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With seven municipal bond funds dominating the list of the 10 top-rated closed-end funds for the first quarter, it's clear that munis are returning to stability.

The muni sector seems to have come to terms with major concerns that had resulted in disruptions in that segment of the fixed-income markets in recent months.

These included collateral damage from the credit crunch that threatened the triple-A credit ratings of bond insurers. In addition, legal questions were raised last year about exemptions of the funds from state income taxes.

All seven of the closed-end muni funds in the table have produced positive returns for the year to date, with the

BlackRock MuniAssets Fund

(MUA) - Get Blackrock MuniAssets Fund Inc Report

rewarding holders with a double-digit first quarter advance of 10.37%. In addition, each of the high-rated muni funds sports an indicated dividend yield of at least 5.5%, with the

Morgan Stanley Muni Income Opportunities Trust II

( OIB) yielding 6.2%.

Six of the muni funds finished the quarter priced at premiums to their respective net asset values per share. The exception was

Western Asset Municipal High Income Fund

(MHF) - Get Western Asset Municipal High Income Fund Inc. Report

, which ended the first quarter of the year priced at a discount of 2.2% from NAV.

A commentary on the uncertainty of our times, investmentwise, is that the three non-muni closed-end funds on the list invest solely, or at least heavily, in natural resources.


Central Fund of Canada

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

is a gold play, while the word "real" in the name of the

BlackRock Real Asset Equity Trust


can be interpreted as "tangible."

BCF's stated objective is to invest in sectors such as energy, natural resources and basic materials. Its largest holdings are

Rio Tinto

( RTB) and

Companhia Vale Rio Doce

(RIO) - Get Rio Tinto Plc Report


Besides its gains from the commodity boom, BCF, with more than half its holdings in international investments, has benefitted from the appreciation of most worldwide currencies vis-à-vis the U.S. dollar.

The Aberdeen Australia Equity Fund

(IAF) - Get Aberdeen Australia Equity Fund Inc Report

slipped 11.75% in the first quarter, but has appreciated 13.58% in the latest 12 months. Its largest holdings are resource investments BHP Billiton Ltd. and Rio Tinto Ltd.

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.