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Precious metals and fixed-income investments wouldn't seem to have much in common. But they were the only classifications of closed-end funds to achieve positive returns during the first quarter of the year.

Of nine closed-end fund investment objectives tracked by Ratings that prefaced their respective first-quarter performance numbers with plus signs, eight were fixed-income categories. However, as can be seen in the accompanying table, the winning classification was precious metals, with an average total return of 6.89% for the quarter.

The top precious metals closed-end fund for the quarter,

Central Fund of Canada

(CEF) - Get Sprott Physical Gold and Silver Trust Units Report

, invests almost totally in gold and silver bullion. Its shares returned 16.9% for the three months and 33.96% for the latest 12 months. A strengthening Canadian dollar wasn't really needed to help the fund finish the quarter priced at a 5.01% premium over its net asset value per share.

The steady decline of the U.S. dollar helped propel the emerging-market income and the global-income sectors to positive territory during the difficult quarter. However, closed-end funds in the solid government bond category averaged a gain of 4.00% for the period, making it the second best investment objective and the top fixed-income classification.

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Not every fixed-income investment objective ended in positive territory. Investment-grade corporate bond funds eased 1.83% on average, while multi-sector bond funds slid 8.23%. The weak economy drove the average high-yield corporate bond fund down 3.11%, while the load participation category, burdened with mortgage-related problems, tumbled 9.62%.

Ironically, however, the credit crunch didn't hold back the average general mortgage closed-end fund, which ended the quarter ahead by 1.79%.

Following a torrid love affair in recent years with international funds, especially of the emerging market genus, investors turned a cold shoulder to the overseas sectors in recent months. That left the non-U.S. equity and emerging markets equity groupings with setbacks for the quarter averaging in the double digits.

After precious metals, the next best equity category was another commodity-related area -- energy/natural resources. Even though one of its component funds --

Kayne Anderson Energy Development


, moved 8.69% higher -- the group average eased 2.44% during the quarter.

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.