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Many of the closed-end funds that have had a tough time over the last 12 months came roaring back in the first quarter. Closed-end funds are portfolios of securities bought and sold like stocks throughout the trading day.

They differ from exchange-traded funds in that closed-end funds don't continuously issue and redeem shares. So, closed-end funds are subject to supply and demand pressures. As investors buy up the limited number of shares being offered for sale, these funds can trade at prices above their net asset value (NAV).

The excess in price over NAV is the premium percentage. High or rising premium percentages reveal securities in demand but also represent the risk of price decline even as the underlying securities hold their value or rise modestly.

Funds trading at prices below NAV are said to be selling at a discount. This is not the case for any of the top ten closed-end performers.

For the first quarter of 2008, the best performing closed-end fund is the C- rated

Cornerstone Strategic Value Fund

(CLM) - Get Cornerstone Strategic Value Fund Inc. Report

. This fund returned 21.10% in the three months ending March 31. At 52.2% above NAV, the fund has been bid up to the largest premium of the top ten. One reason for the huge premium may be the monthly income being paid out at an indicated dividend yield of 17.85%.

Holdings contributing to the positive performance of the Cornerstone Strategic Value Fund include quarterly gains of 27.86% from


(CSX) - Get CSX Corporation Report

, 24.38% from



, 20.68% from

XTO Energy

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( XTO), and 17.76% from

BJ Services

( BJS).

In second place, gaining 18.44% for the quarter is the C-rated

Cohen & Steers Total Return Realty Fund

(RFI) - Get Cohen & Steers Total Return Realty Fund Inc. Report


At quarter-end, this fund was paying a dividend yield of 8.85% and trading at a modest premium of 10.4%. REIT holdings account for 97% of assets. Firstquarter returns of 25.65% in


(UDR) - Get UDR Inc. Report

, 18.30% in

Mid-America Apartment Communities

(MAA) - Get Mid-America Apartment Communities Inc. Report

, 16.51% in

Cedar Shopping Centers

(CDR) - Get Cedar Realty Trust Inc. Report

and 15.12% in

Extra Space Storage

were the best of the lot.

Third place belongs to

Cornerstone Total Return Fund

(CRF) - Get Cornerstone Total Return Fund Inc. (The) Report

returning 17.09% in the first quarter. This fund is rated E+ due to its volatile price history. The fund's quarter-end dividend yield of 17.79% is high, but so is its 51.9% premium. The largest holdings include

Exxon Mobil

(XOM) - Get Exxon Mobil Corporation Report


General Electric

(GE) - Get General Electric Company Report



(C) - Get Citigroup Inc. Report



(T) - Get AT&T Inc. Report

, and


(MSFT) - Get Microsoft Corporation Report


Ten Best Performing Closed-End FundsRanked by first quarter returns

Fund (Ticker) Rating

Total Return 3 Month

Total Return 1 YR

3/31/08 Premium


Cornerstone Strategic Value Fund (CLM) C-




Equity Income

Cohen & Steers Total Return Realty (RFI) C-




Growth & Income

Cornerstone Total Return Fund (CRF) E+




Equity Income

Central Fund of Canada (CEF) A




Sector - Precious Metals

Templeton Global Income Fund, Inc (GIM) B+




Global Income

PIMCO Corporate Income Fund (PCN) B-




Corporate - High Yield

PIMCO Municipal Income Fund (PMF) A




Municipal - National

First Trust Strategic High Income Fund III (FHO) U




Global Income

Cohen & Steers Quality Income Realty Fund (RQI) E+




Growth & Income

BlackRock Investment Quality Municipal Trust (BKN) B+




Municipal - National

Source: Ratings. For an explanation of our ratings,

click here


Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.