Metals Closed-End Funds Make a Pretty Penny
Precious metals and fixed-income investments wouldn't seem to have much in common. But they were the only classifications of closed-end funds to achieve positive returns during the first quarter of the year.
Of nine closed-end fund investment objectives tracked by TheStreet.com Ratings that prefaced their respective first-quarter performance numbers with plus signs, eight were fixed-income categories. However, as can be seen in the accompanying table, the winning classification was precious metals, with an average total return of 6.89% for the quarter.
The top precious metals closed-end fund for the quarter, Central Fund of Canada (CEF - Get Report), invests almost totally in gold and silver bullion. Its shares returned 16.9% for the three months and 33.96% for the latest 12 months. A strengthening Canadian dollar wasn't really needed to help the fund finish the quarter priced at a 5.01% premium over its net asset value per share.
The steady decline of the U.S. dollar helped propel the emerging-market income and the global-income sectors to positive territory during the difficult quarter. However, closed-end funds in the solid government bond category averaged a gain of 4.00% for the period, making it the second best investment objective and the top fixed-income classification.Not every fixed-income investment objective ended in positive territory. Investment-grade corporate bond funds eased 1.83% on average, while multi-sector bond funds slid 8.23%. The weak economy drove the average high-yield corporate bond fund down 3.11%, while the load participation category, burdened with mortgage-related problems, tumbled 9.62%. Ironically, however, the credit crunch didn't hold back the average general mortgage closed-end fund, which ended the quarter ahead by 1.79%. Following a torrid love affair in recent years with international funds, especially of the emerging market genus, investors turned a cold shoulder to the overseas sectors in recent months. That left the non-U.S. equity and emerging markets equity groupings with setbacks for the quarter averaging in the double digits. After precious metals, the next best equity category was another commodity-related area -- energy/natural resources. Even though one of its component funds -- Kayne Anderson Energy Development (KED - Get Report), moved 8.69% higher -- the group average eased 2.44% during the quarter.
|FIRST QUARTER SUMMARY OF CLOSED-END FUND INVESTMENT OBJECTIVE CATEGORIES|
|CATEGORY||YR.-TO-DATE AVG. RET'N (%)||BEST PERF. FUND, TICKER & TheStreet.com RATINGS GRADE||YR.-TO-DATE RET'N (%)||1-YR. TOTAL RET'N (%)||PREM./ DISCOUNT (%)|
|Sector - Precious Metals||6.89||Central Fund of Canada (CEF) A||16.37||33.96||5.01|
|Government Bond||4.00||BlackRock Enhanced Government Fund, Inc. (EGF) C-||4.96||-11.05||-8.22|
|Emerging Market Income||3.55||Templeton Emerging Markets Income Fund (TEI) B-||7.74||7.25||-5.11|
|Municipal - High Yield||2.52||Western Asset Municipal High Income Fund (MHF) A+||8.25||0.22||-2.28|
|General Bd - Investment Grade||2.33||Duff & Phelps Utility &Corporate Bond Trust (DUC) C||8.78||3.03||-7.31|
|General Mortgage||1.79||PIMCO Strategic Global Government Fund (RCS) C||10.54||2.82||9.80|
|Municipal - National||1.30||PIMCO Municipal Income Fund (PMF) A||13.34||-2.44||27.52|
|Global Income||1.09||Templeton Global Income Fund, Inc (GIM) B+||14.94||11.30||2.13|
|Municipal Single State||1.00||Minnesota Municipal Income Fund II (MXN) C+||8.32||-0.95||-2.68|
|Corporate - Investment Grade||-1.83||Rivus Bond Fund (BDF) C+||-1.83||-1.74||-9.84|
|Sector - Energy/Natural Res||-2.44||Kayne Anderson Energy Development Co. (KED) U||8.69||N/A||2.09|
|Corporate - High Yield||-3.11||PIMCO Corporate Income Fund (PCN) B-||13.62||-4.35||13.78|
|Growth & Income||-4.01||Cohen & Steers Total Return Realty (RFI) C-||18.44||-4.21||10.43|
|Equity Income||-4.60||Cornerstone Strategic Value Fund (CLM) C-||21.10||-20.21||52.22|
|Sector - Financial Services||-5.37||First Trust/Gallatin Finance & Financial Opp'ty (FGB) U||10.73||N/A||7.57|
|Sector - Health/Biotechnology||-7.59||Gabelli Healthcare & Wellness Trust (GRX) U||-6.06||N/A||-12.25|
|Global Equity||-7.81||PIMCO Global StocksPLUS&Income (PGP) C-||2.95||-7.94||-2.97|
|Multi-Sector Bond||-8.23||MFS Multimarket Income Trust (MMT) B-||0.21||-0.85||-13.00|
|Sector - Utilities||-8.29||DNP Select Income Fund Inc (DNP) B-||4.78||4.37||22.09|
|Loan Participation||-9.62||PIMCO Floating Rate Income Fund (PFL) D+||-5.38||-21.05||-0.21|
|Growth - Domestic||-9.84||MVC Capital (MVC) B+||-5.58||0.36||-5.40|
|Non-US Equity||-12.99||Taiwan Fund (TWN) C||5.08||24.52||-4.71|
|Emerging Market Equity||-15.14||Indonesia Fund (IF) C||-12.82||7.95||-12.68|
|Source: TheStreet.com Ratings. Data as of 3/31/2008.|
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