UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21137

Nuveen Quality Preferred Income Fund 2

(Exact name of registrant as specified in charter)

     333 West Wacker Drive, Chicago, Illinois 60606     
(Address of principal executive offices) (Zip code)

Kevin J. McCarthy—Vice President and Secretary
     333 West Wacker Drive, Chicago, Illinois 60606     
(Name and address of agent for service)

Registrant’s telephone number, including area code:      312-917-7700     

Date of fiscal year end:        12/31      

Date of reporting period:    3/31/2007   

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 

 

Item 1. Schedule of Investments

Nuveen Quality Preferred Income Fund 2 (JPS)
March 31, 2007

Shares				Description (1)				Coupon				Ratings (2)		Value
				$25 Par (or similar) Preferred Securities – 81.2% (56.2% of Total Investments)
				Automobiles – 0.0%
	4,300			DaimlerChrysler, Series DCX (CORTS)				7.500%				A3		$	105,608
	3,400			DaimlerChrysler AG (CORTS)				7.875%				Baa1			84,966
				Total Automobiles											190,574
				Capital Markets – 4.5%
	68,324			Bear Stearns Capital Trust III				7.800%				A2			1,753,194
	19,200			BNY Capital Trust IV, Series E				6.875%				Aa3			486,336
	45,288			BNY Capital Trust V, Series F				5.950%				Aa3			1,125,860
	399,525			Compass Capital Trust III				7.350%				A3			10,000,111
	28,800			CSFB USA, Series 2002-10 (SATURNS)				7.000%				AA-			730,656
	8,300			Goldman Sachs Capital I (CORTS)				6.000%				A1			200,611
	6,500			Goldman Sachs Capital I, Series A (CORTS)				6.000%				A1			158,470
	3,500			Goldman Sachs Group Inc., Series 2003-11 (SATURNS)				5.625%				Aa3			81,375
	16,500			Goldman Sachs Group Inc., Series 2004-04 (SATURNS)				6.000%				A1			396,990
	4,600			Goldman Sachs Group Inc., Series 2004-06 (SATURNS)				6.000%				A1			110,676
	16,500			Goldman Sachs Group Inc., Series GSC-3 (PPLUS)				6.000%				A1			397,155
	7,900			Goldman Sachs Group Inc., Series GSC-4 Class A (PPLUS)				6.000%				A1			189,284
	7,100			Goldman Sachs Group Inc., Series GSG-2 (PPLUS)				5.750%				AA-			167,134
	4,300			Goldman Sachs Group Inc. (SATURNS)				5.750%				AA-			101,437
	224,900			Lehman Brothers Holdings Capital Trust III, Series K				6.375%				A2			5,622,500
	103,600			Lehman Brothers Holdings Capital Trust IV, Series L				6.375%				A2			2,600,360
	56,200			Lehman Brothers Holdings Capital Trust V, Series M				6.000%				A2			1,391,512
	219,500			Merrill Lynch Preferred Capital Trust III				7.000%				A1			5,555,545
	142,300			Merrill Lynch Preferred Capital Trust IV				7.120%				A1			3,622,958
	243,200			Merrill Lynch Preferred Capital Trust V				7.280%				A1			6,291,584
	55,200			Morgan Stanley (PPLUS)				7.050%				Aa3			1,390,488
	168,008			Morgan Stanley Capital Trust II				7.250%				A1			4,274,124
	404,864			Morgan Stanley Capital Trust III				6.250%				A1			10,077,065
	269,397			Morgan Stanley Capital Trust IV				6.250%				A1			6,683,740
	498,200			Morgan Stanley Capital Trust VI				6.600%				A1			12,808,722
	124,897			Morgan Stanley Capital Trust VII				6.600%				A1			3,161,143
	3,700			Washington Mutual Capital Trust I, Series 2001-22, Class A-1 (CORTS)				7.650%				Baa1			94,942
				Total Capital Markets											79,473,972
				Commercial Banks – 11.1%
	119,000			ABN AMRO Capital Fund Trust V				5.900%				Aa3			2,913,120
	7,000			ABN AMRO Capital Trust Fund VII				6.080%				Aa3			176,120
	160,760			ASBC Capital I				7.625%				A3			4,043,114
	141,300			BAC Capital Trust X				6.250%				Aa2			3,539,565
	21,695			Banco Santander, 144A				6.800%				A+			549,155
	245,856			Banco Santander				6.410%				A2			6,259,494
	17,900			BancorpSouth Capital Trust I				8.150%				Baa1			450,901
	731,000			Banesto Holdings, Series A, 144A				10.500%				A2			22,112,750
	204,700			Bank One Capital Trust VI				7.200%				Aa3			5,207,568
	67,200			BankNorth Capital Trust II				8.000%				A1			1,690,080
	27,412			Barclays Bank PLC, (3)				6.625%				Aa3			727,789
	605,600			Capital One Capital II Corporation				7.500%				Baa1			15,953,805
	122,800			Chittenden Capital Trust I				8.000%				A3			3,083,508
	480,800			Citizens Funding Trust I				7.500%				Baa1			12,455,749
	225,500			Cobank ABC, 144A, (3)				7.000%				N/R			11,629,035
	374,795			HSBC Finance Corporation				6.875%				AA-			9,549,777
	43,000			KeyCorp Capital Trust IX				6.750%				A3			1,088,438
	8,667			KeyCorp Capital Trust V				5.875%				A3			209,828
	59,862			KeyCorp Capital VIII				7.000%				A3			1,552,671
	1,054,700			National City Capital Trust II				6.625%				A2			26,499,338
	5,000			National Westminster Bank PLC				7.760%				Aa3			127,000
	289,600			PFGI Capital Corporation				7.750%				A-			7,592,964
	4,100			PNC Capital Trust				6.125%				A2			101,106
	596,876			Royal Bank of Scotland Group PLC, Series N				6.350%				A1			15,256,151
	11,171			USB Capital Trust VI				5.750%				Aa3			265,870
	522,050			USB Capital Trust XI				6.600%				Aa3			13,280,952
	92,300			VNB Capital Trust I				7.750%				A3			2,349,958
	309,000			Wells Fargo Capital Trust V				7.000%				Aa2			7,820,790
	41,100			Wells Fargo Capital Trust VI				6.950%				Aa2			1,025,856
	45,975			Wells Fargo Capital Trust VII				5.850%				Aa2			1,126,388
	578,650			Zions Capital Trust B				8.000%				A3			14,726,643
				Total Commercial Banks											193,365,483
				Computers & Peripherals – 0.0%
	4,900			IBM Corporation, Class A (CORTS)				5.625%				A+			116,081
	11,700			IBM Inc., Trust Certificates, Series 2001-2				7.100%				A+			299,169
	1,200			IBM Trust VI (CORTS)				6.375%				A+			30,252
				Total Computers & Peripherals											445,502
				Consumer Finance – 0.0%
	24,350			SLM Corporation				6.000%				A			592,192
				Diversified Financial Services – 10.0%
	492,160			BAC Capital Trust XII				6.875%				Aa3			12,842,915
	40,900			CIT Group Incorporated (CORTS)				7.750%				A3			1,069,944
	586,725			Citigroup Capital Trust VIII				6.950%				Aa2			14,762,001
	187,675			Citigroup Capital XIV				6.875%				Aa2			4,903,948
	847,588			Citigroup Capital XV				6.500%				Aa3			21,454,571
	29,000			Citigroup Capital XVI				6.450%				Aa2			727,030
	28,000			Citigroup Capital XVII				6.350%				Aa2			700,070
	12,000			Citigroup, Series CIT (CORTS)				6.750%				A3			301,920
	1,264,700			Deutsche Bank Capital Funding Trust VIII				6.375%				A			32,961,244
	145,762			General Electric Capital Corporation				6.450%				AAA			3,820,422
	1,523,600			ING Group N.V.				7.200%				A1			38,775,620
	1,445,555			ING Group N.V.				7.050%				A			36,601,453
	2,700			ING Group N.V.				6.200%				A1			68,175
	4,900			ING Group N.V.				6.125%				A1			123,284
	250,300			Merrill Lynch Capital Trust I				6.450%				A1			6,315,695
				Total Diversified Financial Services											175,428,292
				Diversified Telecommunication Services – 0.6%
	116,999			AT&T Inc.				7.000%				A			2,971,775
	87,100			AT&T Inc.				6.375%				A			2,193,831
	17,500			BellSouth Capital Funding (CORTS)				7.100%				A			440,235
	43,200			BellSouth Corporation (CORTS)				7.000%				Aa3			1,074,600
	28,800			Verizon Communications (CORTS)				7.625%				A			741,456
	7,600			Verizon Communications (CORTS)				7.375%				A			194,712
	71,800			Verizon Global Funding Corporation (SATURNS)				7.500%				A			1,845,978
	22,100			Verizon New England Inc., Series B				7.000%				A3			558,025
				Total Diversified Telecommunication Services											10,020,612
				Electric Utilities – 3.2%
	2,800			Consolidated Edison, Inc.				7.250%				A2			70,476
	27,400			DTE Energy Trust I				7.800%				Baa3			697,330
	4,200			Entergy Arkansas Inc.				6.700%				AAA			106,008
	57,650			Entergy Louisiana LLC				7.600%				A-			1,449,898
	1,299,100			Entergy Mississippi Inc.				7.250%				A-			33,049,104
	108,392			FPL Group Capital Inc.				6.600%				A3			2,785,674
	12,700			Georgia Power Capital Trust V				7.125%				A3			318,897
	30,200			National Rural Utilities Cooperative Finance Corporation				7.400%				A3			768,590
	7,700			National Rural Utilities Cooperative Finance Corporation				6.100%				A3			188,958
	25,600			National Rural Utilities Cooperative Finance Corporation				5.950%				A3			605,696
	336,800			PPL Energy Supply LLC				7.000%				BBB			8,788,392
	265,500			Virginia Power Capital Trust				7.375%				Baa2			6,783,525
				Total Electric Utilities											55,612,548
				Food Products – 0.3%
	56,900			Dairy Farmers of America Inc., 144A, (3)				7.875%				BBB-			5,937,162
				Household Durables – 0.7%
	489,240			Pulte Homes Inc.				7.375%				BBB			12,383,888
				Industrial Conglomerates – 0.0%
	9,200			General Electric Company, Series GE (CORTS)				6.800%				AAA			231,840
				Insurance – 17.9%
	1,214,900			Ace Ltd., Series C				7.800%				Baa2			31,210,781
	73,618			Aegon N.V.				6.875%				A-			1,942,043
	2,334,600			Aegon N.V., (3)				6.375%				A-			60,279,370
	20,933			AMBAC Financial Group Inc.				5.950%				AA			511,812
	8,400			Arch Capital Group Limited, Series B				7.785%				Baa3			220,416
	989,383			Arch Capital Group Limited				8.000%				Baa3			26,545,146
	479,357			Delphi Financial Group, Inc.				8.000%				BBB			12,439,314
	1,702,521			EverestRe Group Limited				7.850%				Baa1			43,482,384
	65,000			Financial Security Assurance Holdings				6.875%				AA			1,634,750
	709,500			Financial Security Assurance Holdings				6.250%				AA			17,694,930
	54,300			Lincoln National Capital Trust VI				6.750%				A-			1,379,220
	13,400			Lincoln National Corporation				6.750%				A-			346,390
	531,300			Markel Corporation				7.500%				BBB-			13,781,922
	646,620			PartnerRe Limited, Series C				6.750%				BBB+			16,333,621
	27,400			PartnerRe Limited, Series D				6.500%				BBB+			688,562
	109,000			PLC Capital Trust III				7.500%				BBB+			2,755,520
	455,340			PLC Capital Trust IV				7.250%				BBB+			11,447,248
	22,200			PLC Capital Trust V				6.125%				BBB+			537,462
	122,700			Protective Life Corporation				7.250%				BBB			3,182,838
	6,900			Prudential Financial Inc. (CORTS)				6.000%				A			168,015
	223,000			Prudential PLC				6.750%				A-			5,742,250
	900			Prudential PLC, (3)				6.500%				A-			23,085
	305,400			RenaissanceRe Holdings Limited				6.600%				BBB			7,467,030
	145,800			RenaissanceRe Holdings Limited, Series B				7.300%				BBB			3,703,320
	10,668			RenaissanceRe Holdings Limited, Series C				6.080%				BBB			253,898
	24,500			Safeco Capital Trust I (CORTS)				8.750%				Baa2			701,680
	6,600			Safeco Capital Trust III (CORTS)				8.072%				Baa2			167,640
	3,900			Safeco Capital Trust IV (CORTS)				8.375%				Baa2			107,270
	2,600			Safeco Corporation, Series 2001-7 (SATURNS)				8.250%				Baa2			66,508
	8,500			Safeco Corporation, Series 2002-5 (SATURNS)				8.250%				Baa2			217,388
	711,146			W.R. Berkley Corporation				6.750%				BBB-			18,063,108
	572,200			XL Capital Ltd, Series A				8.000%				BBB			14,488,104
	607,617			XL Capital Ltd, Series B				7.625%				BBB			15,421,319
				Total Insurance											313,004,344
				IT Services – 0.0%
	16,400			Vertex Industries Inc. (PPLUS)				7.625%				A			422,136
				Media – 4.6%
	178,000			CBS Corporation				7.250%				BBB			4,480,260
	685,300			CBS Corporation				6.750%				BBB			17,153,950
	100			Comcast Corporation				7.000%				BBB+			2,588
	1,364,614			Comcast Corporation				7.000%				BBB+			35,096,235
	908,740			Viacom Inc.				6.850%				BBB			22,832,093
	2,600			Walt Disney Company (CORTS)				6.875%				A-			66,274
				Total Media											79,631,400
				Multi-Utilities – 0.2%
	119,400			Dominion CNG Capital Trust I				7.800%				Baa2			3,036,342
				Oil, Gas & Consumable Fuels – 1.6%
	908,811			Nexen Inc.				7.350%				Baa3			23,301,914
	147,400			TransCanada Pipeline				8.250%				A3			3,848,614
				Total Oil, Gas & Consumable Fuels											27,150,528
				Pharmaceuticals – 0.0%
	7,600			Bristol-Myers Squibb Company (CORTS)				6.250%				A+			188,480
	7,500			Bristol-Myers Squibb Company Trust (CORTS)				6.800%				A+			189,975
				Total Pharmaceuticals											378,455
				Real Estate – 22.2%
	40,000			AMB Property Corporation, Series O				7.000%				Baa2			1,032,000
	201,379			AMB Property Corporation, Series P				6.850%				Baa2			5,109,992
	95,400			AvalonBay Communities, Inc., Series H				8.700%				BBB			2,593,926
	16,400			BRE Properties, Series B				8.080%				BBB-			413,280
	105,805			BRE Properties, Series C				6.750%				BBB-			2,660,996
	30,335			BRE Properties, Series D				6.750%				BBB-			756,252
	40,467			Developers Diversified Realty Corporation				7.500%				BBB-			1,034,741
	639,813			Developers Diversified Realty Corporation, Series G				8.000%				BBB-			16,289,639
	187,823			Developers Diversified Realty Corporation, Series H				7.375%				BBB-			4,855,225
	298,900			Duke Realty Corporation, Series L				6.600%				BBB			7,502,390
	1,700			Duke Realty Corporation, Series N				7.250%				BBB			43,934
	151,846			Duke-Weeks Realty Corporation				6.950%				BBB			3,841,704
	5,600			Duke-Weeks Realty Corporation				6.625%				BBB			140,392
	220,650			Duke-Weeks Realty Corporation, Series B				7.990%				BBB			10,984,244
	66,850			Equity Residential Properties Trust, Series D				8.600%				BBB			1,678,604
	438,500			First Industrial Realty Trust, Inc., Series C				8.625%				BBB-			11,157,633
	279,000			First Industrial Realty Trust, Inc., Series J				7.250%				BBB-			7,075,440
	1,808,525			HRPT Properties Trust, Series B				8.750%				BBB-			46,406,750
	71,980			HRPT Properties Trust, Series C				7.125%				BBB-			1,860,683
	175,900			Kimco Realty Corporation, Series F				6.650%				BBB+			4,395,741
	199,550			New Plan Excel Realty Trust, Series D				7.800%				BBB-			9,933,858
	771,600			New Plan Excel Realty Trust, Series E				7.625%				BBB-			19,305,432
	1,300			Prologis Trust, Series F				6.750%				BBB			32,994
	95,328			Prologis Trust, Series G				6.750%				BBB			2,418,471
	774,970			PS Business Parks, Inc.				7.000%				BBB-			19,498,245
	108,300			PS Business Parks, Inc., Series I				6.875%				BBB-			2,691,255
	110,700			PS Business Parks, Inc., Series K				7.950%				BBB-			2,936,871
	401,000			PS Business Parks, Inc., Series L				7.600%				BBB-			10,265,600
	5,500			PS Business Parks, Inc., Series O				7.375%				BBB-			139,906
	7,500			Public Storage, Inc.				7.125%				BBB+			190,425
	41,400			Public Storage, Inc.				6.750%				BBB+			1,053,113
	234,300			Public Storage, Inc., Series C				6.600%				BBB+			5,848,128
	38,600			Public Storage, Inc., Series E				6.750%				BBB+			974,650
	72,566			Public Storage, Inc., Series F				6.450%				BBB+			1,799,637
	10,330			Public Storage, Inc., Series H				6.950%				BBB+			264,448
	401,300			Public Storage, Inc., Series I				7.250%				BBB+			10,361,566
	381,020			Public Storage, Inc., Series K				7.250%				BBB+			9,966,073
	706,070			Public Storage, Inc., Series M				6.625%				BBB+			17,519,362
	148,000			Public Storage, Inc., Series V				7.500%				BBB+			3,732,560
	129			Public Storage, Inc., Series X				6.450%				BBB+			3,211
	67,600			Public Storage, Inc., Series Y				6.850%				BBB+			1,679,441
	165,900			Realty Income Corporation				7.375%				BBB-			4,260,312
	466,397			Realty Income Corporation, Series E				6.750%				BBB-			11,674,523
	325,223			Regency Centers Corporation				7.450%				BBB-			8,215,133
	245,800			Regency Centers Corporation				7.250%				BBB-			6,216,282
	326,041			Simon Property Group, Inc., Series G				7.890%				BBB+			16,685,148
	82,000			United Dominion Realty Trust				8.600%				BBB-			2,077,060
	25,600			Vornado Realty Trust, Series F				6.750%				BBB-			644,864
	213,940			Vornado Realty Trust, Series G				6.625%				BBB-			5,318,548
	122,800			Vornado Realty Trust, Series H				6.750%				BBB-			3,083,508
	220,250			Vornado Realty Trust, Series I				6.625%				BBB-			5,504,048
	2,488,500			Wachovia Preferred Funding Corporation				7.250%				A2			69,055,871
	158,600			Weingarten Realty Trust, Series E				6.950%				BBB+			4,020,510
				Total Real Estate											387,204,619
				Thrifts & Mortgage Finance – 2.9%
	974,265			Countrywide Capital Trust IV				6.750%				BBB+			23,635,669
	1,063,375			Countrywide Capital Trust V				7.000%				BBB+			26,052,688
	17,700			Harris Preferred Capital Corporation, Series A				7.375%				A1			446,925
				Total Thrifts & Mortgage Finance											50,135,282
				Wireless Telecommunication Services – 1.4%
	939,840			United States Cellular Corporation				8.750%				A-			24,210,278
				Total $25 Par (or similar) Preferred Securities (cost $1,393,517,580)											1,418,855,449
Principal
Amount (000)				Description (1)				Coupon		Maturity		Ratings (2)		Value
				Corporate Bonds – 1.9% (1.3% of Total Investments)
				Capital Markets – 0.6%
$	10,000			Mizuho JGB Investment				9.870%		6/30/48		BBB+		$	10,528,010
				Commercial Banks – 0.8%
	6,000			HT1 Funding, GmbH				6.352%		6/30/57		A1			8,467,881
	4,400			Swedbank ForengingsSparbanken AB, 144A				7.500%		9/27/49		Aa2			4,739,319
	10,400			Total Commercial Banks											13,207,200
				Insurance – 0.5%
	10,000			AXA SA, 144A				6.463%		12/14/49		Baa1			9,804,840
$	30,400			Total Corporate Bonds (cost $33,709,732)											33,540,050
Principal
Amount (000)/
Shares				Description (1)				Coupon		Maturity		Ratings (2)		Value
				Capital Preferred Securities – 56.2% (38.9% of Total Investments)
				Capital Markets – 7.5%
	1,465			Bank of New York Capital I, Series B				7.970%		12/31/26		Aa3		$	1,524,738
	5,000			C.A. Preferred Fund Trust II				7.000%		10/30/49		A1			5,077,165
	18,600			C.A. Preferred Funding Trust				7.000%		1/30/49		A1			18,838,917
	19,990			Dresdner Funding Trust I, 144A				8.151%		6/30/31		A-			23,859,384
	5,050			First Hawaiian Capital Trust I, Series B				8.343%		7/01/27		A-			5,282,522
	17,095			First Union Capital Trust II, Series A				7.950%		11/15/29		A1			20,714,918
	20,000			Mellon Capital Trust I, Series A				7.720%		12/01/26		A1			20,789,700
	3,600			MUFG Capital Finance 2				4.850%		7/25/56		A2			4,698,928
	3,240			State Street Institutional Capital Trust, 144A				7.940%		12/30/26		A1			3,382,035
	19,800			UBS Preferred Funding Trust I				8.622%		10/29/49		AA-			21,902,146
	5,000			Washington Mutual Capital Trust I				8.375%		6/01/27		A3			5,220,515
				Total Capital Markets											131,290,968
				Commercial Banks – 31.8%
	19,000			AB Svensk Exportkredit, 144A				6.375%		10/27/49		AA-			18,916,400
	37,250			Abbey National Capital Trust I				8.963%		6/30/50		A+			49,849,885
	29,000			AgFirst Farm Credit Bank				8.393%		12/15/16		N/R			32,118,370
	7,100			AgFirst Farm Credit Bank				7.300%		12/15/53		N/R			7,083,116
	6,500			Bank One Capital III				8.750%		9/01/30		Aa3			8,546,246
	5,000			BanPonce Trust I, Series A				8.327%		2/01/27		A3			5,213,950
	36,000			Barclays Bank PLC, 144A				8.550%		6/15/49		Aa3			40,348,296
	13,200			BBVA International Perferred SA, Unipersonal WI/DD, 144A				5.919%		10/18/49		A1			13,079,459
	6,920			Capital One Capital IV Corporation				6.745%		2/17/37		Baa1			6,653,359
	2,000			Corestates Capital Trust I, 144A				8.000%		12/15/26		A+			2,079,346
	3,700			DBS Capital Funding Corporation, 144A				7.657%		3/15/49		A1			4,009,686
	11,700			Den Norske Bank, 144A				7.729%		6/29/49		Aa3			12,706,586
	2,000			Fifth Third Capital Trust IV				6.500%		4/15/37		A1			1,991,946
	1,500			First Empire Capital Trust I				8.234%		2/01/27		Baa1			1,563,821
	1,500			First Midwest Bancorp Inc.				6.950%		12/01/33		Baa1			1,581,645
	32,010			HBOS Capital Funding LP, Notes				6.850%		3/23/49		A1			32,383,589
	2,400			HSBC Capital Funding LP, 144A				9.547%		12/31/49		A1			2,700,569
	6,250			HSBC Capital Funding LP, Debt				10.176%		6/30/50		A1			9,117,450
	32,000			KBC Bank Fund Trust III, 144A				9.860%		5/02/50		A1			35,496,224
	8,000			KeyCorp Capital III				7.750%		7/15/29		A3			9,457,488
	4,000			KeyCorp Capital VII				5.700%		6/15/35		A3			3,711,644
	13,500			Lloyds TSB Bank PLC, Subordinated Note				6.900%		11/22/49		Aa2			13,518,536
	25,000			M&I Capital Trust A				7.650%		12/01/26		A2			25,845,000
	14,000			Nordbanken AB, 144A				8.950%		11/29/49		Aa3			15,169,266
	2,000			North Fork Capital Trust I, Capital Securities				8.700%		12/15/26		Baa1			2,086,060
	8,000			North Fork Capital Trust II				8.000%		12/15/27		Baa1			8,422,480
	2,000			Peoples Heritage Capital Trust I, Series B				9.060%		2/01/27		A1			2,094,696
	7,000			PNC Preferred Funding Trust				6.517%		3/15/49		A2			7,222,474
	2,000			Popular North American Capital Trust I				6.564%		9/15/34		A3			1,986,814
	12,100			RBS Capital Trust B				6.800%		12/31/49		A1			12,148,291
	8,000			Reliance Capital Trust I, Series B				8.170%		5/01/28		N/R			8,503,416
	500			Republic New York Capital II, Capital Securities				7.530%		12/04/26		A1			519,866
	17,500			Royal Bank of Scotland Group PLC				9.118%		3/31/49		A1			19,352,935
	22,700			Shinsei Finance II Cayman Limited, Perpetual Maturity, 144A				7.160%		7/25/49		Baa2			23,423,563
	5,000			Sparebanken Rogaland, Notes, 144A				6.443%		5/01/49		A1			5,003,975
	9,000			St. George Funding Company LLC, 144A				8.485%		12/31/47		A3			9,415,764
	5,000			Suntrust Capital VIII				6.100%		12/01/66		A1			4,701,395
	13,600			Swedbank ForeningsSparbanken AB, 144A				9.000%		9/17/50		Aa3			14,906,430
	9,000			Unicredito Italiano Capital Trust, 144A				9.200%		4/05/51		A-			10,104,480
	1,500			Union Bank of Norway				7.068%		11/19/49		A2			2,240,621
	7,500			Union Planters Capital Trust A				8.200%		12/15/26		A2			7,795,748
	24,000			Union Planters Preferred Fund, 144A				7.750%		7/15/53		A2			26,295,000
	38,200			Washington Mutual Preferred Funding Cayman, Series A-1, 144A				7.250%		3/15/49		Baa1			37,008,084
				Total Commercial Banks											556,373,969
				Diversified Financial Services – 3.0%
	1,000			BNP Paribas Capital Trust, 144A				9.003%		12/29/49		A+			1,115,910
	2,750			BNP Paribas Capital Trust				7.200%		12/31/49		A+			2,758,379
	6,800			Fulton Capital Trust I				6.290%		2/01/36		A3			6,661,096
	15,300			JPMorgan Chase Capital Trust XVIII				6.950%		8/17/36		Aa3			15,997,389
	5,000			MM Community Funding Trust I Limited				8.030%		6/15/31		Aaa			5,590,000
	19,300			Old Mutual Capital Funding, Notes				8.000%		6/22/53		Baa2			20,120,250
				Total Diversified Financial Services											52,243,024
				Diversified Telecommunication Services – 2.0%
	30			Centaur Funding Corporation, Series B, 144A				9.080%		4/21/20		BBB			35,515,391
				Insurance – 7.8%
	14,280			Ace Capital Trust II				9.700%		4/01/30		Baa1			19,048,535
	28,000			American General Institutional Capital, 144A				8.125%		3/15/46		Aa3			35,554,064
	10,700			AXA-UAP				8.600%		12/15/30		A3			13,681,148
	9,600			Great West Life and Annuity Insurance Company				7.153%		5/16/46		A-			10,035,235
	2,000			Mangrove Bay, Class 3, 144A				6.102%		7/15/33		BBB			1,969,624
	11,800			MetLife Inc.				6.400%		12/15/66		BBB+			11,559,103
	1,200			Nationwide Financial Services Capital Trust				7.899%		3/01/37		Baa1			1,420,758
	12,300			Oil Insurance Limited, 144A				7.550%		12/30/49		Baa1			12,988,124
	8,750			Prudential PLC				6.500%		6/29/49		A			8,782,445
	15,600			XL Capital, Limited				6.500%		10/15/57		BBB			15,158,005
	6,500			Zurich Capital Trust I, 144A				8.376%		6/01/37		A-			6,787,638
				Total Insurance											136,984,679
				Oil, Gas & Consumable Fuels – 0.6%
	10,750			KN Capital Trust III				7.630%		4/15/28		Baa3			10,405,065
				Road & Rail – 0.8%
	14,400			Burlington Northern Santa Fe Funding Trust I				6.613%		12/15/55		BBB			13,421,117
				Thrifts & Mortgage Finance – 2.7%
	1,000			Caisse Nationale Des Caisses d’Epargne et de Prevoyance				6.750%		1/27/49		A+			1,023,139
	12,811			Countrywide Capital Trust III, Series B				8.050%		6/15/27		BBB+			13,694,306
	11,825			Dime Capital Trust I, Series A				9.330%		5/06/27		A3			12,411,887
	1,300			MM Community Funding Trust I Limited				9.480%		6/15/31		Baa2			1,487,590
	18,100			Washington Mutual Preferred Funding Trust II				6.665%		3/15/57		Baa1			17,794,834
				Total Thrifts & Mortgage Finance											46,411,756
				Total Capital Preferred Securities (cost $980,663,448)											982,645,969
Shares				Description (1)										Value
				Investment Companies – 3.5% (2.4% of Total Investments)
	237,084			Blackrock Preferred and Corporate Income Strategies Fund										$	5,244,298
	780,770			Blackrock Preferred Income Strategies Fund											16,271,247
	768,998			Flaherty and Crumrine/Claymore Preferred Securities Income Fund Inc.											17,148,655
	295,992			Flaherty and Crumrine/Claymore Total Return Fund Inc.											6,615,421
	699,018			John Hancock Preferred Income Fund III											16,140,326
				Total Investment Companies (cost $56,070,963)											61,419,947
Principal
Amount (000)				Description (1)				Coupon		Maturity				Value
				Short-Term Investments – 1.6% (1.2% of Total Investments)
$	26,755			Repurchase Agreement with Fixed Income Clearing Corporation, dated 3/30/07, repurchase price $26,765,571, collateralized by $27,020,000 U.S. Treasury Notes, 4.750%, due 2/15/10, value $27,290,200				4.900%		4/02/07				$	26,754,646
				Total Short-Term Investments (cost $26,754,646)											26,754,646
				Total Investments (cost $2,490,716,369) – 144.4%											2,523,216,061
				Other Assets Less Liabilities – 1.4%											24,142,195
				Preferred Shares, at Liquidation Value – (45.8)%											(800,000,000	)
				Net Assets Applicable to Common Shares – 100%										$	1,747,358,256

Fund

Fixed Rate

Unrealized

Notional

Pay/Receive

Floating Rate

Fixed Rate

Payment

Termination

Appreciation

Counterparty

Amount

Floating Rate

Index

(Annualized)

Frequency

Date

(Depreciation)

Citigroup Inc.

$

200,000,000

Receive

1-Month USD-LIBOR

3.375

%

Monthly

11/06/07

$

2,489,806

Citigroup Inc.

200,000,000

Receive

1-Month USD-LIBOR

3.910

Monthly

11/06/09

4,755,863

$

7,245,669