UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22058
-----------------------
Nuveen Tax-Advantaged Dividend Growth Fund
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(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
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2007
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREHOLDERS
Annual Report
DECEMBER 31, 2007
Nuveen Investments
CLOSED-END FUNDS
NUVEEN
TAX-ADVANTAGED
DIVIDEND GROWTH
FUND
JTD
Tax-Advantaged Distributions with the Potential for
Dividend Growth, Capital Appreciation
and Reduced Overall Risk
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NUVEEN INVESTMENTS LOGO
Chairman's
LETTER TO SHAREHOLDERS
(TIMOTHY
SCHWERTFEGER
PHOTO) Timothy R. Schwertfeger Chairman of the Board
Dear Shareholder:
On behalf of all of us at Nuveen Investments, I'd like to use this first
shareholder report of the Nuveen Tax-Advantaged Dividend Growth Fund (JTD) to
welcome the shareholders of this Fund to our closed-end fund family. JTD was
introduced in late June 2007, and as of December 31, 2007, the initial proceeds
from the common and preferred share offerings had been invested in a portfolio
designed to provide you with a high level of current income and gains.
With the recent volatility in the stock and bond markets, many have begun to
wonder whether they need to adjust their holdings of investments. No one knows
what the future will bring, which is why we think a well-balanced portfolio that
is structured and carefully monitored with the help of an investment
professional is an important component in achieving your long-term financial
goals. A well-diversified portfolio may actually help to reduce your overall
investment risk, and we believe that investments like your Fund can be important
building blocks in a portfolio crafted to perform well through a variety of
market conditions.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
(TIMOTHY SCHWERTFEGER SIG)
Timothy R. Schwertfeger
Chairman of the Board
February 15, 2008
Portfolio Managers' COMMENTS
NUVEEN INVESTMENTS CLOSED-END FUNDS JTD
The Fund invests primarily in a dividend-growth equity strategy and in
income-oriented securities. It's portfolio is managed by two affiliates of
Nuveen Investments: Santa Barbara Asset Management LLC (Santa Barbara) oversees
the Fund's dividend-growth equity strategy, while the Fund's income-oriented
strategy is managed by NWQ Investment Management Company, LLC (NWQ).
James Boothe, CFA, serves as portfolio manager for the dividend growth equity
strategy. He has 30 years of corporate finance and investment management
experience and joined Santa Barbara in 2002. The income-oriented investment team
at NWQ is led by Michael Carne, CFA. Michael has more than 10 years of
investment experience and joined NWQ in 2002.
Here James and Michael talk about the economic environment and performance of
the Fund over the period June 26, 2007 (commencement of operations) through
December 31, 2007.
WHAT WERE THE GENERAL ECONOMIC CONDITIONS AND MARKET TRENDS DURING THE ANNUAL
REPORTING PERIOD ENDED DECEMBER 31, 2007?
The second half of 2007 was dominated by concerns about the impact of possible
sub-prime mortgage defaults and fears of a recession, especially as the impact
began to spread beyond mortgage lenders to international and domestic money
center banks and other financial institutions. When data began to show the
potential for a severely weakening economy, the Federal Reserve cut the widely
followed short-term fed funds rate by a half a percentage point in September, by
another quarter of a percentage point in October and yet another quarter point
in December. (On January 22 and 29, 2008, after the close of this reporting
period, the Federal Reserve cut the fed funds rate by a combined 1.25%, bringing
the rate to 3.00%.)
The U.S. equity markets suffered through significant turbulence during the
period since the Fund's introduction, as concerns about the credit markets, a
slowing economy and rising commodity prices (particularly oil) weighed on
investor sentiment. Additionally, recent inflation reports have not been
favorable, further raising investor concerns about the equity market's
prospects. Nevertheless, several leading market indicators did finish 2007 with
positive returns, including the S&P 500 Index with 5.49% and The Russell 3000
Index with 5.41%.
--------------------------------------------------------------------------------
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 managers 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
WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUND DURING THIS INITIAL PERIOD?
During the first few months after the Fund's inception, we concentrated on
carefully investing the proceeds raised from the Fund's common and preferred
share offerings into a diversified and well-structured portfolio. This important
task was completed well before the end of the calendar year.
For the equity portion for the Fund's portfolio, we invested in dividend-paying
equity securities consisting primarily of common stocks of mid- to large-cap
companies that have attractive dividend income and, in our view, the potential
for future dividend growth and capital appreciation.
In the fixed-income portion of the Fund's portfolio, we focused primarily on
purchasing tax-advantaged preferred stocks. We employed a disciplined, bottom-up
approach using both fundamental valuation and qualitative measures. In
particular, we looked for undervalued companies where a catalyst, such as a
management change, industry consolidation or a company restructuring, existed
and might lead to better value recognition or improved profitability.
In addition, we attempted to manage the Fund's investments and expenses so that
substantially all (at least 90%) of its distributions would be potentially
tax-advantaged.
--------------------------------------------------------------------------------
Past performance does not guarantee future results. Current performance may be
higher or lower than the data shown.
Returns do not reflect the deduction of taxes that shareholders may have to pay
on Fund distributions or upon the sale of Fund shares. For additional
information, see the Performance Overview for the Fund in this report.
--------------------------------------------------------------------------------
HOW DID THE FUND PERFORM OVER THIS INITIAL PERIOD?
The performance of JTD, as well as a comparative benchmark, is presented in the
accompanying table.
Cumulative Total Returns on Net Asset Value
Since Inception (6/26/07 through 12/31/07)
JTD -0.70%
Comparative Benchmark(1) -2.10%
For the period from the Fund's inception through December 31, 2007, the total
return on net asset value of the Fund outperformed its comparative benchmark.
Since the Fund's inception in June 2007, it has benefited from several
prevailing market trends. First, as the markets became more unstable, investors
favored companies with low market volatility. This often has been a
characteristic of the type of companies we sought for the Fund's portfolio.
Second, due to the potential for cash-flow generation, dividend-paying stocks
garnered increased attention during the market uncertainty in the second half of
2007. Again, this tended to help the relative performance of many of the
securities in which the Fund had invested. Both of these factors, coupled with
constructive stock and sector allocations, helped the comparative return of the
Fund over this short initial period.
In the equity portion of the Fund, we benefited in particular from our relative
overweight position in the utilities sector. The sector was the best performing
sector of the S&P 500 Index during the second half of 2007. Other sectors that
contributed to performance included consumer staples/discretionary, financials
and telecommunications.
--------------------------------------------------------------------------------
1 Comparative benchmark performance is a blended return consisting of: 1) 50% of
the return of the S &P 500 Index, 2) 25% of the return The CBOE S&P 500 BuyWrite
Index (BXM) which is designed to track the performance of a hypothetical
buy-write strategy on the S&P 500 Index, and 3) 25% of the return of the Merrill
Lynch DRD (dividends received deduction) Preferred Index, which consists of
investment-grade, DRD-eligible, exchange-traded preferred stocks with one year
or more to maturity. Index returns are not leveraged, and do not include the
effects of any sales charges or management fees. It is not possible to invest
directly in an index.
--------------------------------------------------------------------------------
5
Our international exposure in Nokia and Telefonica positively impacted
performance as well. Historically, Nokia has had consistent dividend growth
rate, strong cash generation, and a dominant position in the industry. The
market share for Nokia has risen worldwide while the average selling price for
its phones appears to have stabilized after a long, steady decline. Telefonica
was added to the portfolio based on its high dividend yield and strong prospects
for earnings and dividend growth in the coming years. The main drivers of growth
are the Latin American markets, where current organic revenue growth rates are
expected to be twice that of Europe and the domestic Spanish market.
Counterbalancing these holdings, the energy, materials and information
technology sectors constrained the Fund's performance. All three sectors were
some of the weaker performing sectors of the S&P 500 during the second half of
the year. While the financial service sector also performed poorly, the Fund's
diversification within the financial service sector helped offset some of the
impact of that sector's significant decline. For example, while most of the
companies in this sector had negative returns for the period, Hudson City
National Bank (HCBK), with its collateralized jumbo loans in the Northeast, was
able to avoid market fears about liquidity and credit quality. However, the Fund
was not totally immune to the negative sentiment towards financials in the
second half of 2007, and we eliminated Citigroup and Washington Mutual during
the fourth quarter due to the increased possibility of dividend cuts (which
happened for both companies after the close of this reporting period).
In the preferred securities portion of the Fund, performance was affected
negatively by the general decline of the financial service sector securities.
Financial firms account for approximately 75% of the preferred market, and many
of them suffered losses from holding sub-prime mortgages in collateralized debt
obligations (CDOs). The fourth quarter was the worst quarter on record for the
preferred market. The Merrill Lynch Preferred Stock Hybrid Securities Index
posted a 9.2% loss in the fourth quarter, and a loss of 11.3% for the year.
Another factor weighing on the preferred market's performance was new issue
supply. Mortgage-related losses forced firms -- most notably Fannie Mae and
Freddie Mac -- to tap the preferred market in order to raise capital. Net
preferred issuance totaled $17.7 billion in December alone. That was greater
than the net issuance for any of the past four entire years, and expanded the
size of the total preferred market by roughly 10%. This new supply forced a
re-pricing of the entire market, pulling down the prices of all existing issues.
RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED MARKETS
In February 2008, after the close of this reporting period, regularly scheduled
auctions for the FundPreferred(R) shares issued by your Fund began attracting
more shares for sale than offers to buy. This meant that these auctions "failed
to clear," and that many FundPreferred Shareholders who wanted to sell their
shares in these auctions were unable to do so. It is important to note this
decline in liquidity did not lower the credit quality of these shares, and that
FundPreferred Shareholders unable to sell their shares received distributions at
the "maximum rate" calculated in accordance with the pre-established terms of
the FundPreferred stock. At the time this report was prepared, the Fund's
managers could not predict when future auctions might succeed in attracting
sufficient buyers for the shares offered. The Fund's
6
managers are working diligently to develop mechanisms designed to improve the
liquidity of the FundPreferred shares, but at present there is no assurance that
those efforts will succeed.
These developments do not affect the management or investment policies of the
Fund. However, one implication of these auction failures for common shareholders
is that the Fund's cost of leverage will be higher than it otherwise would have
been had the auctions been successful. As a result, the Fund's future common
share earnings may be marginally lower than they otherwise might have been.
7
Common Share
Distribution and Share Price
INFORMATION
The Fund employs financial leverage through the issuance of FundPreferred
shares. Financial leverage provides the potential for higher earnings (net
investment income), total returns and distributions over time, but -- as noted
earlier -- also increases the variability of common shareholders' net asset
value per share in response to changing market conditions. Financial leverage
contributed positively to the Fund's common share net earnings over the
reporting period, but detracted from the Fund's overall total common share
return.
The Fund has a managed distribution program. The goal of a managed distribution
program is to provide common shareholders with relatively consistent and
predictable cash flow by systematically converting its expected long-term return
potential into regular distributions. As a result, regular common share
distributions throughout the year are likely to include a portion of expected
long-term gains (both realized and unrealized), along with net investment
income.
The Fund declared its initial quarterly distribution of .4050 per share in
August 2007.
Important points to understand about the managed distribution program are:
- The Fund seeks to establish a relatively stable common share distribution rate
that roughly corresponds to the projected total return from its investment
strategy over an extended period of time. However, you should not draw any
conclusions about the Fund's past or future investment performance from its
current distribution rate.
- Actual common share returns will differ from projected long-term returns (and
therefore the Fund's distribution rate), at least over shorter time periods.
Over a specific timeframe, the difference between actual returns and total
distributions will be reflected in an increasing (returns exceed
distributions) or a decreasing (distributions exceed returns) Fund net asset
value.
- Each distribution is expected to be paid from some or all of the following
sources:
- net investment income (regular interest and dividends),
- realized capital gains, and
- unrealized gains, or, in certain cases, a return of principal (non-taxable
distributions).
- A non-taxable distribution is a payment of a portion of the Fund's capital.
When the Fund's returns exceed distributions, it may represent portfolio gains
generated, but not realized as a taxable capital gain. In periods when the
Fund's returns fall short of distributions, it will represent a portion of
your original principal unless the shortfall is offset during other time
periods over the life of your investment (previous or subsequent) when the
Fund's total return exceeds distributions.
8
- Because distribution source estimates are updated during the year based on the
Fund's performance and forecast for its current fiscal year (which is the
calendar year for the Fund), estimates on the nature of your distributions
provided at the time the distributions are paid may differ from both the tax
information reported to you in your Fund's IRS Form 1099 statement provided at
year end, as well as the ultimate economic sources of distributions over the
life of your investment.
The following table provides information regarding the Fund's common share
distributions and total return performance for the period June 26, 2007
(commencement of operations) through December 31, 2007. The distribution
information is presented on a tax basis rather than on a generally accepted
accounting principles (GAAP) basis. This information is intended to help you
better understand whether the Fund's returns for the specified time period was
sufficient to meet the Fund's distributions.
----------------------------------------------------------------------------
As of 12/31/07 (common shares) JTD
----------------------------------------------------------------------------
Inception date 6/26/07
Period 6/26/07 (commencement of operations) through 12/31/07:
Per share distribution:
From net investment income $0.28
From short-term capital gains --
From long-term capital gains --
From return of capital 0.54
-------
Total per share distribution $0.82
=======
Distribution rate on NAV 4.51%
Cumulative since inception total return on NAV (.70)%
----------------------------------------------------------------------------
As of December 31, 2007, the Fund was trading at a -10.13% discount to its NAV,
compared with an average -7.01% discount for the period June 26, 2007
(commencement of operations) through December 31, 2007.
9
SHARE REPURCHASES
On November 21, 2007, the Fund's Board of Trustees approved an open market share
repurchase program. This was part of a broad, ongoing effort designed to support
the market prices of the Fund's common shares. Repurchases not only help to
support the market price but, because such purchases are made at a discount to
NAV, they have the effect of augmenting NAV. Under the terms of the program, the
Fund may repurchase up to 10% of its outstanding common shares. As of December
31, 2007, JTD had repurchased 96,900 common shares, representing approximately
0.7% of the Fund's total common shares outstanding.
10
JTD Nuveen Tax-Advantaged
PERFORMANCE Dividend
OVERVIEW Growth Fund
as of December 31, 2007
PORTFOLIO ALLOCATION (AS A % OF TOTAL INVESTMENTS)(2)
(PORTFOLIO ALLOCATION PIE CHART)
Investment Companies 0.60
Short-Term Investments 4.80
$25 Par (or similar) Preferred Securities 19.70
Common Stocks 74.90
2007 DISTRIBUTIONS PER SHARE
(MONTHLY DISTRIBUTIONS BAR CHART)
Sep 0.405
Dec 0.405
SHARE PRICE PERFORMANCE -- WEEKLY CLOSING PRICE
(SHARE PRICE CHART)
6/26/07 20.00
20.00
20.00
20.00
20.00
19.01
19.00
17.00
18.70
17.40
17.74
16.73
17.05
17.35
17.40
17.33
16.59
16.5404
16.59
15.85
15.73
15.92
16.13
16.43
16.39
15.68
16.29
12/31/07 16.33
FUND SNAPSHOT
------------------------------------------------------------------------
Common Share Price $16.33
------------------------------------------------------------------------
Common Share Net Asset Value $18.17
------------------------------------------------------------------------
Premium/(Discount) to NAV -10.13%
------------------------------------------------------------------------
Current Distribution Rate(1) 9.92%
------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000) $268,190
------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
(Inception 6/26/07)
-------------------------------------------------------------------------------------
ON SHARE PRICE ON NAV
-------------------------------------------------------------------------------------
Since Inception (14.37)% (0.70)%
-------------------------------------------------------------------------------------
INDUSTRIES
(as a % of total investments)(2)
-------------------------------------------------------------------------------------
Commercial Banks 12.1%
-------------------------------------------------------------------------------------
Electric Utilities 8.5%
-------------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels 7.9%
-------------------------------------------------------------------------------------
Pharmaceuticals 5.9%
-------------------------------------------------------------------------------------
U.S. Agency 4.3%
-------------------------------------------------------------------------------------
Thrifts & Mortgage Finance 4.0%
-------------------------------------------------------------------------------------
Communications Equipment 4.0%
-------------------------------------------------------------------------------------
Tobacco 4.0%
-------------------------------------------------------------------------------------
Diversified Telecommunication Services 3.7%
-------------------------------------------------------------------------------------
Insurance 3.0%
-------------------------------------------------------------------------------------
Media 2.4%
-------------------------------------------------------------------------------------
Metals & Mining 2.4%
-------------------------------------------------------------------------------------
Health Care Equipment & Supplies 2.4%
-------------------------------------------------------------------------------------
Semiconductors & Equipment 2.3%
-------------------------------------------------------------------------------------
Hotels, Restaurants & Leisure 2.3%
-------------------------------------------------------------------------------------
Electrical Equipment 2.3%
-------------------------------------------------------------------------------------
Beverages 2.3%
-------------------------------------------------------------------------------------
IT Services 2.2%
-------------------------------------------------------------------------------------
Machinery 2.2%
-------------------------------------------------------------------------------------
Aerospace & Defense 2.0%
-------------------------------------------------------------------------------------
Short-Term Investments 4.8%
-------------------------------------------------------------------------------------
Other 15.0%
-------------------------------------------------------------------------------------
1 Current Distribution Rate is based on the Fund's current annualized quarterly
distribution divided by the Fund's current market price. The Fund's quarterly
distributions to its shareholders may be comprised of ordinary income, net
realized capital gains and, if at the end of the calendar year the Fund's
cumulative net ordinary income and net realized gains are less than the amount
of the Fund's distributions, a return of capital for tax purposes.
2 Excluding derivative transactions.
11
SHAREHOLDER MEETING REPORT
The special meeting of shareholders was held in the offices of Nuveen
Investments on October 12, 2007; the meeting was subsequently
adjourned to October 22, 2007.
JTD
------------------------------------------------------------------------------------------
Common and
Preferred
shares voting
together
as a class
------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
For 6,332,314
Against 178,675
Abstain 339,018
Broker Non-Votes 2,359,611
------------------------------------------------------------------------------------------
Total 9,209,618
------------------------------------------------------------------------------------------
TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN NUVEEN ASSET
MANAGEMENT AND
NWQ INVESTMENT MANAGEMENT COMPANY, LLC:
For 6,286,170
Against 218,352
Abstain 345,485
Broker Non-Votes 2,359,611
------------------------------------------------------------------------------------------
Total 9,209,618
------------------------------------------------------------------------------------------
TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN NUVEEN ASSET
MANAGEMENT AND
SANTA BARBARA ASSET MANAGEMENT, LLC:
For 6,268,517
Against 228,824
Abstain 352,666
Broker Non-Votes 2,359,611
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Total 9,209,618
------------------------------------------------------------------------------------------
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE CURRENT FISCAL YEAR:
For 8,832,620
Against 116,305
Abstain 260,693
------------------------------------------------------------------------------------------
Total 9,209,618
------------------------------------------------------------------------------------------
12
Report of INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN TAX-ADVANTAGED DIVIDEND GROWTH FUND
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Nuveen Tax-Advantaged Dividend Growth Fund (the
"Fund") as of December 31, 2007, and the related statements of operations and
changes in net assets and the financial highlights for the period from June 26,
2007 (commencement of operations) through December 31, 2007. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of December 31, 2007, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Nuveen
Tax-Advantaged Dividend Growth Fund at December 31, 2007, the results of its
operations, the changes in its net assets, and the financial highlights for the
period from June 26, 2007 (commencement of operations) through December 31,
2007, in conformity with U.S. generally accepted accounting principles.
(ERNST & YOUNG LLP LOGO)
Chicago, Illinois
February 26, 2008
13
JTD
Nuveen Tax-Advantaged Dividend Growth Fund
Portfolio of INVESTMENTS
as of December 31, 2007
SHARES DESCRIPTION (1) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 85.0% (74.9% OF TOTAL INVESTMENTS)
AEROSPACE & DEFENSE - 2.3%
101,858 Raytheon Company $ 6,182,781
-----------------------------------------------------------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS - 1.4%
52,570 United Parcel Service, Inc., Class B 3,717,750
-----------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 2.6%
114,090 Coca-Cola Company 7,001,703
-----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 0.9%
51,245 E.I. Du Pont de Nemours and Company 2,259,392
-----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS - 7.5%
116,198 Bank of America Corporation 4,794,329
26,615 BB&T Corporation 816,282
105,203 Cullen/Frost Bankers, Inc. 5,329,584
64,680 Fifth Third Bancorp. 1,625,408
58,930 Lloyds TSB Group PLC, Sponsored ADR 2,218,715
169,804 U.S. Bancorp 5,389,579
-----------------------------------------------------------------------------------------------------------------------------------
Total Commercial Banks 20,173,897
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 1.9%
159,075 Waste Management, Inc. 5,196,980
-------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 4.6%
195,605 Nokia Oyj, Sponsored ADR 7,509,276
120,910 QUALCOMM Inc. 4,757,809
-----------------------------------------------------------------------------------------------------------------------------------
Total Communications Equipment 12,267,085
-------------------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.2%
137,118 AT&T Inc. 5,698,624
58,055 Telefonica SA 5,665,587
-----------------------------------------------------------------------------------------------------------------------------------
Total Diversified Telecommunication Services 11,364,211
-------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 7.0%
76,127 Exelon Corporation 6,215,008
95,329 FPL Group Inc. 6,461,400
117,615 PPL Corporation 6,126,565
-----------------------------------------------------------------------------------------------------------------------------------
Total Electric Utilities 18,802,973
-------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 2.6%
124,846 Emerson Electric Co. 7,073,774
-----------------------------------------------------------------------------------------------------------------------------------
FOOD PRODUCTS - 0.4%
31,986 Kraft Foods Inc. 1,043,703
-----------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 2.7%
85,985 Becton, Dickinson and Company 7,186,626
-----------------------------------------------------------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 2.7%
184,864 YUM! Brands, Inc. 7,074,745
-----------------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 1.7%
63,075 Procter & Gamble Company 4,630,967
-----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 2.0%
146,508 General Electric Company 5,431,052
-----------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 1.7%
311,896 Fidelity National Title Group Inc., Class A 4,556,801
-----------------------------------------------------------------------------------------------------------------------------------
14
SHARES DESCRIPTION (1) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
IT SERVICES - 2.5%
187,418 Paychex, Inc. $ 6,788,280
-----------------------------------------------------------------------------------------------------------------------------------
MACHINERY - 2.5%
122,358 PACCAR Inc. 6,666,064
-----------------------------------------------------------------------------------------------------------------------------------
MEDIA - 2.0%
377,488 Pearson Public Limited Company 5,466,026
-----------------------------------------------------------------------------------------------------------------------------------
METALS & MINING - 2.4%
61,837 Southern Copper Corporation 6,500,924
-----------------------------------------------------------------------------------------------------------------------------------
MULTI-UTILITIES - 0.9%
50,285 Dominion Resources, Inc. 2,386,023
-----------------------------------------------------------------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 9.0%
16,153 BP Amoco PLC 1,181,915
81,701 Chevron Corporation 7,625,154
149,117 Equitable Resources Inc. 7,944,954
87,103 Royal Dutch Shell PLC, Class A 7,334,073
-----------------------------------------------------------------------------------------------------------------------------------
Total Oil, Gas & Consumable Fuels 24,086,096
-------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 6.7%
123,454 Abbott Laboratories 6,931,942
103,679 Eli Lilly and Company 5,535,422
76,670 Merck & Co. Inc. 4,455,294
44,697 Pfizer Inc. 1,015,963
-----------------------------------------------------------------------------------------------------------------------------------
Total Pharmaceuticals 17,938,621
-------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & EQUIPMENT - 2.6%
225,534 Microchip Technology Incorporated 7,086,278
-----------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 1.0%
97,935 Home Depot, Inc. 2,638,369
-----------------------------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE - 4.6%
444,173 Hudson City Bancorp, Inc. 6,671,478
318,913 New York Community Bancorp, Inc. 5,606,491
-----------------------------------------------------------------------------------------------------------------------------------
Total Thrifts & Mortgage Finance 12,277,969
-------------------------------------------------------------------------------------------------------------------
TOBACCO - 4.6%
80,374 Altria Group, Inc. 6,074,667
71,894 Loews Corp -- Carolina Group 6,132,558
-----------------------------------------------------------------------------------------------------------------------------------
Total Tobacco 12,207,225
-------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $225,442,423) 228,006,315
===================================================================================================================
SHARES DESCRIPTION (1) COUPON RATINGS (2) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
$25 PAR (OR SIMILAR) PREFERRED SECURITIES - 22.4% (19.7% OF TOTAL INVESTMENTS)
AUTOMOBILES - 0.2%
30,900 Daimler Finance NA LLC, Structured Asset Trust 7.000% A3 $ 689,843
Unit Repackaging, Series DCX
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS - 2.1%
47,700 Bear Stearns Capital Trust III 7.800% A2 1,152,432
700 Bear Stearns Companies, Series E, (3) 6.150% BBB+ 27,475
25,000 Deutsche Bank Capital Funding Trust IX 6.625% Aa3 542,750
75,000 Goldman Sachs Group Inc., (3) 6.200% A 1,716,750
45,000 Lehman Brothers Holdings Inc., Series F, (3) 6.500% A- 973,350
50,000 Merrill Lynch and Company, Inc., (3) 6.375% A- 1,002,000
12,500 Morgan Stanley Capital Trust VII 6.600% A2 245,125
-----------------------------------------------------------------------------------------------------------------------------------
Total Capital Markets 5,659,882
-------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS - 6.2%
75,000 Banco Santander Finance 6.800% Aa3 1,653,750
50,000 Banco Santander Finance 6.500% A 1,043,750
49,200 Bank of America Corporation, Series D, (3) 6.204% Aa3 1,067,640
15,000 Bank of America Corporation 7.250% Aa3 384,375
20,000 Bank of America Corporation 6.625% Aa3 473,750
15
JTD
Nuveen Tax-Advantaged Dividend Growth Fund (continued)
Portfolio of INVESTMENTS as of December 31, 2007
SHARES DESCRIPTION (1) COUPON RATINGS (2) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS (continued)
50,000 Barclays Bank PLC 7.100% Aa3 $ 1,187,500
52,300 Barclays Bank PLC 6.625% Aa3 1,135,956
25,000 Fifth Third Capital Trust VI 7.250% A1 520,000
23,200 Fleet Capital Trust VIII 7.200% Aa2 545,200
15,200 HSBC Holdings PLC, Series A 6.200% A1 309,624
55,200 HSBC USA Inc., (3) 6.500% A 1,214,952
50,000 National City Capital Trust IV 8.000% A2 1,053,750
50,000 Royal Bank of Scotland Group PLC, Series T 7.250% Aa3 1,154,500
50,000 Royal Bank of Scotland Group PLC 6.600% Aa3 1,013,000
54,700 USB Capital Trust XI 6.600% A1 1,156,905
75,000 Wachovia Corporation, (3) 8.000% A 1,897,500
2,500 Wells Fargo Capital Trust V 7.000% Aa2 57,750
31,400 Wells Fargo Capital Trust XI 6.250% AA- 646,840
-----------------------------------------------------------------------------------------------------------------------------------
Total Commercial Banks 16,516,742
-------------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE - 0.5%
16,700 HSBC Finance Corporation 6.360% A 338,175
38,900 MBNA Corporation, Capital Trust D 8.125% Aa2 962,775
-----------------------------------------------------------------------------------------------------------------------------------
Total Consumer Finance 1,300,950
-------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 1.8%
25,000 Citigroup Capital Trust VII 7.125% A+ 536,250
24,500 Citigroup Capital Trust VIII 6.950% A+ 515,725
75,000 Citigroup Capital Trust XIX 7.250% A+ 1,650,000
30,400 Deutsche Bank Capital Funding Trust VIII 6.375% A 644,784
25,000 ING Group N.V. 7.200% A1 560,500
35,000 ING Group N.V. 7.050% A 766,500
2,000 JPMorgan Chase Capital Trust X 7.000% Aa3 47,200
-----------------------------------------------------------------------------------------------------------------------------------
Total Diversified Financial Services 4,720,959
-------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 2.7%
70,000 Alabama Power Company, (3) 5.625% BBB+ 1,651,566
1,400 Consolidated Edison Company of New York Inc., (3) 5.000% A3 124,810
700 DTE Energy Trust I 7.800% Baa3 17,465
3,000 Entergy Louisiana LLC 7.600% A- 73,470
19,800 FPC Capital I 7.100% Baa2 470,250
50,000 FPL Group Capital Inc. 7.450% A3 1,295,000
59,000 PPL Capital Funding, Inc. 6.850% Baa2 1,387,090
50,000 PPL Electric Utilities Corporation, (3) 6.250% BBB 1,234,375
10,000 Southern California Edison Company, Series C, (3) 6.000% Baa2 963,750
300 Virginia Power Capital Trust 7.375% BBB 7,317
-----------------------------------------------------------------------------------------------------------------------------------
Total Electric Utilities 7,225,093
-------------------------------------------------------------------------------------------------------------------
INSURANCE - 1.7%
53,600 Ace Ltd., Series C 7.800% BBB 1,281,040
10,000 Aegon N.V. 6.875% A- 212,000
32,400 Aegon N.V. 6.375% A- 639,900
25,000 American International Group 7.700% Aa3 626,250
21,800 Arch Capital Group Limited 8.000% BBB- 544,782
12,100 Endurance Specialty Holdings Limited 7.750% BBB- 252,043
5,000 MetLife Inc., Series A 5.991% Baa1 105,500
11,625 Phoenix Companies Inc. 7.450% BBB- 235,871
35,000 RenaissanceRe Holdings Limited, Series C 6.080% BBB+ 602,700
-----------------------------------------------------------------------------------------------------------------------------------
Total Insurance 4,500,086
-------------------------------------------------------------------------------------------------------------------
MEDIA - 0.7%
50,000 Comcast Corporation 7.000% BBB+ 1,122,000
38,700 Viacom Inc. 6.850% BBB 852,174
-----------------------------------------------------------------------------------------------------------------------------------
Total Media 1,974,174
-------------------------------------------------------------------------------------------------------------------
METALS & MINING - 0.3%
34,300 Gabelli Global Gold & Natural Resources and Income 6.625% Aaa 819,770
Trust
-----------------------------------------------------------------------------------------------------------------------------------
16
SHARES DESCRIPTION (1) COUPON RATINGS (2) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE/MORTGAGE - 1.1%
50,000 Kimco Realty Corporation, Series G 7.750% BBB+ $ 1,159,250
75,600 Wachovia Preferred Funding Corporation 7.250% A2 1,715,364
-----------------------------------------------------------------------------------------------------------------------------------
Total Real Estate/Mortgage 2,874,614
-------------------------------------------------------------------------------------------------------------------
U.S. AGENCY - 4.8%
75,000 Federal Home Loan Mortgage Corporation, (3) 8.375% AA- 1,961,250
25,000 Federal Home Loan Mortgage Corporation, (3) 5.000% AA- 860,000
25,000 Federal Home Loan Mortgage Corporation, (3) 5.100% AA- 875,000
48,265 Federal Home Loan Mortgage Corporation, (3) 5.660% AA- 948,890
75,000 Federal Home Loan Mortgage Corporation, (3) 5.570% AA- 1,443,750
125,000 Federal National Mortgage Association, (3) 8.250% AA- 3,218,750
25,000 Federal National Mortgage Association, (3) 5.375% AA- 912,500
25,000 Federal National Mortgage Association, (3) 5.810% AA- 976,500
40,000 Federal National Mortgage Association 6.750% AA- 950,000
32,900 Federal National Mortgage Association 7.625% AA- 834,838
-----------------------------------------------------------------------------------------------------------------------------------
Total U.S. Agency 12,981,478
-------------------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES - 0.3%
25,600 Telephone and Data Systems Inc. 7.600% Baa3 532,992
11,800 United States Cellular Corporation 8.750% A- 294,292
-----------------------------------------------------------------------------------------------------------------------------------
Total Wireless Telecommunication Services 827,284
-------------------------------------------------------------------------------------------------------------------
TOTAL $25 PAR (OR SIMILAR) PREFERRED SECURITIES 60,090,875
(COST $65,710,108)
===================================================================================================================
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) COUPON MATURITY RATINGS (2) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS - 0.0% (0.0% OF TOTAL INVESTMENTS)
AIRLINES - 0.0%
$ 14 Continental Airlines 6.541% 9/15/09 B $ 14,313
-----------------------------------------------------------------------------------------------------------------------------------
$ 14 TOTAL CORPORATE BONDS (COST $14,177) 14,313
===================================================================================================================================
SHARES DESCRIPTION (1) VALUE
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 0.6% (0.6% OF TOTAL INVESTMENTS)
50,000 Blackrock Preferred Income Strategies Fund $ 796,500
50,000 Flaherty and Crumrine/Claymore Preferred 808,000
Securities Income Fund Inc.
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT COMPANIES (COST $1,764,560) 1,604,500
===================================================================================================================
PRINCIPAL
AMOUNT (000) DESCRIPTION (1) COUPON MATURITY VALUE
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.5% (4.8% OF TOTAL INVESTMENTS)
$ 14,710 Repurchase Agreement with State Street Bank, dated 1.000% 1/02/08 $ 14,709,730
12/31/07, repurchase price $14,710,547,
collateralized by $11,235,000 U.S. Treasury
Bonds, 7.625%, due 11/15/22, value $14,900,419
and $80,000 U.S. Treasury Bonds, 6.750%, due
8/15/26, value $104,100
============= -------------------------------------------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENTS (COST $14,709,730) 14,709,730
===================================================================================================================
TOTAL INVESTMENTS (COST $307,640,998) - 113.5% 304,425,733
===================================================================================================================
NOTIONAL EXPIRATION STRIKE
CONTRACTS TYPE AMOUNT (4) DATE PRICE VALUE
-----------------------------------------------------------------------------------------------------------------------------------
CALL OPTIONS WRITTEN - (0.4)%
(260) S&P 500 Index $ (38,350,000) 1/19/08 $1,475 $ (622,700)
(260) S&P 500 Index (39,000,000) 1/19/08 1,500 (322,400)
-----------------------------------------------------------------------------------------------------------------------------------
(520) TOTAL CALL OPTIONS WRITTEN (PREMIUMS RECEIVED (77,350,000) (945,100)
$2,868,840)
===================================================================================================================================
OTHER ASSETS LESS LIABILITIES - 0.3% 709,040
===================================================================================================================
FUNDPREFERRED SHARES, AT LIQUIDATION (36,000,000)
VALUE - (13.4)% (5)
===================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES - 100% $268,189,673
===================================================================================================================
17
JTD
Nuveen Tax-Advantaged Dividend Growth Fund (continued)
Portfolio of INVESTMENTS as of December 31, 2007
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable
to Common shares unless otherwise noted.
(2) Ratings (not covered by the report of independent registered public accounting firm):
Using the higher of Standard & 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.
(3) Investment is eligible for the Dividends Received Deduction.
(4) For disclosure purposes, Notional Amount is calculated by multiplying the number of
Contracts by the Strike Price by 100.
(5) FundPreferred Shares, at Liquidation Value as of percentage of total investments is
(11.8)%.
ADR American Depositary Receipt.
See accompanying notes to financial statements.
18
Statement of
ASSETS AND LIABILITIES
December 31, 2007
-------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $307,640,998) $304,425,733
Receivables:
Dividends and interest 645,266
Investments sold 1,013,720
Reclaims 15,500
Other assets 943
-------------------------------------------------------------------------------------------
Total assets 306,101,162
-------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 545,033
Call options written, at value (premiums received
$2,868,840) 945,100
Accrued expenses:
Management fees 259,871
Offering costs 10,936
Other 116,458
FundPreferred shares dividends payable 34,091
-------------------------------------------------------------------------------------------
Total liabilities 1,911,489
-------------------------------------------------------------------------------------------
FundPreferred shares, at liquidation value 36,000,000
-------------------------------------------------------------------------------------------
Net assets applicable to Common shares $268,189,673
-------------------------------------------------------------------------------------------
Common shares outstanding 14,758,340
-------------------------------------------------------------------------------------------
Net asset value per Common share outstanding (net assets
applicable to
Common shares, divided by Common shares outstanding) $ 18.17
-------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
-------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 147,583
Paid-in surplus 272,928,175
Undistributed (Over-distribution of) net investment income (64,629)
Accumulated net realized gain (loss) from investments and
derivative transactions (3,529,931)
Net unrealized appreciation (depreciation) of investments
and derivative transactions (1,291,525)
-------------------------------------------------------------------------------------------
Net assets applicable to Common shares $268,189,673
-------------------------------------------------------------------------------------------
Authorized shares:
Common Unlimited
FundPreferred Unlimited
-------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
19
Statement of
OPERATIONS
For the Period June 26, 2007 (commencement
of operations)
through December 31, 2007
----------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign tax withheld of $44,370) $ 5,257,817
Interest 1,019,463
----------------------------------------------------------------------------
Total investment income 6,277,280
----------------------------------------------------------------------------
EXPENSES
Management fees 1,491,370
FundPreferred shares - auction fees 23,918
FundPreferred shares - dividend disbursing agent fees 1,941
Shareholders' servicing agent fees and expenses 56
Custodian's fees and expenses 41,980
Trustees' fees and expenses 4,596
Professional fees 28,310
Shareholders' reports - printing and mailing expenses 44,355
Investor relations expense 52,892
Other expenses 11,376
----------------------------------------------------------------------------
Total expenses before custodian fee credit 1,700,794
Custodian fee credit (4,906)
----------------------------------------------------------------------------
Net expenses 1,695,888
----------------------------------------------------------------------------
Net investment income 4,581,392
----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments (5,444,823)
Call options written 1,920,080
Change in net unrealized appreciation (depreciation) of:
Investments (3,215,265)
Call options written 1,923,740
----------------------------------------------------------------------------
Net realized and unrealized gain (loss) (4,816,268)
----------------------------------------------------------------------------
DISTRIBUTIONS TO FUNDPREFERRED SHAREHOLDERS
From net investment income (578,656)
----------------------------------------------------------------------------
Decrease in net assets applicable to Common shares from
distributions
to FundPreferred shareholders (578,656)
----------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations $ (813,532)
============================================================================
See accompanying notes to financial statements.
20
Statement of
CHANGES in NET ASSETS
For the Period June 26, 2007 (commencement
of operations)
through December 31, 2007
--------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,581,392
Net realized gain (loss) from:
Investments (5,444,823)
Call options written 1,920,080
Change in net unrealized appreciation (depreciation) of:
Investments (3,215,265)
Call options written 1,923,740
Distributions to FundPreferred shareholders:
From net investment income (578,656)
--------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from operations (813,532)
--------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (4,068,983)
Tax return of capital (7,963,761)
--------------------------------------------------------------------------
Decrease in net assets applicable to Common shares from
distributions to Common shareholders (12,032,744)
--------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Proceeds from sale of shares, net of offering costs 283,041,000
Repurchased (1,545,135)
FundPreferred shares offering costs (560,000)
--------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares from capital share transactions 280,935,865
--------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to Common
shares 268,089,589
Net assets applicable to Common shares at the beginning of
period 100,084
--------------------------------------------------------------------------
Net assets applicable to Common shares at the end of period $268,189,673
--------------------------------------------------------------------------
Undistributed (Over-distribution of) net investment income
at the end of period $ (64,629)
==========================================================================
See accompanying notes to financial statements.
21
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
Nuveen Tax-Advantaged Dividend Growth Fund (the "Fund") is a diversified,
closed-end management investment company registered under the Investment Company
Act of 1940, as amended. The Fund's shares are listed on the New York Stock
Exchange and trade under the ticker symbol "JTD." The Fund was organized as a
Massachusetts business trust on February 22, 2007.
Prior to the commencement of operations, the Fund had no operations other than
those related to organizational matters, the initial capital contribution of
$100,084 by Nuveen Asset Management (the "Adviser"), a wholly owned subsidiary
of Nuveen Investments, Inc. ("Nuveen"), and the recording of the organization
expenses ($11,000) and their reimbursement by Nuveen Investments, LLC, also a
wholly owned subsidiary of Nuveen.
The Fund seeks to provide an attractive level of tax-advantaged distributions
and capital appreciation by investing in dividend-paying equity securities
consisting primarily of common stocks of mid- to large-cap companies that have
attractive dividend income and the potential for future dividend growth and
capital appreciation. The Fund will also invest in preferred and other fixed
income securities.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
Exchange-listed securities are generally valued at the last sales price on the
securities exchange on which such securities are primarily traded. Securities
traded on a securities exchange for which there are no transactions on a given
day or securities not listed on a securities exchange are valued at the mean of
the closing bid and asked prices. Securities traded on Nasdaq are valued at the
Nasdaq Official Closing Price. The prices of fixed-income securities are
generally provided by an independent pricing service approved by the Fund's
Board of Trustees. When price quotes are not readily available, the pricing
service or, in the absence of a pricing service for a particular investment, the
Board of Trustees of the Fund, or its designee, may establish fair value using a
wide variety of market data including yields or prices of investments of
comparable quality, type of issue, coupon, maturity and rating, market quotes or
indications of value from security dealers, evaluations of anticipated cash
flows or collateral, general market conditions and other information and
analysis, including the obligor's credit characteristics considered relevant by
the pricing service or the Board of Trustees' designee. The value of options
written are based on the last sale price in the case of exchange-traded options
or, in the case of options traded in the OTC market, the last asked price. If
the pricing service is unable to supply a price for an investment or derivative
instrument, the Fund may use a market quote provided by a major broker/dealer in
such investments. If it is determined that the market price for an investment or
derivative instrument is unavailable or inappropriate, the Board of Trustees of
the Fund, or its designee, may establish fair value in accordance with
procedures established in good faith by the Board of Trustees. Short-term
investments are valued at amortized cost, which approximates market value.
Index options are generally valued at the average of the closing bid and asked
quotations. The close of trading of index options traded on the Chicago Board
Options Exchange normally occurs at 4:15 ET, which is different from the normal
4:00 ET close of the NYSE (the time of day as of which each Fund's NAV is
calculated). Under normal market circumstances, closing index option quotations
are considered to reflect the index option contract values as of the close of
the NYSE and will be used to value the option contracts. However, a significant
change in the S&P 500 or NASDAQ-100 futures contracts between the NYSE close and
the options market close will be considered as an indication that closing market
quotations for index options do not reflect the value of the contracts as of the
stock market close. In the event of such a significant change, the Board of
Trustees, or its designee, will determine a fair value for the options. Any such
fair valuation will likely take into account any information that may be
available about the actual trading price of the affected option as of 4:00 ET,
and if no such information is reliably available, the fair valuation of the
option may take into account various option pricing methodologies, as determined
to be appropriate under the circumstances.
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and
losses from investment transactions are determined on the specific
identification method. Investments purchased on a when-issued/delayed delivery
basis may have extended settlement periods. Any investments so purchased are
subject to market fluctuation during this period. The Fund has instructed the
custodian to segregate assets with a current value at least equal to the amount
of the when-issued/delayed delivery purchase commitments. At December 31, 2007,
the Fund had no such outstanding purchase commitments.
Investment Income
Dividend income is recorded on the ex-dividend date or, for foreign securities,
when information is available. Interest income, which includes the amortization
of premiums and accretion of discounts for financial reporting purposes, is
recorded on an accrual basis.
22
Federal Income Taxes
The Fund intends to comply with the requirements of Subchapter M of the Internal
Revenue Code applicable to regulated investment companies. The Fund intends to
distribute substantially all of its investment company taxable income to
shareholders. In any year when the Fund realizes net capital gains, the Fund may
choose to distribute all or a portion of its net capital gains to shareholders,
or alternatively, to retain all or a portion of its net capital gains and pay
federal corporate income taxes on such retained gains.
Effective June 29, 2007, the Fund 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 Fund's tax returns to determine whether it
is "more-likely-than-not" (i.e. greater than 50-percent) 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 benefit or expense in the
current year.
Implementation of FIN 48 required management of the Fund 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. the last four tax year ends and
the interim tax period since then). The Fund has no examinations in progress.
For all open tax years and all major taxing jurisdictions through the end of the
reporting period, management of the Fund has reviewed all tax positions taken or
expected to be taken in the preparation of the Fund's tax return and concluded
the adoption of FIN 48 resulted in no impact to the Fund's net assets or results
of operations as of and during the period June 26, 2007 (commencement of
operations) through December 31, 2007.
The Fund is also not aware of any tax positions for which it is reasonable
possible that the total amounts of unrecognized tax benefits will significantly
change in the next twelve months.
Dividends and Distributions to Common Shareholders
Distributions to Common shareholders are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
corporate income tax regulations, which may differ from U.S. generally accepted
accounting principles.
The Fund makes quarterly cash distributions to Common shareholders of a stated
dollar amount per share. Subject to approval and oversight by the Fund's Board
of Trustees, the Fund seeks to maintain a stable distribution level designed to
deliver the long-term return potential of the Fund's investment strategy through
regular quarterly distributions (a "Managed Distribution Program"). Total
distributions during a calendar year generally will be made from the Fund's net
investment income, net realized capital gains and net unrealized capital gains
in the Fund's portfolio, if any. The portion of distributions paid from net
unrealized gains, if any, would be distributed from the Fund's assets and would
be treated by shareholders as a non-taxable distribution for tax purposes. In
the event that total distributions during a calendar year exceed the Fund's
total return on net asset value, the difference will be treated as a return of
capital for tax purposes and will reduce net asset value per share. If the
Fund's total return on net asset value exceeds total distributions during a
calendar year, the excess will be reflected as an increase in net asset value
per share. The final determination of the source and character of all
distributions for the fiscal year are made after the end of the fiscal year and
are reflected in the accompanying financial statements.
FundPreferred Shares
The Fund has issued and outstanding 1,440 Series T, FundPreferred shares,
$25,000 stated value per share, as a means of effecting financial leverage. The
dividend rate paid by the Fund on the 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.
Option Transactions
The Fund is authorized to write (sell) call options. When the Fund writes a call
option, an amount equal to the net premium received (the premium less
commission) is recorded as a liability and is subsequently adjusted to reflect
the current value of the written option until the option expires or a Fund
enters into a closing purchase transaction. When a call option expires or the
Fund enters into a closing purchase transaction, the difference between the net
premium received and any amount paid at expiration or on effecting a closing
purchase transaction, including commission, is treated as a net realized gain on
option contracts written or, if the net premium received is less than the amount
paid, as a net realized loss on option contracts written. The Fund, as a writer
of a call option, bears the risk of an unfavorable change in the market value of
the security or index underlying the written option. There is the risk the Fund
may not be able to enter into a closing transaction because of an illiquid
market.
23
Notes to
FINANCIAL STATEMENTS (continued)
Organization and Offering Costs
Nuveen Investments, LLC has agreed to reimburse all organization expenses
(approximately $11,000) and pay all Common share offering costs (other than
sales load) that exceed $.04 per Common share. The Fund's Common share of
offering costs of $594,000 was recorded as a reduction of the proceeds from the
sale of the Common shares.
Costs incurred by the Fund in connection with its offering of FundPreferred
shares of $560,000 were recorded as a reduction to paid-in surplus.
Repurchase Agreements
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian take possession of the underlying collateral
securities, the fair value of which exceeds the principal amount of the
repurchase transaction, including accrued interest, at all times. If the seller
defaults, and the fair value of the collateral declines, realization of the
collateral may be delayed or limited.
Custodian Fee Credit
The Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by net credits earned on the 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 the Fund overdraws its account at the custodian bank.
Indemnifications
Under the Fund's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with 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. FUND SHARES
On November 21, 2007, the Fund's Board of Trustees approved an open-market share
repurchase program, as part of a broad, ongoing effort designed to support the
market prices of the Fund's Common shares. Under the terms of the program, the
Fund may repurchase up to 10% of its outstanding Common shares.
Transactions in Common shares were as follows:
FOR THE PERIOD
6/26/07
(COMMENCEMENT OF
OPERATIONS)
THROUGH 12/31/07
-------------------------------------------------------------------------------------
Common shares:
Sold 14,850,000
Repurchased (96,900)
-------------------------------------------------------------------------------------
14,753,100
-------------------------------------------------------------------------------------
FundPreferred shares sold 1,440
-------------------------------------------------------------------------------------
Weighted average price per Common share repurchased $15.93
Weighted average discount per Common share repurchased 12.14%
-------------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and call options written) for the period June 26, 2007 (commencement of
operations) through December 31, 2007, aggregated $438,368,725 and $140,024,240,
respectively.
24
Transactions in call options written during the period June 26, 2007
(commencement of operations) through December 31, 2007, were as follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
-------------------------------------------------------------------------------------------------------
Outstanding, beginning of period -- $ --
Call options written 2,440 8,348,880
Call options terminated in closing purchase transactions (1,920) (5,480,040)
Call options expired -- --
-------------------------------------------------------------------------------------------------------
Outstanding, end of period 520 $ 2,868,840
-------------------------------------------------------------------------------------------------------
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the recognition of unrealized gain or loss for tax
(mark-to-market) on option contracts, timing differences in the recognition of
income and timing differences in recognizing certain gains and losses on
investment transactions. To the extent that differences arise that are permanent
in nature, such amounts are reclassified within the capital accounts on the
Statement of Assets and Liabilities presented in the annual report, based on
their federal tax basis treatment; temporary differences do not require
reclassification. Temporary and permanent differences do not impact the net
asset value of the Fund.
At December 31, 2007, the cost of investments (excluding call options written)
was $307,651,704.
Gross unrealized appreciation and gross unrealized depreciation of investments
(excluding call options written) at December 31, 2007, were as follows:
------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 14,597,250
Depreciation (17,823,221)
------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments $ (3,225,971)
------------------------------------------------------------------------------------------------------------------------
The tax components of undistributed net ordinary income and net long-term
capital gains at December 31, 2007, the Fund's tax year end, were as follows:
------------------------------------------------------------------------------------------------------------------------
Undistributed net ordinary income * $ --
Undistributed net long-term capital gains --
------------------------------------------------------------------------------------------------------------------------
* Net ordinary income consists of net taxable income derived from dividends,
interest, and net short-term capital gains, if any.
The tax character of distributions paid during the Fund's tax year ended
December 31, 2007, was designated for purposes of the dividends paid deduction
as follows:
FOR THE PERIOD JUNE 26, 2007 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31,
2007
--------------------------------------------------------------------------------
Distributions from net ordinary income * $4,613,548
Distributions from net long-term capital gains --
Tax return of capital 7,963,761
--------------------------------------------------------------------------------
* Net ordinary income consists of net taxable income derived from dividends,
interest, and net short-term capital gains, if any.
At December 31, 2007, the Fund had an unused capital loss carryforward of
$1,545,737 available for federal income tax purposes to be applied against
future capital gains, if any. If not applied, the carryforwards will expire in
2015.
The Fund elected to defer net realized losses from investments incurred from
November 1, 2007 through December 31, 2007, the Fund's tax year end,
("post-October losses") in accordance with federal income tax regulations.
Post-October losses of $60,454 are treated as having arisen on the first day of
the following fiscal year.
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's management fee is separated into two components -- a complex-level
component, based on the aggregate amount of all fund assets managed by the
Adviser, and a specific fund-level component, based only on the amount of assets
within the Fund. This pricing structure enables Nuveen fund shareholders to
benefit from growth in the assets within each individual fund as well as from
growth in the amount of complex-wide assets managed by the Adviser.
25
Notes to
FINANCIAL STATEMENTS (continued)
The annual fund-level fee, payable monthly, is based upon the average daily
Managed Assets of the Fund as follows:
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
---------------------------------------------------------------------------------------------
For the first $500 million .8000%
For the next $500 million .7750
For the next $500 million .7500
For the next $500 million .7250
For Managed Assets over $2 billion .7000
---------------------------------------------------------------------------------------------
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the tables below. As
of December 31, 2007, the complex-level fee rate was .1846%.
Effective August 20, 2007, 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
------------------------------------------------------------------------------------------------
Prior to August 20, 2007, the complex-level fee schedule was 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 .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
------------------------------------------------------------------------------------------------
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Adviser is
responsible for the overall strategy and asset allocation decisions. The Adviser
has entered into Sub-Advisory Agreements with Santa Barbara Asset Management,
LLC ("Santa Barbara"), a wholly owned subsidiary of Nuveen, and NWQ Investment
Management Company, LLC ("NWQ"), of which Nuveen owns a controlling interest
while key management of NWQ owns a non-controlling minority interest. Santa
Barbara manages the portion of the Fund's investment portfolio allocated to
dividend-paying equity securities. NWQ manages the portion of the Fund's
investment portfolio allocated to preferred securities and other fixed income
securities. The Sub-Adviser is also responsible for the writing of index call
options on various equity market indices, if any. Santa Barbara and NWQ are
compensated for their services to the Fund from the management fees paid to the
Adviser.
The Fund pays no compensation directly to those of its Trustees who are
affiliated with the Adviser or to its Officers, all of whom receive remuneration
for their services to the Fund from the Adviser or its affiliates. The Board of
Trustees has adopted a deferred compensation plan for independent Trustees that
enables Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.
26
Agreement and Plan of Merger
On June 20, 2007, Nuveen Investments announced that it had entered into a
definitive Agreement and Plan of Merger ("Merger Agreement") with Windy City
Investments, Inc. ("Windy City"), a corporation formed by investors led by
Madison Dearborn Partners, LLC ("Madison Dearborn"), pursuant to which Windy
City would acquire Nuveen Investments. Madison Dearborn is a private equity
investment firm based in Chicago, Illinois. The merger was consummated on
November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between the Fund and the Adviser and, if applicable, each sub-advisory
agreement between the Adviser and any sub-adviser of the Fund, and resulted in
the automatic termination of each such agreement. The Board of Trustees of the
Fund considered and approved a new investment management agreement with the
Adviser, and, if applicable, a new sub-advisory agreement between the Adviser
and any sub-adviser on the same terms as the previous agreements. Each new
ongoing investment management agreement and sub-advisory agreement, if
applicable, was approved by the shareholders of the Fund and took effect on
November 13, 2007.
The investors led by Madison Dearborn includes an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of the Fund. Certain conflicts of
interest may arise as a result of such indirect affiliation. For example, the
Fund is generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation will
significantly impact the ability of the Fund to pursue its investment objectives
and policies.
Related Party Holdings
At December 31, 2007, the Fund owned 50,000 shares of Merrill Lynch and Company,
Inc. preferred securities with a market value of $1,002,000. Total income earned
by the Fund from such securities amounted to $51,794 and is included in dividend
income on the Statement of Operations.
6. NEW ACCOUNTING PRONOUNCEMENT
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of December 31, 2007, management does not believe the adoption
of SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
7. SUBSEQUENT EVENTS
During February 2008, regularly scheduled auctions for the FundPreferred shares
issued by the Fund began attracting more shares for sale than offers to buy.
This meant that these auctions "failed to clear," and that many FundPreferred
shareholders who wanted to sell their shares in these auctions were unable to do
so. FundPreferred shareholders unable to sell their shares received
distributions at the "maximum rate" calculated in accordance with the
pre-established terms of the FundPreferred stock.
These developments do not affect the management or investment policies of the
Fund. However, one implication of these auction failures for Common shareholders
is that the Fund's cost of leverage will be higher than it otherwise would have
been had the auctions been successful. As a result, the Fund's future Common
share earnings may be lower than they otherwise might have been.
27
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations
----------------------------------------------------------------
Distributions
from Net Distributions
Beginning Investment from Capital
Common Net Income to Gains to
Share Net Realized/ FundPreferred FundPreferred
Net Asset Investment Unrealized Share- Share-
Value Income(a) Gain (Loss) holders+ holders+ Total
---------------------------------------------------------------------------------------------------
Year Ended 12/31:
2007(b) $19.10 $ .31 $(.30) $(.04) $-- (0.03)
---------------------------------------------------------------------------------------------------
Less Distributions
----------------------------------------------
Net Offering Costs
Investment Capital and Ending
Income to Gains to FundPreferred Common
Common Common Tax Share Share Ending
Share- Share- Return of Underwriting Net Asset Market
holders holders Capital Total Discounts Value Value
-----------------------------------------------------------------------------------------------------------
Year Ended 12/31:
2007(b) $(.28) $-- $(.54) $(.82) $(0.08) $18.17 $16.33
-----------------------------------------------------------------------------------------------------------
* Annualized.
** Total Return on Market Value is the combination of changes in the market
price per share and the effect of reinvested dividend income and reinvested
capital gains distributions, if any, at the average price paid per share at
the time of reinvestment. The last dividend declared in the period, which
is typically paid on the first business day of the following month, is
assumed to be reinvested at the ending market price. The actual
reinvestment for the last dividend declared in the period takes place over
several days, and in some instances may not be based on the market price,
so the actual reinvestment price may be different from the price used in
the calculation. Total returns are not annualized.
Total Return 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.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to FundPreferred
shareholders; income ratios reflect income earned on assets attributable to
FundPreferred shares.
(a) Per share Net Investment Income is calculated using the average daily
shares method.
(b) For the period June 26, 2007 (commencement of operations) through December
31, 2007.
28
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Total Returns Before Credit After Credit***
----------------- ----------------------------- -----------------------------
Based
on Ending Net
Common Assets
Based Share Applicable to
on Net Common Net Net Portfolio
Market Asset Shares Investment Investment Turnover
Value** Value** (000) Expenses++ Income++ Expenses++ Income++ Rate
------------------------------------------------------------------------------------------------------------------
(14.37)% (.70)% $268,190 1.19%* 3.21%* 1.19%* 3.21%* 58%
------------------------------------------------------------------------------------------------------------------
FundPreferred Shares at End of Period
--------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Per Coverage
(000) Share Per Share
------------------------------------------------------------------------------------------------------------------
$36,000 $25,000 $211,243
---
See accompanying notes to financial statements.
29
BOARD MEMBERS & OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at eight. None of the board members who are not interested persons of the Funds
has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NAME, BIRTHDATE POSITION(S) HELD WITH YEAR FIRST NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS ELECTED OR IN FUND COMPLEX PRINCIPAL OCCUPATION(S)
APPOINTED OVERSEEN BY INCLUDING OTHER DIRECTORSHIPS
AND TERM(2) BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
- TIMOTHY R.
SCHWERTFEGER(1)
3/28/49 Chairman of 1994 Former director
333 W. Wacker Drive the Board ANNUAL (1994-November 12, 2007),
Chicago, IL 60606 and Board Member Chairman (1996-June 30,
2007), Non-Executive Chairman
(July 1, 2007-November 12,
2007) and Chief Executive
Officer (1996-June 30, 2007)
184 of Nuveen Investments, Inc.
and Nuveen Asset Management
and certain other
subsidiaries of Nuveen
Investments, Inc.; formerly,
Director (1992-2006) of
Institutional Capital
Corporation.
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
- ROBERT P. BREMNER
8/22/40 Lead Independent 1997 184 Private Investor and
333 W. Wacker Drive Board member CLASS III Management Consultant.
Chicago, IL 60606
- JACK B. EVANS
10/22/48 1999 President, The Hall-Perrine
333 W. Wacker Drive Board member CLASS III Foundation, a private phil-
Chicago, IL 60606 anthropic corporation (since
1996); Director and Vice
Chairman, United Fire Group,
a publicly held company;
Member of the Board of
Regents Companies; for the
State of Iowa University
System; Director, Gazette
Life Trustee of Coe College
184 and Iowa College Foundation;
Member of the Advisory
Council of the Department of
Finance in the Tippie College
of Business, University of
Iowa; formerly, Director,
Alliant Energy; formerly,
Director, Federal Reserve
Bank of Chicago; formerly,
President and Chief Operating
Officer, SCI Financial Group,
Inc., a regional financial
services firm.
- WILLIAM C. HUNTER
3/6/48 2004 Dean, Tippie College of
333 W. Wacker Drive Board member CLASS II Business, University of Iowa
Chicago, IL 60606 (since July 2006); formerly,
Dean and Distinguished
Professor of Finance, School
of Business at the University
of Connecticut (2003-2006);
previously, Senior Vice
President and Director of
Research at the Federal
184 Reserve Bank of Chicago
(1995-2003); Director (since
1997), Credit Research Center
at George Washington
University; Director (since
2004) of Xerox Corporation;
Director (since 2005) Beta
Gamma Sigma International
Honor Society; Director, SS&C
Technologies, Inc. (May
2005-October 2005).
30
NAME, BIRTHDATE POSITION(S) HELD WITH YEAR FIRST NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS ELECTED OR IN FUND COMPLEX PRINCIPAL OCCUPATION(S)
APPOINTED OVERSEEN BY INCLUDING OTHER DIRECTORSHIPS
AND TERM(2) BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
- DAVID J. KUNDERT
10/28/42 2005 Director, Northwestern Mutual
333 W. Wacker Drive Board member CLASS II Wealth Management Company;
Chicago, IL 60606 Retired (since 2004) as
Chairman, JPMorgan Fleming
Asset Management, President
and CEO, Banc One Investment
Advisors Corporation, and
President, One Group Mutual
Funds; prior thereto,
Executive Vice President,
182 Banc One Corporation and
Chairman and CEO, Banc One
Investment Management Group;
Member, Board of Regents,
Luther College; member of the
Wisconsin Bar Association;
member of Board of Directors,
Friends of Boerner Botanical
Gardens; member of Investment
Committee, Greater Milwaukee
Foundation.
- WILLIAM J. SCHNEIDER
9/24/44 1997 Chairman of Miller-Valentine
333 W. Wacker Drive Board member ANNUAL Partners Ltd., a real estate
Chicago, IL 60606 investment company, formerly,
Senior Partner and Chief
184 Operating Officer (retired,
2004); Director, Dayton
Development Coalition;
formerly, Member, Business
Advisory Council, Cleveland
Federal Reserve Bank.
- JUDITH M. STOCKDALE
12/29/47 1997 Executive Director, Gaylord
333 W. Wacker Drive Board member CLASS I and Dorothy Donnelley
Chicago, IL 60606 Foundation (since 1994);
184 prior thereto, Executive
Director, Great Lakes
Protection Fund (from 1990 to
1994).
- CAROLE E. STONE
6/28/47 2007 Director, Chicago Board
333 W. Wacker Drive Board member CLASS I Options Exchange (since
Chicago, IL 60606 2006); Chair New York Racing
Association Oversight Board
(2005-12/2007); Commissioner,
New York State Commission on
Public Authority Reform
184 (since 2005); formerly
Director, New York State
Division of the Budget
(2000-2004), Chair, Public
Authorities Control Board
(2000-2004) and Director,
Local Government Assistance
Corporation (2000-2004).
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND:
- GIFFORD R. ZIMMERMAN
9/9/56 Chief Administrative Managing Director (since
333 W. Wacker Drive Officer 1988 2002), Assistant Secretary
Chicago, IL 60606 and Associate General
Counsel, formerly, Vice
President and Assistant
General Counsel, of Nuveen
Investments, LLC; Managing
Director (since 2002),
Associate General Counsel and
Assistant Secretary, of
Nuveen Asset Management; Vice
President and Assistant
Secretary of NWQ Investment
Management Company, LLC.
(since 2002), Nuveen
Investments Advisers Inc.
(since 2002), Symphony Asset
Management LLC, and NWQ
184 Investment Management
Company, LLC (since 2003),
Tradewinds Global Inves-
tors, LLC, and Santa Barbara
Asset Management, LLC (since
2006); Nuveen HydePark Group
LLC and Richards & Tierney,
Inc. (since 2007); Managing
Director, Associate General
Counsel and Assistant
Secretary of Rittenhouse
Asset Management, Inc. (since
2003); Managing Director
(since 2004) and Assistant
Secretary (since 1994) of
Nuveen Investments, Inc.,
Assistant Secretary (since
2003) of Symphony Asset
Management LLC.
31
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND (CONTINUED):
- WILLIAM ADAMS IV
6/9/55 Executive Vice President,
333 W. Wacker Drive Vice President 2007 U.S. Structured Products
Chicago, IL 60606 of Nuveen Investments,
120 LLC, (since 1999), prior
thereto, Managing
Director of Structured
Investments.
- JULIA L. ANTONATOS
9/22/63 Managing Director (since
333 W. Wacker Drive Vice President 2004 2005), formerly Vice
Chicago, IL 60606 184 President (2002-2005) of
Nuveen Investments, LLC;
Chartered Financial
Analyst.
- CEDRIC H. ANTOSIEWICZ
1/11/62 Managing Director, (since
333 W. Wacker Drive Vice President 2007 120 2004) previously, Vice
Chicago, IL 60606 President (1993-2004) of
Nuveen Investments, LLC.
- MICHAEL T. ATKINSON
2/3/66 Vice President Vice President (since
333 W. Wacker Drive and Assistant 2000 184 2002) of Nuveen
Chicago, IL 60606 Secretary Investments, LLC.
- PETER H. D'ARRIGO
11/28/67 Vice President and
333 W. Wacker Drive Vice President 1999 Treasurer of Nuveen
Chicago, IL 60606 Investments, LLC and
Nuveen Investments, Inc.;
Vice President and
Treasurer of Nuveen Asset
Management (since 2002),
Nuveen Investments
Advisers Inc. (since
2002); NWQ Investment
Management Company, LLC.
(since 2002); Rittenhouse
Asset Management, Inc.
(since 2003), Tradewinds
NWQ Global Investors, LLC
184 (since 2006), Santa
Barbara Asset Management,
LLC (since 2006) and
Nuveen HydePark Group,
LLC and Richards &
Tierney, Inc. (since
2007); Treasurer of
Symphony Asset Management
LLC (since 2003);
formerly, Vice President
and Treasurer (1999-2004)
of Nuveen Advisory Corp.
and Nuveen Institutional
Advisory Corp.(3),
Chartered Financial
Analyst.
- LORNA C. FERGUSON
10/24/45 Managing Director (since
333 W. Wacker Drive Vice President 1998 2004), formerly, Vice
Chicago, IL 60606 President of Nuveen
Investments, LLC,
Managing Director (2004)
184 formerly, Vice President
(1998-2004) of Nuveen
Advisory Corp. and Nuveen
Institutional Advisory
Corp.(3); Managing
Director (since 2005) of
Nuveen Asset Management.
- STEPHEN D. FOY
5/31/54 Vice President Vice President (since
333 W. Wacker Drive and Controller 1998 1993) and Funds
Chicago, IL 60606 Controller (since 1998)
of Nuveen Investments,
LLC; Vice President
(since 2005) of Nuveen
184 Asset Management;
formerly, Vice President
and Funds Controller
(1998-2004) of Nuveen
Investments, Inc.;
Certified Public
Accountant.
- WALTER M. KELLY
2/24/70 Chief Compliance Vice President (since
333 W. Wacker Drive Officer and 2003 2006) formerly, Assistant
Chicago, IL 60606 Vice President Vice President and
Assistant General Counsel
(2003-2006) of Nuveen
Investments, LLC;
184 Assistant Vice President
and Assistant Secretary
of the Nuveen Funds
(2003-2006); previously,
Associate (2001-2003) at
the law firm of
VedderPrice P.C.
32
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND (CONTINUED):
- DAVID J. LAMB
3/22/63 Vice President (since
333 W. Wacker Drive Vice President 2000 2000) of Nuveen
Chicago, IL 60606 184 Investments, LLC;
Certified Public
Accountant.
- TINA M. LAZAR
8/27/61 Vice President of Nuveen
333 W. Wacker Drive Vice President 2002 184 Investments, LLC (since
Chicago, IL 60606 1999).
- LARRY W. MARTIN
7/27/51 Vice President Vice President, Assistant
333 W. Wacker Drive and Assistant 1988 Secretary and Assistant
Chicago, IL 60606 Secretary General Counsel of Nuveen
Investments, LLC;
formerly, Vice President
and Assistant Secretary
of Nuveen Advisory Corp.
and Nuveen Institutional
Advisory Corp.(3); Vice
President (since 2005)
and Assistant Secretary
of Nuveen Investments,
Inc.; Vice President
(since 2005) and
Assistant Secretary
(since 1997) of Nuveen
Asset Management; Vice
President (since 2000),
Assistant Secretary and
184 Assistant General Counsel
(since 1998) of
Rittenhouse Asset Manage-
ment, Inc.; Vice
President and Assistant
Secretary of Nuveen
Investments Advisers Inc.
(since 2002); NWQ
Investment Management
Company, LLC (since
2002), Symphony Asset
Management LLC (since
2003), Tradewinds Global
Investors, LLC, Santa
Barbara Asset Management
LLC (since 2006) and of
Nuveen HydePark Group,
LLC and Richards &
Tierney, Inc. (since
2007).
- KEVIN J. MCCARTHY
3/26/66 Vice President Vice President, Nuveen
333 W. Wacker Drive and Secretary 2007 Investments, LLC (since
Chicago, IL 60606 2007); Vice President,
and Assistant Secretary,
Nuveen Asset Management,
Rittenhouse Asset
Management, Inc., Nuveen
Investment Advisers Inc.,
Nuveen Investment
Institutional Services
Group LLC, NWQ Investment
Management Company, LLC,
Tradewinds Global
184 Investors LLC, NWQ
Holdings, LLC, Symphony
Asset Management LLC,
Santa Barbara Asset
Management LLC, Nuveen
HydePark Group, LLC and
Richards & Tierney, Inc.
(since 2007); Vice
President and Assistant
General Counsel, Nuveen
Investments, Inc. (since
2007). Prior thereto,
Partner, Bell, Boyd &
Lloyd LLP (1997-2007).
- JOHN V. MILLER
4/10/67 Managing Director (since
333 W. Wacker Drive Vice President 2007 2007), formerly, Vice
Chicago, IL 60606 184 President (2002-2007) of
Nuveen Investments, LLC;
Chartered Financial
Analyst.
- JAMES F. RUANE
7/3/62 Vice President Vice President, Nuveen
333 W. Wacker Drive and Assistant 2007 Investments (since 2007);
Chicago, IL 60606 Secretary prior thereto, Partner,
184 Deloitte & Touche USA LLP
(since 2005), formerly,
senior tax manager (since
2002); Certified Public
Accountant.
33
NAME, BIRTHDATE POSITION(S) HELD WITH NUMBER OF PORTFOLIOS
& ADDRESS THE FUNDS YEAR FIRST IN FUND COMPLEX PRINCIPAL
ELECTED OR OVERSEEN OCCUPATION(S)
APPOINTED(4) BY OFFICER DURING PAST 5 YEARS
OFFICERS OF THE FUND (CONTINUED):
- MARK L. WINGET
12/21/68 Vice President Vice President, Nuveen
333 W. Wacker Drive and Assistant 2008 Investments, LLC (since
Chicago, IL 60606 Secretary 2008); Vice President and
Assistant Secretary,
Nuveen Asset Management,
Rittenhouse Asset
Management, Inc., Nuveen
Investment Advisers Inc.,
Nuveen Investment
Institutional Services
Group LLC, NWQ Investment
Management Company, LLC,
Tradewinds Global
184 Investors, LLC, NWQ
Holdings, LLC, Symphony
Asset Management LLC,
Santa Barbara Asset
Management, LLC, Nuveen
HydePark Group, LLC and
Richards & Tierney, Inc.
(since 2008); Vice
President and Assistant
General Counsel, Nuveen
Investments Inc. (since
2008); prior thereto,
Counsel, VedderPrice P.C.
(1997-2007).
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, by reason of being the former Chairman and
Chief Executive Officer of Nuveen Investments, Inc. and having previously
served in various other capacities with Nuveen Investments, Inc. and its
subsidiaries. It is expected that Mr. Schwertfeger will resign from the
Board of Trustees by the end of the second quarter of 2008.
(2) Board Members serve three year terms, except for two board members who are
elected by the holders of Preferred Shares. The Board of Trustees is divided
into three classes, Class I, Class II, and Class III, with each being
elected to serve until the third succeeding annual shareholders' meeting
subsequent to its election or thereafter in each case when its respective
successors are duly elected or appointed, except two board members are
elected by the holders of Preferred Shares to serve until the next annual
shareholders' meeting subsequent to its election or thereafter in each case
when its respective successors are duly elected or appointed. The first year
elected or appointed represents the year in which the board member was first
elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
34
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.
35
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.
36
Glossary of
TERMS USED in this REPORT
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.
Collateralized Debt Obligations (CDOs): Collateralized debt obligations are a
type of asset-backed security constructed from a portfolio of fixed-income
assets. CDOs usually are divided into different tranches having different
ratings and paying different interest rates. Losses, if any, are applied in
reverse order of seniority and so junior tranches generally offer higher coupons
to compensate for added default risk.
Market Yield (also known as Dividend Yield or Current Yield): Market yield is
based on the Fund's current annualized quarterly distribution divided by the
Fund's current market price. The Fund's quarterly distributions to its
shareholders may be comprised of ordinary income, net realized capital gains
and, if at the end of the calendar year the Fund's cumulative net ordinary
income and net realized gains are less than the amount of the Fund's
distributions, a tax return of capital.
Net Asset Value (NAV): A Fund's common share NAV per 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 shares outstanding. Fund NAVs are calculated at the
end of each business day.
37
NOTES
38
OTHER USEFUL INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
The Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Fund voted proxies relating to portfolio securities held during the most
recent twelve-month period ended June 30, 2007, and (iii) a description of the
policies and procedures that the Fund used to determine how to vote proxies
relating to portfolio securities are available 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 1-202-942-8090
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
Reference Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO Certification Disclosure
The Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
The Fund has filed with the Securities and Exchange Commission the certification
of its Chief Executive Officer and Chief Financial Officer required by Section
302 of the Sarbanes-Oxley Act.
Distribution Information
Nuveen Tax-Advantaged Dividend Growth Fund (JTD) hereby designates 81.24% of
dividends paid from ordinary income as dividends qualifying for the 70%
dividends received deduction for corporations and 100% as qualified dividend
income for individuals under Section 1(h)(11) of the Internal Revenue Code.
Board of Trustees
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carol E. Stone
Fund Manager
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
Custodian
State Street Bank & Trust Company
Boston, MA
Transfer Agent and
Shareholder Services
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
Legal Counsel
Chapman and Cutler LLP
Chicago, IL
Independent Registered
Public Accounting Firm
Ernst & Young LLP
Chicago, IL
The Fund intends to repurchase shares of its own common or preferred
stock in the future at such times and in such amounts as is deemed
advisable. During the period covered by this report the Fund
repurchased 96,900 common shares. Any future repurchases will be
reported to shareholders in the next annual or semi-annual report.
39
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.
Managing $170 billion in assets, as of September 30, 2007, Nuveen Investments
offers access to a number of different asset classes and investing solutions
through a variety of products. Nuveen Investments markets its capabilities under
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
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.
EAN-J-1207D
Learn more about Nuveen Funds at: WWW.NUVEEN.COM/CEF
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. [There were no amendments to or waivers
from the Code during the period covered by this report.] The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Shareholder Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors (the "Board") determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Tax-Advantaged Dividend Growth Fund
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP the Audit Committee approved in advance all
audit services and non-audit services that Ernst & Young LLP provided to the
Fund, except for those non-audit services that were subject to the pre-approval
exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The
pre-approval exception for services provided directly to the Fund waives the
pre-approval requirement for services other than audit, review or attest
services if: (A) the aggregate amount of all such services provided constitutes
no more than 5% of the total amount of revenues paid by the Fund to its
accountant during the fiscal year in which the services are provided; (B) the
Fund did not recognize the services as non-audit services at the time of the
engagement; and (C) the services are promptly brought to the Audit Committee's
attention, and the Committee (or its delegate) approves the services before the
audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND(1) BILLED TO FUND(2) BILLED TO FUND(3) BILLED TO FUND(4)
===================================================================================================================
December 31, 2007 (5) $ 15,000 $ 0 $ 0 $ 0
-------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------
===================================================================================================================
December 31, 2006 N/A N/A N/A N/A
-------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------
(1) "Audit Fees" are the aggregate fees billed for professional services for
the audit of the Fund's annual financial statements and services provided
in connection with statutory and regulatory filings or engagements.
(2) "Audit Related Fees" are the aggregate fees billed for assurance and
related services reasonably related to the performance of the audit or
review of financial statements and are not reported under "Audit Fees".
(3) "Tax Fees" are the aggregate fees billed for professional services for tax
advice, tax compliance, and tax planning.
(4) "All Other Fees" are the aggregate fees billed for products and services
for agreed upon procedures engagements performed for leveraged funds.
(5) The Fund commenced operations on June 26, 2007.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The tables also show the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
===================================================================================================================
December 31, 2007(1) $ 0 $ 0 $ 0
-------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------
December 31, 2006 N/A N/A N/A
-------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
-------------------------------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 26, 2007.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
=====================================================================================================================
December 31, 2007(1) $ 0 $ 0 $ 0 $ 0
December 31, 2006 N/A N/A N/A N/A
(1) The Fund commenced operations on June 26, 2007.
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser in their respective amounts from the previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit
Committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the Audit Committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the Audit Committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the Audit Committee at
the next Audit Committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board has a separately designated Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are
Robert P. Bremner, Jack B. Evans, David J. Kundert and William J. Schneider. Mr.
Eugene S. Sunshine, who also served as a member of the Committee during this
reporting period, has resigned from the Board. His resignation became effective
on July 31, 2007.
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.
Nuveen Asset Management (NAM) is the registrant's investment adviser (NAM is
also referred to as the "Adviser".) NAM, as Adviser, provides discretionary
investment advisory services. NAM is responsible for the selection and on-going
monitoring of the Fund's investment portfolio, managing the Fund's business
affairs and providing certain clerical, bookkeeping and administrative services.
The Adviser has engaged NWQ Investment Management Company, LLC ("NWQ"), and
Santa Barbara Asset Management ("Santa Barbara") as Sub-Advisers to provide
discretionary investment advisory services (NWQ and Santa Barbara are also
collectively referred to as "Sub-Advisers"). As part of these services, the
Adviser has also delegated to each Sub-Adviser the full responsibility for proxy
voting on securities held in its portfolio and related duties in accordance with
the Sub-Adviser's policy and procedures. The Adviser periodically will monitor
each Sub-Adviser's voting to ensure that they are carrying out their duties. The
Adviser's and Sub-Advisers' proxy voting policies and procedures are summarized
as follows:
NAM
The registrant invests its assets primarily in fixed income securities and cash
management securities. In the rare event that a fixed income issuer were to
issue a proxy or that the registrant were to receive a proxy issued by a cash
management security, NAM would either engage an independent third party to
determine how the proxy should be voted or vote the proxy with the consent, or
based on the instructions, of the registrant's Board or its representative. A
member of NAM's legal department would oversee the administration of the voting,
and ensure that records were maintained in accordance with Rule 206(4)-6,
reports were filed with the SEC on Form N-PX, and the results provided to the
registrant's Board and made available to shareholders as required by applicable
rules.
NWQ
With respect to NWQ, NWQ's Proxy Voting Committee (the "Committee") is
responsible for supervision of the proxy voting process, including
identification of material conflicts of interest involving NWQ and the proxy
voting process in respect of securities owned on behalf of clients, and
circumstances when NWQ may deviate from its policies and procedures. Unless
otherwise determined by the Committee, NWQ will cause proxies to be voted
consistent with the recommendations or guidelines of an independent third party
proxy service or other third party, and in most cases, votes generally in
accordance with the recommendations of ISS on the voting of proxies relating to
securities held on behalf of clients' accounts. Unless otherwise restricted,
NWQ's Committee reserves the right to override the specific recommendations in
any situation where it believes such recommendation is not in its clients best
interests. NWQ's Committee oversees the identification of material conflicts of
interest, and where such matter is covered by the recommendations or guidelines
of a third party proxy service, it shall cause proxies to be voted in accordance
with the applicable recommendation or guidelines, to avoid such conflict. If a
material conflict of interest matter is not covered by the third party service
provider recommendations, NWQ may (i) vote in accordance with the
recommendations of an alternative independent third party or (ii) disclose the
conflict to the client, and with their consent, make the proxy voting
determination and document the basis for such determination.
NWQ generally does not intend to vote proxies associated with the securities of
any issuer if as a result of voting, the issuer restricts such securities from
being transacted for a period (this occurs for issuers in a few foreign
countries), or where the voting would in NWQ's judgment result in some other
financial, legal, regulatory disability or burden to NWQ or the client (such as
imputing control with respect to the issuer). Likewise, the Committee may
determine not to recall securities on loan if negative consequences of such
recall outweigh benefits of voting in the particular instance, or expenses and
inconvenience of such recall outweigh benefits, in NWQ's judgment.
SANTA BARBARA
The Fund is responsible for voting proxies on securities held in its portfolio.
When the Fund receives a proxy, the decision regarding how to vote such proxy
will be made by the Sub-Adviser responsible for the assets to which the proxy
relates in accordance with that Sub-Adviser's proxy voting procedures.
With respect to Santa Barbara, the Fund has granted to Santa Barbara the
authority to vote proxies on its behalf with respect to the assets managed by
Santa Barbara. A senior member of Santa Barbara is responsible for oversight of
the Fund's proxy voting process. Santa Barbara also uses the services of
Institutional Shareholder Services, Inc. ("ISS"). Santa Barbara reviews ISS
recommendations and frequently follows the ISS recommendations. However, on
selected issues, Santa Barbara may not vote in accordance with the ISS
recommendations when it believes that specific ISS recommendations are not in
the best economic interest of the Fund. If Santa Barbara manages the assets of a
company or its pension plan and any of Santa Barbara's clients hold any
securities of that company, Santa Barbara will vote proxies relating to such
company's securities in accordance with the ISS recommendations to avoid any
conflict of interest. If a client requests Santa Barbara to follow specific
voting guidelines or additional guidelines, Santa Barbara will review the
request and inform the client only if Santa Barbara is not able to follow the
client's request.
Santa Barbara has adopted the ISS Proxy Voting Guidelines. While these
guidelines are not intended to be all-inclusive, they do provide guidance on
Santa Barbara's general voting policies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Nuveen Asset Management (NAM) is the registrant's investment adviser (NAM is
also referred to as the "Adviser".) NAM, as Adviser, provides discretionary
investment advisory services. NAM is responsible for the selection and on-going
monitoring of the Fund's investment portfolio, managing the Fund's business
affairs and providing certain clerical, bookkeeping and administrative services.
The Adviser has engaged NWQ Investment Management Company, LLC ("NWQ"), and
Santa Barbara Asset Management ("Santa Barbara") as Sub-Advisers to provide
discretionary investment advisory services (NWQ and Santa Barbara are also
collectively referred to as "Sub-Advisers"). The following section provides
information on the portfolio managers at the Adviser as well as each
Sub-Adviser:
NAM
ITEM 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
Messrs. Rob A. Guttschow, CFA and John Gambla, CFA are primarily responsible for
the day-to-day management of the registrant's portfolio ("Portfolio Manager")
since 2007.
Mr. Guttschow is a Managing Director of Nuveen HydePark Group, LLC ("HydePark")
and Nuveen Asset Management ("NAM"). Mr. Guttschow joined NAM in May 2004 to
develop and implement a derivative overlay capability. Mr. Guttschow then joined
Nuveen HydePark Group LLC in September 2007, while retaining his Managing
Director status with Nuveen Asset Management. Mr. Guttschow was a Managing
Director and Senior Portfolio Manager at Lotsoff Capital Management ("LCM") from
1993 until 2004. While at LCM, Mr. Guttschow managed a variety of taxable fixed
income portfolios and enhanced equity index products totaling $1.5 billion. Mr.
Guttschow is a Chartered Financial Analyst ("CFA") and a member of the
Association for Investment Management Research. He has served as a member of the
TRIAD group for the Investment Analyst Society of Chicago. Education: University
of Illinois at Urbana/Champaign, B.S., M.B.A., CFA.
Mr. Gambla is a Managing Director of Nuveen HydePark Group LLC and a Managing
Director at NAM, since 2007. He is responsible for designing and maintaining
equity and alternative investment portfolios. Prior to this, he was a Senior
Trader and Quantitative Specialist for NAM (since 2003), and a Portfolio Manager
for Nuveen's closed-end fund managed account. Additional responsibilities
included quantitative research and product development. Mr. Gambla joined Nuveen
in 1992 as an Assistant Portfolio Manager. In 1993, he became a lead Portfolio
Manager responsible for seven closed-end and open-end bond funds totaling $1.5
billion. In 1998, he became Manager of Defined Portfolio Advisory which provided
fundamental research, quantitative research and trading for Nuveen's $11 billion
of equity and fixed-income Unit Trusts. Prior to his career with Nuveen, he was
a Financial Analyst with Abbott Laboratories. He is a Chartered Financial
Analyst, Certified Financial Risk Manager, Phi Beta Kappa, and is Series 7, 63
and 65-licensed. Education: University of Illinois, B.A., B.S., University of
Chicago, M.B.A.
ITEM 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS
(iii) NUMBER OF OTHER ACCOUNTS AND
(ii) NUMBER OF OTHER ACCOUNTS MANAGED ASSETS FOR WHICH ADVISORY FEE IS
AND ASSETS BY ACCOUNT TYPE PERFORMANCE-BASED
OTHER OTHER
REGISTERED OTHER POOLED REGISTERED OTHER POOLED
(i) NAME OF INVESTMENT INVESTMENT OTHER INVESTMENT INVESTMENT OTHER
PORTFOLIO MANAGER COMPANIES VEHICLES ACCOUNTS COMPANIES VEHICLES ACCOUNTS
---------------------------------------------------------------------------------------------------------------------------
Rob A. Guttschow, CFA 5 1,781mm n/a 3 0.5mm 1 20mm
---------------------------------------------------------------------------------------------------------------------------
John Gambla, CFA 5 1,781mm 2 0.3mm 1 20mm
---------------------------------------------------------------------------------------------------------------------------
POTENTIAL MATERIAL CONFLICTS OF INTEREST
The simultaneous management of the Fund and the other registered investment
companies noted above by the Portfolio Managers may present actual or apparent
conflicts of interest with respect to the allocation and aggregation of
securities orders placed on behalf of the Fund and the other accounts.
The Adviser has adopted several policies that address potential conflicts of
interest, including best execution and trade allocation policies that are
designed to ensure (1) that portfolio management is seeking the best price for
portfolio securities under the circumstances, (2) fair and equitable allocation
of investment opportunities among accounts over time and (3) compliance with
applicable regulatory requirements. All accounts are to be treated in a
non-preferential manner, such that allocations are not based upon account
performance, fee structure or preference of the portfolio manager. In addition,
the Adviser has adopted a Code of Conduct that sets forth policies regarding
conflicts of interest.
ITEM 8(a)(3). FUND MANAGER COMPENSATION
Compensation. Each Portfolio Manager's compensation consists of three basic
elements--base salary, cash bonus and long-term incentive compensation. The
Adviser's compensation strategy is to annually compare overall compensation,
including these three elements, to the market in order to create a compensation
structure that is competitive and consistent with similar financial services
companies. As discussed below, several factors are considered in determining
each Portfolio Manager's total compensation. In any year these factors may
include, among others, the effectiveness of the investment strategies
recommended by the Portfolio Manager's investment team, the investment
performance of the accounts managed by the Portfolio Manager's, and the overall
performance of Nuveen Investments, Inc. (the parent company of the Adviser).
Although investment performance is a factor in determining each Portfolio
Manager's compensation, it is not necessarily a decisive factor.
Base salary. Each Portfolio Manager is paid a base salary that is set at a level
determined by the Adviser in accordance with its overall compensation strategy
discussed above. The Adviser is not under any current contractual obligation to
increase a Portfolio Manager's base salary.
Cash bonus. Each Portfolio Manager is also eligible to receive an annual cash
bonus. The level of this bonus is based upon evaluations and determinations made
by each Portfolio Manager's supervisors. These reviews and evaluations often
take into account a number of factors, including the effectiveness of the
investment strategies recommended to the Adviser's investment team, the
performance of the accounts for which he serves as portfolio manager relative to
any benchmarks established for those accounts, his effectiveness in
communicating investment performance to stockholders and their representatives,
and his contribution to the Adviser's investment process and to the execution of
investment strategies. The cash bonus component is also impacted by the overall
performance of Nuveen Investments, Inc. in achieving its business objectives.
Long-term incentive compensation. Each Portfolio Manager is eligible to receive
two forms of long term incentive compensation. One form is tied to the
successful revenue growth of the Nuveen HydePark Group LLC. The second form of
long term compensation is tied to the success of Nuveen Investments Inc and its
ability to grow its business as a private company.
ITEM 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2007
NAME OF PORTFOLIO $1 - $10,001- $50,001- $100,001- $500,001 OVER
MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000
-------------------------------------------------------------------------------------------
Rob Guttschow X
-------------------------------------------------------------------------------------------
John Gambla X
-------------------------------------------------------------------------------------------
NWQ
ITEM 8(a)(1). PORTFOLIO MANAGER BIOGRAPHIES
MICHAEL CARNE, CFA, Managing Director and Fixed Income Portfolio Manager
Mr. Carne has been with NWQ since 2002 and has been a Managing Director since
2006.
ITEM 8(a)(2). OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS
In addition to managing the Income Oriented Strategy, Mr. Carne is also
primarily responsible for the day-to-day portfolio management of the following
accounts. Information is provided as of December 31, 2007 unless otherwise
indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS*
--------------------------------------------- ------------------ --------------
Registered Investment Company 1 $ 391,390,531
Other Pooled Investment 0 $ 0
Other Accounts 10,743 $2,297,028,827
------------
* None of the assets in these accounts are subject to an advisory fee based
on performance.
POTENTIAL MATERIAL CONFLICTS OF INTEREST
Actual or apparent conflicts of interest may arise when a portfolio manager has
day-to-day management responsibilities with respect to more than one account.
More specifically, portfolio managers who manage multiple accounts are presented
with the following potential conflicts:
- The management of multiple accounts may result in a portfolio
manager devoting unequal time and attention to the management of
each account. NWQ seeks to manage such competing interests for
the time and attention of portfolio managers by having portfolio
managers focus on a particular investment discipline. Most
accounts managed by a portfolio manager in a particular
investment strategy are managed using the same investment models.
- If a portfolio manager identifies a limited investment
opportunity which may be suitable for more than one account, an
account may not be able to take full advantage of that
opportunity due to an allocation of filled purchase or sale
orders across all eligible accounts. To deal with these
situations, NWQ has adopted procedures for allocating portfolio
transactions across multiple accounts.
- With respect to many of its clients' accounts, NWQ determines
which broker to use to execute transaction orders, consistent
with its duty to seek best execution of the transaction. However,
with respect to certain other accounts, NWQ may be limited by the
client with respect to the selection of brokers or may be
instructed to direct trades through a particular broker. In these
cases, NWQ may place separate, non-simultaneous, transactions for
a Fund and other accounts which may temporarily affect the market
price of the security or the execution of the transactions, or
both, to the detriment of the Fund or the other accounts.
- The Fund is subject to different regulation than other pooled
investment vehicles and other accounts managed by the portfolio
managers. As a consequence of this difference in regulatory
requirements, the Fund may not be permitted to engage in all the
investment techniques or transactions or to engage in these
transactions to the same extent as the other accounts managed by
the portfolio managers. Finally, the appearance of a conflict of
interest may arise where NWQ has an incentive, such as a
performance-based management fee, which relates to the management
of some accounts, with respect to which a portfolio manager has
day-to-day management responsibilities.
NWQ has adopted certain compliance procedures which are designed to address
these types of conflicts common among investment managers. However, there is no
guarantee that such procedures will detect each and every situation in which a
conflict arises.
In addition, Merrill Lynch & Co. (and its affiliates) is an indirect investor in
Nuveen and therefore is considered an affiliate of NWQ under certain federal
securities laws. NWQ may have a conflict of interest due to its relationship
with Merrill Lynch & Co. (and its affiliates).
ITEM 8(a)(3). FUND MANAGER COMPENSATION
NWQ's portfolio managers participate in a highly competitive compensation
structure with the purpose of attracting and retaining the most talented
investment professionals and rewarding them through a total compensation program
as determined by the firm's executive committee. The total compensation program
consists of both a base salary and an annual bonus that can be a multiple of the
base salary. The portfolio manager's performance is formally evaluated annually
and based on a variety of factors. Bonus compensation is primarily a function of
the firm's overall annual profitability and the individual portfolio manager's
contribution as measured by the overall investment performance of client
portfolios in the strategy they manage relative to the strategy's general
benchmark for one, three and five year periods (as applicable), as well as an
objective review of stock recommendations and the quality of primary research,
and subjective review of the professional's contributions to portfolio strategy,
teamwork, collaboration and work ethic.
The total compensation package includes availability of equity-like incentive
for purchase (whose value is determined by the increase in profitability of NWQ
over time) made to most investment professionals. Additionally, the portfolio
managers have been provided compensation in conjunction with signing long-term
employment agreements.
ITEM 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2007
NAME OF PORTFOLIO $1 - $10,001- $50,001- $100,001- $500,001 OVER
MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000
-------------------------------------------------------------------------------------------
Michael Carne X
-------------------------------------------------------------------------------------------
SANTA BARBARA
ITEM 8(a)(1). PORTFOLIO MANAGER BIOGRAPHY
Mr. James Boothe, CFA, joined Santa Barbara in 2002 with over 20 years of
investment management experience. He was a portfolio manager with USAA
Investment Management. Prior to that Mr. Boothe was a portfolio manager /
analyst at San Juan Asset Management. He has a BBA from Kent State University
and a MBA in finance from Loyola Marymount University. Mr. Boothe has earned the
AIMR Chartered Financial Analyst designation.
ITEM 8(a)(2). OTHER ACCOUNTS MANAGED
In addition to managing the Dividend Growth Equity Strategy, Mr. Boothe is also
primarily responsible for the day-to-day portfolio management of the following
accounts. Information is provided as of December 31, 2007 unless otherwise
indicated:
TYPE OF ACCOUNT MANAGED NUMBER OF ACCOUNTS ASSETS*
--------------------------------------------- ------------------ ---------------
Registered Investment Company 3 $ 258,380,765
Other Pooled Investment 0 $ 0
Other Accounts 180 $186,657,326.01
------------
* None of the assets in these accounts are subject to an advisory fee based
on performance.
** The fees received by NAM for this pooled investment account are performance
based.
Material Conflicts of Interest. Actual or apparent conflicts of interest may
arise when a portfolio manager has day-to-day management responsibilities with
respect to more than one account. More specifically, a portfolio manager who
manages multiple accounts is presented with the following potential conflicts:
- The management of multiple accounts may result in a portfolio manager
devoting unequal time and attention to the management of each account.
Santa Barbara seeks to manage such competing interests for the time
and attention of portfolio managers by having portfolio managers focus
on a particular investment discipline. Most accounts managed by a
portfolio manager in a particular investment strategy are managed
using the same investment models.
- If a portfolio manager identifies a limited investment opportunity
that may be suitable for more than one account, an account may not be
able to take full advantage of that opportunity due to an allocation
of filled purchase or sale orders across all eligible accounts. To
deal with these situations, Santa Barbara has adopted procedures for
allocating portfolio transactions across multiple accounts.
- With respect to many of its clients' accounts, Santa Barbara
determines which broker to use to execute transaction orders,
consistent with its duty to seek best execution of the transaction.
However, with respect to certain other accounts, Santa Barbara may be
limited by the client with respect to the selection of brokers or may
be instructed to direct trades through a particular broker. In these
cases, Santa Barbara may place separate, non-simultaneous,
transactions for a Fund and other accounts, which may temporarily
affect the market price of the security or the execution of the
transaction, or both, to the detriment of the Fund or the other
accounts.
- The Fund is subject to different regulation than the other pooled
investment vehicles and other accounts managed by the portfolio
manager. As a consequence of this difference in regulatory
requirements, the Fund may not be permitted to engage in all the
investment techniques or transactions or to engage in these
transactions to the same extent as the other accounts managed by the
portfolio manager. Finally, the appearance of a conflict of interest
may arise where Santa Barbara has an incentive, such as a
performance-based management fee, which relates to the management of
some accounts, with respect to which a portfolio manager has
day-to-day management responsibilities.
Santa Barbara has adopted certain compliance procedures that are designed to
address these types of conflicts common among investment managers. However,
there is no guarantee that such procedures will detect each and every situation
in which a conflict arises.
ITEM 8(a)(3). FUND MANAGER COMPENSATION
Salary and Cash Bonus. With respect to Santa Barbara, Mr. Boothe participates in
a highly competitive compensation structure with the purpose of attracting and
retaining the most talented investment professionals and rewarding them through
a total compensation program as determined by Santa Barbara's executive
committee. The total compensation consists of both a base salary and any annual
bonus that can be a multiple of the base salary. Mr. Boothe's performance is
formally evaluated annually and based on a variety of factors. Bonus
compensation is primarily a function of Santa Barbara's overall annual
profitability and Mr. Boothe's contribution as measured by the overall
investment performance of client portfolios in the strategies he manages
relative the strategy's general benchmark for one-, three- and five-year periods
as well as an objective review of stock recommendations and the quality of
primary research and subjective review of Mr. Boothe's contributions to
portfolio strategy, team work, collaboration and work ethic.
ITEM 8(a)(4). OWNERSHIP OF JTD SECURITIES AS OF DECEMBER 31, 2007
NAME OF PORTFOLIO $1 - $10,001- $50,001- $100,001- $500,001 OVER
MANAGER NONE $10,000 $50,000 $100,000 $500,000 $1,000,000 $1,000,000
-------------------------------------------------------------------------------------------
James Boothe X
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Period* (a) (b) (c) (d)*
TOTAL NUMBER OF AVERAGE TOTAL NUMBER OF SHARES MAXIMUM NUMBER (OR
SHARES (OR PRICE (OR UNITS) PURCHASED AS APPROXIMATE DOLLAR VALUE) OF
UNITS) PAID PER PART OF PUBLICLY SHARES (OR UNITS) THAT MAY YET
PURCHASED SHARE (OR ANNOUNCED PLANS OR BE PURCHASED UNDER THE PLANS OR
UNIT) PROGRAMS PROGRAMS
NOVEMBER 21 - 30, 2007
0 $ - - 1,500,000
DECEMBER 1-31, 2007
96,900 $ 15.93 96,900 1,403,100
TOTAL 96,900
* The registrant's repurchase program was announced November 21, 2007. The
registrant's repurchase program authorized the repurchase of 1,500,000 shares.
The repurchases made by the registrant pursuant to the program were all 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. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Shareholder Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: 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 Tax-Advantaged Dividend Growth Fund
-------------------------------------------------------
By (Signature and Title)* /s/ Kevin J. McCarthy
------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: March 7, 2008
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: March 7, 2008
By (Signature and Title)* /s/ Stephen D. Foy
------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: March 7, 2008
* Print the name and title of each signing officer under his or her signature.