This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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. RATINGS TOP-RATED CLOSED-END FUNDS
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: Ratings -- Data as of 3/31/2008.

Richard Widows is a senior financial analyst for Ratings. Prior to joining, 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.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs