.4% ------------------------------------ Water and Sewer 13.3% ------------------------------------ Transportation 12.2% ------------------------------------ Education and Civic Organizations 12.0% ------------------------------------ Other 8.9% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.6%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (3) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0269 per share. 14 NUJ Performance OVERVIEW Nuveen New Jersey Dividend Advantage Municipal Fund 2 as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1) AAA/U.S. Guaranteed 30% AA 33% A 19% BBB 12% BB or Lower 4% N/R 2% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(3) Nov 0.0575 Dec 0.0575 Jan 0.0575 Feb 0.0575 Mar 0.0575 Apr 0.0575 May 0.0575 Jun 0.0575 Jul 0.0575 Aug 0.0575 Sep 0.0575 Oct 0.0575 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.98 13.94 13.66 13.45 13.3499 13.58 13.81 13.49 13.34 13.26 13.95 14.2 13.98 14.12 14.4599 14.24 13.4999 13.27 13.05 13.2 12.99 12.99 13.34 13.45 13.43 13.49 13.51 13.6 13.6 13.7 13.96 13.87 14.35 13.5 13.4 13.4 13.059 13.42 13.26 13.01 13.04 12.98 13.15 13.25 13.57 13.55 13.18 12.85 11.9 11.2 8.25 9.78 10.8 10/31/08 10.8 FUND SNAPSHOT ------------------------------------ Common Share Price $10.80 ------------------------------------ Common Share Net Asset Value $12.06 ------------------------------------ Premium/(Discount) to NAV -10.45% ------------------------------------ Market Yield 6.39% ------------------------------------ Taxable-Equivalent Yield(2) 9.48% ------------------------------------ Net Assets Applicable to Common Shares ($000) $54,539 ------------------------------------ Average Effective Maturity on Securities (Years) 15.97 ------------------------------------ Leverage-Adjusted Duration 13.96 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -18.32% -13.79% ------------------------------------ 1-Year -18.36% -14.38% ------------------------------------ 5-Year -0.68% 1.66% ------------------------------------ Since Inception 0.98% 3.37% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ Health Care 19.4% ------------------------------------ Tax Obligation/Limited 19.0% ------------------------------------ U.S. Guaranteed 18.4% ------------------------------------ Transportation 15.4% ------------------------------------ Education and Civic Organizations 9.9% ------------------------------------ Long-Term Care 5.9% ------------------------------------ Other 12.0% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.6%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (3) The Fund paid shareholders a capital gains distribution in December 2007 of $0.1515 per share. 15 NQP Performance OVERVIEW Nuveen Pennsylvania Investment Quality Municipal Fund as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1) AAA/U.S. Guaranteed 40% AA 42% A 8% BBB 9% N/R 1% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share Nov 0.055 Dec 0.055 Jan 0.055 Feb 0.055 Mar 0.055 Apr 0.055 May 0.055 Jun 0.055 Jul 0.055 Aug 0.055 Sep 0.057 Oct 0.057 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.39 13.46 12.96 12.65 12.64 12.74 13.01 12.95 12.64 12.93 13.54 13.72 13.42 13.67 13.57 13.52 12.92 12.73 12.39 12.88 12.57 12.38 12.76 12.9 12.92 13.23 13.09 13.154 13.11 13.16 13.19 13.05 12.93 12.7 12.57 12.57 12.63 12.59 12.4401 12.25 12.25 12.25 12.19 12.105 12.23 12.35 12.24 11.58 10.67 10.25 7.66 9.03 10.29 10/31/08 10.286 FUND SNAPSHOT ------------------------------------ Common Share Price $10.29 ------------------------------------ Common Share Net Asset Value $12.13 ------------------------------------ Premium/(Discount) to NAV -15.17% ------------------------------------ Market Yield 6.65% ------------------------------------ Taxable-Equivalent Yield(2) 9.53% ------------------------------------ Net Assets Applicable to Common Shares ($000) $196,081 ------------------------------------ Average Effective Maturity on Securities (Years) 15.40 ------------------------------------ Leverage-Adjusted Duration 15.13 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -19.21% -13.60% ------------------------------------ 1-Year -19.51% -14.11% ------------------------------------ 5-Year -1.96% 0.58% ------------------------------------ 10-Year 0.50% 3.09% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ U.S. Guaranteed 21.4% ------------------------------------ Education and Civic Organizations 19.2% ------------------------------------ Tax Obligation/General 16.3% ------------------------------------ Health Care 8.2% ------------------------------------ Transportation 7.8% ------------------------------------ Tax Obligation/Limited 6.0% ------------------------------------ Housing/Single Family 5.6% ------------------------------------ Water and Sewer 4.1% ------------------------------------ Other 11.4% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30.2%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 16 NPY Performance OVERVIEW Nuveen Pennsylvania Premium Income Municipal Fund 2 as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments(1) AAA/U.S. Guaranteed 34% AA 39% A 9% BBB 11% BB or Lower 3% N/R 4% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(3) Nov 0.0495 Dec 0.0495 Jan 0.0495 Feb 0.0495 Mar 0.0495 Apr 0.0495 May 0.0495 Jun 0.0495 Jul 0.0495 Aug 0.0495 Sep 0.052 Oct 0.052 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 12.63 12.64 12.34 11.94 12.13 12.31 12.41 12.21 12.07 12.34 12.77 12.93 12.71 12.84 12.85 12.87 12.23 12.23 11.83 12.1 11.92 11.8 12.05 12.25 12.15 12.35 12.35 12.26 12.28 12.4 12.36 12.32 12.37 12.13 11.83 11.8999 12.06 11.93 11.71 11.48 11.53 11.53 11.53 11.537 11.59 11.73 11.52 11.26 10.14 9.89 7.2 8.36 9.39 10/31/08 9.35 FUND SNAPSHOT ------------------------------------ Common Share Price $9.35 ------------------------------------ Common Share Net Asset Value $11.38 ------------------------------------ Premium/(Discount) to NAV -17.84% ------------------------------------ Market Yield 6.67% ------------------------------------ Taxable-Equivalent Yield(2) 9.56% ------------------------------------ Net Assets Applicable to Common Shares ($000) $178,257 ------------------------------------ Average Effective Maturity on Securities (Years) 16.28 ------------------------------------ Leverage-Adjusted Duration 15.38 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -21.86% -15.21% ------------------------------------ 1-Year -21.85% -16.57% ------------------------------------ 5-Year -3.28% -0.04% ------------------------------------ 10-Year 1.96% 3.07% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ U.S. Guaranteed 15.4% ------------------------------------ Education and Civic Organizations 15.1% ------------------------------------ Transportation 12.8% ------------------------------------ Tax Obligation/General 10.6% ------------------------------------ Utilities 8.9% ------------------------------------ Health Care 8.7% ------------------------------------ Water and Sewer 7.8% ------------------------------------ Tax Obligation/Limited 5.8% ------------------------------------ Other 14.9% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30.2%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (3) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0439 per share. 17 NXM Performance OVERVIEW Nuveen Pennsylvania Dividend Advantage Municipal Fund as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments(1) AAA/U.S. Guaranteed 26% AA 41% A 13% BBB 10% BB or Lower 5% N/R 5% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Common Share(3) Nov 0.057 Dec 0.057 Jan 0.057 Feb 0.057 Mar 0.057 Apr 0.057 May 0.057 Jun 0.057 Jul 0.057 Aug 0.057 Sep 0.0585 Oct 0.0585 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.52 13.5006 13.43 12.93 12.95 13.1399 13.45 13.03 12.92 13.16 13.76 13.92 13.8 13.77 13.82 13.72 13.33 13.59 13.0101 13.07 12.82 13 13.3 13.2 13.27 13.63 13.79 13.7 13.96 13.85 13.65 13.58 13.48 13.1 13.06 12.99 13.1 12.94 13.24 13.05 12.78 12.67 12.51 12.51 12.67 12.84 12.61 11.84 11.476 11.56 9.43 9.63 10.69 10/31/08 10.76 FUND SNAPSHOT ------------------------------------ Common Share Price $10.76 ------------------------------------ Common Share Net Asset Value $12.04 ------------------------------------ Premium/(Discount) to NAV -10.63% ------------------------------------ Market Yield 6.52% ------------------------------------ Taxable-Equivalent Yield(2) 9.34% ------------------------------------ Net Assets Applicable to Common Shares ($000) $40,117 ------------------------------------ Average Effective Maturity on Securities (Years) 17.15 ------------------------------------ Leverage-Adjusted Duration 14.15 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -18.70% -14.66% ------------------------------------ 1-Year -16.34% -15.32% ------------------------------------ 5-Year -0.77% 0.93% ------------------------------------ Since Inception 1.92% 4.00% ------------------------------------ INDUSTRIES (as a % of total investments) ------------------------------------ Education and Civic Organizations 18.1% ------------------------------------ Health Care 14.3% ------------------------------------ Long-Term Care 11.5% ------------------------------------ U.S. Guaranteed 10.7% ------------------------------------ Tax Obligation/Limited 9.5% ------------------------------------ Tax Obligation/General 9.0% ------------------------------------ Transportation 7.8% ------------------------------------ Housing/Single Family 5.1% ------------------------------------ Other 14.0% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30.2%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (3) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0516 per share. 18 NVY Performance OVERVIEW Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 as of October 31, 2008 Pie Chart: Credit Quality (as a % of total investments)(1),(2) AAA/U.S. Guaranteed 28% AA 46% A 9% BBB 8% BB or Lower 4% N/R 5% Bar Chart: 2007-2008 Monthly Tax-Free Dividends Per Share(4) Nov 0.0575 Dec 0.0575 Jan 0.0575 Feb 0.0575 Mar 0.0575 Apr 0.0575 May 0.0575 Jun 0.0575 Jul 0.0575 Aug 0.0575 Sep 0.0585 Oct 0.0585 Line Chart: Common Share Price Performance -- Weekly Closing Price 11/01/07 13.6 13.58 13.23 13.18 13.15 13.32 13.5001 13.06 13.29 13.18 13.81 14.02 14.22 14.22 14.64 14.4 13.92 14 13.2 13.7 13.17 13.16 13.42 13.68 13.48 13.52 13.64 13.51 13.82 13.85 13.58 13.59 13.58 13.04 12.82 12.78 13.06 12.71 12.69 12.78 12.76 12.56 12.51 12.63 12.7 12.82 12.86 11.85 11.05 11.139 7.8 9.73 10.17 10/31/08 10.33 FUND SNAPSHOT ------------------------------------ Common Share Price $10.33 ------------------------------------ Common Share Net Asset Value $12.36 ------------------------------------ Premium/(Discount) to NAV -16.42% ------------------------------------ Market Yield 6.80% ------------------------------------ Taxable-Equivalent Yield(3) 9.74% ------------------------------------ Net Assets Applicable to Common Shares ($000) $46,056 ------------------------------------ Average Effective Maturity on Securities (Years) 14.37 ------------------------------------ Leverage-Adjusted Duration 12.68 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 6-Month (Cumulative) -20.67% -12.52% ------------------------------------ 1-Year -19.85% -13.26% ------------------------------------ 5-Year -1.33% 1.39% ------------------------------------ Since Inception 0.28% 3.53% ------------------------------------ INDUSTRIES (as a % of total investments)(2) ------------------------------------ U.S. Guaranteed 21.1% ------------------------------------ Tax Obligation/Limited 15.8% ------------------------------------ Tax Obligation/General 13.9% ------------------------------------ Education and Civic Organizations 12.3% ------------------------------------ Health Care 9.6% ------------------------------------ Water and Sewer 5.8% ------------------------------------ Long-Term Care 4.4% ------------------------------------ Industrials 4.1% ------------------------------------ Other 13.0% ------------------------------------ (1) The percentages shown in the foregoing chart may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (2) Excluding derivative transactions. (3) Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30.2%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. (4) The Fund paid shareholders a capital gains distribution in December 2007 of $0.0487 per share. 19 NQJ Nuveen New Jersey Investment Quality Municipal Fund, Inc. Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 41.4%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 27 NNJ Nuveen New Jersey Premium Income Municipal Fund, Inc. Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Portion of investment has been pledged to collateralize the net payment obligations under futures contracts. (5) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (6) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 38.6%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 34 NXJ Nuveen New Jersey Dividend Advantage Municipal Fund Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 39.5%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 40 NUJ Nuveen New Jersey Dividend Advantage Municipal Fund 2 Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 39.9%. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 46 NQP Nuveen Pennsylvania Investment Quality Municipal Fund Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 39.6%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 53 NPY Nuveen Pennsylvania Premium Income Municipal Fund 2 Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 41.5%. N/R Not rated. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 60 NXM Nuveen Pennsylvania Dividend Advantage Municipal Fund Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's) rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (5) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 39.4%. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 66 NVY Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 Portfolio of INVESTMENTS October 31, 2008 (Unaudited)

71 NVY Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS October 31, 2008 (Unaudited) FUTURES CONTRACTS OUTSTANDING AT OCTOBER 31, 2008:

(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic principal paydowns. (3) Ratings: Using the higher of Standard & Poor's Group ("Standard & Poor's") or Moody's Investor Service, Inc. ("Moody's") rating. Ratings below BBB by Standard & Poor's or Baa by Moody's are considered to be below investment grade. The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AGC, AMBAC, CIFG, FGIC, FSA, MBIA, RAAI and SYNCORA as of October 31, 2008. Please see the Portfolio Manager's Commentary for an expanded discussion of the affect on the Fund of changes to the ratings of certain bonds in the portfolio resulting from changes to the ratings of the underlying insurers both during the period and after period end. (4) Portion of investment has been pledged to collateralize the net payment obligations under futures contracts. (5) Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensure the timely payment of principal and interest. Such investments are normally considered to be equivalent to AAA rated securities. (6) Preferred Shares, at Liquidation Value as a percentage of Total Investments is 38.5%. N/R Not rated. (ETM) Escrowed to maturity. See accompanying notes to financial statements. 72 Statement of ASSETS & LIABILITIES October 31, 2008 (Unaudited)

See accompanying notes to financial statements. 73 Statement of ASSETS & LIABILITIES (continued) October 31, 2008 (Unaudited)

See accompanying notes to financial statements. 74 Statement of OPERATIONS Six Months Ended October 31, 2008 (Unaudited)

See accompanying notes to financial statements. 75 Statement of OPERATIONS (continued) Six Months Ended October 31, 2008 (Unaudited)

See accompanying notes to financial statements. 76 Statement of CHANGES in NET ASSETS (Unaudited)

See accompanying notes to financial statements. 77 Statement of CHANGES in NET ASSETS (continued) (Unaudited)

See accompanying notes to financial statements. 78

See accompanying notes to financial statements. 79 Statement of CHANGES in NET ASSETS (continued) (Unaudited)

See accompanying notes to financial statements. 80 Notes to FINANCIAL STATEMENTS (Unaudited) 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The state funds covered in this report and their corresponding Common share stock exchange symbols are Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ), Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ), Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ), Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ), Nuveen Pennsylvania Investment Quality Municipal Fund (NQP), Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY), Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) and Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY) (collectively, the "Funds"). Common shares of New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), Pennsylvania Investment Quality (NQP) and Pennsylvania Premium Income 2 (NPY) are traded on the New York Stock Exchange while Common shares of New Jersey Dividend Advantage (NXJ), New Jersey Dividend Advantage 2 (NUJ), Pennsylvania Dividend Advantage (NXM) and Pennsylvania Dividend Advantage 2 (NVY) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end management investment companies. Each Fund seeks to provide current income exempt from both regular federal and designated state income taxes by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state or certain U.S. territories. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Investment Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When market price quotes are not readily available (which is usually the case for municipal securities), the pricing service may establish fair value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. Prices of forward swap contracts are also provided by an independent pricing service approved by each Fund's Board of Directors/Trustees. Futures contracts are valued using the closing settlement price, or, in the absence of such a price, at the mean of the bid and asked prices. If the pricing service is unable to supply a price for an investment or derivative instrument, each Fund may use market quotes provided by major broker/dealers in such investments. If it is determined that the market price for an investment or derivative instrument is unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish fair value in accordance with procedures established in good faith by the Board of Directors/Trustees. Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates value. Investment Transactions Investment transactions are recorded on a trade date basis. Realized gains and losses from 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 Funds have 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 October 31, 2008, there were no such outstanding purchase commitments in any of the Funds. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. 81 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. Effective October 31, 2007, the Funds adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the affirmative evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether it is "more-likely-than-not" (i.e., a greater than 50-percent likelihood) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold may result in a tax expense in the current year. Implementation of FIN 48 required management of the Funds to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. 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). The Funds have no examinations in progress. For all open tax years and all major taxing jurisdictions through the end of the reporting period, management of the Funds has reviewed all tax positions taken or expected to be taken in the preparation of the Funds' tax returns and concluded the adoption of FIN 48 resulted in no impact to the Funds' net assets or results of operations as of and during the six months ended October 31, 2008. The Funds are 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 Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. 82 Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in one or more Series. The dividend rate paid by the Funds on each Series 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. As of October 31, 2008, the number of Preferred shares outstanding, by Series and in total, for each Fund is as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) -------------------------------------------------------------------------------- Number of shares: Series M 3,200 -- -- -- Series T -- 624 1,920 -- Series W -- 1,440 -- 1,380 Series TH 2,000 1,600 -- -- Series F 1,280 -- -- -- -------------------------------------------------------------------------------- Total 6,480 3,664 1,920 1,380 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) -------------------------------------------------------------------------------- Number of shares: Series M -- 844 -- 1,140 Series T 880 -- 1,000 -- Series W 2,400 -- -- -- Series TH 2,000 2,080 -- -- Series F -- 1,800 -- -- -------------------------------------------------------------------------------- Total 5,280 4,724 1,000 1,140 ================================================================================ Beginning in February 2008, more shares for sale were submitted in the regularly scheduled auctions for the Preferred shares issued by the Funds than there were offers to buy. This meant that these auctions "failed to clear," and that many Preferred shareholders who wanted to sell their shares in these auctions were unable to do so. 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 Preferred shares. These developments generally do not affect the management or investment policies of the Funds. 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. On June 11, 2008, Nuveen Investments, Inc. ("Nuveen") announced the Fund Board's approval of plans to use tender option bonds (TOBs), also known as "floaters" or floating rate obligations, to refinance a portion of the municipal funds' outstanding Preferred shares, whose auctions have been failing for several months. The plan included an initial phase of approximately $1 billion in forty-one funds. The Funds did not redeem any of their Preferred shares during the six months ended October 31, 2008. Inverse Floating Rate Securities Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond's par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an "inverse floater") that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond's downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond's value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond. 83 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an "externally-deposited inverse floater"), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a "self-deposited inverse floater"). The inverse floater held by a Fund gives the Fund the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as an "Inverse floating rate investment". An investment in a self-deposited inverse floater is accounted for as a financing transaction in accordance with Statement of Financial Accounting Standards No. 140 (SFAS No. 140) "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as an "Underlying bond of an inverse floating rate trust", with the Fund accounting for the short-term floating rate certificates issued by the trust as "Floating rate obligations" on the Statement of Assets and Liabilities. In addition, the Fund reflects in Investment Income the entire earnings of the underlying bond and the related interest paid to the holders of the short-term floating rate certificates is included as "Interest expense on floating rate obligations" on the Statement of Operations. Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a "recourse trust" or "credit recovery swap") (such agreements referred to herein as "Recourse Trusts") with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates issued by the trust plus any shortfalls in interest cash flows. Under these agreements, a Fund's potential exposure to losses related to or on inverse floaters may increase beyond the value of a Fund's inverse floater investments as a Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates. At period end, any such shortfall is included as "Unrealized depreciation on Recourse Trusts" on the Statement of Assets and Liabilities. During the six months ended October 31, 2008, New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), New Jersey Dividend Advantage (NXJ), Pennsylvania Investment Quality (NQP) and Pennsylvania Premium Income 2 (NPY) invested in externally deposited inverse floaters and/or self-deposited inverse floaters. New Jersey Dividend Advantage 2 (NUJ), Pennsylvania Dividend Advantage (NXM) and Pennsylvania Dividend Advantage 2 (NVY) did not invest in any such instruments during the six months ended October 31, 2008. At October 31, 2008, the Funds were not invested in any externally-deposited Recourse Trusts. NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) -------------------------------------------------------------------------------- Maximum exposure $ -- $ -- $ -- $ -- ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) -------------------------------------------------------------------------------- Maximum exposure $ -- $ -- $ -- $ -- ================================================================================ 84 The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters during the six months ended October 31, 2008, were as follows: PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM QUALITY INCOME 2 (NQP) (NPY) -------------------------------------------------------------------------------- Average floating rate obligations $21,652,391 $6,220,272 Average annual interest rate and fees 2.63% 2.69% ================================================================================ Forward Swap Transactions Each Fund is authorized to invest in forward interest rate swap transactions. Each Fund's use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed rate payment, the accruals for which would begin at a specified date in the future (the "effective date"). The amount of the payment obligation is based on the notional amount of the forward swap contract and the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is recognized. When a forward swap is terminated, it ordinarily does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated, to terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To reduce such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. None of the Funds invested in forward interest rate swap transactions during the six months ended October 31, 2008. Futures Contracts Each Fund is authorized to invest in futures contracts. Upon entering into a futures contract, a Fund is required to deposit with the broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by a Fund each day, depending on the daily fluctuation of the value of the contract. During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by "marking-to-market" on a daily basis to reflect the changes in market value of the contract. When the contract is closed or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into. Cash held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized on the Statement of Assets and Liabilities. Additionally, the Statement of Assets and Liabilities reflects a receivable or payable for the variation margin, when applicable. New Jersey Premium Income (NNJ) and Pennsylvania Dividend Advantage 2 (NVY) invested in futures contracts during the six months ended October 31, 2008. Risks of investments in futures contracts include the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities or indices. Zero Coupon Securities Each Fund is authorized to invest in zero coupon securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the Portfolios of Investments with a 0.000% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. 85 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which a Fund overdraws its account at the custodian bank. Indemnifications Under the Funds' organizational documents, their Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FAIR VALUE MEASUREMENTS During the current fiscal period, the Funds 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 each Fund's 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 management's 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 each Fund's fair value measurements as of October 31, 2008:

* Represents net unrealized appreciation (depreciation). 86

* Represents net unrealized appreciation (depreciation). 3. FUND SHARES Common Shares The Board of Directors/Trustees approved an open-market share repurchase program on July 10, 2007, for Pennsylvania Investment Quality (NQP) and Pennsylvania Premium Income 2 (NPY) and on July 31, 2008 for New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), New Jersey Dividend Advantage (NXJ), New Jersey Dividend Advantage 2 (NUJ), Pennsylvania Dividend Advantage (NXM) and Pennsylvania Dividend Advantage 2 (NVY) under which each Fund may repurchase an aggregate of up to 10% of its outstanding Common shares. Transactions in Common shares were as follows:

87 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) 4. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the six months ended October 31, 2008, were as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) -------------------------------------------------------------------------------- Purchases $ 3,899,750 $3,114,075 $ 575,565 $ 197,894 Sales and maturities 14,148,446 4,443,224 4,156,246 1,240,380 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) -------------------------------------------------------------------------------- Purchases $12,630,271 $17,981,782 $2,603,507 $3,067,058 Sales and maturities 19,553,397 24,127,616 3,799,002 2,075,670 ================================================================================ 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 timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No.140. 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 values of the Funds. At October 31, 2008, the cost of investments was as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) -------------------------------------------------------------------------------- Cost of investments $432,718,329 $255,999,509 $136,345,802 $96,398,190 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) -------------------------------------------------------------------------------- Cost of investments $340,975,953 $317,092,453 $70,622,392 $80,754,640 ================================================================================ 88 Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2008, were as follows:

The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at April 30, 2008, the Funds' last tax year end, were as follows:

* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on April 1, 2008, paid on May 1, 2008. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 89 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) The tax character of distributions paid during the Funds' last tax year ended April 30, 2008, was designated for purposes of the dividends paid deduction as follows:

** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. At April 30, 2008, the Funds' last tax year end, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows: PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM QUALITY INCOME 2 (NQP) (NPY) -------------------------------------------------------------------------------- Expiration: April 30, 2014 $124,650 $ -- April 30, 2015 170,887 -- April 30, 2016 217,013 840,338 -------------------------------------------------------------------------------- Total $512,550 $840,338 ================================================================================ The following Funds have elected to defer net realized losses from investments incurred from November 1, 2007 through April 30, 2008, the Funds' last tax year end, ("post-October losses") in accordance with federal income tax regulations. Post-October losses are treated as having arisen on the first day of the current fiscal year: PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND QUALITY INCOME 2 ADVANTAGE (NQP) (NPY) (NXM) -------------------------------------------------------------------------------- Post-October capital losses $2,297,704 $659,889 $116,226 ================================================================================ 6. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Each Fund's 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, and a specific fund-level component, based only on the amount of assets within each individual Fund. This pricing structure enables Nuveen 90 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, for each Fund is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: NEW JERSEY INVESTMENT QUALITY (NQJ) NEW JERSEY PREMIUM INCOME (NNJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA INVESTMENT QUALITY (NQP) (INCLUDING NET ASSETS PENNSYLVANIA PREMIUM INCOME 2 (NPY) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ NEW JERSEY DIVIDEND ADVANTAGE (NXJ) NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) (INCLUDING NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================ 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 October 31, 2008, the complex-level fee rate was .1998%. 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 but to exclude assets attributable to investments in other Nuveen funds. 91 Notes to FINANCIAL STATEMENTS (continued) (Unaudited) The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to its Officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds. For the first ten years of New Jersey Dividend Advantage's (NXJ) and Pennsylvania Dividend Advantage's (NXM) operations, the Adviser has agreed to reimburse the Funds, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, ------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse New Jersey Dividend Advantage (NXJ) and Pennsylvania Dividend Advantage (NXM) for any portion of their fees and expenses beyond March 31, 2011. For the first ten years of New Jersey Dividend Advantage 2's (NUJ) and Pennsylvania Dividend Advantage 2's (NVY) operations, the Adviser has agreed to reimburse the Funds, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse New Jersey Dividend Advantage 2 (NUJ) and Pennsylvania Dividend Advantage 2 (NVY) for any portion of their fees and expenses beyond March 31, 2012. 92 7. 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 fund's 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 October 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. 8. SUBSEQUENT EVENTS Distributions to Common Shareholders The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2008, to shareholders of record on November 15, 2008, as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) -------------------------------------------------------------------------------- Dividend per share $.0545 $.0515 $.0550 $.0575 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) -------------------------------------------------------------------------------- Dividend per share $.0570 $.0520 $.0585 $.0585 ================================================================================ 93 Financial HIGHLIGHTS (Unaudited) Selected data for a Common share outstanding throughout each period:

Preferred Shares at End of Period -------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ==================================================== PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) ---------------------------------------------------- Year Ended 4/30: 2009(b) $25,000 $25,000 $65,117 2008 25,000 25,000 73,211 2007(c) 25,000 25,000 76,160 Year Ended 6/30: 2006 25,000 25,000 74,660 2005 25,000 25,000 77,712 2004 25,000 25,000 75,549 2003 25,000 25,000 78,591 PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) ---------------------------------------------------- Year Ended 4/30: 2009(b) 28,500 25,000 65,400 2008 28,500 25,000 72,366 2007(c) 28,500 25,000 75,124 Year Ended 6/30: 2006 28,500 25,000 73,769 2005 28,500 25,000 76,907 2004 28,500 25,000 73,570 2003 28,500 25,000 76,932 ==================================================== * Total Return Based on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized. Total Return Based on 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 Fund's market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. ** 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 Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares. (a) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. (b) For the six months ended October 31, 2008. (c) For the ten months ended April 30, 2007. See accompanying notes to financial statements. 100-101 spread Annual Investment Management Agreement APPROVAL PROCESS The Investment Company Act of 1940, as amended (the "1940 Act"), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuance is approved at least annually by the fund's board members, including by a vote of a majority of the board members who are not parties to the advisory agreement or "interested persons" of any parties (the "Independent Board Members"), cast in person at a meeting called for the purpose of considering such approval. In connection with such approvals, the fund's board members must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. Accordingly, at a meeting held on May 28-29, 2008 (the "May Meeting"), the Boards of Trustees or Directors (as the case may be)(each, a "Board" and each Trustee or Director, a "Board Member") of the Funds, including a majority of the Independent Board Members, considered and approved the continuation of the advisory agreement (each, an "Advisory Agreement") between each Fund and Nuveen Asset Management ("NAM") for an additional one-year period. In preparation for their considerations at the May Meeting, the Board also held a separate meeting on April 23, 2008 (the "April Meeting"). Accordingly, the factors considered and determinations made regarding the renewals by the Independent Board Members include those made at the April Meeting. In addition, in evaluating the Advisory Agreements, as described in further detail below, the Independent Board Members reviewed a broad range of information relating to the Funds and NAM, including absolute performance, fee and expense information for the Funds as well as comparative performance, fee and expense information for a comparable peer group of funds, the performance information of recognized benchmarks (as applicable), the profitability of Nuveen for its advisory activities (which includes its wholly owned subsidiaries), and other information regarding the organization, personnel, and services provided by NAM. The Independent Board Members also met quarterly as well as at other times as the need arose during the year and took into account the information provided at such meetings and the knowledge gained therefrom. Prior to approving the renewal of the Advisory Agreements, the Independent Board Members reviewed the foregoing information with their independent legal counsel and with management, reviewed materials from independent legal counsel describing applicable law and their duties in reviewing advisory contracts, and met with independent legal counsel in private sessions without management present. The Independent Board Members considered the legal advice provided by independent legal counsel and relied upon their knowledge of NAM, its services and the Funds resulting from their meetings and other interactions throughout the year and their own business judgment in determining the factors to be considered in evaluating the Advisory Agreements. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund's Advisory Agreement. The Independent Board Members did not identify any single factor as all-important or controlling. The Independent Board Members' considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below. 102 A. NATURE, EXTENT AND QUALITY OF SERVICES In considering renewal of the Advisory Agreements, the Independent Board Members considered the nature, extent and quality of NAM's services, including advisory services and administrative services. The Independent Board Members reviewed materials outlining, among other things, NAM's organization and business; the types of services that NAM or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives Nuveen had taken for the applicable fund product line. With respect to personnel, the Independent Board Members evaluated the background, experience and track record of NAM's investment personnel. In this regard, the Independent Board Members considered the additional investment in personnel to support Nuveen fund advisory activities, including in operations, product management and marketing as well as related fund support functions, including sales, executive, finance, human resources and information technology. The Independent Board Members also reviewed information regarding portfolio manager compensation arrangements to evaluate NAM's ability to attract and retain high quality investment personnel. In evaluating the services of NAM, the Independent Board Members also considered NAM's ability to supervise the Funds' other service providers and given the importance of compliance, NAM's compliance program. Among other things, the Independent Board Members considered the report of the chief compliance officer regarding the Funds' compliance policies and procedures. In addition to advisory services, the Independent Board Members considered the quality of administrative services provided by NAM and its affiliates including product management, fund administration, oversight of service providers, shareholder services, administration of Board relations, regulatory and portfolio compliance and legal support. In addition to the foregoing services, the Independent Board Members also noted the additional services that NAM or its affiliates provide to closed-end funds, including, in particular, its secondary market support activities and the costs of such activities. The Independent Board Members recognized Nuveen's continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of programs designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include maintaining an investor relations program to timely provide information and education to financial advisers and investors; providing advertising and marketing for the closed-end funds; maintaining its closed-end fund website; and providing educational seminars. With respect to closed-end funds that utilize leverage through the issuance of auction rate preferred securities ("ARPS"), the Board has recognized the unprecedented market conditions in the auction rate market industry with the failure of the auction process. The Independent Board Members noted Nuveen's efforts and the resources and personnel employed to analyze the situation, explore potential alternatives and develop and implement solutions that serve the interests of the affected funds and all of their respective shareholders. The Independent Board Members further noted Nuveen's commitment and efforts to keep investors and financial advisers informed as to its progress in addressing the ARPS situation through, among other things, conference calls, press releases, and information posted on its website as well as its refinancing activities. The Independent Board Members also noted Nuveen's continued support for holders of preferred shares of its closed-end funds by, among other things, seeking distribution for preferred shares with new market participants, managing relations with remarketing agents and the broker community, maintaining the leverage and risk management of leverage and maintaining systems necessary to test compliance with rating agency criteria. Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Advisory Agreements were satisfactory. 103 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM The Board considered the investment performance of each Fund, including the Fund's historic performance as well as its performance compared to funds with similar investment objectives (the "Performance Peer Group") based on data provided by an independent third party (as described below). The Independent Board Members also reviewed portfolio level performance (which does not reflect fund level fees, expenses and leverage), as described in further detail below. In evaluating the performance information, the Board considered whether the Fund has operated within its investment objectives and parameters and the impact that the investment mandates may have had on performance. In addition, in comparing a Fund's performance with that of its Performance Peer Group, the Independent Board Members took into account that the closest Performance Peer Group in certain instances may not adequately reflect the respective fund's investment objectives and strategies thereby hindering a meaningful comparison of the fund's performance with that of the Performance Peer Group. The Independent Board Members also recognized that certain funds lack comparable peers in which case their performance is measured against a more general municipal category for various states. The closed-end municipal funds that do not have corresponding state-specific Performance Peer Groups are from states other than New York, California, Florida, New Jersey, Michigan, and Pennsylvania. The Independent Board Members reviewed performance information including, among other things, total return information compared with the Fund's Performance Peer Group and recognized benchmarks for the one-, three-, and five-year periods (as applicable) ending December 31, 2007 and with the Performance Peer Group for the quarter and same yearly periods ending March 31, 2008 (as applicable). The Independent Board Members also reviewed the Fund's portfolio level performance (which does not reflect fund level fees and expenses (and leverage for closed-end funds)) compared to recognized benchmarks for the one-, three-, and five-year periods ending December 31, 2007 (as applicable). The analysis was used to assess the efficacy of investment decisions against appropriate measures of risk and total return, within specific market segments. This information supplemented the Fund performance information provided to the Board at each of its quarterly meetings. Based on their review, the Independent Board Members determined that each Fund's investment performance over time had been satisfactory. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund's gross management fees (which take into account breakpoints), net management fees (which take into account fee waivers or reimbursements) and total expense ratios (before and after expense reimbursements and/or waivers) in absolute terms as well as compared to the gross management fees, net management fees (after waivers and/or reimbursements) and total expense ratios (before and after waivers) of a comparable universe of unaffiliated funds based on data provided by an independent data provider (the "Peer Universe") and/or a more focused subset of funds therein (the "Peer Group"). The Independent Board Members further reviewed data regarding the construction of Peer Groups as well as the methods of measurement for the fee and expense analysis and the performance analysis. In reviewing the comparisons of fee and expense information, the Independent Board Members took into account that in certain instances various factors such as the size of the Fund relative to peers, the size and particular composition of the Peer Group, the investment objectives of the peers, expense anomalies, and the timing of information used may impact the comparative data, thereby limiting the ability to make a meaningful comparison. The Independent Board Members also considered, among other things, the differences in the use of leverage and the differences in the use of insurance as well as the states reflected in a respective Peer Group for the state municipal funds (such as the use of a 104 general "other states" category for closed-end state funds (other than New York and California)). In reviewing the fee schedule for a Fund, the Independent Board Members also considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain closed-end funds launched since 1999). Based on their review of the fee and expense information provided, the Independent Board Members determined that each Fund's management fees and net total expense ratio were reasonable in light of the nature, extent and quality of services provided to the Fund. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Independent Board Members further reviewed information regarding the nature of services and fee rates offered by NAM to other clients. Such other clients include NAM's municipal separately managed accounts. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees. 3. PROFITABILITY OF NUVEEN In conjunction with its review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers) and its financial condition. The Independent Board Members reviewed the revenues and expenses of Nuveen's advisory activities for the last two years and the allocation methodology used in preparing the profitability data. The Independent Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Independent Board Members noted that they had also appointed an Independent Board Member as a point person to review and keep them apprised of changes to the profitability analysis and/or methodologies during the year. The Independent Board Members considered Nuveen's profitability compared with other fund sponsors prepared by two independent third party service providers as well as comparisons of the revenues, expenses and profit margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. In reviewing profitability, the Independent Board Members recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser's particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent Board Members recognized Nuveen's investment in its fund business. Based on its review, the Independent Board Members concluded that Nuveen's level of profitability for its advisory activities was reasonable in light of the services provided. 105 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to NAM by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates receive, or are expected to receive, that are directly attributable to the management of the Funds, if any. See Section E below for additional information on indirect benefits NAM may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Independent Board Members determined that the advisory fees and expenses of the respective Fund were reasonable. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE With respect to economies of scale, the Independent Board Members recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base. The Independent Board Members therefore considered whether the Funds have appropriately benefited from any economies of scale and whether there is potential realization of any further economies of scale. In considering economies of scale, the Independent Board Members have recognized that economies of scale are difficult to measure and predict with precision, particularly on a fund-by-fund basis. Notwithstanding the foregoing, one method to help ensure the shareholders share in these benefits is to include breakpoints in the advisory fee schedule. Accordingly, the Independent Board Members reviewed and considered the fund-level breakpoints in the advisory fee schedules that reduce advisory fees. In this regard, given that the Funds are closed-end funds, the Independent Board Members recognized that although the Funds may from time to time make additional share offerings, the growth in their assets will occur primarily through appreciation of each Fund's investment portfolio. In addition to fund-level advisory fee breakpoints, the Board also considered the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. In evaluating the complex-wide fee arrangement, the Independent Board Members recognized that the complex-wide fee schedule was recently revised in 2007 to provide for additional fee savings to shareholders and considered the amended schedule. The Independent Board Members further considered that the complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen's costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base. Based on their review, the Independent Board Members concluded that the breakpoint schedule and complex-wide fee arrangement were acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Independent Board Members received and considered information regarding potential "fall out" or ancillary benefits NAM or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Independent Board Members considered revenues received by affiliates of NAM for serving as agent at Nuveen's preferred trading desk and for serving as a co-manager in the initial public offering of new closed-end exchange traded funds. 106 In addition to the above, the Independent Board Members considered whether NAM received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to NAM in managing the assets of the Funds and other clients. The Independent Board Members noted that NAM does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating "commissions," NAM intends to comply with the applicable safe harbor provisions. Based on their review, the Independent Board Members concluded that any indirect benefits received by NAM as a result of its relationship with the Funds were reasonable and within acceptable parameters. F. OTHER CONSIDERATIONS The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the Advisory Agreements are fair and reasonable, that NAM's fees are reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed. 107 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, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value on the last business day immediately prior to the purchase date. 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. 108 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. 109 Glossary of TERMS USED in this REPORT [] AUCTION RATE BOND: An auction rate bond is a security whose interest payments are adjusted periodically through an auction process, which process typically also serves as a means for buying and selling the bond. Auctions that fail to attract enough buyers for all the shares offered for sale are deemed to have "failed", with current holders receiving a formula-based interest rate until the next scheduled auction. [] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. [] AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity of the bonds in a Fund's portfolio, computed by weighting each bond's time to maturity (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions unless an escrow account has been established to redeem the bond before maturity. The market value weighting for an investment in an inverse floating rate security is the value of the portfolio's residual interest in the inverse floating rate trust, and does not include the value of the floating rate securities issued by the trust. [] INVERSE FLOATERS: Inverse floating rate securities are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond's par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an "inverse floater") to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond's downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond's value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis. [] LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's or Fund's duration, the more the price of the bond or Fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is longer than the duration of the Fund's portfolio of bonds. [] MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. [] NET ASSET VALUE (NAV): A Fund's 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. [] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. [] ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon to its holders during the life of the bond. Tax-exempt income to the holder of the bond comes from accretion of the difference between the original purchase price of the bond at issuance and the par value of the bond at maturity and is effectively paid at maturity. The market prices of zero coupon bonds generally are more volatile than the market prices of bonds that pay interest periodically. 110 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION You may obtain (i) each Fund's quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the twelve-month period ended June 30, 2008, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 100 F Street NE, Washington, D.C. 20549. CEO CERTIFICATION DISCLOSURE Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange (NYSE) the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. BOARD OF DIRECTORS/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 Each 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. No shares were repurchased or redeemed during the period covered by this report. Any future repurchases and/or redemptions will be reported to shareholders in the next annual or semi-annual report. 111 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, Rittenhouse, Santa Barbara, Symphony and Tradewinds. In total, the Company managed $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/etf Share prices Fund details Daily financial news Investor education Interactive planning tools ESA-B-1008D ITEM 2. CODE OF ETHICS. Not applicable to this filing. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to this filing. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to this filing. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to this filing. 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. Not applicable to this filing. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to this filing. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

* The registrant's first repurchase program, which authorized the repurchase of 1,600,000 shares, was announced on July 10, 2007 and expired on July 9, 2008. A second repurchase program, which authorized the repurchase of 1,615,000 shares, was announced on August 7, 2008. Any repurchases made by the registrant pursuant to the program were made through open-market transactions. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board implemented after the registrant last provided disclosure in response to this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. (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 to this filing. (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: See 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: See 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 Pennsylvania Investment Quality Municipal Fund ----------------------------------------------------------- By (Signature and Title) /s/ Kevin J. McCarthy ---------------------------------------------- Kevin J. McCarthy (Vice President and Secretary) Date: January 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. By (Signature and Title) /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: January 9, 2009 ------------------------------------------------------------------- By (Signature and Title) /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: January 9, 2009 -------------------------------------------------------------------