This Day On The Street
Continue to site
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

Muni Funds Are Top Closed-End Achievers

Municipal bond funds dominated the list of Ratings 10 top-rated closed-end funds.

Nine of the funds in the accompanying list of the 10 highest-rated closed-end funds are munis, with three of them single-state funds and one a high-yield muni fund.

This represents a recovery for the muni group, which experienced lackluster performance during the second half of last year. Single-state muni funds were handicapped by potential threats to their exemptions to state income taxes. Then there were the credit-crunch-inspired woes of muni bond insurers, along with turbulence in the auction-rate securities markets.

Observers are cautioned not to refer to the lone high-yield muni on the list as a "junk-bond fund," as the Western Asset Management Municipal High Income Fund (MHF) has returned high-quality returns of 9.78%, 18.84% and 11.68%, respectively, over the past three months, year to day and 12 months. With a three-year annualized growth rate of 10.57%, it is the only fund on the list with a double-digit compound annual return for that stretch.

The lone equity fund on the top-10-ratings list, the BlackRock Real Asset Equity Trust (BCF), sports the best three-month and 12-month performance numbers for the group, 13.09% for the quarter ended June 30 and 22.47% for the most recent 12 months.

The "Real Asset" reference in BCF's name fits the current economic times: minerals that are likely to retain their values in this inflationary period. The fund's top portfolio holdings include Rio Tinto (RTP), Companhia Vale Do Rio Doce ADS (RIO), BHP Billiton (BHP) and E.I. du Pont de Nemours. (DD - Get Report).

The funds on the list are split evenly as to those that ended the year's first half priced at a premium to net asset value per share vs. changing hands at a discount to NAV. The PIMCO California Municipal Income Fund (PCQ) and the BlackRock Maryland Muni Bond Trust (BZM) both ended the second quarter priced at double-digit premiums over NAV, while the Western Asset Managed Municipals Fund (MMU) and the BlackRock Real Asset Equity Trust (BCF) were priced, respectively, at hefty discounts of 8.34% and 9.83%.

BlackRock MD Muni Bond Trust (BZM) A 3.69 9.96 -2.43 5.37 11.10
BlackRock NY Muni 2018 Income Trust (BLH) A -0.41 -1.53 6.62 5.28 -0.32
BlackRock Real Asset Equity Trust (BCF) A 13.09 9.41 22.47 N/A -9.83
Morgan Stanley Muni Inc Opp II (OIB) A 4.65 6.51 0.85 7.05 3.79
Morgan Stanley Muni Inc Opp III (OIC) A 1.54 6.88 -2.26 6.12 1.47
Nuveen Muni Value (NUV) A -1.15 5.85 3.57 5.23 -0.21
Nuveen Select Tax-Free Inc 3 (NXR) A 2.55 8.73 9.08 6.38 -0.14
PIMCO CA Municipal Income Fund (PCQ) A+ -1.29 0.71 0.41 6.89 12.62
Western Asset Managed Municipals (MMU) A+ 1.05 2.70 2.73 5.61 -8.34
Western Asset Municipal High Inc (MHF) A+ 9.78 18.84 11.68 10.57 5.57
Source: Ratings - Data as of 6/30/2008.
For an explanation of our ratings, click here.
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.

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BCF $7.76 0.00%
BHP $27.28 2.30%
DD $67.15 -0.28%
NUV $10.04 0.20%
PCQ $15.55 0.92%


Chart of I:DJI
DOW 17,867.61 +147.69 0.83%
S&P 500 2,096.67 +16.26 0.78%
NASDAQ 5,145.4410 +36.7750 0.72%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs