This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Top Closed-End Funds: Munis Regain Stability

With seven municipal bond funds dominating the list of the 10 top-rated closed-end funds for the first quarter, it's clear that munis are returning to stability.

The muni sector seems to have come to terms with major concerns that had resulted in disruptions in that segment of the fixed-income markets in recent months.

These included collateral damage from the credit crunch that threatened the triple-A credit ratings of bond insurers. In addition, legal questions were raised last year about exemptions of the funds from state income taxes.

All seven of the closed-end muni funds in the table have produced positive returns for the year to date, with the BlackRock MuniAssets Fund (MUA) rewarding holders with a double-digit first quarter advance of 10.37%. In addition, each of the high-rated muni funds sports an indicated dividend yield of at least 5.5%, with the Morgan Stanley Muni Income Opportunities Trust II (OIB) yielding 6.2%.

Six of the muni funds finished the quarter priced at premiums to their respective net asset values per share. The exception was Western Asset Municipal High Income Fund (MHF), which ended the first quarter of the year priced at a discount of 2.2% from NAV.

A commentary on the uncertainty of our times, investmentwise, is that the three non-muni closed-end funds on the list invest solely, or at least heavily, in natural resources.

The Central Fund of Canada (CEF) is a gold play, while the word "real" in the name of the BlackRock Real Asset Equity Trust (BCF) can be interpreted as "tangible."

BCF's stated objective is to invest in sectors such as energy, natural resources and basic materials. Its largest holdings are Rio Tinto (RTB) and Companhia Vale Rio Doce (RIO).

Besides its gains from the commodity boom, BCF, with more than half its holdings in international investments, has benefitted from the appreciation of most worldwide currencies vis-à-vis the U.S. dollar.

The Aberdeen Australia Equity Fund (IAF) slipped 11.75% in the first quarter, but has appreciated 13.58% in the latest 12 months. Its largest holdings are resource investments BHP Billiton Ltd. and Rio Tinto Ltd.

TheStreet.com RATINGS TOP-RATED CLOSED-END FUNDS
NAME, TICKER & TheStreet.com RATINGS GRADE INVESTMENT OBJECTIVE 3-MO. TOTAL RET'N (%) 12-MO. TOTAL RET'N (%) DIVIDEND YIELD (%) PREMIUM/ DISCOUNT (%)
Aberdeen Australia Equity Fund (IAF) A Non-US Equity -11.75 13.58 10.8 2.9
BlackRock CA Muni Bond Trust (BZA) A Municipal Single State 4.61 -5.25 5.7 9.8
BlackRock CA Municipal Income Trust (BFZ) A+ Municipal Single State 4.28 -7.05 5.9 9.0
BlackRock MuniAssets Fund (MUA) A Municipal - National 10.37 -5.17 5.9 7.9
BlackRock NY Muni Bond Trust (BQH) A+ Municipal Single State 1.36 -3.99 5.8 8.3
BlackRock Real Asset Equity Trust (BCF) A+ Equity Income -3.26 17.43 6.7 -15.1
Central Fund of Canada (CEF) A+ Sector - Precious Metals 16.37 33.96 0.1 4.0
Morgan Stanley Muni Inc Opp II (OIB) A Municipal - National 1.78 -5.53 6.2 1.1
Nuveen Muni Value (NUV) A Municipal - National 7.08 0.06 4.8 2.2
Western Asset Municipal High Inc (MHF) A+ Municipal - High Yield 8.25 0.22 5.5 -2.2
For an explanation of our ratings, click here.
Source: TheStreet.com Ratings -- Data as of 3/31/2008.
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BCF $7.76 0.00%
CEF $11.01 0.00%
IAF $5.66 0.00%
MHF $7.15 0.00%
MUA $13.43 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs