While it was no surprise that precious metals and energy/natural resources led the closed-end fund categories in the second quarter, some surprising groupings climbed to near the top of the performance array.

With an average gain of 6.30% for the three months, closed-end funds in the precious metals classification led the 21 investment objectives in the accompanying table. Rising inflation, the tumbling U.S. dollar and general uncertainty over the economy propelled the group higher during the period.

Anyone who has filled up a gas tank shouldn't be surprised that runner-up honors went to the energy/natural resources group, which climbed 5.68% on averaged during the quarter. The group's leading performer, the

BlackRock Global Energy & Resources Fund

(BGR) - Get Report

spurted 25.39% for the quarter, lifting it 34.93% for the latest 12 months. BGR's largest holdings include popular

Consol Energy

(CNX) - Get Report


Peabody Energy

(BTU) - Get Report


Massey Energy



The two leading "hard asset" groupings were followed by a pair of conservative "defensive" categories during the period of elevated economic turmoil. The utilities sector, which shined in 2007 but backed off during the first quarter of this year, rebounded 5.49% while closed-end government bond funds advanced 4.47% on average.

Some surprises appear near the top of the listings. Loan participation funds, which were hammered for months because of exposure to subprime mortgages, gained an average of 3.88% during the quarter. That grouping was followed by a quartet of other fixed-income categories that are ordinarily considered to be on the riskier end of the spectrum: high-yield corporate bond funds, up 3.74% on average; high-yield municipal bond closed-ends, ahead 2.74%; global income, boosted by the cascading value of the U.S. dollar, up 1.08%; and emerging-market income --also benefitting from the ailing greenback -- 0.85% in the plus column on average.

Despite the economic and investment uncertainty, 12 closed-end fund classifications achieved positive average gains during the second quarter while nine fund groupings suffered losses.

Not surprisingly, as the credit-crunch-inspired woes of the banking industry compounded in recent months, the financial services sector tumbled 17.95% on average over the three months.

Of the individual funds that led their respective groupings, the best performer after BGR was the surprising

Cornerstone Total Return Fund

(CRF) - Get Report

. Bid to premiums close to 80% above its net asset value per share, it vaulted 17.45% during the quarter, leaving its investors ahead 37.52% for the year to date.

CRF achieved its stellar market performance with blue-chip top holdings that include

Exxon Mobil

(XOM) - Get Report


General Electric




(MSFT) - Get Report



(T) - Get Report


Johnson & Johnson

(JNJ) - Get Report


Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, 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.