Among Closed-End Funds, Energy Still Tops

We compiled a list of the best-performing closed-end funds within each fund objective for the month of May. As was the case with ETFs, the groups of closed-end stock funds generally outperformed fixed-income funds. Energy again powered its way to the top.

The best energy and natural resource, closed-end fund in May was the Kayne Anderson Energy Total Return Fund(KYE Quote). It returned 8.20% for the month. At last measure, three pipeline companies were the largest holdings, with Kinder Morgan Management(KMR Quote) totaling 11.88% of fund assets followed by 5.38% in Plains All American Pipeline(PAA Quote), and 3.82% in Enterprise Products Partners(EPD Quote).

The second-best average closed-end fund objective for May was the domestic growth sector. Here, the best fund is the B+ rated Royce Focus Trust(FUND Quote), earning 13.76%. The wrinkle is that this fund seeks long-term capital growth by picking smaller stocks perceived to be a good value. Some of the best performing holdings in May were Timberland(TBL Quote), up 26.10%; Allied Nevada Gold(ANV Quote), up 24.80%; and Sanderson Farms(SAFM Quote).

The best-performing fund on the list is from the non-U.S. equity group. The Morgan Stanley Eastern Europe Fund(RNE Quote), which gained 15.39% for the month, would be worthy of consideration for the "R" portion of a "BRIC" portfolio. Russia accounts for 69.9% of fund assets, with Gazprom OAO, MMC Norilsk Nickel and Lukoil as the top three holdings. The positions advanced 13.53%, 10.68%, and 25.06%, respectively, in May. ...