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). With oil dropping to the $90s, the prospects for its holdings of Kinder Morgan (KMR Quote), Plains All American(PAA Quote), Enbridge Energy(EEP Quote) and Sunoco Logistics(SXL Quote) have gone south as well.

The other is from the emerging-market-income category. The Western Asset Emerging Markets Floating Rate Fund(EFL Quote) 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), Gazprom(OGZPY Quote) 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) 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), Colgate-Palmolive(CL Quote), PepsiCo(PEP Quote), and Sysco(SYY Quote), 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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