Stay Away From These Closed-End Funds

A truism made more valid today: Investing is not for the faint of heart. Most of the top-performing closed-end funds in August have crashed in the past few days.

Two that I would not touch have ties to energy. At 13.7%, no fund on the list did better than Tortoise Energy Capital(TYY Quote - Cramer on TYY - Stock Picks). With oil dropping to the $90s, the prospects for its holdings of Kinder Morgan (KMR Quote - Cramer on KMR - Stock Picks), Plains All American(PAA Quote - Cramer on PAA - Stock Picks), Enbridge Energy(EEP Quote - Cramer on EEP - Stock Picks) and Sunoco Logistics(SXL Quote - Cramer on SXL - Stock Picks) have gone south as well.

The other is from the emerging-market-income category. The Western Asset Emerging Markets Floating Rate Fund(EFL Quote - Cramer on EFL - Stock Picks) added 8.5% in August before giving it all back this month.

Half the fund's investments are in the sovereign debt of oil-rich countries like Mexico, Brazil, Venezuela and Egypt. A total of 44.5% of its holdings are allocated to corporate debt including HSBC Bank(HBC Quote - Cramer on HBC - Stock Picks), Gazprom(OGZPY Quote - Cramer on OGZPY - Stock Picks) and Mexico's Pemex.

While there are no safe bets in this market, the month-to-date beating taken by Eagle Capital Growth Fund(GRF Quote - Cramer on GRF - Stock Picks) has left it trading at a discount to net asset value of almost 10%. That's not a bad way to purchase some of its top holdings, Johnson & Johnson(JNJ Quote - Cramer on JNJ - Stock Picks), Colgate-Palmolive(CL Quote - Cramer on CL - Stock Picks), PepsiCo(PEP Quote - Cramer on PEP - Stock Picks), and Sysco(SYY Quote - Cramer on SYY - Stock Picks), all of which have held up well.

Best Performing Closed-End Fund for Each Objective in August
Objective	Fund (Ticker) Rating	August 2008 Total Return
Corporate - High Yield	BlackRock Debt Strategies Fund Inc (DSU) C	4.52%
Corporate - Investment Grade	Rivus Bond Fund (BDF) C+	3.44%
Emerging Market Equity	Templeton Emerging Markets Fd (EMF) C+	-7.22%
Emerging Market Income	Western Asset Emerg Mkts Fltg (EFL) B+	8.52%
Equity Income	J Hancock Preferred Income III (HPS) D+	7.40%
General Bd - Investment Grade	BlackRock Income Opportunity Trust (BNA) C+	2.72%
General Mortgage	PIMCO Strategic Glob Gov Fund (RCS) C-	8.54%
Global Equity	Gabelli Global Deal Fund (GDL) C+	4.21%
Global Income	AllianceBernstein Global High Inc (AWF) B+	4.01%
Government Bond	BlackRock Enhanced Government (EGF) C-	2.98%
Growth - Domestic	Eagle Capital Growth Fund (GRF) C-	9.23%
Growth & Income	The Cushing MLP Total Return Fund (SRV) U	7.32%
Loan Participation	Eaton Vance Credit Opportunities (EOE) D	3.94%
Multi-Sector Bond	Highland Credit Strategies Fund (HCF) D	2.95%
INSERT	Nuveen Muni High Income Opport 2 (NMD) U	2.98%
Municipal - National	Morgan Stanley Muni Inc Opp (OIA) C+	6.01%
Municipal Single State	Eaton Vance Insured MA Muni Bond (MAB) D+	7.40%
Non-US Equity	India Fund (IFN) C+	0.32%
Sector - Energy/Natural Res	Tortoise Energy Capital (TYY) C-	13.68%
Sector - Financial Services	First Trust/Gallatin Spl Fin & Finl (FGB) E-	4.89%
Sector - Health/Biotechnology	BlackRock Health Sciences Trust (BME) B+	3.11%
Sector - Precious Metals	Gabelli Global Gold Nat Res&Income (GGN) B+	-5.19%
Sector - Utilities	DNP Select Income Fund Inc (DNP) B-	3.15%
Source: TheStreet.com Ratings

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