Closed-End Funds

Nuveen Investments

Closed-End Funds

Seeks High Current Income from a Portfolio of
Investment-Grade Preferred Securities

Annual Report

July 31, 2012

Nuveen Quality Preferred
Income Fund

JTP

Nuveen Quality Preferred
Income Fund 2

JPS

Nuveen Quality Preferred
Income Fund 3

JHP

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Table of Contents

Chairman's Letter to Shareholders					4
Portfolio Managers' Comments					5
Fund Leverage and Other Information					8
Common Share Distribution and Price Information					10
Shareholder Meeting Report					11
Performance Overviews					12
Report of Independent Registered Public Accounting Firm					15
Portfolios of Investments					16
Statement of Assets & Liabilities					35
Statement of Operations					36
Statement of Changes in Net Assets					37
Statement of Cash Flows					39
Financial Highlights					40
Notes to Financial Statements					43
Board Members & Officers					54
Annual Investment Management Agreement Approval Process					59
Reinvest Automatically, Easily and Conveniently					66
Glossary of Terms Used in this Report					67
Additional Fund Information					71

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Chairman's
Letter to Shareholders

Dear Shareholders,

Investors have many reasons to remain cautious. The challenges in the Euro area are casting a shadow over global economies and financial markets. The political support for addressing fiscal issues is eroding as the economic and social impacts become more visible. At the same time, member nations appear unwilling to provide adequate financial support or to surrender sufficient sovereignty to strengthen the banks or unify the Euro area financial system. The gains made in reducing deficits, and the hard-won progress on winning popular acceptance of the need for economic austerity, are at risk. To their credit, European political leaders press on to find compromise solutions, but there is increasing concern that time will begin to run out.

In the U.S., strong corporate earnings have enabled the equity markets to withstand much of the downward pressures coming from weakening job creation, slower economic growth and political uncertainty. The Fed remains committed to low interest rates and announced on September 13, 2012 (after the close of this reporting period) another program of quantitative easing (QE3) to continue until mid-2015. Pre-election maneuvering has added to the already highly partisan atmosphere in Congress. The end of the Bush-era tax cuts and implementation of the spending restrictions of the Budget Control Act of 2011, both scheduled to take place at year-end, loom closer.

During the last year, U.S. based investors have experienced a sharp decline and a strong recovery in the equity markets. The experienced investment teams at Nuveen keep their eye on a longer time horizon and use their practiced investment disciplines to negotiate through market peaks and valleys to achieve long-term goals for investors. Experienced professionals pursue investments that will weather short-term volatility and at the same time, seek opportunities that are created by markets that overreact to negative developments. Monitoring this process is an important consideration for the Fund Board as it oversees your Nuveen Fund on your behalf.

As always, I encourage you to contact your financial consultant if you have any questions about your investment in a Nuveen Fund. On behalf of the other members of your Fund Board, we look forward to continuing to earn your trust in the months and years ahead.

Sincerely,

Robert P. Bremner
Chairman of the Board
September 21, 2012

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Portfolio Managers' Comments

Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.

Ratings shown are the highest rating given by one of the following national rating agencies: Standard & Poor's Group, Moody's Investors Service, Inc. or Fitch, Inc. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC, CC, C and D are below investment grade ratings. Certain bonds backed by U.S. Government or agency securities are regarded as having an implied rating equal to the rating of such securities. Holdings designated N/R are not rated by a national rating agency.

Nuveen Quality Preferred Income Fund (JTP)
Nuveen Quality Preferred Income Fund 2 (JPS)
Nuveen Quality Preferred Income Fund 3 (JHP)

The Funds are sub-advised by a team of specialists at Spectrum Asset Management, a wholly-owned subsidiary of Principal Global Investors, LLC. Mark Lieb and Phil Jacoby, who have more than 50 years of combined experience in the preferred securities markets, lead the team. Here Mark and Phil review economic and market conditions and talk about their management strategies and the performance of the Funds for the twelve-month period ended July 31, 2012.

What factors affected the U.S. economic and equity market environments during the twelve-month reporting period ended July 31, 2012?

During the reporting period, the U.S. economy's progress toward recovery from recession remained sluggish. The Federal Reserve (Fed) maintained its efforts to improve the overall economic environment by continuing to hold the benchmark Fed Funds rate at the record low level of zero to 0.25% that it had established in December 2008. At its September 2012 meeting, the central bank affirmed its opinion that economic conditions would likely warrant keeping the rate at "exceptionally low levels" through mid-2015. The Fed also announced that it would extend its so-called Operation Twist program, whereby it is lengthening the average maturity of its holdings of U.S. Treasury securities, through the end of December 2012. The goals of this program are to lower longer-term interest rates, make broader financial conditions more accommodating, support a stronger economic recovery and help ensure that inflation remains at levels consistent with the Fed's mandates of maximum employment and price stability.

In the second quarter 2012, the U.S. economy slowed to an annualized growth rate of 1.5%, according to initial estimates for U.S. gross domestic product (GDP). While this marked the twelfth consecutive quarter of positive growth, it was also a significant slowdown from the previous few quarters. The Consumer Price Index (CPI) rose 1.4% year-over-year as of July 2012, lower than the June figure of 1.7%, which was the lowest twelve-month rate of change since November 2010. Core CPI (which excludes food and energy) increased 2.1% during the period, remaining above the Fed's unofficial objective of 2.0% or lower for this inflation measure. However, the number was slightly below the 2.2% figure reported in June. Labor market conditions continued to be slow to improve, with the national unemployment rate registering 8.3% in July 2012. While this figure was down from 9.1% one year ago, the rate was still a slight uptick from June 2012. The housing market remained the major weak spot in the economy, beleaguered by a high level of distressed properties and difficult credit conditions. For the twelve months

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ended June 2012 (the most recent data available at the time this report was prepared), the average home price in the Standard & Poor's (S&P)/Case-Shiller Index of 20 major metropolitan areas rose 0.5%, marking the second consecutive month prices rose. In addition, the U.S. economic picture continued to be clouded by concerns about the European debt crisis and global financial markets in general and efforts to reduce the U.S. federal deficit.

Throughout the fiscal year period, fixed income markets were buffeted by concerns about the tepid U.S. economic recovery combined with the ballooning U.S. federal deficit, the seemingly unending European debt crisis and a broader slowdown in global growth, especially emerging markets. These macro events caused the financial markets to fluctuate between embracing risk and shunning risk several times during the period. In late summer 2011, the markets experienced a massive flight to quality, leading U.S. Treasuries to outperform all risk assets, particularly equities, high yield and investment-grade corporate bonds. However, late fall brought about a renewed appetite for risk as the European crisis appeared to be on the mend and U.S. economic indicators strengthened. Risk premiums on non-government bonds contracted and asset classes such as high yield corporate bonds, emerging market debt and commercial mortgage-backed securities (CMBS) substantially outperformed Treasuries. In the final months of the reporting period, however, the situation reversed once again as a broad slowdown in global growth together with renewed political discord and sovereign funding pressures in Europe cast a malaise over the markets. Not surprisingly, risk premiums on non-government bonds widened once again as U.S. Treasuries renewed their perceived safe haven status, outperforming other riskier asset classes.

During the reporting period, the European Central Bank created unlimited long-term funding facilities that sparked a rally in preferred shares from December 2011 through the end of the reporting period (with only a short pause in May 2012).

What key strategies were used to manage the Funds during the twelve-month period ended July 31, 2012?

The investment objective of each Fund is to seek high current income consistent with capital preservation. Each Fund's secondary objective is to enhance portfolio value. Under normal market conditions, the Funds seek to invest at least 80% of their net assets in preferred securities and up to 20% in debt securities, including convertible debt and convertible preferred securities.

Our basic strategy is to stay relatively balanced between the individual investor-oriented $25 par preferred securities often traded on securities exchanges and the institutional investor-oriented $1,000 par preferred securities traded over-the-counter in the capital markets. Both types of securities offer different performance opportunities from one another, which together with the broad diversification benefits of the combined universe, help to produce potentially attractive risk-adjusted rates of return.

We keep a risk-averse posture toward security structure and ultimately portfolio structure, which is an important core aspect of our effort to preserve capital and provide attractive income over the long-term. We also maintain approximately a 60% weighting to U.S. issued securities and a 40% weighting to foreign names as part of the strategy of

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Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares.

For additional information, see the individual Performance Overview page for your Fund in this report.

*  JTP since inception return is from 6/25/02. JPS since inception return is from 9/24/02. JHP since inception return is from 12/18/02.

**  Refer to Glossary of Terms Used in this Report for definitions. Indexes are not available for direct investment.

all three Funds seeking to invest in U.S. versus foreign issuers in approximately the same proportion as the Comparative Index.

During the reporting period, we favored discount purchases and securities that had favorable technical characteristics that are unique to hybrid preferred securities. We purchased securities with adequate call protection to help foster higher income protection. We also rebalanced the U.S. trust preferred securities sector of the Funds' portfolios to own more securities that could benefit from the call cycle and have less exposure to premium risk from an early call as a result of a capital treatment event. A capital treatment event occurs if the Federal Reserve revises its position on the treatment of such trust preferred securities as Tier 1 capital.

How did the Funds perform over this twelve-month period?

The performance of the Funds, as well as comparative indexes and benchmarks, are presented in the accompanying table.

Average Annual Total Returns on Common Share Net Asset Value

For the period ended 7/31/12

Fund				1-Year				5-Year				10-Year				Since Inception*
JTP					12.51	%			1.18	%			3.75	%			3.56	%
Barclays U.S. Aggregate Bond Index**					7.25	%			6.91	%			5.65	%			5.69	%
Comparative Index**					8.87	%			3.03	%			4.49	%			4.43	%
JPS					12.32	%			1.90	%			N/A				4.48	%
Barclays U.S. Aggregate Bond Index**					7.25	%			6.91	%			N/A				5.39	%
Comparative Index**					8.87	%			3.03	%			N/A				4.10	%
JHP					11.91	%			1.48	%			N/A				3.69	%
Barclays U.S. Aggregate Bond Index**					7.25	%			6.91	%			N/A				5.44	%
Comparative Index**					8.87	%			3.03	%			N/A				4.14	%

 

For the twelve-month period ended July 31, 2012, all three Funds outperformed both the Barclays U.S. Aggregate Bond Index and the Comparative Index.

During the reporting period, several factors contributed positively to each Fund's performance. Each Fund's overweight in the U.S. sector benefited performance. There was a general flight to U.S. domiciled names from the European sector due to the slowdown in global growth, renewed political discord and sovereign funding pressures in Europe.

Security selection in the life insurance, utility and reinsurance sectors also contributed to performance. Each Fund's overweight in the Real Estate Investment Trust (REIT) preferred securities sector benefited absolute and relative return with specific benefit derived from security selection. In particular, the Funds' holdings in Delphi Financial Group, Inc., Aegon NV, FPL Group Capital Inc., PPL Capital Funding, Inc., Arch Capital Group Limited and Axis Capital Holdings Limited all positively contributed to performance.

While the Funds outperformed for the reporting period, they were negatively impacted by allocations to Banco Santander Finance and Banco Bilbao Vizcaya Argentaria S.A. due to the ongoing European debt crisis and global financial market turmoil.

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Fund Leverage
and Other Information

IMPACT OF THE FUNDS' LEVERAGE STRATEGY ON PERFORMANCE

One important factor impacting the returns of the Funds relative to the comparative indexes was the Funds' use of leverage through the use of bank borrowings. The Funds use leverage because their managers believe that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, use of leverage also can expose common shareholders to additional volatility. For example, as the prices of securities held by a Fund decline, the negative impact of these valuation changes on common share net asset value (NAV) and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share returns during periods when the prices of securities held by a Fund generally are rising. Leverage had a positive impact on the performance of the Funds over this reporting period. During the period, the Funds did not enter into any new interest rate swap contracts in order to hedge leverage costs; however, existing swap contracts that were previously entered into in order to fix (or lock-in) a portion of the Funds' leverage costs had a mildly negative effect on performance during the period as the interest rate swaps had negative cash flow accruals for the period and unrealized losses from a decline in interest rates.

RISK CONSIDERATIONS

Fund shares are not guaranteed or endorsed by any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation. Shares of closed-end funds are subject to investment risks, including the possible loss of principal invested. Past performance is no guarantee of future results.

Investment and Market Risk. An investment in common shares is subject to investment risk, including the possible loss of the entire principal amount that you invest. Your investment in common shares represents an indirect investment in the corporate securities owned by the Funds, which generally trade in the over-the-counter markets. Your common shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.

Price Risk. Shares of closed-end investment companies like these Funds frequently trade at a discount to their net asset value (NAV). Your common shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.

Leverage Risk. A Fund's use of leverage creates the possibility of higher volatility for a Fund's per share NAV, market price, and distributions. Leverage risk can be introduced through regulatory leverage (issuing preferred shares or debt borrowings at the Fund

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level) or through certain derivative investments held in a Fund's portfolio. Leverage typically magnifies the total return of a Fund's portfolio, whether that return is positive or negative. The use of leverage creates an opportunity for increased common share net income, but there is no assurance that a Fund's leveraging strategy will be successful.

Tax Risk. The tax treatment of Fund distributions may be affected by new IRS interpretations of the Internal Revenue Code and future changes in tax laws and regulations.

Issuer Credit Risk. This is the risk that a security in a Fund's portfolio will fail to make dividend or interest payments when due.

Interest Rate Risk. Fixed-income securities such as bonds, preferred, convertible and other debt securities will decline in value if market interest rates rise.

Reinvestment Risk. If market interest rates decline, income earned from a Fund's portfolio may be reinvested at rates below that of the original bond that generated the income.

Preferred Stock Risk. Preferred stocks are subordinate to bonds and other debt instruments in a company's capital structure, and therefore are subject to greater credit risk.

Call Risk or Prepayment Risk. Issuers may exercise their option to prepay principal earlier than scheduled, forcing a Fund to reinvest in lower-yielding securities.

Non-U.S. Securities Risk. Investments in non-U.S securities involve special risks not typically associated with domestic investments including currency risk and adverse political, social and economic developments. These risks often are magnified in emerging markets.

Derivatives Strategy Risk. Derivative securities, such as calls, puts, warrants, swaps and forwards, carry risks different from, and possibly greater than, the risks associated with the underlying investments.

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Common Share Distribution
and Price Information

Distribution Information

The following information regarding your Fund's distributions is current as of July 31, 2012, and likely will vary over time based on each Fund's investment activities and portfolio investment value changes.

During the twelve-month reporting period, the Funds did not make any changes to their monthly distributions to common shareholders. Some of the important factors affecting the amount and composition of these distributions are summarized below.

The Funds employ leverage through the use of bank borrowings. Financial leverage provides the potential for higher earnings (net investment income), total returns and distributions over time, but—as noted earlier—also increases the variability of common shareholders' NAV per share in response to changing market conditions.

During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of earnings, the excess constitutes negative UNII that is likewise reflected in a Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of July 31, 2012, all three Funds had positive UNII balances for tax purposes. JTP and JPS had positive UNII balances and JHP had a negative UNII balance for financial reporting purposes.

Common Share Repurchases and Price Information

As of July 31, 2012, and since the inception of the Funds' repurchase program, the Funds have not repurchased any of their outstanding common shares.

At July 31, 2012, and during the twelve-month reporting period, the Funds' common share prices were trading at (+) premiums or (-) discounts to their common share NAVs as shown in the accompanying table.

Fund				7/31/12 (+) Premium				Twelve-Month Average (-) Discount
JTP				(+)0.93%				(-)1.28%
JPS				(+)2.41%				(-)2.22%
JHP				(+)0.57%				(-)1.48%

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JTP

JPS

JHP

Shareholder Meeting Report

The annual meeting of shareholders was held in the offices of Nuveen Investments on March 30, 2012; at this meeting the shareholders were asked to vote on the election of Board Members.

				JTP				JPS				JHP
				Common Shares				Common Shares				Common Shares
Approval of the Board Members was reached as follows:
Robert P. Bremner
For					51,276,146				97,064,504				19,199,834
Withhold					1,403,300				1,706,774				548,927
Total					52,679,446				98,771,278				19,748,761
Jack B. Evans
For					51,349,117				97,011,091				19,236,542
Withhold					1,330,329				1,760,187				512,219
Total					52,679,446				98,771,278				19,748,761
William J. Schneider
For					51,277,888				97,080,063				19,215,524
Withhold					1,401,558				1,691,215				533,237
Total					52,679,446				98,771,278				19,748,761

 

 

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Fund Snapshot

Common Share Price				$	8.70
Common Share Net Asset Value (NAV)				$	8.62
Premium/(Discount) to NAV					0.93	%
Latest Dividend				$	0.0500
Market Yield					6.90	%
Net Assets Applicable to Common Shares ($000)				$	556,997

 

Leverage

Regulatory Leverage					28.04	%
Effective Leverage					28.04	%

 

Average Annual Total Returns

(Inception 6/25/02)

				On Share Price				On NAV
1-Year					24.30	%			12.51	%
5-Year					2.11	%			1.18	%
10-Year					3.42	%			3.75	%

 

Portfolio Composition

(as a % of total investments)^2,4

Insurance					30.2	%
Commercial Banks					20.9	%
Real Estate/Mortgage					14.6	%
Capital Markets					7.4	%
Diversified Financial Services					6.9	%
Short-Term Investments					2.6	%
Other					17.4	%

 

Country Allocation

(as a % of total investments)^2,4

United States					61.7	%
United Kingdom					8.6	%
Netherlands					5.5	%
Switzerland					3.9	%
Germany					3.7	%
France					3.0	%
Other					13.6	%

 

Top Five Issuers

(as a % of total investments)^1,2,4

PNC Financial Services Group Inc					3.7	%
Firstar Realty LLC					3.1	%
HSBC Holdings PLC					2.7	%
Aegon N.V.					2.6	%
Deutsche Bank AG					2.5	%

JTP

Performance

OVERVIEW

Nuveen Quality Preferred Income Fund

  as of July 31, 2012

Portfolio Allocation (as a % of total investments)^2,4

2011-2012 Monthly Distributions Per Common Share

Common Share Price Performance — Weekly Closing Price

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund's Performance Overview page.

1 Excluding short-term investments.

2 Holdings are subject to change.

3 Rounds to less than 0.1%.

4 Excluding investments in derivatives.

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JPS

Performance

OVERVIEW

Nuveen Quality Preferred Income Fund 2

  as of July 31, 2012

Portfolio Allocation (as a % of total investments)^2,3

2011-2012 Monthly Distributions Per Common Share

Common Share Price Performance — Weekly Closing Price

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund's Performance Overview page.

1 Excluding short-term investments.

2 Holdings are subject to change.

3 Excluding investments in derivatives.

Fund Snapshot

Common Share Price				$	9.34
Common Share Net Asset Value (NAV)				$	9.12
Premium/(Discount) to NAV					2.41	%
Latest Dividend				$	0.0550
Market Yield					7.07	%
Net Assets Applicable to Common Shares ($000)				$	1,097,385

 

Leverage

Regulatory Leverage					28.01	%
Effective Leverage					28.01	%

 

Average Annual Total Returns

(Inception 9/24/02)

				On Share Price				On NAV
1-Year					25.17	%			12.32	%
5-Year					3.05	%			1.90	%
Since Inception					4.57	%			4.48	%

 

Portfolio Composition

(as a % of total investments)^2,3

Insurance					31.1	%
Commercial Banks					20.8	%
Real Estate/Mortgage					12.6	%
Diversified Financial Services					7.7	%
Capital Markets					7.0	%
Short-Term Investments					2.9	%
Other					17.9	%

 

Country Allocation

(as a % of total investments)^2,3

United States					62.1	%
United Kingdom					7.5	%
Netherlands					6.3	%
Germany					4.2	%
France					3.6	%
Switzerland					3.5	%
Other					12.8	%

 

Top Five Issuers

(as a % of total investments)^1,2,3

Wells Fargo and Company					4.4	%
PNC Financial Services Group Inc					3.7	%
Deutsche Bank AG					3.0	%
Vodafone Group Public Limited Company					2.9	%
Aegon N.V.					2.9	%

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Fund Snapshot

Common Share Price				$	8.85
Common Share Net Asset Value (NAV)				$	8.80
Premium/(Discount) to NAV					0.57	%
Latest Dividend				$	0.0520
Market Yield					7.05	%
Net Assets Applicable to Common Shares ($000)				$	208,729

 

Leverage

Regulatory Leverage					27.96	%
Effective Leverage					27.96	%

 

Average Annual Total Returns

(Inception 12/18/02)

				On Share Price				On NAV
1-Year					24.04	%			11.91	%
5-Year					2.13	%			1.48	%
Since Inception					3.52	%			3.69	%

 

Portfolio Composition

(as a % of total investments)^2,3

Insurance					29.6	%
Commercial Banks					21.7	%
Real Estate/Mortgage					9.9	%
Capital Markets					8.5	%
Diversified Financial Services					6.3	%
Short-Term Investments					4.3	%
Other					19.7	%

 

Country Allocation

(as a % of total investments)^2,3

United States					61.6	%
United Kingdom					7.5	%
Netherlands					5.8	%
France					4.7	%
Switzerland					4.3	%
Germany					4.3	%
Other					11.8	%

 

Top Five Issuers

(as a % of total investments)^1,2,3

Wells Fargo and Company					4.3	%
Deutsche Bank AG					3.7	%
Vodafone Group Public Limited Company					3.1	%
Aegon N.V.					2.9	%
PNC Financial Services Group Inc					2.9	%

JHP

Performance

OVERVIEW

Nuveen Quality Preferred Income Fund 3

  as of July 31, 2012

Portfolio Allocation (as a % of total investments)^2,3

2011-2012 Monthly Distributions Per Common Share

Common Share Price Performance — Weekly Closing Price

Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund's Performance Overview page.

1 Excluding short-term investments.

2 Holdings are subject to change.

3 Excluding investments in derivatives.

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Report of INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
Nuveen Quality Preferred Income Fund
Nuveen Quality Preferred Income Fund 2
Nuveen Quality Preferred Income Fund 3

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Quality Preferred Income Fund, Nuveen Quality Preferred Income Fund 2, and Nuveen Quality Preferred Income Fund 3 (the "Funds") as of July 31, 2012, and the related statements of operations and cash flows for the year then ended, and the statements of changes in net assets and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2012, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Quality Preferred Income Fund, Nuveen Quality Preferred Income Fund 2, and Nuveen Quality Preferred Income Fund 3 at July 31, 2012, and the results of their operations and their cash flows for the year then ended, and the changes in their net assets, and the financial highlights for each of the periods indicated therein in conformity with U.S. generally accepted accounting principles.

Chicago, Illinois
September 27, 2012

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JTP

Nuveen Quality Preferred Income Fund

Portfolio of Investments

  July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				$25 Par (or similar) Preferred Securities – 65.3% (47.1% of Total Investments)
				Capital Markets – 6.4%
	135,155			Ameriprise Financial, Inc.					7.750	%						A				$	3,911,386
	26,395			BNY Capital Trust V, Series F					5.950	%						A2					679,671
	181,516			Credit Suisse					7.900	%						BBB					13,513,833
	515,646			Deutsche Bank Capital Funding Trust II					6.550	%						BBB					12,891,150
	86,100			Deutsche Bank Contingent Capital Trust III					7.600	%						BBB					2,242,044
	37,900			Goldman Sachs Group Inc., Series GSC-3 (PPLUS)					6.000	%						Baa3					921,728
	2,200			Goldman Sachs Group Inc., Series GSG-1 (PPLUS)					6.000	%						A-					56,078
	4,500			Goldman Sachs Group Inc., Series GSG-2 (PPLUS)					5.750	%						A-					113,625
	43,900			Morgan Stanley Capital Trust IV					6.250	%						BB+					1,090,037
				Total Capital Markets																	35,419,552
				Commercial Banks – 7.9%
	197,661			Banco Santander Finance					10.500	%						BBB-					5,182,671
	2,100			Barclays Bank PLC					6.625	%						BBB					51,704
	700,500			BPCE SA, (7)					13.000	%						BBB-					704,001
	144,700			First Naigara Finance Group					8.625	%						BB+					4,283,120
	18,400			HSBC Holdings PLC					8.000	%						A-					508,944
	13,800			HSBC Holdings PLC					6.200	%						BBB+					349,140
	3,500,000			National Australia Bank, (7)					8.000	%						Baa1					3,783,500
	742,900			PNC Financial Services					6.125	%						BBB					20,288,599
	25,000			Royal Bank of Scotland Group PLC, Series L					5.750	%						BB					481,500
	4,300,000			Royal Bank of Scotland Group PLC, (7)					7.648	%						BB					3,741,000
	60,000			Wells Fargo Capital Trust IX					5.625	%						BBB+					1,533,600
	120,000			Wells Fargo Capital Trust XII					7.875	%						BBB+					3,109,200
				Total Commercial Banks																	44,016,979
				Diversified Financial Services – 4.5%
	18,000			Bank of America Corporation					6.375	%						BB+					448,740
	80,549			Citigroup Capital Trust XI					6.000	%						BB					2,012,920
	150,514			Citigroup Capital XIII					7.875	%						BB+					4,122,578
	1,900			Citigroup Capital XIV					6.875	%						BB+					47,975
	36,800			ING Groep N.V.					7.375	%						BBB					918,160
	625,776			ING Groep N.V.					7.200	%						BBB					15,506,729
	80,308			Merrill Lynch Preferred Capital Trust V					7.280	%						BB+					2,019,746
	1,626			National Rural Utilities Cooperative Finance Corporation					5.950	%						A3					41,983
				Total Diversified Financial Services																	25,118,831
				Diversified Telecommunication Services – 1.8%
	188,510			Qwest Corporation					7.500	%						BBB-					5,144,438
	40,805			Qwest Corporation					7.375	%						BBB-					1,122,138
	34,600			Qwest Corporation					7.000	%						BBB-					924,858
	101,300			Qwest Corporation					7.000	%						BBB-					2,701,671
				Total Diversified Telecommunication Services																	9,893,105
				Electric Utilities – 1.2%
	33,000			Alabama Power Company, (7)					6.450	%						A-					1,020,938
	15,000			Entergy Louisiana LLC					5.250	%						A-					394,500
	181,516			Entergy Texas Inc.					7.875	%						BBB+					5,363,798
				Total Electric Utilities																	6,779,236

 

Nuveen Investments
16

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Shares				Description (1)				Coupon								Ratings (2)				Value
				Food Products – 0.5%
	28,100			Dairy Farmers of America Inc., 144A, (7)					7.875	%						BBB-				$	2,868,836
				Insurance – 17.5%
	795,723			Aegon N.V.					6.375	%						Baa1					19,932,861
	326,106			Allianz SE, (7)					8.375	%						A+					8,580,664
	63,200			Arch Capital Group Limited					6.750	%						BBB					1,714,616
	11,265			Aspen Insurance Holdings Limited					7.250	%						BBB-					296,495
	222,779			Axis Capital Holdings Limited					6.875	%						BBB					6,104,145
	1,100,000			Chubb Corporation, (7)					6.375	%						A-					1,149,500
	3,250,000			Dai-Ichi Mutual Life, 144A, (7)					7.250	%						A3					3,480,669
	231,787			Delphi Financial Group, Inc., (7)					7.376	%						Baa3					5,743,983
	536,420			EverestRe Capital Trust II					6.200	%						Baa1					13,544,605
	25,430			Hartford Financial Services Group Inc.					7.875	%						BB+					704,411
	188,983			Markel Corporation					7.500	%						BBB					4,803,948
	216,365			PartnerRe Limited, Series C					6.750	%						BBB+					5,528,126
	8,019			PartnerRe Limited, Series D					6.500	%						BBB+					204,324
	166,360			Prudential Financial Inc.					6.750	%						A-					4,285,434
	4,100,000			Reinsurance Group of America Inc., (7)					6.750	%						BBB-					3,879,928
	29,002			RenaissanceRe Holdings Limited, Series C					6.080	%						BBB+					733,751
	274,478			RenaissanceRe Holdings Limited, Series D					6.600	%						BBB+					6,971,741
	277,529			W. R. Berkley Corporation, Capital Trust II					6.750	%						BBB-					6,982,630
	4,200			XLIT Limited, (7)					3.687	%						Ba1					3,009,563
				Total Insurance																	97,651,394
				Machinery – 1.0%
	202,000			Stanley, Black and Decker Inc.					5.750	%						BBB+					5,239,880
				Multi-Utilities – 3.7%
	224,700			Dominion Resources Inc.					8.375	%						BBB					6,482,595
	185,800			DTE Energy Company					6.500	%						BBB-					5,315,738
	9,862			Scana Corporation					7.700	%						BBB-					282,349
	327,119			Xcel Energy Inc.					7.600	%						BBB					8,724,264
				Total Multi-Utilities																	20,804,946
				Oil, Gas & Consumable Fuels – 2.0%
	443,824			Nexen Inc.					7.350	%						BB+					11,228,747
				Pharmaceuticals – 0.0%
	2,340			Bristol Myers Squibb Company (CORTS)					6.250	%						A+					60,208
				Real Estate/Mortgage – 16.1%
	164,500			CommomWealth REIT					7.250	%						Baa3					4,378,990
	69,874			Duke Realty Corporation, Series L					6.600	%						Baa3					1,780,390
	145,700			Hospitality Properties Trust					7.125	%						BB					3,923,701
	20,000			Health Care REIT, Inc.					6.500	%						Baa3					538,800
	8,050			Kimco Realty Corporation, Series F					6.650	%						Baa2					202,136
	647,775			Kimco Realty Corporation, Series G					7.750	%						Baa2					16,472,917
	9,119			Kimco Realty Corporation, Series H					6.900	%						Baa2					259,344
	53,524			National Retail Properties Inc.					6.625	%						Baa3					1,407,681
	92,378			Prologis Inc.					6.750	%						BB					2,338,087
	12,691			PS Business Parks, Inc.					6.875	%						BBB-					342,530
	112,407			PS Business Parks, Inc., (7)					6.450	%						BBB-					3,021,388
	200,922			PS Business Parks, Inc.					6.000	%						BBB-					5,091,363
	4,300			Public Storage, Inc., Series F					6.500	%						A-					121,561
	10,000			Public Storage, Inc., Series M					5.625	%						A-					262,600
	22,544			Public Storage, Inc., Series Q					6.350	%						A-					617,480
	192,495			Public Storage, Inc., Series Y, (7)					5.750	%						A-					5,083,793
	136,000			Public Storage, Inc.					5.900	%						A-					3,623,040
	268,800			Realty Income Corporation					6.625	%						Baa2					7,289,856
	8,960			Realty Income Corporation					6.750	%						Baa2					228,032
	128,400			Regency Centers Corporation					6.625	%						Baa3					3,410,304

 

Nuveen Investments
17

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JTP

Nuveen Quality Preferred Income Fund (continued)

Portfolio of Investments July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				Real Estate/Mortgage (continued)
	452,734			Vornado Realty LP					7.875	%						BBB				$	12,758,043
	109,700			Vornado Realty Trust					5.700	%						BBB-					2,747,985
	230,282			Wachovia Preferred Funding Corporation, (3)					7.250	%						BBB+					6,254,459
	3,540			Weingarten Realty Trust, Preferred Securities					6.750	%						Baa3					89,420
	293,645			Weingarten Realty Trust					6.500	%						Baa3					7,417,473
				Total Real Estate/Mortgage																	89,661,373
				Specialty Retail – 0.5%
	2,800,000			Swiss Re Capital I, (7)					6.854	%						A					2,737,000
				U.S. Agency – 2.0%
	119,800			Cobank Agricultural Credit Bank, 144A, (7)					7.000	%						A					6,061,137
	46,000			Cobank Agricultural Credit Bank, Series C, (7)					11.000	%						A-					2,463,875
	48,600			Cobank Agricultural Credit Bank, Series D, (7)					11.000	%						A-					2,695,784
				Total U.S. Agency																	11,220,796
				Wireless Telecommunication Services – 0.2%
	18,500			Telephone and Data Systems Inc.					7.000	%						Baa2					514,485
	28,000			Telephone and Data Systems Inc.					6.875	%						Baa2					763,000
				Total Wireless Telecommunication Services																	1,277,485
				Total $25 Par (or similar) Preferred Securities (cost $340,921,871)																	363,978,368
Principal Amount (000)				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Corporate Bonds – 8.4% (6.0% of Total Investments)
				Capital Markets – 0.2%
$	500			Credit Suisse Guernsey					7.875	%		2/24/41				BBB-				$	495,000
	1,000			Man Group PLC					5.000	%		8/09/17				BBB-					801,583
	1,500			Total Capital Markets																	1,296,583
				Commercial Banks – 2.4%
	2,100			BNP Paribas, 144A					5.186	%		6/29/15				BBB+					1,806,000
	1,515			Groupe BCPE					3.800	%		12/30/49				BBB-					632,513
	8,400			LBG Capital I PLC, 144A					7.875	%		11/01/20				BB					7,878,646
	3,400			Lloyds Banking Group LBG Capital 1, 144A					8.000	%		6/15/20				BB					3,009,000
	15,415			Total Commercial Banks																	13,326,159
				Diversified Financial Services – 0.5%
	3,100			Fortis Hybrid Financing					8.250	%		8/27/49				BBB					2,542,000
				Electric Utilities – 0.6%
	3,400			FPL Group Capital Inc.					6.650	%		6/15/17				BBB					3,570,000
				Industrial Conglomerates – 0.5%
	2,500			Hutchison Whampoa International 12 Limited, 144A					6.000	%		11/07/62				BBB					2,559,375
				Insurance – 3.7%
	1,700			Mitsui Sumitomo Insurance Company Limited, 144A					7.000	%		3/15/72				A-					1,855,125
	2,500			Prudential PLC					11.750	%		12/23/49				A-					2,900,625
	16,750			QBE Capital Funding Trust II, 144A					7.250	%		5/24/41				BBB+					15,682,187
	20,950			Total Insurance																	20,437,937
				Multi-Utilities – 0.5%
	2,000			Dominion Resources Inc.					2.761	%		9/30/66				BBB					1,797,344
	1,000			Wisconsin Energy Corporation					6.250	%		5/15/67				Baa1					1,055,000
	3,000			Total Multi-Utilities																	2,852,344
$	49,865			Total Corporate Bonds (cost $46,138,128)																	46,584,398

 

Nuveen Investments
18

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Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Capital Preferred Securities – 59.2% (42.7% of Total Investments)
				Capital Markets – 3.6%
	5,600			Charles Schwab Corporation					7.000	%		8/01/49				BBB+				$	6,123,824
	5,000			Deutsche Bank Capital Trust, 144A					3.260	%		12/29/49				Ba2					3,350,000
	1,900			Dresdner Funding Trust I, 144A					8.151	%		6/30/31				Ba2					1,548,500
	1,800			Goldman Sachs Capital II					4.000	%		6/01/43				BB+					1,288,458
	3,300			Goldman Sachs Group, Inc.					6.345	%		2/15/34				Baa3					3,207,577
	6,300			State Street Capital Trust IV, (3)					1.468	%		6/15/77				A3					4,698,893
				Total Capital Markets																	20,217,252
				Commercial Banks – 18.6%
	8,500			ABN AMRO North America Holding Capital, 144A					6.523	%		12/31/49				BB+					7,947,500
	2,720			Banco Santander Finance					10.500	%		9/29/49				BBB-					2,584,544
	550			Barclays Bank PLC, 144A					7.434	%		12/15/17				BBB					548,869
	2,920			Barclays Bank PLC, Regulation S, 144A					6.860	%		6/15/32				BBB					2,631,650
	2,800			Barclays Bank PLC					6.278	%		12/15/34				BBB					2,349,376
	4,800			BBVA International Preferred Uniperson					5.919	%		4/18/17				BB+					3,018,552
	400			First Empire Capital Trust I					8.234	%		2/01/27				BBB					431,579
	3,500			Fulton Capital Trust I					6.290	%		2/01/36				Baa3					3,325,000
	300			HBOS Capital Funding LP, 144A					6.071	%		6/30/14				BB					203,250
	11,650			HSBC Capital Funding LP, Debt					10.176	%		6/30/50				A-					15,261,500
	4,200			HSBC Financial Capital Trust IX					5.911	%		11/30/35				BBB+					4,032,000
	2,000			KeyCorp Capital III					7.750	%		7/15/29				BBB-					2,299,348
	5,000			Nordea Bank AB					8.375	%		3/25/15				BBB+					5,380,000
	7,100			PNC Financial Services Inc.					6.750	%		8/01/21				BBB					7,691,643
	4,750			Rabobank Nederland, 144A					11.000	%		6/30/19				A					6,068,125
	17,500			Reliance Capital Trust I, Series B					8.170	%		5/01/28				N/R					18,015,428
	2,700			Societe Generale, 144A					1.333	%		12/31/49				BBB-					1,213,245
	700			Societe Generale, 144A					5.922	%		4/05/57				BBB-					517,787
	8,900			Societe Generale					8.750	%		10/07/49				BBB-					8,450,550
	1,200			Sovereign Capital Trust VI					7.908	%		6/13/36				BB+					1,218,000
	2,250			Sparebanken Rogaland, Notes, 144A					6.443	%		5/01/49				Ba1					2,283,750
	2,700			Standard Chartered PLC, 144A					6.409	%		1/30/17				BBB+					2,605,500
	5,050			Standard Chartered PLC, 144A					7.014	%		7/30/37				BBB+					5,050,576
	700			Wachovia Capital Trust III					5.570	%		3/15/42				BBB+					693,000
				Total Commercial Banks																	103,820,772
				Consumer Finance – 0.4%
	2,100			American Express Company					6.800	%		9/01/66				Baa2					2,231,250
				Diversified Financial Services – 4.6%
	200			Bank One Capital III					8.750	%		9/01/30				BBB					278,150
	4,000			BankAmerica Institutional Capital Trust, Series B, 144A					7.700	%		12/31/26				BB+					4,060,000
	2,600			Citigroup Capital III					7.625	%		12/01/36				BB+					2,836,639
	13,300			General Electric Capital Corporation					7.125	%		12/15/49				AA-					14,390,467
	48			JPMorgan Chase Capital Trust XXIX					6.700	%		4/02/40				A					1,258,750
	2,509			NB Capital Trust II					7.830	%		12/15/26				BB+					2,515,273
				Total Diversified Financial Services																	25,339,279
				Electric Utilities – 0.3%
	1,500			PPL Capital Funding, Inc.					6.700	%		3/30/17				BB+					1,533,750
				Insurance – 20.7%
	698			Ace Capital Trust II					9.700	%		4/01/30				BBB+					984,180
	6,600			Allstate Corporation					6.125	%		5/15/67				Baa1					6,699,000
	4,880			AXA S.A., 144A					6.379	%		12/14/66				Baa1					3,965,000
	4,000			AXA					8.600	%		12/15/30				A3					4,391,948
	8,395			Catlin Insurance Company Limited					7.249	%		7/19/67				BBB+					7,555,500
	9,925			Glen Meadows Pass Through Trust					6.505	%		2/15/67				BB+					7,294,875

 

Nuveen Investments
19

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JTP

Nuveen Quality Preferred Income Fund (continued)

Portfolio of Investments July 31, 2012

Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Insurance (continued)
	5,500			Great West Life & Annuity Capital I, 144A					6.625	%		11/15/34				A-				$	5,464,454
	3,800			Great West Life and Annuity Insurance Company, 144A					7.153	%		5/16/16				A-					3,762,000
	3,000			Liberty Mutual Group, 144A					7.800	%		3/15/37				Baa3					3,127,500
	2,500			Lincoln National Corporation					6.050	%		4/20/17				BBB					2,412,500
	5,100			Lincoln National Corporation					7.000	%		5/17/66				BBB					5,061,750
	6,300			MetLife Capital Trust IV, 144A					7.875	%		12/15/67				BBB					7,182,000
	600			MetLife Capital Trust X, 144A					9.250	%		4/08/68				BBB					747,000
	12,650			National Financial Services Inc.					6.750	%		5/15/37				Baa2					12,330,723
	1,400			Nationwide Financial Services Capital Trust					7.899	%		3/01/37				Baa2					1,534,271
	7,225			Oil Insurance Limited, 144A					3.443	%		12/30/56				Baa1					6,279,826
	7,400			Old Mutual Capital Funding, Notes					8.000	%		6/22/53				Baa3					7,415,540
	1,000			Progressive Corporation, (3)					6.700	%		6/15/67				A2					1,065,000
	2,400			Prudential PLC					6.500	%		6/23/49				A-					2,301,600
	1,100			QBE Capital Funding Trust II, 144A					6.797	%		6/01/67				BBB+					967,237
	3,000			Swiss Re Capital I, 144A					6.854	%		5/25/16				A					2,934,045
	13,100			XL Capital Ltd					6.500	%		10/15/57				BBB-					11,364,250
	2,536			ZFS FINANCE USA TRUST II 144A					6.450	%		12/15/65				A					2,612,080
	7,970			ZFS Finance USA Trust V					6.500	%		5/09/67				A					8,009,850
				Total Insurance																	115,462,129
				Multi-Utilities – 0.4%
	2,300			Dominion Resources Inc.					7.500	%		6/30/16				BBB					2,484,000
				Real Estate – 4.2%
	19			Firstar Realty LLC, 144A					8.875	%		12/15/50				A2					23,120,625
				Road & Rail – 2.1%
	10,900			Burlington Northern Santa Fe Funding Trust I					6.613	%		12/15/55				BBB					11,826,500
				Thrifts & Mortgage Finance – 0.3%
	2,000			Caisse Nationale Des Caisses d'Epargne et de Prevoyance					6.750	%		1/27/49				BBB-					1,458,000
				U.S. Agency – 0.7%
	3			Farm Credit Bank of Texas					10.000	%		12/15/60				A3					3,942,938
				Wireless Telecommunication Services – 3.3%
	15			Centaur Funding Corporation, Series B					9.080	%		4/21/20				BBB					18,280,938
				Total Capital Preferred Securities (cost $312,859,009)																	329,717,433
Shares				Description (1)				Coupon								Ratings (2)				Value
				Convertible Preferred Securities – 0.0% (0.0% of Total Investments)
				Commerical Banks – 0.0%
	200			Wells Fargo & Company					7.500	%						BBB+				$	231,400
				Total Convertible Preferred Securities (cost $203,295)																	231,400
Shares				Description (1)																Value
				Investment Companies – 2.2% (1.6% of Total Investments)
	315,548			BlackRock Credit Allocation Income Trust II																$	3,515,205
	116,133			Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc.																	2,261,109
	320,892			John Hancock Preferred Income Fund III																	6,331,199
				Total Investment Companies (cost $14,113,063)																	12,107,513

 

Nuveen Investments
20

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Principal Amount (000)				Description (1)				Coupon				Maturity								Value
				Short-Term Investments — 3.6% (2.6% of Total Investments)
$	20,136			Repurchase Agreement with Fixed Income Clearing Corporation, dated 7/31/12, repurchase price $20,136,016, collateralized by $19,175,000 U.S. Treasury Notes, 1.875%, due 8/31/17, value $20,541,219					0.010	%		8/01/12								$	20,136,010
				Total Short-Term Investments (cost $20,136,010)																	20,136,010
				Total Investments (cost $734,371,376) – 138.7%																	772,755,122
				Borrowings – (39.0)% (4), (5)																	(217,000,000	)
				Other Assets Less Liabilities – 0.3% (6)																	1,241,895
				Net Assets Applicable to Common Shares – 100%																$	556,997,017

 

Investments in Derivatives at July 31, 2012

Interest Rate Swaps outstanding:

Counterparty				Notional Amount				Fund Pay/Receive Floating Rate				Floating Rate Index				Fixed Rate*				Fixed Rate Payment Frequency				Termination Date				Unrealized Appreciation (Depreciation) (6)
JPMorgan				$	38,718,750			Receive				1-Month USD-LIBOR					1.193	%		Monthly				3/21/14				$	(603,930	)
Morgan Stanley					38,718,750			Receive				1-Month USD-LIBOR					2.064			Monthly				3/21/16					(2,269,287	)
																												$	(2,873,217	)

 

*  Annualized.

 

    For Fund portfolio compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

  (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 highest of Standard & Poor's Group ("Standard & Poor's"), Moody's Investors Service, Inc. ("Moody's") or Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's, Baa by Moody's or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

  (3)  Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives.

  (4)  Borrowings as a percentage of Total Investments is 28.1%.

  (5)  The Fund may pledge up to 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings. As of July 31, 2012, investments with a value of $505,765,270 have been pledged as collateral for Borrowings.

  (6)  Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as noted within Investments in Derivatives at July 31, 2012.

  (7)  For fair value measurement disclosure purposes, $25 Par (or similar) Preferred Securities categorized as Level 2. See Notes to Financial Statements, Footnote 1—General Information and Significant Accounting Policies, Investment Valuation for more Information.

  N/R  Not rated.

  144A  Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

  CORTS  Corporate Backed Trust Securities.

  PPLUS  PreferredPlus Trust.

  USD-LIBOR  United States Dollar—London Inter-Bank Offered Rate.

See accompanying notes to financial statements.

Nuveen Investments
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JPS

Nuveen Quality Preferred Income Fund 2

Portfolio of Investments

  July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				$25 Par (or similar) Preferred Securities – 65.4% (47.1% of Total Investments)
				Capital Markets – 6.4%
	373,200			Ameriprise Financial, Inc.					7.750	%						A				$	10,800,408
	11,000,000			Charles Schwab Corporation, (8)					7.000	%						BBB+					12,028,939
	3,700			Credit Suisse					7.900	%						BBB					97,236
	91,230			Deutsche Bank Capital Funding Trust I					7.350	%						BBB					2,298,996
	1,284,535			Deutsche Bank Capital Funding Trust II					6.550	%						BBB					32,113,376
	13,800			Deutsche Bank Capital Funding Trust IX					6.625	%						BBB					343,206
	40,000			Deutsche Bank Capital Funding Trust V					8.050	%						BBB					1,062,800
	91,791			Deutsche Bank Capital Funding Trust VIII					6.375	%						BBB					2,257,141
	256,400			Deutsche Bank Contingent Capital Trust III					7.600	%						BBB					6,676,656
	70,214			Goldman Sachs Group Inc., Series GSC-3 (PPLUS)					6.000	%						Baa3					1,707,604
	5,200			Goldman Sachs Group Inc., Series GSC-4 Class A (PPLUS)					6.000	%						Baa3					127,608
	1,040			Goldman Sachs Group Inc., Series GSG-1 (PPLUS)					6.000	%						A-					26,510
	1,390			Morgan Stanley Capital Trust III					6.250	%						BB+					34,722
	2,800			Morgan Stanley Capital Trust V					5.750	%						Ba1					68,936
				Total Capital Markets																	69,644,138
				Commercial Banks – 8.6%
	54,000			Banco Santander Finance					10.500	%						BBB-					1,415,880
	150,000			Barclays Bank PLC					8.125	%						BBB					3,853,500
	1,933,500			BPCE SA, (8)					13.000	%						BBB-					1,943,168
	2,917			Fifth Third Capital Trust VI					7.250	%						Baa3					74,121
	146,500			First Naigara Finance Group					8.625	%						BB+					4,336,400
	10,500,000			HSBC Bank PLC, (8)					1.000	%						A					4,777,500
	408,000			HSBC Holdings PLC					8.000	%						A-					11,285,280
	102,700			HSBC Holdings PLC					6.200	%						BBB+					2,598,310
	5,600,000			National Australia Bank, (8)					8.000	%						Baa1					6,053,600
	1,214,400			PNC Financial Services					6.125	%						BBB					33,165,264
	20,000,000			PNC Financial Services Inc., (8)					6.750	%						BBB					21,666,600
	3,400,000			Royal Bank of Scotland Group PLC, (8)					7.648	%						BB					2,958,000
				Total Commercial Banks																	94,127,623
				Consumer Finance – 0.0%
	20,100			HSBC USA Inc., Series H					6.500	%						A-					507,525
				Diversified Financial Services – 4.5%
	139,900			Citigroup Capital Trust XI					6.000	%						BB					3,496,101
	271,589			Citigroup Capital XIII					7.875	%						BB+					7,438,823
	40,000			Citigroup Capital XVI					6.450	%						BB+					1,000,000
	768,094			ING Groep N.V.					7.200	%						BBB					19,033,369
	731,274			ING Groep N.V.					7.050	%						BBB					17,916,213
				Total Diversified Financial Services																	48,884,506
				Diversified Telecommunication Services – 1.7%
	184,004			Qwest Corporation					7.500	%						BBB-					5,021,469
	96,790			Qwest Corporation					7.375	%						BBB-					2,661,725
	26,600			Qwest Corporation					7.000	%						BBB-					711,018
	383,205			Qwest Corporation					7.000	%						BBB-					10,220,077
				Total Diversified Telecommunication Services																	18,614,289

 

Nuveen Investments
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Shares				Description (1)				Coupon								Ratings (2)				Value
				Electric Utilities – 1.4%
	135,400			Alabama Power Company, (8)					6.450	%						A-				$	4,188,938
	59,650			Entergy Louisiana LLC					5.875	%						A-					1,651,709
	25,000			Entergy Louisiana LLC					5.250	%						A-					657,500
	66,253			Entergy Texas Inc.					7.875	%						BBB+					1,957,776
	73,246			NextEra Energy Inc.					5.700	%						BBB					1,983,502
	190,346			PPL Capital Funding, Inc.					6.850	%						BBB					4,792,912
				Total Electric Utilities																	15,232,337
				Food Products – 0.5%
	53,400			Dairy Farmers of America Inc., 144A, (8)					7.875	%						BBB-					5,451,809
				Industrial Conglomerates – 0.2%
	1,600,000			General Electric Capital Trust I, (8)					6.375	%						AA-					1,680,000
				Insurance – 16.3%
	1,717,889			Aegon N.V.					6.375	%						Baa1					43,033,118
	617,913			Allianz SE, (8)					8.375	%						A+					16,258,836
	261,725			Arch Capital Group Limited					6.750	%						BBB					7,100,599
	74,981			Aspen Insurance Holdings Limited					7.250	%						BBB-					1,973,500
	354,550			Axis Capital Holdings Limited					6.875	%						BBB					9,714,670
	2,100,000			Chubb Corporation, (8)					6.375	%						A-					2,194,500
	6,500,000			Dai-Ichi Mutual Life, 144A, (8)					7.250	%						A3					6,961,338
	402,182			Delphi Financial Group, Inc., (8)					7.376	%						Baa3					9,966,593
	309,617			EverestRe Capital Trust II					6.200	%						Baa1					7,817,829
	391,890			Markel Corporation					7.500	%						BBB					9,961,844
	568,624			PartnerRe Limited, Series C					6.750	%						BBB+					14,528,343
	6,971			Protective Life Corporation					7.250	%						BBB					176,297
	4,000			Protective Life Corporation					6.250	%						BBB					104,360
	195,842			Prudential Financial Inc.					9.000	%						BBB+					5,260,316
	317,875			Prudential Financial Inc.					6.750	%						A-					8,188,460
	4,704,000			Reinsurance Group of America Inc., (8)					6.750	%						BBB-					4,451,508
	540,560			RenaissanceRe Holdings Limited, Series D					6.600	%						BBB+					13,730,224
	708,217			W. R. Berkley Corporation, Capital Trust II					6.750	%						BBB-					17,818,740
				Total Insurance																	179,241,075
				Machinery – 0.9%
	398,000			Stanley, Black and Decker Inc.					5.750	%						BBB+					10,324,120
				Multi-Utilities – 3.6%
	541,591			Dominion Resources Inc.					8.375	%						BBB					15,624,900
	148,032			Scana Corporation					7.700	%						BBB-					4,238,156
	750,941			Xcel Energy Inc.					7.600	%						BBB					20,027,596
				Total Multi-Utilities																	39,890,652
				Oil, Gas & Consumable Fuels – 1.8%
	789,010			Nexen Inc.					7.350	%						BB+					19,961,953
				Real Estate/Mortgage – 17.5%
	5,000			Alexandria Real Estate Equities Inc., Series B					6.450	%						Baa3					131,100
	149,097			CommomWealth REIT					7.125	%						Baa3					3,728,916
	126,100			CommomWealth REIT					5.750	%						Baa2					3,118,453
	12,800			Digital Realty Trust Inc.					7.000	%						Baa3					341,632
	161,969			Duke Realty Corporation, Series L					6.600	%						Baa3					4,126,970
	8,710			Harris Preferred Capital Corporation, Series A					7.375	%						BBB+					224,021
	321,594			Hospitality Properties Trust					7.125	%						BB					8,660,526
	51,646			Kimco Realty Corporation, Series F					6.650	%						Baa2					1,296,831
	908,230			Kimco Realty Corporation, Series G					7.750	%						Baa2					23,096,289
	58,372			Kimco Realty Corporation, Series H					6.900	%						Baa2					1,660,100
	4,600			Kimco Realty Corporation, Series I					6.000	%						Baa2					118,910

 

Nuveen Investments
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JPS

Nuveen Quality Preferred Income Fund 2 (continued)

Portfolio of Investments July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				Real Estate/Mortgage (continued)
	131,572			National Retail Properties Inc.					6.625	%						Baa3				$	3,460,344
	82,301			Prologis Inc., Series Q, (8)					8.540	%						Baa3					5,082,087
	2,024			Prologis Inc., Series R					6.750	%						BB					51,025
	87,050			Prologis Inc., Series S					6.750	%						BB					2,203,236
	13,030			Prologis Inc., Series L					6.500	%						Baa3					333,047
	98,000			PS Business Parks, Inc.					6.700	%						BBB-					2,483,320
	152,633			PS Business Parks, Inc., (8)					6.450	%						BBB-					4,102,622
	450,182			PS Business Parks, Inc.					6.000	%						BBB-					11,407,612
	6,400			Public Storage, Inc.					6.500	%						A-					180,928
	203,125			Public Storage, Inc., (8)					5.750	%						A-					5,364,531
	10,000			Public Storage, Inc.					5.625	%						A-					262,600
	196,229			Public Storage, Inc.					5.900	%						A-					5,227,541
	410,326			Realty Income Corporation					6.750	%						Baa2					10,442,797
	65,100			Realty Income Corporation					6.625	%						Baa2					1,765,512
	146,600			Regency Centers Corporation					6.625	%						Baa3					3,893,696
	1,079,521			Vornado Realty LP					7.875	%						BBB					30,420,902
	1,686,413			Wachovia Preferred Funding Corporation					7.250	%						BBB+					45,802,976
	93,358			Weingarten Realty Trust, Preferred Securities					6.750	%						Baa3					2,358,223
	37,766			Weingarten Realty Trust					8.100	%						BBB					868,618
	148,974			Weingarten Realty Trust					6.950	%						Baa3					3,809,265
	216,183			Weingarten Realty Trust					6.500	%						Baa3					5,460,783
				Total Real Estate/Mortgage																	191,485,413
				Specialty Retail – 0.1%
	1,400,000			Swiss Re Capital I, (8)					6.854	%						A					1,368,500
				U.S. Agency – 1.7%
	235,100			Cobank Agricultural Credit Bank, 144A, (8)					7.000	%						A					11,894,602
	82,000			Cobank Agricultural Credit Bank, Series C, (8)					11.000	%						A-					4,392,125
	42,800			Cobank Agricultural Credit Bank, Series D, (8)					11.000	%						A-					2,374,065
				Total U.S. Agency																	18,660,792
				Wireless Telecommunication Services – 0.2%
	9,050			Telephone and Data Systems Inc.					7.000	%						Baa2					251,681
	70,501			Telephone and Data Systems Inc.					6.875	%						Baa2					1,921,152
				Total Wireless Telecommunication Services																	2,172,833
				Total $25 Par (or similar) Preferred Securities (cost $674,640,645)																	717,247,565
Principal Amount (000)				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Corporate Bonds – 9.0% (6.5% of Total Investments)
				Capital Markets – 1.1%
$	800			Credit Suisse Guernsey					7.875	%		2/24/41				BBB-				$	792,000
	600			Man Group PLC					5.000	%		8/09/17				BBB-					480,950
	14,686			State Street Capital Trust IV, (3)					1.468	%		6/15/77				A3					10,953,641
	16,086			Total Capital Markets																	12,226,591
				Commercial Banks – 2.0%
	4,200			BNP Paribas, 144A					5.186	%		6/29/15				BBB+					3,612,000
	1,000			Den Norske Bank					0.813	%		2/18/35				Baa3					530,000
	1,000			Den Norske Bank					0.713	%		2/24/37				Baa3					530,000
	10,000			Groupe BCPE					3.800	%		12/30/49				BBB-					4,175,000
	6,500			LBG Capital I PLC, 144A					7.875	%		11/01/20				BB					6,096,571
	7,500			Lloyds Banking Group LBG Capital 1, 144A					8.000	%		6/15/20				BB					6,637,500
	650			Swedbank ForengingsSparbanken AB, 144A					7.500	%		9/11/12				Ba1					651,152
	30,850			Total Commercial Banks																	22,232,223

 

Nuveen Investments
24

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Principal Amount (000)				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Diversified Financial Services – 0.2%
$	2,600			Fortis Hybrid Financing					8.250	%		8/27/49				BBB				$	2,132,000
				Electric Utilities – 1.1%
	8,000			FPL Group Capital Inc.					6.650	%		6/15/17				BBB					8,400,000
	2,900			WPS Resource Corporation					6.110	%		12/01/16				BBB					3,001,500
	10,900			Total Electric Utilities																	11,401,500
				Industrial Conglomerates – 0.7%
	7,500			Hutchison Whampoa International 12 Limited, 144A					6.000	%		11/07/62				BBB					7,678,125
				Insurance – 3.7%
	2,000			AXA S.A.					3.675	%		8/06/49				A3					935,000
	4,300			Mitsui Sumitomo Insurance Company Limited, 144A					7.000	%		3/15/72				A-					4,692,375
	5,200			Prudential PLC					11.750	%		12/23/49				A-					6,033,300
	31,370			QBE Capital Funding Trust II, 144A					7.250	%		5/24/41				BBB+					29,370,162
	42,870			Total Insurance																	41,030,837
				Multi-Utilities – 0.2%
	2,000			Wisconsin Energy Corporation					6.250	%		5/15/67				Baa1					2,110,000
$	112,806			Total Corporate Bonds (cost $98,544,530)																	98,811,276
Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Capital Preferred Securities – 57.8% (41.6% of Total Investments)
				Capital Markets – 2.0%
	800			BNY Institutional Capital, 144A					7.780	%		12/01/26				A2				$	804,000
	8,500			Credit Suisse thru Claudius Limited					8.250	%		6/27/49				BBB					8,818,750
	4,200			Dresdner Funding Trust I, 144A					8.151	%		6/30/31				Ba2					3,423,000
	1,900			Goldman Sachs Capital II					4.000	%		6/01/43				BB+					1,360,039
	7,931			Goldman Sachs Group, Inc.					6.345	%		2/15/34				Baa3					7,708,876
				Total Capital Markets																	22,114,665
				Commercial Banks – 18.3%
	5,500			AB Svensk Exportkredit					6.375	%		10/27/49				Aa3					5,303,837
	9,600			ABN AMRO North America Holding Capital, 144A					6.523	%		12/31/49				BB+					8,976,000
	12,974			Banco Santander Finance					10.500	%		9/29/49				BBB-					12,327,895
	575			Barclays Bank PLC, 144A					7.434	%		12/15/17				BBB					573,817
	2,980			Barclays Bank PLC, Regulation S, 144A					6.860	%		6/15/32				BBB					2,685,725
	5,000			Barclays Bank PLC					6.278	%		12/15/34				BBB					4,195,315
	9,500			BBVA International Preferred Uniperson					5.919	%		4/18/17				BB+					5,974,218
	1,500			First Empire Capital Trust I					8.234	%		2/01/27				BBB					1,618,422
	17,095			First Union Capital Trust II, Series A					7.950	%		11/15/29				BBB+					19,374,345
	6,800			Fulton Capital Trust I					6.290	%		2/01/36				Baa3					6,460,000
	5,500			HSBC Bank PLC					0.850	%		6/11/49				A-					2,519,000
	4,650			HSBC Capital Funding LP, Debt					10.176	%		6/30/50				A-					6,091,500
	8,352			HSBC Financial Capital Trust IX					5.911	%		11/30/35				BBB+					8,017,920
	6,000			KeyCorp Capital III					7.750	%		7/15/29				BBB-					6,898,044
	11,900			Nordea Bank AB					8.375	%		3/25/15				BBB+					12,804,400
	8,200			North Fork Capital Trust II					8.000	%		12/15/27				Baa3					8,261,500
	12,230			Rabobank Nederland, 144A					11.000	%		6/30/19				A					15,623,825
	8,000			Reliance Capital Trust I, Series B					8.170	%		5/01/28				N/R					8,235,624
	800			Societe Generale, 144A					1.333	%		12/31/49				BBB-					359,480
	1,300			Societe Generale, 144A					5.922	%		4/05/57				BBB-					961,604
	24,144			Societe Generale					8.750	%		10/07/49				BBB-					22,924,727
	3,522			Sovereign Capital Trust VI					7.908	%		6/13/36				BB+					3,574,830
	3,750			Sparebanken Rogaland, Notes, 144A					6.443	%		5/01/49				Ba1					3,806,250

 

Nuveen Investments
25

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JPS

Nuveen Quality Preferred Income Fund 2 (continued)

Portfolio of Investments July 31, 2012

Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Commercial Banks (continued)
	6,310			Standard Chartered PLC, 144A					6.409	%		1/30/17				BBB+				$	6,089,150
	6,450			Standard Chartered PLC, 144A					7.014	%		7/30/37				BBB+					6,450,735
	—	(4)		Union Planters Preferred Fund, 144A					7.750	%		7/15/53				BB					20,520,000
				Total Commercial Banks																	200,628,163
				Consumer Finance – 1.1%
	3,900			American Express Company					6.800	%		9/01/66				Baa2					4,143,750
	7,019			Capital One Capital IV Corporation					6.745	%		2/05/82				Baa3					7,072,344
	1,180			Capital One Capital VI					8.875	%		5/15/40				Baa3					1,198,717
				Total Consumer Finance																	12,414,811
				Diversified Financial Services – 6.1%
	3,400			Bank One Capital III					8.750	%		9/01/30				BBB					4,728,550
	14,420			BankAmerica Institutional Capital Trust, Series B, 144A					7.700	%		12/31/26				BB+					14,636,300
	5,400			Citigroup Capital III					7.625	%		12/01/36				BB+					5,891,481
	12,811			Countrywide Capital Trust III, Series B					8.050	%		6/15/27				BB+					14,508,458
	2,800			General Electric Capital Corporation					6.375	%		11/15/17				AA-					2,951,480
	21,400			General Electric Capital Corporation					7.125	%		12/15/49				AA-					23,154,586
	17			JPMorgan Chase Capital Trust XI					5.875	%		6/15/33				BBB					441,635
				Total Diversified Financial Services																	66,312,490
				Electric Utilities – 0.9%
	1,700			FPL Group Capital Inc.					6.350	%		10/01/66				BBB					1,768,000
	7,700			PPL Capital Funding, Inc.					6.700	%		3/30/17				BB+					7,873,250
				Total Electric Utilities																	9,641,250
				Insurance – 23.0%
	1,200			Allstate Corporation					6.500	%		5/15/67				Baa1					1,236,000
	9,186			Allstate Corporation					6.125	%		5/15/67				Baa1					9,323,790
	9,450			AXA SA, 144A					6.379	%		12/14/66				Baa1					7,678,125
	11,350			AXA					8.600	%		12/15/30				A3					12,462,152
	15,359			Catlin Insurance Company Limited					7.249	%		7/19/67				BBB+					13,823,100
	1,200			Everest Reinsurance Holdings, Inc.					6.600	%		5/15/37				Baa1					1,198,800
	23,200			Glen Meadows Pass Through Trust					6.505	%		2/15/67				BB+					17,052,000
	2,600			Great West Life & Annuity Capital I, 144A					6.625	%		11/15/34				A-					2,583,196
	6,600			Great West Life and Annuity Insurance Company, 144A					7.153	%		5/16/16				A-					6,534,000
	10,481			Liberty Mutual Group, 144A					7.800	%		3/15/37				Baa3					10,926,443
	2,500			Lincoln National Corporation					6.050	%		4/20/17				BBB					2,412,500
	7,076			Lincoln National Corporation					7.000	%		5/17/66				BBB					7,022,930
	16,600			MetLife Capital Trust IV, 144A					7.875	%		12/15/67				BBB					18,924,000
	1,400			MetLife Capital Trust X, 144A					9.250	%		4/08/68				BBB					1,743,000
	23,754			National Financial Services Inc.					6.750	%		5/15/37				Baa2					23,154,473
	1,200			Nationwide Financial Services Capital Trust					7.899	%		3/01/37				Baa2					1,315,090
	14,200			Oil Insurance Limited, 144A					3.443	%		12/30/56				Baa1					12,342,356
	15,600			Old Mutual Capital Funding, Notes					8.000	%		6/22/53				Baa3					15,632,760
	6,300			Progressive Corporation, (3)					6.700	%		6/15/67				A2					6,709,500
	5,600			Prudential Financial Inc.					8.875	%		6/15/18				BBB+					6,693,837
	8,250			Prudential PLC					6.500	%		6/23/49				A-					7,911,750
	10,400			Swiss Re Capital I, 144A					6.854	%		5/25/16				A					10,171,356
	2,600			White Mountains Re Group Limited					7.506	%		6/30/17				BB+					2,613,026
	29,050			XL Capital Ltd					6.500	%		10/15/57				BBB-					25,200,874
	3,600			ZFS Finance USA Trust II 144A					6.450	%		12/15/65				A					3,708,000
	24,257			ZFS Finance USA Trust V					6.500	%		5/09/67				A					24,378,285
				Total Insurance																	252,751,343
				Multi-Utilities – 0.6%
	6,400			Dominion Resources Inc.					7.500	%		6/30/16				BBB					6,912,000

 

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Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Oil, Gas & Consumable Fuels – 0.2%
	2,125			TranCanada Pipelines Limited					6.350	%		5/15/17				Baa1				$	2,218,251
				Road & Rail – 1.1%
	11,400			Burlington Northern Santa Fe Funding Trust I					6.613	%		12/15/55				BBB					12,369,000
				Thrifts & Mortgage Finance – 0.1%
	500			Onbank Capital Trust I					9.250	%		2/01/27				BBB					542,268
				U.S. Agency – 0.4%
	2,800			AgFirst Farm Credit Bank					7.300	%		12/15/53				A-					2,796,556
	2			Farm Credit Bank of Texas					10.000	%		12/15/60				A3					1,971,469
				Total U.S. Agency																	4,768,025
				Wireless Telecommunication Services – 4.0%
	36			Centaur Funding Corporation, Series B					9.080	%		4/21/20				BBB					43,428,315
				Total Capital Preferred Securities (cost $607,540,720)																	634,100,581
Shares				Description (1)				Coupon								Ratings (2)				Value
				Convertible Preferred Securities – 0.3% (0.2% of Total Investments)
				Commerical Banks – 0.3%
	3,100,000			Credit Suisse AG					7.875	%						BBB				$	3,224,000
				Total Convertible Preferred Securities (cost $3,217,364)																	3,224,000
Shares				Description (1)																Value
				Investment Companies – 2.4% (1.7% of Total Investments)
	838,654			BlackRock Credit Allocation Income Trust II																$	9,342,606
	231,522			Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc.																	4,507,733
	631,778			John Hancock Preferred Income Fund III																	12,464,980
				Total Investment Companies (cost $32,430,913)																	26,315,319
Principal Amount (000)				Description (1)				Coupon				Maturity								Value
				Short-Term Investments – 3.9% (2.9% of Total Investments)
$	43,240			Repurchase Agreement with Fixed Income Clearing Corporation, dated 7/31/12, repurchase price $43,239,562, collateralized by $41,175,000 U.S. Treasury Notes, 1.875%, due 8/31/17, value $44,108,719					0.010	%		8/01/12								$	43,239,550
				Total Short-Term Investments (cost $43,239,550)																	43,239,550
				Total Investments (cost $1,459,613,722) – 138.8%																	1,522,938,291
				Borrowings – (38.9)% (5), (6)																	(427,000,000	)
				Other Assets Less Liabilities – 0.1% (7)																	1,446,416
				Net Assets Applicable to Common Shares – 100%																$	1,097,384,707

 

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JPS

Nuveen Quality Preferred Income Fund 2 (continued)

Portfolio of Investments July 31, 2012

Investments in Derivatives at July 31, 2012

Interest Rate Swaps outstanding:

Counterparty				Notional Amount				Fund Pay/Receive Floating Rate				Floating Rate Index				Fixed Rate*				Fixed Rate Payment Frequency				Termination Date				Unrealized Appreciation (Depreciation) (7)
JPMorgan				$	77,200,000			Receive				1-Month USD-LIBOR					1.193	%		Monthly				3/21/14				$	(1,204,154	)
Morgan Stanley					77,200,000			Receive				1-Month USD-LIBOR					2.064			Monthly				3/21/16					(4,524,655	)
																												$	(5,728,809	)

 

*  Annualized.

    For Fund portfolio compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

  (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 highest of Standard & Poor's Group ("Standard & Poor's"), Moody's Investors Service, Inc. ("Moody's") or Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's, Baa by Moody's or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.

  (3)  Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives.

  (4)  Principal Amount (000) rounds to less than $1,000.

  (5)  Borrowings as a percentage of Total Investments is 28.0%.

  (6)  The Fund may pledge up to 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings. As of July 31, 2012, investments with a value of $1,023,496,166 have been pledged as collateral for Borrowings.

  (7)  Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as noted within Investments in Derivatives at July 31, 2012.

  (8)  For fair value measurement disclosure purposes, $25 Par (or similar) Preferred Securities categorized as Level 2. See Notes to Financial Statements, Footnote 1—General Information and Significant Accounting Policies, Investment Valuation for more Information.

  N/R  Not rated.

  144A  Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

  PPLUS  PreferredPlus Trust.

  USD-LIBOR  United States Dollar—London Inter-Bank Offered Rate.

See accompanying notes to financial statements.

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JHP

Nuveen Quality Preferred Income Fund 3

Portfolio of Investments

  July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				$25 Par (or similar) Preferred Securities – 63.7% (45.8% of Total Investments)
				Capital Markets – 8.5%
	59,609			Ameriprise Financial, Inc.					7.750	%						A				$	1,725,083
	2,100,000			Charles Schwab Corporation, (8)					7.000	%						BBB+					2,296,433
	133,865			Credit Suisse					7.900	%						BBB					3,517,972
	388,759			Deutsche Bank Capital Funding Trust II					6.550	%						BBB					9,718,975
	2,100			Deutsche Bank Contingent Capital Trust III					7.600	%						BBB					54,684
	12,200			Goldman Sachs Group Inc., Series GSC-3 (PPLUS)					6.000	%						Baa3					296,704
	7,600			Merrill Lynch Capital Trust I					6.450	%						BB+					189,240
				Total Capital Markets																	17,799,093
				Commercial Banks – 6.9%
	19,158			Banco Santander Finance					10.500	%						BBB-					502,323
	300,000			BPCE SA, (8)					13.000	%						BBB-					301,500
	1,500,000			HSBC Bank PLC, (8)					1.000	%						A					682,500
	25,000			HSBC Holdings PLC					8.000	%						A-					691,500
	4,500			HSBC USA Inc., Series F					2.858	%						A-					226,530
	2,700,000			National Australia Bank, (8)					8.000	%						Baa1					2,918,700
	211,700			PNC Financial Services					6.125	%						BBB					5,781,527
	2,000,000			PNC Financial Services Inc., (8)					6.750	%						BBB					2,166,660
	52,500			Royal Bank of Scotland Group PLC, Series L					5.750	%						BB					1,011,150
				Total Commercial Banks																	14,282,390
				Diversified Financial Services – 5.6%
	30,100			BAC Capital Trust XII					6.875	%						BB+					754,005
	35,000			Citigroup Capital Trust XI					6.000	%						BB					874,650
	54,185			Citigroup Capital XIII					7.875	%						BB+					1,484,127
	24,300			Citigroup Capital XVI					6.450	%						BB+					607,500
	59,100			Countrywide Capital Trust IV					6.750	%						BB+					1,475,136
	239,500			ING Groep N.V.					7.050	%						BBB					5,867,749
	10,000			ING Groep N.V.					6.125	%						BBB					216,800
	3,300			Merrill Lynch Capital Trust II					6.450	%						BB+					82,071
	13,420			Merrill Lynch Capital Trust III					7.375	%						BB+					339,258
	940			National Rural Utilities Cooperative Finance Corporation					5.950	%						A3					24,271
				Total Diversified Financial Services																	11,725,567
				Diversified Telecommunication Services – 1.9%
	26,800			Qwest Corporation					7.500	%						BBB-					731,372
	26,699			Qwest Corporation					7.375	%						BBB-					734,223
	22,500			Qwest Corporation					7.000	%						BBB-					601,425
	72,881			Qwest Corporation					7.000	%						BBB-					1,943,736
				Total Diversified Telecommunication Services																	4,010,756
				Electric Utilities – 1.8%
	10,000			Alabama Power Company, (8)					6.450	%						A-					309,375
	10,000			Entergy Arkansas Inc.					5.750	%						A-					277,700
	10,000			Entergy Louisiana LLC					5.250	%						A-					263,000
	78,100			Entergy Texas Inc.					7.875	%						BBB+					2,307,855
	25,000			NextEra Energy Inc.					5.700	%						BBB					677,000
				Total Electric Utilities																	3,834,930

 

Nuveen Investments
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JHP

Nuveen Quality Preferred Income Fund 3 (continued)

Portfolio of Investments July 31, 2012

Shares				Description (1)				Coupon								Ratings (2)				Value
				Energy Equipment & Services – 1.0%
	81,071			NextEra Energy Inc.					5.625	%						BBB				$	2,152,435
				Food Products – 0.5%
	10,400			Dairy Farmers of America Inc., 144A, (8)					7.875	%						BBB-					1,061,776
				Industrial Conglomerates – 0.5%
	900,000			General Electric Capital Trust I, (8)					6.375	%						AA-					945,000
				Insurance – 14.0%
	319,390			Aegon N.V.					6.375	%						Baa1					8,000,720
	75,054			Allianz SE, (8)					8.375	%						A+					1,974,858
	25,000			Arch Capital Group Limited					6.750	%						BBB					678,250
	11,500			Aspen Insurance Holdings Limited					7.250	%						BBB-					302,680
	47,000			Axis Capital Holdings Limited					6.875	%						BBB					1,287,800
	250,000			Chubb Corporation, (8)					6.375	%						A-					261,250
	1,250,000			Dai-Ichi Mutual Life, 144A, (8)					7.250	%						A3					1,338,719
	90,100			Delphi Financial Group, Inc., (8)					7.376	%						Baa3					2,232,795
	97,554			EverestRe Capital Trust II					6.200	%						Baa1					2,463,239
	9,900			PartnerRe Limited					7.250	%						BBB+					273,834
	199,616			PartnerRe Limited					6.750	%						BBB+					5,100,188
	2,214			PLC Capital Trust V					6.125	%						BBB					55,948
	87,569			Protective Life Corporation					7.250	%						BBB					2,214,620
	63,344			Prudential PLC					6.750	%						A-					1,631,741
	1,400,000			Reinsurance Group of America Inc., (8)					6.750	%						BBB-					1,324,854
				Total Insurance																	29,141,496
				Machinery – 0.9%
	75,000			Stanley, Black and Decker Inc.					5.750	%						BBB+					1,945,500
				Multi-Utilities – 2.4%
	94,598			Dominion Resources Inc.					8.375	%						BBB					2,729,152
	81,305			Xcel Energy Inc.					7.600	%						BBB					2,168,404
				Total Multi-Utilities																	4,897,556
				Oil, Gas & Consumable Fuels – 2.2%
	177,664			Nexen Inc.					7.350	%						BB+					4,494,899
				Pharmaceuticals – 0.1%
	6,500			Bristol Myers Squibb Company (CORTS)					6.250	%						A+					167,245
				Real Estate/Mortgage – 13.7%
	8,000			CommomWealth REIT					7.250	%						Baa3					212,960
	34,254			CommomWealth REIT					7.125	%						Baa3					856,693
	11,400			CommomWealth REIT					5.750	%						Baa2					281,922
	54,287			Hospitality Properties Trust					7.125	%						BB					1,461,949
	16,336			Kimco Realty Corporation, Series F					6.650	%						Baa2					410,197
	148,636			Kimco Realty Corporation, Series G					7.750	%						Baa2					3,779,813
	11,100			Prologis Inc., Series G					6.750	%						BB					280,941
	10,000			PS Business Parks, Inc.					6.875	%						BBB-					269,900
	35,300			PS Business Parks, Inc.					6.700	%						BBB-					894,502
	73,699			PS Business Parks, Inc.					6.000	%						BBB-					1,867,533
	2,621			Public Storage, Inc.					6.450	%						BBB+					66,836
	8,000			Public Storage, Inc., (8)					5.750	%						A-					211,280
	117,100			Realty Income Corporation					6.625	%						Baa2					3,175,752
	95,087			Regency Centers Corporation					6.700	%						Baa3					2,410,455
	155,320			Vornado Realty LP					7.875	%						BBB					4,376,918
	57,400			Vornado Realty Trust					5.700	%						BBB-					1,437,870
	80,367			Wachovia Preferred Funding Corporation, (3)					7.250	%						BBB+					2,182,768
	191,297			Weingarten Realty Trust					8.100	%						BBB					4,399,831
				Total Real Estate/Mortgage																	28,578,120

 

Nuveen Investments
30

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Shares				Description (1)				Coupon								Ratings (2)				Value
				Specialty Retail – 0.1%
	300,000			Swiss Re Capital I, (8)					6.854	%						A				$	293,250
				U.S. Agency – 2.0%
	44,500			Cobank Agricultural Credit Bank, 144A, (8)					7.000	%						A					2,251,424
	16,000			Cobank Agricultural Credit Bank, Series C, (8)					11.000	%						A-					857,000
	20,200			Cobank Agricultural Credit Bank, Series D, (8)					11.000	%						A-					1,120,470
				Total U.S. Agency																	4,228,894
				Wireless Telecommunication Services – 1.6%
	70,400			Telephone and Data Systems Inc.					7.000	%						Baa2					1,957,824
	31,000			Telephone and Data Systems Inc.					6.875	%						Baa2					844,750
	19,791			United States Cellular Corporation					6.950	%						Baa2					539,305
				Total Wireless Telecommunication Services																	3,341,879
				Total $25 Par (or similar) Preferred Securities (cost $124,116,339)																	132,900,786
Principal Amount (000)				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Corporate Bonds – 7.4% (5.3% of Total Investments)
				Capital Markets – 1.5%
$	1,700			Credit Suisse Guernsey					7.875	%		2/24/41				BBB-				$	1,683,000
	200			Man Group PLC					5.000	%		8/09/17				BBB-					160,317
	1,795			State Street Capital Trust IV					1.468	%		6/15/77				A3					1,338,812
	3,695			Total Capital Markets																	3,182,129
				Commercial Banks – 1.9%
	1,700			BNP Paribas, 144A					5.186	%		6/29/15				BBB+					1,462,000
	250			Den Norske Bank					0.813	%		2/18/35				Baa3					132,500
	250			Den Norske Bank					0.713	%		2/24/37				Baa3					132,500
	2,400			Groupe BCPE					3.800	%		12/30/49				BBB-					1,002,000
	650			LBG Capital I PLC, 144A					7.875	%		11/01/20				BB					609,657
	700			Lloyds Banking Group LBG Capital 1, 144A					8.000	%		6/15/20				BB					619,500
	5,950			Total Commercial Banks																	3,958,157
				Diversified Financial Services – 0.1%
	300			Fortis Hybrid Financing					8.250	%		8/27/49				BBB					246,000
				Electric Utilities – 0.2%
	450			FPL Group Capital Inc.					6.650	%		6/15/17				BBB					472,500
				Industrial Conglomerates – 0.5%
	1,000			Hutchison Whampoa International 12 Limited, 144A					6.000	%		11/07/62				BBB					1,023,750
				Insurance – 2.8%
	6,100			QBE Capital Funding Trust II, 144A					7.250	%		5/24/41				BBB+					5,711,124
				Multi-Utilities – 0.4%
	900			Dominion Resources Inc.					2.761	%		9/30/66				BBB					808,805
$	18,395			Total Corporate Bonds (cost $15,569,306)																	15,402,465

 

Nuveen Investments
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JHP

Nuveen Quality Preferred Income Fund 3 (continued)

Portfolio of Investments July 31, 2012

Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Capital Preferred Securities – 59.3% (42.7% of Total Investments)
				Capital Markets – 1.7%
	1,200			BNY Institutional Capital, 144A, (3)					7.780	%		12/01/26				A2				$	1,206,000
	900			Deutsche Bank Capital Funding Trust I					3.430	%		12/29/49				BBB					595,269
	800			Goldman Sachs Capital II					4.000	%		6/01/43				BB+					572,648
	1,200			Goldman Sachs Group, Inc.					6.345	%		2/15/34				Baa3					1,166,392
				Total Capital Markets																	3,540,309
				Commercial Banks – 21.3%
	2,200			Abbey National Capital Trust I					8.963	%		6/30/30				BBB-					2,244,000
	1,000			ABN AMRO North America Holding Capital, 144A					6.523	%		12/31/49				BB+					935,000
	650			Banco Santander Finance					10.500	%		9/29/49				BBB-					617,630
	1,400			Barclays Bank PLC, 144A					7.434	%		12/15/17				BBB					1,397,120
	1,500			Barclays Bank PLC, Regulation S, 144A					6.860	%		6/15/32				BBB					1,351,875
	1,000			Barclays Bank PLC					6.278	%		12/15/34				BBB					839,063
	1,700			BBVA International Preferred Uniperson					5.919	%		4/18/17				BB+					1,069,071
	1,000			First Empire Capital Trust I					8.234	%		2/01/27				BBB					1,078,948
	2,700			First Hawaiian Capital Trust I, Series B					8.343	%		7/01/27				BBB+					2,700,000
	8,485			First Union Capital Trust II, Series A					7.950	%		11/15/29				BBB+					9,616,338
	500			Fulton Capital Trust I					6.290	%		2/01/36				Baa3					475,000
	2,700			HBOS Capital Funding LP, 144A					6.071	%		6/30/14				BB					1,829,250
	1,500			HSBC Bank PLC					0.850	%		6/11/49				A-					687,000
	1,500			HSBC Financial Capital Trust IX					5.911	%		11/30/35				BBB+					1,440,000
	1,900			Nordea Bank AB					8.375	%		3/25/15				BBB+					2,044,400
	1,900			North Fork Capital Trust II					8.000	%		12/15/27				Baa3					1,914,250
	2,200			Rabobank Nederland, 144A					11.000	%		6/30/19				A					2,810,500
	200			Societe Generale, 144A					1.333	%		12/31/49				BBB-					89,870
	200			Societe Generale, 144A					5.922	%		4/05/57				BBB-					147,939
	3,400			Societe Generale					8.750	%		10/07/49				BBB-					3,228,300
	100			Standard Chartered PLC, 144A					6.409	%		1/30/17				BBB+					96,500
	2,700			Standard Chartered PLC, 144A					7.014	%		7/30/37				BBB+					2,700,308
	—	(4)		Union Planters Preferred Fund, 144A					7.750	%		7/15/53				BB					5,130,000
				Total Commercial Banks																	44,442,362
				Consumer Finance – 0.9%
	1,800			Capital One Capital IV Corporation					6.745	%		2/05/82				Baa3					1,813,680
				Diversified Financial Services – 3.0%
	4,000			General Electric Capital Corporation					7.125	%		12/15/49				AA-					4,327,960
	2,000			NB Capital Trust II					7.830	%		12/15/26				BB+					2,005,000
				Total Diversified Financial Services																	6,332,960
				Electric Utilities – 1.0%
	2,000			FPL Group Capital Inc.					7.300	%		9/01/17				BBB					2,160,000
				Insurance – 24.4%
	400			Ace Capital Trust II					9.700	%		4/01/30				BBB+					564,000
	2,100			Allstate Corporation					6.125	%		5/15/67				Baa1					2,131,500
	4,300			AXA SA, 144A					6.379	%		12/14/66				Baa1					3,493,750
	1,200			AXA					8.600	%		12/15/30				A3					1,317,584
	3,200			Catlin Insurance Company Limited					7.249	%		7/19/67				BBB+					2,880,000
	3,125			Glen Meadows Pass Through Trust					6.505	%		2/15/67				BB+					2,296,875
	1,850			Great West Life and Annuity Insurance Company, 144A					7.153	%		5/16/16				A-					1,831,500
	800			Liberty Mutual Group, 144A					7.800	%		3/15/37				Baa3					834,000
	4,100			Lincoln National Corporation					7.000	%		5/17/66				BBB					4,069,250
	3,200			MetLife Capital Trust IV, 144A					7.875	%		12/15/67				BBB					3,648,000
	5,500			National Financial Services Inc.					6.750	%		5/15/37				Baa2					5,361,186
	400			Nationwide Financial Services Capital Trust					7.899	%		3/01/37				Baa2					438,363
	2,800			Oil Insurance Limited, 144A					3.443	%		12/30/56				Baa1					2,433,704

 

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Principal Amount (000)/ Shares				Description (1)				Coupon				Maturity				Ratings (2)				Value
				Insurance (continued)
	1,600			Old Mutual Capital Funding					8.000	%		6/22/53				Baa3				$	1,603,360
	2,000			Progressive Corporation					6.700	%		6/15/67				A2					2,130,000
	1,500			Prudential Financial Inc.					8.875	%		6/15/18				BBB+					1,792,992
	2,000			Prudential PLC					6.500	%		6/23/49				A-					1,918,000
	1,900			Swiss Re Capital I, 144A					6.854	%		5/25/16				A					1,858,229
	900			White Mountains Re Group Limited					7.506	%		6/30/17				BB+					904,509
	4,900			XL Capital Ltd					6.500	%		10/15/57				BBB-					4,250,750
	2,700			ZFS FINANCE USA TRUST II, 144A					6.450	%		12/15/65				A					2,781,000
	2,454			ZFS Finance USA Trust V					6.500	%		5/09/67				A					2,466,270
				Total Insurance																	51,004,822
				Multi-Utilities – 0.3%
	500			Dominion Resources Inc.					7.500	%		6/30/16				BBB					540,000
				Road & Rail – 1.6%
	3,185			Burlington Northern Santa Fe Funding Trust I					6.613	%		12/15/55				BBB					3,455,725
				U.S. Agency – 0.9%
	1,800			AgFirst Farm Credit Bank					7.300	%		12/15/53				A-					1,797,786
				Wireless Telecommunication Services – 4.2%
	7			Centaur Funding Corporation, Series B					9.080	%		4/21/20				BBB					8,702,925
				Total Capital Preferred Securities (cost $118,878,012)																	123,790,569
Shares				Description (1)				Coupon								Ratings (2)				Value
				Convertible Preferred Securities – 0.1% (0.1% of Total Investments)
				Commercial Banks – 0.1%
	1,512			KeyCorp Convertible Preferred Stock					7.750	%						BBB-				$	175,165
				Total Convertible Preferred Securities (cost $149,530)																	175,165
Shares				Description (1)																Value
				Investment Companies – 2.4% (1.8% of Total Investments)
	172,099			BlackRock Credit Allocation Income Trust II																$	1,917,183
	42,775			Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc.																	832,829
	121,877			John Hancock Preferred Income Fund III																	2,404,633
				Total Investment Companies (cost $6,398,468)																	5,154,645
Principal Amount (000)				Description (1)				Coupon				Maturity								Value
				Short-Term Investments – 5.9% (4.3% of Total Investments)
$	12,394			Repurchase Agreement with Fixed Income Clearing Corporation, dated 7/31/12, repurchase price $12,394,326, collateralized by $11,805,000 U.S. Treasury Notes, 1.875%, due 8/31/17, value $12,646,106					0.010	%		8/01/12								$	12,394,323
				Total Short-Term Investments (cost $12,394,323)																	12,394,323
				Total Investments (cost $277,505,978) – 138.8%																	289,817,953
				Borrowings – (38.8)% (5), (6)																	(81,000,000	)
				Other Assets Less Liabilities – (0.0)% (7)																	(88,952	)
				Net Assets Applicable to Common Shares – 100%																$	208,729,001

 

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JHP

Nuveen Quality Preferred Income Fund 3 (continued)

Portfolio of Investments July 31, 2012

Investments in Derivatives at July 31, 2012

Interest Rate Swaps outstanding:

Counterparty				Notional Amount				Fund Pay/Receive Floating Rate				Floating Rate Index				Fixed Rate*				Fixed Rate Payment Frequency				Termination Date				Unrealized Appreciation (Depreciation) (7)
JPMorgan				$	14,725,000			Receive				1-Month USD-LIBOR					1.193	%		Monthly				3/21/14				$	(229,679	)
Morgan Stanley					14,725,000			Receive				1-Month USD-LIBOR					2.064			Monthly				3/21/16					(863,025	)
																												$	(1,092,704	)

 

*  Annualized.

    For Fund portfolio compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.

  (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 highest of Standard & Poor's Group ("Standard & Poor's"), Moody's Investors Service, Inc. ("Moody's") or Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor's, Baa by Moody's or BBB by Fitch are considered to be below investment grade. Holding designated N/R are not rated by any of these national rating agencies.

  (3)  Investment, or portion of investment, has been pledged to collateralize the net payment obligations for investments in derivatives.

  (4)  Principal Amount (000) rounds to less than $1,000.

  (5)  Borrowings as a percentage of Total Investments is 27.9%.

  (6)  The Fund may pledge up to 100% of its eligible investments in the Portfolio of Investments as collateral for Borrowings. As of July 31, 2012, investments with a value of $192,013,579 have been pledged as collateral for Borrowings.

  (7)  Other Assets Less Liabilities includes the Unrealized Appreciation (Depreciation) of derivative instruments as noted within Investments in Derivatives at July 31, 2012.

  (8)  For fair value measurement disclosure purposes, $25 Par (or similar) Preferred Securities categorized as Level 2. See Notes to Financial Statements, Footnote 1—General Information and Significant Accounting Policies, Investment Valuation for more Information.

  144A  Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.

  CORTS  Corporate Backed Trust Securities.

  PPLUS  PreferredPlus Trust.

  USD-LIBOR  United States Dollar—London Inter-Bank Offered Rate.

See accompanying notes to financial statements.

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Statement of

ASSETS & LIABILITIES

July 31, 2012

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Assets
Investments, at value (cost $734,371,376, $1,459,613,722 and $277,505,978, respectively)				$	772,755,122			$	1,522,938,291			$	289,817,953
Cash					—				428,405				—
Receivables:
Dividends					646,570				998,088				225,605
Interest					5,565,492				11,471,612				2,096,254
Investments sold					1,892,385				2,276,849				212,004
Other assets					115,463				221,090				42,422
Total assets					780,975,032				1,538,334,335				292,394,238
Liabilities
Borrowings					217,000,000				427,000,000				81,000,000
Unrealized depreciation on interest rate swaps					2,873,217				5,728,809				1,092,704
Common share dividends payable					3,181,823				6,495,255				1,216,203
Accrued expenses:
Interest on borrowings					15,875				31,239				5,926
Management fees					561,187				1,084,033				212,221
Other					345,913				610,292				138,183
Total liabilities					223,978,015				440,949,628				83,665,237
Net assets applicable to Common shares				$	556,997,017			$	1,097,384,707			$	208,729,001
Common shares outstanding					64,646,831				120,351,828				23,725,369
Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding)				$	8.62			$	9.12			$	8.80
Net assets applicable to Common shares consist of:
Common shares, $.01 par value per share				$	646,468			$	1,203,518			$	237,254
Paid-in surplus					882,125,429				1,688,187,549				329,713,600
Undistributed (Over-distribution of) net investment income					7,683,964				4,506,652				(77,017	)
Accumulated net realized gain (loss)					(368,969,373	)			(654,108,772	)			(132,364,107	)
Net unrealized appreciation (depreciation)					35,510,529				57,595,760				11,219,271
Net assets applicable to Common shares				$	556,997,017			$	1,097,384,707			$	208,729,001
Authorized shares:
Common					Unlimited				Unlimited				Unlimited
Preferred					Unlimited				Unlimited				Unlimited

 

See accompanying notes to financial statements.

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Statement of

OPERATIONS

Year Ended July 31, 2012

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Investment Income
Dividends				$	28,651,244			$	53,450,175			$	10,051,012
Interest					23,411,679				48,216,828				9,210,346
Total investment income					52,062,923				101,667,003				19,261,358
Expenses
Management fees					6,178,797				11,931,860				2,332,878
Interest expense on borrowings					2,838,751				5,586,257				1,061,003
Shareholders' servicing agent fees and expenses					6,212				9,328				1,723
Custodian's fees and expenses					114,216				209,952				53,183
Trustees' fees and expenses					24,737				48,481				9,362
Professional fees					33,338				74,320				6,992
Shareholders' reports — printing and mailing expenses					153,428				242,067				52,546
Stock exchange listing fees					20,809				38,736				8,658
Investor relations expense					111,552				194,801				38,097
Other expenses					31,013				50,012				18,476
Total expenses before custodian fee credit					9,512,853				18,385,814				3,582,918
Custodian fee credit					(169	)			(539	)			(114	)
Net expenses					9,512,684				18,385,275				3,582,804
Net investment income (loss)					42,550,239				83,281,728				15,678,554
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments and foreign currency					1,009,553				4,909,208				1,972,994
Interest rate swaps					(1,105,455	)			(2,204,130	)			(420,412	)
Change in net unrealized appreciation (depreciation) of:
Investments and foreign currency					21,337,512				37,462,005				5,546,726
Interest rate swaps					(1,193,426	)			(2,379,530	)			(453,868	)
Net realized and unrealized gain (loss)					20,048,184				37,787,553				6,645,440
Net increase (decrease) in net assets applicable to Common shares from operations				$	62,598,423			$	121,069,281			$	22,323,994

 

See accompanying notes to financial statements.

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Statement of

CHANGES in NET ASSETS

				Quality Preferred Income (JTP)												Quality Preferred Income 2 (JPS)
				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10
Operations
Net investment income (loss)				$	42,550,239			$	22,341,737			$	41,883,329			$	83,281,728			$	44,637,240			$	83,019,337
Net realized gain (loss) from:
Investments and foreign currency					1,009,553				1,144,421				(3,028,241	)			4,909,208				3,022,882				(9,421,988	)
Interest rate swaps					(1,105,455	)			(383,193	)			—				(2,204,130	)			(764,036	)			—
Change in net unrealized appreciation (depreciation) of:
Investments and foreign currency					21,337,512				12,913,213				64,050,994				37,462,005				18,327,998				122,415,711
Interest rate swaps					(1,193,426	)			(1,679,791	)			—				(2,379,530	)			(3,349,279	)			—
Net increase (decrease) in net assets applicable to Common shares from operations					62,598,423				34,336,387				102,906,082				121,069,281				61,874,805				196,013,060
Distribution to Common Shareholders
From net investment income					(38,782,506	)			(22,621,303	)			(37,745,260	)			(79,417,479	)			(46,323,910	)			(78,449,841	)
Decrease in net assets applicable to Common shares from distributions to Common shareholders					(38,782,506	)			(22,621,303	)			(37,745,260	)			(79,417,479	)			(46,323,910	)			(78,449,841	)
Capital Share Transactions
Net proceeds from Common shares issued to shareholders due to reinvestments of distributions					119,036				—				—				264,678				—				—
Net increase (decrease) in net assets applicable to Common shares from capital share transactions					119,036				—				—				264,678				—				—
Net increase (decrease) in net assets applicable to Common shares					23,934,953				11,715,084				65,160,822				41,916,480				15,550,895				117,563,219
Net assets applicable to Common shares at the beginning of period					533,062,064				521,346,980				456,186,158				1,055,468,227				1,039,917,332				922,354,113
Net assets applicable to Common shares at the end of period				$	556,997,017			$	533,062,064			$	521,346,980			$	1,097,384,707			$	1,055,468,227			$	1,039,917,332
Undistributed (Over-distribution of) net investment income at the end of period				$	7,683,964			$	4,054,297			$	10,037,866			$	4,506,652			$	1,176,058			$	6,519,710

 

See accompanying notes to financial statements.

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Statement of

CHANGES in NET ASSETS(continued)

				Quality Preferred Income 3 (JHP)
				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10
Operations
Net investment income (loss)				$	15,678,554			$	8,489,109			$	15,383,796
Net realized gain (loss) from:
Investments and foreign currency					1,972,994				735,225				476,202
Interest rate swaps					(420,412	)			(145,731	)			—
Change in net unrealized appreciation (depreciation) of:
Investments and foreign currency					5,546,726				2,818,458				20,558,969
Interest rate swaps					(453,868	)			(638,836	)			—
Net increase (decrease) in net assets applicable to Common shares from operations					22,323,994				11,258,225				36,418,967
Distribution to Common Shareholders
From net investment income					(14,801,665	)			(8,633,012	)			(14,608,313	)
Decrease in net assets applicable to Common shares from distributions to Common shareholders					(14,801,665	)			(8,633,012	)			(14,608,313	)
Capital Share Transactions
Net proceeds from Common shares issued to shareholders due to reinvestments of distributions					68,152				—				25,644
Net increase (decrease) in net assets applicable to Common shares from capital share transactions					68,152				—				25,644
Net increase (decrease) in net assets applicable to Common shares					7,590,481				2,625,213				21,836,298
Net assets applicable to Common shares at the beginning of period					201,138,520				198,513,307				176,677,009
Net assets applicable to Common shares at the end of period				$	208,729,001			$	201,138,520			$	198,513,307
Undistributed (Over-distribution of) net investment income at the end of period				$	(77,017	)		$	(791,666	)		$	1,697,492

 

See accompanying notes to financial statements.

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Statement of

CASH FLOWS

Year Ended July 31, 2012

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Cash Flows from Operating Activities:
Net Increase (Decrease) in Net Assets Applicable to Common Shares from Operations				$	62,598,423			$	121,069,281			$	22,323,994
Adjustments to reconcile the net increase (decrease) in net assets applicable to Common shares from operations to net cash provided by (used in) operating activities:
Purchases of investments					(199,224,556	)			(343,580,537	)			(72,529,783	)
Proceeds from sales and maturities of investments					151,784,566				261,017,678				60,589,684
Proceeds from (Purchases of) short-term investments, net					(15,605,396	)			(34,262,280	)			(10,686,320	)
Proceeds from (Payments for) interest rate swap contracts, net					(1,105,455	)			(2,204,130	)			(420,412	)
Amortization (Accretion) of premiums and discounts, net					(64,510	)			465,420				20,496
(Increase) Decrease in:
Receivable for dividends					352,533				821,676				122,012
Receivable for interest					(1,238,514	)			(2,667,651	)			(411,512	)
Receivable for investments sold					(1,266,008	)			(2,087,204	)			179,416
Other assets					24,515				41,403				10,741
Increase (Decrease) in:
Accrued interest on borrowings					(5,686	)			(11,562	)			(2,239	)
Accrued management fees					49,003				86,287				17,153
Accrued other expenses					11,356				16,233				805
Net realized (gain) loss from:
Investments and foreign currency					(1,009,553	)			(4,909,208	)			(1,972,994	)
Interest rate swaps					1,105,455				2,204,130				420,412
Change in net unrealized (appreciation) depreciation of:
Investments and foreign currency					(21,337,512	)			(37,462,005	)			(5,546,726	)
Interest rate swaps					1,193,426				2,379,530				453,868
Taxes paid on undistributed capital gains					—				—				(25,495	)
Proceeds from litigation					243,571				373,562				85,834
Net cash provided by (used in) operating activities					(23,494,342	)			(38,709,377	)			(7,371,066	)
Cash Flows from Financing Activities:
Increase (Decrease) in borrowings					62,125,000				118,200,000				22,100,000
Cash distributions paid to Common shareholders					(38,647,541	)			(79,062,218	)			(14,728,934	)
Net cash provided by (used in) financing activities					23,477,459				39,137,782				7,371,066
Net Increase (Decrease) in Cash					(16,883	)			428,405				—
Cash at the beginning of period					16,883				—				—
Cash at the End of Period				$	—			$	428,405			$	—

 

Supplemental Disclosure of Cash Flow Information

Cash paid for interest on borrowings (excluding borrowing costs) was $2,711,937, $5,342,819 and $1,015,742 for Quality Preferred Income (JTP), Quality Preferred Income 2 (JPS) and Quality Preferred Income 3 (JHP), respectively.

Non-cash financing activities not included herein consists of reinvestments of Common share distributions of $119,036, $264,678 and $68,152 for Quality Preferred Income (JTP), Quality Preferred Income 2 (JPS) and Quality Preferred Income 3 (JHP), respectively.

 

See accompanying notes to financial statements.

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Financial

HIGHLIGHTS

Selected data for a Common share outstanding throughout each period:

								Investment Operations																				Less Distributions
				Beginning Common Share Net Asset Value				Net Investment Income (Loss)(a)				Net Realized/ Unrealized Gain (Loss)				Distributions from Net Investment Income to FundPreferred Share- holders(b)				Distributions from Capital Gains to FundPreferred Share- holders(b)				Total				Net Investment Income to Common Share- holders				Capital Gains to Common Share- holders				Return of Capital to Common Share- holders				Total
Quality Preferred Income (JTP)
Year Ended 7/31:
	2012			$	8.25			$	.66			$	.31			$	—			$	—			$	.97			$	(.60	)		$	—			$	—			$	(.60	)
	2011	(g)			8.07				.35				.18				—				—				.53				(.35	)			—				—				(.35	)
Year Ended 12/31:
	2010				7.06				.65				.94				—				—				1.59				(.58	)			—				—				(.58	)
	2009				5.25				.63				1.82				—	*			—				2.45				(.57	)			—				(.07	)			(.64	)
	2008				11.06				1.10				(5.81	)			(.19	)			—				(4.90	)			(.90	)			—				(.01	)			(.91	)
	2007				14.10				1.29				(2.96	)			(.35	)			—				(2.02	)			(.93	)			—				(.09	)			(1.02	)
Quality Preferred Income 2 (JPS)
Year Ended 7/31:
	2012				8.77				.69				.32				—				—				1.01				(.66	)			—				—				(.66	)
	2011	(g)			8.64				.37				.15				—				—				.52				(.39	)			—				—				(.39	)
Year Ended 12/31:
	2010				7.67				.69				.93				—				—				1.62				(.65	)			—				—				(.65	)
	2009				5.42				.69				2.29				—	*			—				2.98				(.70	)			—				(.03	)			(.73	)
	2008				11.57				1.18				(6.18	)			(.18	)			—				(5.18	)			(.97	)			—				—				(.97	)
	2007				14.66				1.34				(2.96	)			(.34	)			(.01	)			(1.97	)			(1.04	)			(.04	)			(.04	)			(1.12	)
Quality Preferred Income 3 (JHP)
Year Ended 7/31:
	2012				8.48				.66				.28				—				—				.94				(.62	)			—				—				(.62	)
	2011	(g)			8.37				.36				.11				—				—				.47				(.36	)			—				—				(.36	)
Year Ended 12/31:
	2010				7.45				.65				.89				—				—				1.54				(.62	)			—				—				(.62	)
	2009				5.14				.63				2.34				—	*			—				2.97				(.58	)			—				(.08	)			(.66	)
	2008				11.02				1.08				(5.85	)			(.19	)			—				(4.96	)			(.90	)			—				(.02	)			(.92	)
	2007				14.22				1.31				(3.09	)			(.37	)			—				(2.15	)			(.95	)			—				(.10	)			(1.05	)

(a)  Per share Net Investment Income (Loss) is calculated using the average daily shares method.

(b)  The amounts shown are based on Common share equivalents.

(c)  Total Return Based on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total returns are not annualized.

  Total Return Based on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund's market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized.

(d)  After expense reimbursement from the Adviser, where applicable. As of June 30, 2010, September 30, 2010 and December 31, 2010, the Adviser is no longer reimbursing Quality Preferred Income (JTP), Quality Preferred Income 2 (JPS) and Quality Preferred Income 3 (JHP), respectively, for any fees and expenses.

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																				Ratios/Supplemental Data
												Total Returns												Ratios to Average Net Assets Applicable to Common Shares Before Reimbursement(e)								Ratios to Average Net Assets Applicable to Common Shares After Reimbursement(d)(e)
				Ending Common Share Net Asset Value				Ending Market Value				Based on Market Value(c)				Based on Common Share Net Asset Value(c)				Ending Net Assets Applicable to Common Shares (000)				Expenses				Net Investment Income (Loss)				Expenses				Net Investment Income (Loss)				Portfolio Turnover Rate
Quality Preferred Income (JTP)
Year Ended 7/31:
	2012			$	8.62			$	8.70				24.30	%			12.51	%		$	556,997				1.83	%			8.17	%			N/A				N/A				21	%
	2011	(g)			8.25				7.54				6.62				6.74				533,062				1.61	**			7.17	**			N/A				N/A				9
Year Ended 12/31:
	2010				8.07				7.40				21.94				23.09				521,347				1.65				8.37				1.60	%			8.42	%			20
	2009				7.06				6.57				53.05				51.85				456,186				1.86				11.04				1.71				11.19				29
	2008				5.25				4.86				(47.05	)			(46.97	)			339,270				2.01				11.65				1.67				11.99				24
	2007				11.06				10.33				(24.60	)			(15.32	)			713,945				1.54				9.43				1.11				9.86				32
Quality Preferred Income 2 (JPS)
Year Ended 7/31:
	2012				9.12				9.34				25.17				12.32				1,097,385				1.80				8.13				N/A				N/A				19
	2011	(g)			8.77				8.07				7.02				5.99				1,055,468				1.58	**			7.21	**			N/A				N/A				7
Year Ended 12/31:
	2010				8.64				7.90				18.31				21.99				1,039,917				1.59				8.29				1.51				8.37				25
	2009				7.67				7.25				63.90				61.22				922,354				1.82				11.27				1.64				11.45				27
	2008				5.42				5.04				(47.49	)			(47.58	)			649,377				1.96				12.02				1.59				12.39				18
	2007				11.57				10.81				(22.24	)			(14.32	)			1,386,125				1.45				9.35				1.00				9.80				31
Quality Preferred Income 3 (JHP)
Year Ended 7/31:
	2012				8.80				8.85				24.04				11.91				208,729				1.84				8.04				N/A				N/A				23
	2011	(g)			8.48				7.70				4.08				5.69				201,139				1.65	**			7.19	**			N/A				N/A				8
Year Ended 12/31:
	2010				8.37				7.74				20.66				21.49				198,513				1.65				8.05				1.54				8.16				24
	2009				7.45				6.95				54.50				63.23				176,677				1.87				10.56				1.66				10.77				35
	2008				5.14				5.08				(45.66	)			(48.00	)			121,870				2.00				11.51				1.60				11.91				30
	2007				11.02				10.51				(23.61	)			(16.01	)			261,081				1.60				9.38				1.10				9.87				35

 

(e)  • Ratios do not reflect the effect of dividend payments to FundPreferred shareholders, where applicable.

  • Net Investment Income (Loss) ratios reflect income earned and expenses incurred on assets attributable to FundPreferred shares and/or borrowings, where applicable.

  • Ratios do not reflect the effect of custodian fee credits earned on the Fund's net cash on deposit with the custodian bank, where applicable.

  • Each ratio includes the effect of all interest expense paid and other costs related to borrowings, where applicable as follows:

Ratios of Borrowings Interest Expense to Average Net Assets Applicable to Common Shares								Ratios of Borrowings Interest Expense to Average Net Assets Applicable to Common Shares								Ratios of Borrowings Interest Expense to Average Net Assets Applicable to Common Shares
Quality Preferred Income (JTP)								Quality Preferred Income 2 (JPS)								Quality Preferred Income 3 (JHP)
Year Ended 7/31:								Year Ended 7/31:								Year Ended 7/31:
	2012				.54	%			2012				.55	%			2012				.54	%
	2011	(g)			.38	**			2011	(g)			.37	**			2011	(g)			.37	**
Year Ended 12/31:								Year Ended 12/31:								Year Ended 12/31:
	2010				.41				2010				.39				2010				.38
	2009				.61				2009				.59				2009				.59
	2008				.26				2008				.30				2008				.20
	2007				—				2007				—				2007				—

 

(g)  For the seven months ended July 31, 2011.

N/A  The Fund no longer has a contractual reimbursement agreement with the Adviser.

*  Rounds to less than $.01 per share.

**  Annualized.

 

See accompanying notes to financial statements.

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Financial

HIGHLIGHTS (continued)

				FundPreferred Shares at End of Period												Borrowings at End of Period
				Aggregate Amount Outstanding (000)				Liquidation Value Per Share				Asset Coverage Per Share				Aggregate Amount Outstanding (000)				Asset Coverage Per $1,000
Quality Preferred Income (JTP)
Year Ended 7/31:
	2012			$	—			$	—			$	—			$	217,000			$	3,567
	2011	(g)			—				—				—				154,875				4,442
Year Ended 12/31:
	2010				—				—				—				154,875				4,366
	2009				—				—				—				153,375				3,974
	2008				64,875				25,000				155,740				86,500				5,672
	2007				440,000				25,000				65,565				—				—
Quality Preferred Income 2 (JPS)
Year Ended 7/31:
	2012				—				—				—				427,000				3,570
	2011	(g)			—				—				—				308,800				4,418
Year Ended 12/31:
	2010				—				—				—				300,000				4,466
	2009				—				—				—				289,500				4,186
	2008				130,000				25,000				149,880				165,200				5,718
	2007				800,000				25,000				68,316				—				—
Quality Preferred Income 3 (JHP)
Year Ended 7/31:
	2012				—				—				—				81,000				3,577
	2011	(g)			—				—				—				58,900				4,415
Year Ended 12/31:
	2010				—				—				—				55,000				4,609
	2009				—				—				—				55,000				4,212
	2008				18,100				25,000				193,329				33,000				5,242
	2007				166,000				25,000				64,319				—				—

 

(g)  For the seven months ended July 31, 2011.

 

See accompanying notes to financial statements.

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Notes to

FINANCIAL STATEMENTS

1. General Information and Significant Accounting Policies

General Information

The funds covered in this report and their corresponding Common share New York Stock Exchange ("NYSE") symbols are Nuveen Quality Preferred Income Fund (JTP), Nuveen Quality Preferred Income Fund 2 (JPS) and Nuveen Quality Preferred Income Fund 3 (JHP) (each a "Fund" and collectively, the "Funds"). The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end registered investment companies.

Each Fund's investment objective is high current income consistent with capital preservation. Each Fund's secondary investment objective is to enhance portfolio value. Each Fund invests at least 80% of its net assets in preferred securities; up to 20% of its net assets in debt securities, including convertible debt securities and convertible preferred securities; and 100% of each Fund's total assets in securities that, at the time of investment, are investment grade quality (BBB/Baa or better), which may include up to 10% in securities that are rated investment grade by at least one nationally recognized statistical rating organization and lower by another.

Significant Accounting Policies

The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").

Investment Valuation

Equity-type securities are valued at the last sales price on the securities exchange on which such securities are primarily traded and are generally classified as Level 1 for fair value measurement purposes. Securities primarily traded on the NASDAQ National Market ("NASDAQ") are valued, except as indicated below, at the NASDAQ Official Closing Price and are generally classified as Level 1. However, securities traded on a securities exchange or NASDAQ for which there were no transactions on a given day or securities not listed on a securities exchange or NASDAQ are valued at the quoted bid price and are generally classified as Level 2. Investments in investment companies are valued at their respective net asset values on the valuation date. These investment vehicles are generally classified as Level 1.

Prices of fixed-income securities and interest rate swap contracts are provided by a pricing service approved by the Funds' Board of Trustees. These securities are generally classified as Level 2. The pricing service establishes a security's fair value using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor's credit characteristics considered relevant. In pricing certain securities, particularly less liquid and lower quality securities, the pricing service may consider information about a security, its issuer or market activity provided by Nuveen Fund Advisors, Inc. (the "Adviser"), a wholly-owned subsidiary of Nuveen Investments, Inc. ("Nuveen"). These securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs.

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

Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Funds' Board of Trustees or its designee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; debt securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund's net asset value (as may be the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security's fair value. As a general principle, the fair value of a security would appear to be the amount that the owner might reasonably expect to receive for it in a current sale. A

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Notes to

FINANCIAL STATEMENTS (continued)

variety of factors may be considered in determining the fair value of such securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor's credit characteristics considered relevant. These securities are generally classified as Level 2 or as Level 3 depending on the priority of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Funds' Board of Trustees or its designee.

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

Investment Transactions

Investment transactions are recorded on a trade date basis. Realized gains and losses from investment transactions are determined on the specific identification method, which is the same basis used for federal income tax purposes. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to earmark securities in the Funds' portfolio with a current value at least equal to the amount of the when-issued/delayed delivery purchase commitments. At July 31, 2012, the Funds' had no outstanding when-issued/delayed delivery purchase commitments.

Investment Income

Dividend income is recorded on the ex-dividend date or, for foreign securities, when information is available. Interest income, which reflects the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Interest income also reflects paydown gains and losses, if any.

Income Taxes

Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its investment company taxable income to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies ("RICs"). Therefore, no federal income tax provision is required.

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

Dividends and Distributions to Common Shareholders

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

Distributions to Common shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.

FundPreferred Shares

The Funds are authorized to issue auction rate preferred ("FundPreferred") shares. As of December 31, 2009, Quality Preferred Income (JTP), Quality Preferred Income 2 (JPS) and Quality Preferred Income 3 (JHP) redeemed all of their outstanding FundPreferred shares, at liquidation values of $440,000,000, $800,000,000 and $166,000,000, respectively.

Foreign Currency Transactions

Each Fund is authorized to engage in foreign currency exchange transactions, including foreign currency exchange contracts, futures, options and swap contracts. To the extent that the Funds invest in securities and/or contracts that are denominated in a currency other than U.S. dollars, the Funds will be subject to currency risk, which is the risk that an increase in the U.S. dollar relative

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to the foreign currency will reduce returns or portfolio value. Generally, when the U.S. dollar rises in value against a foreign currency, the Fund's investments denominated in that currency will lose value because its currency is worth fewer U.S. dollars; the opposite effect occurs if the U.S. dollar falls in relative value. Investments and other assets and liabilities denominated in foreign currencies are converted into U.S. dollars on a spot (i.e. cash) basis at the spot rate prevailing in the foreign currency exchange market at the time of valuation. Purchases and sales of investments and income denominated in foreign currencies are translated into U.S. dollars on the respective dates of such transactions.

The books and records of the Funds are maintained in U.S. dollars. Foreign currencies, assets and liabilities are translated into U.S. dollars at 4:00 p.m. Eastern time. Investment transactions, income and expenses are translated on the respective dates of such transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date of the transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of a Fund and the amounts actually received.

The realized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with other assets and liabilities on investments, foreign currency exchange contracts, futures, options purchased, options written and swaps are recognized as a component of "Net realized gain (loss) from investments and foreign currency" on the Statement of Operations, when applicable.

The unrealized gains and losses resulting from changes in foreign currency exchange rates and changes in foreign exchange rates associated with other assets and liabilities on investments are recognized as a component of "Change in unrealized appreciation (depreciation) of investments and foreign currency" on the Statement of Operations when applicable. The unrealized gains and losses resulting from changes in foreign exchange rates associated with foreign currency exchange contracts, futures, options purchased, options written and swaps are recognized as a component of "Change in net unrealized appreciation (depreciation) of foreign currency exchange contracts, futures, options purchased, options written and interest rate swaps" respectively on the Statement of Operations, when applicable.

Interest Rate Swap Contracts

Each Fund is subject to interest rate risk in the normal course of pursuing its investment objectives and is authorized to invest in interest rate swap transactions in an attempt to manage such risk. Each Fund's use of interest rate swap contracts is intended to mitigate the negative impact that an increase in short-term interest rates could have on Common share net earnings as a result of leverage. Interest rate swap contracts involve each Fund's agreement with the counterparty to pay or receive a fixed rate payment in exchange for the counterparty receiving or paying a variable rate payment that is intended to approximate each Fund's variable rate payment obligation on FundPreferred shares or any variable rate borrowing. The payment obligation is based on the notional amount of the interest rate swap contract. Interest rate swap contracts do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the net amount of interest payments that each Fund is to receive. Interest rate swap positions are valued daily. Each Fund accrues the fixed rate payment expected to be paid or received and the variable rate payment expected to be received or paid on interest rate swap contracts on a daily basis, and recognizes the daily change in the fair value of the Fund's contractual rights and obligations under the contracts. The net amount recorded for these transactions for each counterparty is recognized on the Statement of Assets and Liabilities as a component of "Unrealized appreciation or depreciation on interest rate swaps (,net)" with the change during the fiscal period recognized on the Statement of Operations as a component of "Change in net unrealized appreciation (depreciation) of interest rate swaps." Income received or paid by each Fund is recognized as a component of "Net realized gain (loss) from interest rate swaps" on the Statement of Operations, in addition to the net realized gains or losses recognized upon the termination of an interest rate swap contract, and are equal to the difference between the Fund's basis in the interest rate swap and the proceeds from (or cost of) the closing transaction. Payments received or made at the beginning of the measurement period are recognized as a component of "Interest rate swap premiums paid and/or received" on the Statement of Assets and Liabilities, when applicable. For tax purposes, periodic payments are treated as ordinary income or expense.

During the fiscal year ended July 31, 2012, each Fund used interest rate swap contracts to partially fix the interest cost of leverage, which each Fund uses through the use of bank borrowings.

The average notional amount of interest rate swap contracts outstanding during the fiscal year ended July 31, 2012, was as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Average notional amount of interest rate swap contracts outstanding*				$	100,668,750			$	200,720,000			$	38,285,000

 

*  The average notional amount is calculated based on the outstanding notional amount at the beginning of the fiscal year and at the end of each fiscal quarter within the current fiscal period.

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

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Notes to

FINANCIAL STATEMENTS (continued)

Market and Counterparty Credit Risk

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

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

Repurchase Agreements

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

Zero Coupon Securities

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

Custodian Fee Credit

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

Indemnifications

Under the Funds' organizational documents, their officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates.

2. Fair Value Measurements

Fair value is defined as the price that the Funds would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the

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asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.

Level 1 — Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.

Level 2 — Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).

Level 3 — Prices are determined using significant unobservable inputs (including management's assumptions in determining the fair value of investments).

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

Quality Preferred Income (JTP)				Level 1				Level 2				Level 3				Total
Long-Term Investments*:
$25 Par (or similar) Preferred Securities				$	303,952,809			$	60,025,559			$	—			$	363,978,368
Corporate Bonds					—				46,584,398				—				46,584,398
Capital Preferred Securities					—				329,717,433				—				329,717,433
Convertible Preferred Securities					231,400				—				—				231,400
Investment Companies					12,107,513				—				—				12,107,513
Short-Term Investments:
Repurchase Agreements					—				20,136,010				—				20,136,010
Derivatives:
Interest Rate Swaps**					—				(2,873,217	)			—				(2,873,217	)
Total				$	316,291,722			$	453,590,183			$	—			$	769,881,905
Quality Preferred Income 2 (JPS)				Level 1				Level 2				Level 3				Total
Long-Term Investments*:
$25 Par (or similar) Preferred Securities				$	582,087,704			$	135,159,861			$	—			$	717,247,565
Corporate Bonds					—				98,811,276				—				98,811,276
Capital Preferred Securities					—				634,100,581				—				634,100,581
Convertible Preferred Securities					—				3,224,000				—				3,224,000
Investment Companies					26,315,319				—				—				26,315,319
Short-Term Investments:
Repurchase Agreements					—				43,239,550				—				43,239,550
Derivatives:
Interest Rate Swaps**					—				(5,728,809	)			—				(5,728,809	)
Total				$	608,403,023			$	908,806,459			$	—			$	1,517,209,482
Quality Preferred Income 3 (JHP)				Level 1				Level 2				Level 3				Total
Long-Term Investments*:
$25 Par (or similar) Preferred Securities				$	110,352,942			$	22,547,844			$	—			$	132,900,786
Corporate Bonds					—				15,402,465				—				15,402,465
Capital Preferred Securities					—				123,790,569				—				123,790,569
Convertible Preferred Securities					175,165				—				—				175,165
Investment Companies					5,154,645				—				—				5,154,645
Short-Term Investments:
Repurchase Agreements					—				12,394,323				—				12,394,323
Derivatives:
Interest Rate Swaps**					—				(1,092,704	)			—				(1,092,704	)
Total				$	115,682,752			$	173,042,497			$	—			$	288,725,249

 

*  Refer to the Fund's Portfolio of Investments for industry classifications and breakdown of $25 Par (or similar) Preferred Securities classified as Level 2.

**  Represents net unrealized appreciation (depreciation) as reported in the Fund's Portfolio of Investments.

Nuveen Investments
47

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Notes to

FINANCIAL STATEMENTS (continued)

The table below presents the transfers in and out of the valuation levels for each Fund as of the end of the reporting period when compared to the valuation levels at the end of the previous reporting period. Changes in valuation inputs or methodologies may result in transfers into or out of an assigned level within the fair value hierarchy. Transfers in or out of levels are generally due to the availability of publicly available information and to the significance or extent a manager determines that the valuation inputs or methodologies may impact the valuation of those securities.

				Level 1								Level 2								Level 3
				Transfers In				(Transfers Out)				Transfers In				(Transfers Out)				Transfers In				(Transfers Out)
Quality Preferred Income (JTP)				$	—			$	(5,743,983	)		$	5,743,983			$	—			$	—			$	—
Quality Preferred Income 2 (JPS)					—				(9,966,593	)			9,966,593				—				—				—
Quality Preferred Income 3 (JHP)					—				(2,232,795	)			2,232,795				—				—				—

 

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

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer's financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts' research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

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

3. Derivative Instruments and Hedging Activities

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

The following tables present the fair value of all derivative instruments held by the Funds as of July 31, 2012, the location of these instruments on the Statement of Assets and Liabilities, and the primary underlying risk exposure.

Quality Preferred Income (JTP)

Location on the Statement of Assets and Liabilities

Underlying

Derivative

Asset Derivatives

Liability Derivatives

Risk Exposure

Instrument

Location

Value

Location

Value

Interest Rate

Swaps

—

$

—

Unrealized depreciation on interest rate swaps

$

(2,873,217

)

Nuveen Investments
48

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Quality Preferred Income 2 (JPS)

Location on the Statement of Assets and Liabilities

Underlying

Derivative

Asset Derivatives

Liability Derivatives

Risk Exposure

Instrument

Location

Value

Location

Value

Interest Rate

Swaps

—

$

—

Unrealized depreciation on interest rate swaps

$

(5,728,809

)

 

Quality Preferred Income 3 (JHP)

Location on the Statement of Assets and Liabilities

Underlying

Derivative

Asset Derivatives

Liability Derivatives

Risk Exposure

Instrument

Location

Value

Location

Value

Interest Rate

Swaps

—

$

—

Unrealized depreciation on interest rate swaps

$

(1,092,704

)

 

The following tables present the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the fiscal year ended July 31, 2012, on derivative instruments, as well as the primary risk exposure associated with each.

Net Realized Gain (Loss) from Interest Rate Swaps				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Risk Exposure
Interest Rate				$	(1,105,455	)		$	(2,204,130	)		$	(420,412	)
Change in Net Unrealized Appreciation (Depreciation) of Interest Rate Swaps				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Risk Exposure
Interest Rate				$	(1,193,426	)		$	(2,379,530	)		$	(453,868	)

 

4. Fund Shares

Common Shares

Since the inception of the Funds' repurchase program, the Funds have not repurchased any of their outstanding Common shares.

Transactions in Common shares were as follows:

				Quality Preferred Income (JTP)												Quality Preferred Income 2 (JPS)												Quality Preferred Income 3 (JHP)
				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10				Year Ended 7/31/12				Seven Months Ended 7/31/11				Year Ended 12/31/10
Common shares issued to shareholders due to reinvestment of distributions					14,536				—				—				29,986				—				—				8,303				—				3,042

 

5. Investment Transactions

Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended July 31, 2012, were as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Purchases				$	199,224,556			$	343,580,537			$	72,529,783
Sales and maturities					151,784,566				261,017,678				60,589,684

Nuveen Investments
49

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Notes to

FINANCIAL STATEMENTS (continued)

6. Income Tax Information

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to recognition of premium amortization, 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 as listed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds.

At July 31, 2012, the cost and unrealized appreciation (depreciation) of investments (excluding investments in derivatives), as determined on a federal income tax basis, were as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Cost of investments				$	732,115,482			$	1,456,243,114			$	278,202,369
Gross unrealized:
Appreciation				$	47,404,599			$	89,330,829			$	16,297,611
Depreciation					(6,764,959	)			(22,635,652	)			(4,682,027	)
Net unrealized appreciation (depreciation) of investments				$	40,639,640			$	66,695,177			$	11,615,584

 

Permanent differences, primarily due to adjustments for investments in real estate investment trusts and complex securities character adjustments, resulted in reclassifications among the Funds' components of Common share net assets at July 31, 2012, the Funds' tax year end, as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Paid-in-surplus				$	—			$	—			$	(25,495	)
Undistributed (Over-distribution of) net investment income					(138,066	)			(533,655	)			(162,240	)
Accumulated net realized gain (loss)					138,066				533,655				187,735

 

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

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Undistributed net ordinary income *				$	8,447,121			$	5,919,064			$	1,843,778
Undistributed net long-term capital gains					—				—				—

 

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

The tax character of distributions paid during the Funds' tax years ended July 31, 2012 and July 31, 2011, was designated for purposes of the dividends paid deduction as follows:

2012				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Distributions from net ordinary income *				$	38,781,779			$	79,415,830			$	14,801,233
Distributions from net long-term capital gains					—				—				—

Nuveen Investments
50

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2011				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Distributions from net ordinary income *				$	38,520,847			$	79,171,774			$	14,751,546
Distributions from net long-term capital gains					—				—				—

 

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

At July 31, 2012, the Funds' tax year end, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Expiration:
July 31,2015				$	516,804			$	—			$	—
July 31,2016					14,951,415				16,302,010				7,719,987
July 31,2017					185,142,331				307,494,854				77,582,335
July 31,2018					164,307,763				317,825,546				47,045,512
July 31,2019					3,371,042				10,696,373				15,796
Total				$	368,289,355			$	652,318,783			$	132,363,630

 

During the tax year ended July 31, 2012, the Funds utilized capital loss carryforwards as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Utilized capital loss carryforwards				$	483,977			$	3,108,398			$	1,486,470

 

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted, which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the Act, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

The Act also contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.

During the Funds' tax year ended July 31, 2012, there were no post-enactment capital losses generated by any of the Funds.

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

				Quality Preferred Income (JTP)
Post-October capital losses				$	489,968
Late-year ordinary losses					—

 

7. Management Fees and Other Transactions with Affiliates

Each Fund's management fee consists of two components – a fund-level fee, based only on the amount of assets within the Fund, and a complex-level fee, based on the aggregate amount of all eligible fund assets managed by the Adviser. This pricing

 

Nuveen Investments
51

---

Notes to

FINANCIAL STATEMENTS (continued)

structure enables Fund shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.

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

Average Daily Managed Assets*				Fund-Level Fee Rate
For the first $500 million					.7000	%
For the next $500 million					.6750
For the next $500 million					.6500
For the next $500 million					.6250
For managed assets over $2 billion					.6000

 

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

Complex-Level Managed Asset Breakpoint Level*				Effective Rate at Breakpoint Level
$55 billion					.2000	%
$56 billion					.1996
$57 billion					.1989
$60 billion					.1961
$63 billion					.1931
$66 billion					.1900
$71 billion					.1851
$76 billion					.1806
$80 billion					.1773
$91 billion					.1691
$125 billion					.1599
$200 billion					.1505
$250 billion					.1469
$300 billion					.1445

 

*  For the fund-level and complex-level fees, managed assets include closed-end fund assets managed by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes the funds' use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust's issuance of floating rate securities, subject to an agreement by the Adviser as to certain funds to limit the amount of such assets for determining managed assets in certain circumstances. The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen Funds that constitute "eligible assets." Eligible assets do not include assets attributable to investments in other Nuveen Funds and assets in excess of $2 billion added to the Nuveen Fund complex in connection with the Adviser's assumption of the management of the former First American Funds effective January 1, 2011. As of July 31, 2012, the complex-level fee rate for these Funds was .1709%.

The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Adviser is responsible for each Fund's overall investment strategy and asset allocation decisions. The Adviser has entered into sub-advisory agreements with Spectrum Asset Management, Inc. ("Spectrum"), under which Spectrum manages the investment portfolios of the Funds. The Adviser is responsible for overseeing the Funds' investments in interest rate swap contracts. Spectrum is compensated for its services to the Funds from the management fees paid to the Adviser. Spectrum also receives compensation on certain portfolio transactions for providing brokerage services to the Funds. During the fiscal year ended July 31, 2012, Quality Preferred Income (JTP), Quality Preferred Income 2 (JPS) and Quality Preferred Income 3 (JHP) paid Spectrum commissions of $80,613, $123,835 and $29,335, respectively.

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

Nuveen Investments
52

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compensation they are entitled to receive from certain Nuveen-advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen-advised funds.

8. Borrowing Arrangements

Each Fund has entered into a prime brokerage facility ("Borrowings") with BNP Paribas Prime Brokerage, Inc. ("BNP") as a means of financial leverage. Each Fund's maximum commitment amount under these Borrowings is as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Maximum commitment amount				$	217,000,000			$	427,000,000			$	81,000,000

 

As of July 31, 2012, each Fund's outstanding balance on its Borrowings was as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Outstanding borrowings				$	217,000,000			$	427,000,000			$	81,000,000

 

On November 9, 2011, each Fund amended its prime brokerage facility with BNP. Prior to November 9, 2011, each Fund's maximum commitment amount was as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Maximum commitment amount				$	164,000,000			$	325,000,000			$	62,000,000

 

During the fiscal year ended July 31, 2012, the average daily balance outstanding and average annual interest rate on each Fund's Borrowings were as follows:

				Quality Preferred Income (JTP)				Quality Preferred Income 2 (JPS)				Quality Preferred Income 3 (JHP)
Average daily balance outstanding				$	191,555,328			$	377,395,082			$	71,802,732
Average annual interest rate					1.35	%			1.35	%			1.35	%

 

In order to maintain these Borrowings, the Funds must meet certain collateral, asset coverage and other requirements. Borrowings outstanding are fully secured by securities held in each Fund's portfolio of investments. Interest is charged on these Borrowings for each Fund at the 3-Month London Inter-Bank Offered Rate (LIBOR) plus .95% on the amounts borrowed and .85% on the undrawn balance. Each Fund also incurred a one-time .25% amendment fee on the increase to the maximum commitment amount, which was fully expensed during the current reporting period.

Effective January 9, 2012, interest charged on the amount borrowed changed from the 3-Month LIBOR plus .95% on the amounts borrowed and .85% on the undrawn balance to the 3-Month LIBOR plus .85% on the amounts borrowed and .50% on the undrawn balance. All other terms remain unchanged.

Borrowings outstanding are recognized as "Borrowings" on the Statement of Assets and Liabilities. Interest expense incurred on each Fund's borrowed amount and undrawn balance and the one-time amendment fee are recognized as a component of "Interest expense on borrowings" on the Statement of Operations.

9. New Accounting Pronouncements

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

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

Nuveen Investments
53

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Board Members & Officers (Unaudited)

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 Funds is currently set at ten. None of the board members who are not "interested" persons of the Funds (referred to herein as "independent board members") has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the 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 & Address

Position(s) Held with the Funds

Year First Elected or Appointed and Term(1)

Principal Occupation(s) Including other Directorships During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Board Member

Independent Board Members:

nROBERT P. BREMNER

8/22/40 333 W. Wacker Drive Chicago, IL 60606

Chairman of the Board and Board Member

1996 Class III

Private Investor and Management Consultant; Treasurer and Director, Humanities Council of Washington, D.C.; Board Member, Independent Directors Council affiliated with the Investment Company Institute.

219

nJACK B. EVANS

10/22/48 333 W. Wacker Drive Chicago, IL 60606

Board Member

1999 Class III

President, The Hall-Perrine Foundation, a private philanthropic corporation (since 1996); Director and Chairman, United Fire Group, a publicly held company; member of the Board of Regents for the State of Iowa University System; Director, Source Media Group; Life Trustee of Coe College and the Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm.

219

nWILLIAM C. HUNTER

3/6/48 333 W. Wacker Drive Chicago, IL 60606

Board Member

2004 Class I

Dean Emeritus (since June 30, 2012), formerly, Dean, Tippie College of Business, University of Iowa (2006-2012); Director (since 2004) of Xerox Corporation; Director (since 2005), and President (since July 2012) Beta Gamma Sigma, Inc., The International Honor Society; Director of Wellmark, Inc. (since 2009); formerly, Dean and Distinguished Professor of Finance, School of Business at the University of Connecticut (2003-2006); previously, Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago (1995-2003); formerly, Director (1997-2007), Credit Research Center at Georgetown University.

219

Nuveen Investments
54

---

Name, Birthdate & Address

Position(s) Held with the Funds

Year First Elected or Appointed and Term(1)

Principal Occupation(s) Including other Directorships During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Board Member

Independent Board Members (continued):

nDAVID J. KUNDERT

10/28/42 333 W. Wacker Drive Chicago, IL 60606

Board Member

2005 Class II

Director, Northwestern Mutual Wealth Management Company; retired (since 2004) as Chairman, JPMorgan Fleming Asset Management, President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual Funds; prior thereto, Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Member, Board of Regents, Luther College; member of the Wisconsin Bar Association; member of Board of Directors, Friends of Boerner Botanical Gardens; member of Board of Directors and Chair of Investment Committee, Greater Milwaukee Foundation.

219

nWILLIAM J. SCHNEIDER

9/24/44 333 W. Wacker Drive Chicago, IL 60606

Board Member

1996 Class III

Chairman of Miller-Valentine Partners Ltd., a real estate investment company; formerly, Senior Partner and Chief Operating Officer (retired 2004) of Miller-Valentine Group; member, University of Dayton Business School Advisory Council;member, Mid-America Health System Board; formerly, member and chair, Dayton Philharmonic Orchestra Association; formerly, member, Business Advisory Council, Cleveland Federal Reserve Bank.

219

nJUDITH M. STOCKDALE

12/29/47 333 W. Wacker Drive Chicago, IL 60606

Board Member

1997 Class I

Executive Director, Gaylord and Dorothy Donnelley Foundation (since 1994); prior thereto, Executive Director, Great Lakes Protection Fund (1990-1994).

219

nCAROLE E. STONE

6/28/47 333 W. Wacker Drive Chicago, IL 60606

Board Member

2007 Class I

Director, Chicago Board Options Exchange (since 2006); Director, C2 Options Exchange, Incorporated (since 2009); formerly, Commissioner, New York State Commission on Public Authority Reform (2005-2010); formerly, Chair, New York Racing Association Oversight Board (2005-2007).

219

nVIRGINIA L. STRINGER

8/16/44 333 W. Wacker Drive Chicago, IL 60606

Board Member

2011

Board Member, Mutual Fund Directors Forum; former governance consultant and non-profit board member; former Owner and President, Strategic Management Resources, Inc. a management consulting firm; former Member, Governing Board, Investment Company Institute's Independent Directors Council; previously, held several executive positions in general management, marketing and human resources at IBM and The Pillsbury Company; Independent Director, First American Fund Complex (1987-2010) and Chair (1997-2010).

219

 

Nuveen Investments
55

---

Board Members & Officers (Unaudited) (continued)

Name, Birthdate & Address

Position(s) Held with the Funds

Year First Elected or Appointed and Term(1)

Principal Occupation(s) Including other Directorships During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Board Member

Independent Board Members (continued):

nTERENCE J. TOTH

9/29/59 333 W. Wacker Drive Chicago, IL 60606

Board Member

2008 Class II

Director, Legal & General Investment Management America, Inc. (since 2008); Managing Partner, Promus Capital (since 2008); formerly, CEO and President, Northern Trust Global Investments (2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various positions with Northern Trust Company (since 1994); member: Goodman Theatre Board (since 2004), Chicago Fellowship Board (since 2005), Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board (since 2012), and a member of its investment committee; formerly,Member, Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004).

219

Interested Board Member:

nJOHN P. AMBOIAN(2)

6/14/61 333 W. Wacker Drive Chicago, IL 60606

Board Member

2008 Class II

Chief Executive Officer and Chairman (since 2007) and Director (since 1999) of Nuveen Investments, Inc., formerly, President (1999-2007); Chief Executive Officer (since 2007) of Nuveen Investments Advisers, Inc.; Director (since 1998) formerly, Chief Executive Officer (2007-2010) of Nuveen Fund Advisors, Inc.

219

Name, Birthdate and Address

Position(s) Held with the Funds

Year First Elected or Appointed(3)

Principal Occupation(s) During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Officer

Officers of the Funds:

nGIFFORD R. ZIMMERMAN

9/9/56 333 W. Wacker Drive Chicago, IL 60606

Chief Administrative Officer

1988

Managing Director (since 2002), and Assistant Secretary of Nuveen Securities, LLC; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; Managing Director (since 222 2002), Assistant Secretary (since 1997) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel of Nuveen Asset Management, LLC (since 2011); Managing Director, Associate General Counsel and Assistant Secretary, of Symphony Asset Management LLC (since 2003); Vice President and Assistant Secretary of NWQ Investment Management Company, LLC (since 2002), Nuveen Investments Advisers Inc. (since 2002), Santa Barbara Asset Management, LLC (since 2006), and of Winslow Capital Management LLC (since 2010); Chief Administrative Officer and Chief Compliance Officer (since 2006) of Nuveen Commodities Asset Management, LLC; Chartered Financial Analyst.

219

 

Nuveen Investments
56

---

Name, Birthdate and Address

Position(s) Held with the Funds

Year First Elected or Appointed(3)

Principal Occupation(s) During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Officer

Officers of the Funds (continued):

nWILLIAM ADAMS IV

6/9/55 333 W. Wacker Drive Chicago, IL 60606

Vice President

2007

Senior Executive Vice President, Global Structured Products (since 2010), formerly, Executive Vice President (1999-2010) of Nuveen Securities, LLC; Co-President of Nuveen Fund Advisors, Inc. (since 2011); President 122 (since 2011), formerly, Managing Director (2010-2011) of Nuveen Commodities Asset Management, LLC.

117

nCEDRIC H. ANTOSIEWICZ

1/11/62 333 W. Wacker Drive Chicago, IL 60606

Vice President

2007

Managing Director of Nuveen Securities, LLC.

117

nMARGO L. COOK

4/11/64 333 W. Wacker Drive Chicago, IL 60606

Vice President

2009

Executive Vice President (since 2008) of Nuveen Investments, Inc. and of Nuveen Fund Advisors, Inc. (since 2011); Managing Director-Investment Services of Nuveen Commodities Asset Management, LLC (since August 2011), previously, Head of Institutional Asset Management (2007-2008) of Bear Stearns Asset Management; Head of Institutional Asset Management (1986-2007) of Bank of NY Mellon; Chartered Financial Analyst.

219

nLORNA C. FERGUSON

10/24/45 333 W. Wacker Drive Chicago, IL 60606

Vice President

1998

Managing Director (since 2005) of Nuveen Fund Advisors, Inc. and Nuveen Securities, LLC (since 2004).

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nSTEPHEN D. FOY

5/31/54 333 W. Wacker Drive Chicago, IL 60606

Vice President and Controller

1998

Senior Vice President (since 2010), formerly, Vice President (2005-2010) and Funds Controller of Nuveen Securities, LLC; Vice President of Nuveen Fund Advisors, Inc.; Chief Financial Officer of Nuveen Commodities Asset Management, LLC (since 2010); Certified Public Accountant.

219

nSCOTT S. GRACE

8/20/70 333 W. Wacker Drive Chicago, IL 60606

Vice President and Treasurer

2009

Managing Director, Corporate Finance & Development, Treasurer (since 2009) of Nuveen Securities, LLC; Managing Director and Treasurer (since 2009) of Nuveen Fund Advisors, Inc., Nuveen Investments Advisers, Inc., Nuveen Investments Holdings Inc. and (since 2011) Nuveen Asset Management, LLC; Vice President and Treasurer of NWQ Investment Management Company, LLC, Tradewinds Global Investors, LLC, Symphony Asset Management LLC and Winslow Capital Management, LLC; Vice President of Santa Barbara Asset Management, LLC; formerly, Treasurer (2006-2009), Senior Vice President (2008-2009), previously, Vice President (2006-2008) of Janus Capital Group, Inc.; formerly, Senior Associate in Morgan Stanley's Global Financial Services Group (2000-2003); Chartered Accountant Designation.

219

 

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Board Members & Officers (Unaudited) (continued)

Name, Birthdate and Address

Position(s) Held with the Funds

Year First Elected or Appointed(3)

Principal Occupation(s) During Past 5 Years

Number of Portfolios in Fund Complex Overseen by Officer

Officers of the Funds (continued):

nWALTER M. KELLY

2/24/70 333 W. Wacker Drive Chicago, IL 60606

Chief Compliance Officer and Vice President

2003

Senior Vice President (since 2008) and Assistant Secretary (since 2003) of Nuveen Fund Advisors, Inc.; Senior Vice President (since 2008) of Nuveen Investment Holdings, Inc.; formerly, Senior Vice President (2008-2011) of Nuveen Securities, LLC.

219

nTINA M. LAZAR

8/27/61 333 W. Wacker Drive Chicago, IL 60606

Vice President

2002

Senior Vice President (since 2010), formerly, Vice President (2005-2010) of Nuveen Fund Advisors, Inc.

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nKEVIN J. MCCARTHY

3/26/66 333 W. Wacker Drive Chicago, IL 60606

Vice President and Secretary

2007

Managing Director and Assistant Secretary (since 2008), formerly, Vice President (2007-2008), Nuveen Securities, LLC; Managing Director (since 2008), Assistant Secretary (since 2007) and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Managing Director (since 2008), and Assistant Secretary, Nuveen Investment Holdings, Inc.; Vice President (since 2007) and Assistant Secretary of Nuveen Investments Advisers Inc., NWQ Investment Management Company, LLC, NWQ Holdings, LLC, Symphony Asset Management LLC, Santa Barbara Asset Management, LLC, and of Winslow Capital Management, LLC (since 2010); Vice President and Secretary (since 2010) of Nuveen Commodities Asset Management, LLC; prior thereto, Partner, Bell, Boyd & Lloyd LLP (1997-2007).

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nKATHLEEN L. PRUDHOMME

3/30/53 901 Marquette Avenue Minneapolis, MN 55402

Vice President and Assistant Secretary

2011

Managing Director, Assistant Secretary and Co-General Counsel (since 2011) of Nuveen Fund Advisors, Inc.; Managing Director, Assistant Secretary and Associate General Counsel (since 2011) of Nuveen Asset Management, LLC; Managing Director and Assistant Secretary (since 2011) of Nuveen Securities, LLC; formerly, Deputy General Counsel, FAF Advisors, Inc. (2004-2010).

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(1) Board Members serve three year terms. The Board of Trustees is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. The first year elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex.

(2) Mr. Amboian is an interested trustee because of his position with Nuveen Investments, Inc. and certain of its subsidiaries, which are affiliates of the Nuveen Funds.

(3) Officers serve one year terms through August 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.

 

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Annual Investment Management Agreement Approval Process (Unaudited)

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

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

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

In addition, the Board continues its program of seeking to have the Board Members or a subset thereof visit each sub-advisor to the Nuveen funds at least once over a multiple year rotation, meeting with key investment and business

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Annual Investment Management Agreement
Approval Process (Unaudited) (continued)

personnel. In this regard, the Board visited the Sub-Advisor in Connecticut in October 2011. Further, an ad hoc committee of the Board visited the then-current transfer agents of the Nuveen funds in 2011 and the audit committee of the Board visited the various pricing agents for the Nuveen funds in January 2012.

The Board considers factors and information that are relevant to its annual consideration of the renewal of the Advisory Agreements at the meetings held throughout the year. Accordingly, the Board considers the information provided and knowledge gained at these meetings when performing its annual review of the Advisory Agreements. The Independent Board Members are assisted throughout the process by independent legal counsel who provided materials describing applicable law and the duties of directors or trustees in reviewing advisory contracts and met with the Independent Board Members in executive sessions without management present. In addition, it is important to recognize that the management arrangements for the Nuveen funds are the result of many years of review and discussion between the Independent Board Members and fund management and that the Board Members' conclusions may be based, in part, on their consideration of fee arrangements and other factors developed in previous years.

The Board considered all factors it believed relevant with respect to each Fund, including among other factors: (a) the nature, extent and quality of the services provided by the Fund Advisers, (b) the investment performance of the Fund and Fund Advisers, (c) the advisory fees and costs of the services to be provided to the Fund and the profitability of the Fund Advisers, (d) the extent of any economies of scale, (e) any benefits derived by the Fund Advisers from the relationship with the Fund and (f) other factors. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund's Advisory Agreements. The Independent Board Members did not identify any single factor as all important or controlling. The Independent Board Members' considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below.

A. Nature, Extent and Quality of Services

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

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

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In addition to advisory services, the Board considered the quality and extent of administrative and other non-investment advisory services the Advisor and its affiliates provide to the Funds, including product management, investment services (such as oversight of investment policies and procedures, risk management, and pricing), fund administration, oversight of service providers, shareholder services and communications, administration of Board relations, regulatory and portfolio compliance, legal support, managing leverage and promoting an orderly secondary market for common shares. The Board further recognized Nuveen's additional investments in personnel, including in compliance and risk management.

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

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

B. The Investment Performance of the Funds and Fund Advisers

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

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

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

In reviewing performance comparison information, the Independent Board Members recognized that the usefulness of the comparisons of the performance of certain funds with the performance of their respective Performance Peer Group may be limited because the Performance Peer Group may not adequately represent the objectives and strategies of the applicable funds or may be limited in size or number. The Independent Board Members also noted that the investment experience of a particular shareholder in the Nuveen funds will vary depending on when such shareholder invests in the applicable fund, the class held (if multiple classes are offered in a fund) and the performance of the fund (or respective class) during that shareholder's investment period. In addition, although the performance below reflects the performance

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Annual Investment Management Agreement
Approval Process (Unaudited) (continued)

results for the time periods ending as of the most recent calendar year end (unless otherwise indicated), the Board also recognized that selecting a different ending time period may derive different results. Furthermore, while the Board is cognizant of the relevant performance of a fund's peer set and/or benchmark(s), the Board evaluated fund performance in light of the respective fund's investment objectives, investment parameters and guidelines and recognized that the objectives, investment parameters and guidelines of peers and/or benchmarks may differ to some extent, thereby resulting in differences in performance results. Nevertheless, with respect to any Nuveen funds that the Board considers to have underperformed their peers and/or benchmarks from time to time, the Board monitors such funds closely and considers any steps necessary or appropriate to address such issues.

In considering the results of the comparisons, the Independent Board Members observed, among other things, that the Nuveen Quality Preferred Income Fund (the "Quality Fund") lagged its peers somewhat in the longer period, but demonstrated more favorable performance in the shorter or more recent periods, as it was in the second quartile for the one- and three-year periods. In addition, the Nuveen Quality Preferred Income Fund 2 (the "Quality Fund 2") demonstrated generally satisfactory performance compared to its peers, falling within the second or third quartile over various periods, although such Fund was in the first quartile for the three-year period. Finally, the Independent Board Members observed that the Nuveen Quality Preferred Income Fund 3 (the "Quality Fund 3") lagged its peers and/or benchmarks over various periods, although it was in the first quartile and outperformed its benchmark in the three-year period.

Based on their review, the Independent Board Members determined that each Fund's investment performance had been satisfactory.

C. Fees, Expenses and Profitability

1. Fees and Expenses

The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund's gross management fees, net management fees and net expense ratios in absolute terms as well as compared to the fee and expenses of a comparable universe of funds provided by an independent fund data provider (the "Peer Universe") and any expense limitations.

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

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

The Independent Board Members noted that the Quality Fund 3 had net management fees and a net expense ratio (including fee waivers and expense reimbursements, if any) below or in line with its peer averages, while the Quality

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Fund and the Quality Fund 2 each had net management fees slightly higher or higher than the peer average, but net expense ratios below the peer average.

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

2. Comparisons with the Fees of Other Clients

The Independent Board Members further reviewed information regarding the nature of services and range of fees offered by the Advisor to other clients, including separately managed accounts (both retail and institutional accounts), collective trusts, foreign investment funds offered by Nuveen, and funds that are not offered by Nuveen but are sub-advised by one of Nuveen's investment management teams. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the various products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees.

In considering the fees of the Sub-Advisor, the Independent Board Members also considered the pricing schedule or fees that the Sub-Advisor charges for similar investment management services for other fund sponsors or clients (such as retail and/or institutional managed accounts) as applicable. The Independent Board Members noted that the sub-advisory fees were the result of arm's-length negotiations.

3. Profitability of Fund Advisers

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

In reviewing profitability, the Independent Board Members recognized the Advisor's continued investment in its business to enhance its services, including capital improvements to investment technology, updated compliance systems, and additional personnel in compliance, risk management, and product development as well as its ability to allocate resources to various areas of the Advisor as the need arises. In addition, in evaluating profitability, the Independent Board Members also recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative

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Annual Investment Management Agreement
Approval Process (Unaudited) (continued)

of the industry and may be affected by, among other things, the adviser's particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent Board Members recognized Nuveen's investment in its fund business. Based on their review, the Independent Board Members concluded that the Advisor's level of profitability for its advisory activities was reasonable in light of the services provided.

The Independent Board Members also considered the Sub-Advisor's revenues, expenses and profitability margins (pre- and post-tax) for its advisory activities with the Funds. Based on their review, the Independent Board Members were satisfied that the Sub-Advisor's level of profitability was reasonable in light of the services provided.

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

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

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

In addition to fund-level advisory fee breakpoints, the Board also considered the Funds' complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex are generally reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen's costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base. In addition, with the acquisition of the funds previously advised by FAF Advisors, Inc., the Board noted that a portion of such funds' assets at the time of acquisition were deemed eligible to be included in the complex-wide fee calculation in order to deliver fee savings to shareholders in the combined complex and such funds were subject to differing complex-level fee rates.

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

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E. Indirect Benefits

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

In addition to the above, the Independent Board Members considered whether the Fund Advisers received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to the Fund Adviser in managing the assets of the Funds and other clients. The Independent Board Members recognized that the Advisor has the authority to pay a higher commission in return for brokerage and research services if it determines in good faith that the commission paid is reasonable in relation to the value of the brokerage and research services provided and may benefit from such soft dollar arrangements. Similarly, the Board recognized that the research received pursuant to soft dollar arrangements by the Advisor may also benefit a Fund and shareholders to the extent the research enhances the ability of the Advisor to manage the Fund. The Independent Board Members noted that the profitability of the Advisor may be somewhat lower if it did not receive the research services pursuant to the soft dollar arrangements and had to acquire such services directly. Additionally, the Board noted that the Sub-Adviser does not direct fund trades through non-affiliated broker-dealers and therefore does not have any brokerage to provide in order to receive research or related services on a soft dollar basis. The Sub-Adviser, however, may from time to time receive research from various firms with which it transacts client business, but it has no arrangements with these firms. The Sub-Adviser also serves as its own broker for portfolio transactions for the Nuveen funds it advises and therefore may receive some indirect compensation.

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

F. Other Considerations

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

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Reinvest Automatically,
Easily and Conveniently

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

Nuveen Closed-End Funds Automatic Reinvestment Plan

Your Nuveen Closed-End Fund allows you to conveniently reinvest distributions in additional Fund shares.

By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of compounding. Just like distributions in cash, there may be times when income or capital gains taxes may be payable on distributions that are reinvested.

It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market.

Easy and convenient

To make recordkeeping easy and convenient, each month you'll receive a statement showing your total distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own.

How shares are purchased

The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the greater of the net asset value or 95% of the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value on the last business day immediately prior to the purchase date. Distributions received to purchase shares in the open market will normally be invested shortly after the distribution payment date. No interest will be paid on distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions.

Flexible

You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change.

You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan.

The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time.

Call today to start reinvesting distributions

For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787.

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Glossary of Terms
Used in this Report

•  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.

•  Barclays U.S. Aggregate Bond Index: An unmanaged index that includes all investment-grade, publicly issued, fixed-rate, dollar denominated, nonconvertible debt issues and commercial mortgage backed securities with maturities of at least one year and outstanding par values of $150 million or more. Index returns assume reinvestment of distributions, but do not include the effects of any applicable sales charges or management fees.

•  Comparative Index: A blended return consisting of: 1) 55% of the Merrill Lynch Fixed Rate Index, an unmanaged index of investment-grade, exchange traded preferred stocks with outstanding market values of at least $30 million and at least one year to maturity; and 2) 45% of the Barclays Tier 1 Capital Securities Index, an unmanaged index that includes securities that can generally be viewed as hybrid fixed-income securities that either receive regulatory capital treatment or a degree of "equity credit'' from a rating agency. Index returns do not include the effects of any sales charges or management fees.

•  Effective Leverage: Effective leverage is a Fund's effective economic leverage, and includes both Regulatory Leverage (see below) and the leverage effects of certain derivative investments in the Fund's portfolio that increase the Funds' investment exposure.

•  Gross Domestic Product (GDP): The total market value of all final goods and services produced in a country/region in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

•  Leverage: Using borrowed money to invest in securities or other assets, seeking to increase the return of an investment or portfolio.

•  Market Yield (also known as Dividend Yield or Current Yield): Market yield is based on the Fund's current annualized monthly distribution divided by the Fund's current market price. The Fund's monthly 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): The net market value of all securities held in a portfolio.

•  Net Asset Value (NAV) Per Share: The market value of one share of a mutual fund or closed-end fund. For a Fund, the NAV is calculated daily by taking the Fund's total assets (securities, cash, and accrued earnings), subtracting the Fund's liabilities, and dividing by the number of shares outstanding.

•  Regulatory Leverage: Regulatory Leverage consists of preferred shares issued by or borrowings of the Fund. Both of these are part of a Fund's capital structure. Regulatory Leverage is sometimes referred to as "'40 Act Leverage" and is subject to asset coverage limits set forth in the Investment Company Act of 1940.

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Notes

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Notes

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Notes

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Additional Fund Information

Board of Trustees

John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Virginia L. Stringer
Terence J. Toth

Fund Manager

Nuveen Fund Advisors, Inc.
333 West Wacker Drive
Chicago, IL 60606

Custodian

State Street Bank & Trust Company
Boston, MA

Transfer Agent and
Shareholder Services

State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787

Legal Counsel

Chapman and Cutler LLP
Chicago, IL

Independent Registered
Public Accounting Firm

Ernst & Young LLP
Chicago, IL

Quarterly Portfolio of Investments and Proxy Voting Information

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

You may also obtain this and other Fund information directly from the Securities and Exchange Commission (SEC). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public Reference Section at 100 F Street NE, Washington, D.C. 20549.

CEO Certification Disclosure

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

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

Distribution Information

The Funds hereby designate their amounts, (or the maximum amount eligible), as dividends qualifying for the 70% dividends received deduction (DRD) for corporations and their amounts, (or the maximum amount eligible), as qualified dividend income (QDI) for individuals under Section 1(h)(11) of the Internal Revenue Code as shown in the accompanying table. The actual qualified dividend income distributions will be reported to shareholders on Form 1099-DIV which will be sent to shareholders shortly after calendar year end.

Fund				DRD				QDI
JTP					14.95	%			41.87	%
JPS					16.28	%			27.10	%
JHP					14.23	%			25.13	%

 

Common Share Information

Each Fund intends to repurchase shares of its own common stock in the future at such times and in such amounts as is deemed advisable. During the period covered by this report, the Funds repurchased shares of their common stock as shown in the accompanying table.

Fund				Common Shares Repurchased
JTP					—
JPS					—
JHP					—

 

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

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Nuveen Investments:
Serving Investors for Generations

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

Focused on meeting investor needs.

Nuveen Investments provides high-quality investment services designed to help secure the long-term goals of institutional and individual investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets a wide range of specialized investment solutions which provide investors access to capabilities of its high-quality boutique investment affiliates—Nuveen Asset Management, Symphony Asset Management, NWQ Investment Management Company, Santa Barbara Asset Management, Tradewinds Global Investors, Winslow Capital Management and Gresham Investment Management. In total, Nuveen Investments managed approximately $212 billion as of June 30, 2012.

Find out how we can help you.

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

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

Distributed by
Nuveen Securities, LLC
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com/cef

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