Hard Assets Helped Some of May's Best Closed-End Funds

For the best rated closed-end funds in May, the cream of the crop either held the shares of companies that benefited from hard-asset inflation or were paid a steady stream of municipal income.

Closed-end funds are similar to exchange-traded funds in that they both are available to trade throughout the day. Where they differ is that closed-end funds do not continuously issue and redeem shares. Instead, the limited number of shares forces the fund to trade at a premium or discount to net asset value depending on the supply and demand for the shares.

The best-rated closed-end fund this month is the Blackrock Real Asset Equity Trust(BCF Quote - Cramer on BCF - Stock Picks).

While the fund's 13.97% discount to net asset value at month-end may seem like a bargain, since the discount has remained relatively steady over the last year, a potential return to premium valuation in the short term should be less of a consideration than the merits of the underlying holdings.

The holdings are allocated 39.6% to mining, 23.5% to oil & gas, 9.4% to chemicals, 8.0% to forest & paper products, 6.9% to oil & gas services, and 4.9% to coal.

As many as 13 different members of the Blackrock Real Asset Equity portfolio produced triple-digit total returns over the last year, including: Mosaic(MOS Quote - Cramer on MOS - Stock Picks), Massey Energy(MEE Quote - Cramer on MEE - Stock Picks), Petroleo Brasileiro(PBR Quote - Cramer on PBR - Stock Picks) and Consol Energy(CNX Quote - Cramer on CNX - Stock Picks).

Also with an A+ rating, the Blackrock Global Energy and Resources Trust(BGR Quote - Cramer on BGR - Stock Picks) set a new record-high share price even as its discount to net assets expanded to 15.98%.

The list of holdings with one-year, triple-digit returns contains names like Massey Energy, Potash Corp of Saskatchewan(POT Quote - Cramer on POT - Stock Picks), Brigham Exploration(BEXP Quote - Cramer on BEXP - Stock Picks), Hess(HES Quote - Cramer on HES - Stock Picks), Arch Coal(ACI Quote - Cramer on ACI - Stock Picks), and Helmerich & Payne(HP Quote - Cramer on HP - Stock Picks).

Seven of the remaining eight funds are baskets of municipal securities. The highest-rated of the bunch is Western Asset Managed Municipals(MMU Quote - Cramer on MMU - Stock Picks). The fund has a current yield of 4.98% and seeks to generate income exempt from federal taxes.

The only other non-muni fund to rank in the top 10 closed-end funds is the Gabelli Global Gold Natural Resources & Income Trust(GGN Quote - Cramer on GGN - Stock Picks) made up of about two-thirds mining and one-third energy stocks.

A few of the fund's best performing mining shares include Goldcorp(GG Quote - Cramer on GG - Stock Picks), Randgold Resources(GOLD Quote - Cramer on GOLD - Stock Picks), and Rio Tinto(RTP Quote - Cramer on RTP - Stock Picks). The energy headlines are lead by Petroleo Brasileiro, Chesapeake Energy(CHK Quote - Cramer on CHK - Stock Picks), and Weatherford International(WFT Quote - Cramer on WFT - Stock Picks).

This fund does fluctuate between premium and discount valuationsm, so the current discount of around 7% is favorable and contracting from the 9.16% reading at month-end.

Top 10 Rated Closed-End Funds
Fund (Ticker) Rating	Total % Return 3 Year	Total % Return 1 Year	Objective
BlackRock Real Asset Equity Trust (BCF) A+	NA	27.04	Equity Income
BlackRock Global Energy & Resources (BGR) A+	25.53	32.29	Sector - Energy/Natural Res
Western Asset Managed Municipals (MMU) A+	6.56	5.56	Municipal - National
Western Asset Municipal High Inc (MHF) A+	9.03	3.54	Municipal - High Yield
Gabelli Global Gold Nat Res&Income (GGN) A+	23.37	24.98	Sector - Precious Metals
PIMCO CA Municipal Income Fund (PCQ) A+	9.15	4.54	Municipal Single State
Nuveen CT Div Adv Muni Fund 2 (NGK) A	6.18	4.85	Municipal Single State
BlackRock VA Muni Bond Trust (BHV) A	10.59	18.28	Municipal Single State
BlackRock NJ Muni Bond Trust (BLJ) A	11.76	11.90	Municipal Single State
Nuveen Muni Value (NUV) A	7.04	7.09	Municipal - National
Source: TheStreet.com Ratings

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