Stay Away From These Closed-End Funds - TheStreet

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)

. With oil dropping to the $90s, the prospects for its holdings of

Kinder Morgan

(KMR)

,

Plains All American

(PAA) - Get Report

,

Enbridge Energy

(EEP)

and

Sunoco Logistics

(SXL)

have gone south as well.

The other is from the emerging-market-income category. The

Western Asset Emerging Markets Floating Rate Fund

(EFL) - Get Report

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)

,

Gazprom

(OGZPY)

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) - Get Report

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) - Get Report

,

Colgate-Palmolive

(CL) - Get Report

,

PepsiCo

(PEP) - Get Report

, and

Sysco

(SYY) - Get Report

, all of which have held up well.

As with any trade, you can lose money. Remember to place stop-loss orders to help protect you from sudden moves against positions.

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Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, 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.