For a video presentation of this report from Gregg Greenberg, click here.

As Jim Cramer likes to say, there's always a bull market somewhere. You just have to find it.

So investors tramping through the beleaguered new-issue market shouldn't call off the hounds just yet. There's a spot you may have overlooked: covered-call closed-end funds.

Closed-end funds are actively managed mutual funds that trade essentially like stocks. Covered-call closed-end funds follow a strategy that, in its most basic form, involves buying shares and then selling call options on the same shares. This forfeits stock-appreciation gains but produces solid premium and dividend income. With bond yields low and the stock market sputtering, these funds are suddenly in great demand.

Over 15 new funds employing variations on the strategy have gone public since the Madison/Claymore Covered Call Fund ( MCN) kicked off the craze last July with a $260 million offering. The IPOs have raised more than $10 billion in less than a year.

One fund that cannonballed into the market with a major splash this February was the NFJ Dividend Interest and Premium Strategy Fund ( NFJ). The NFJ, which is co-managed by three separate investment firms under the larger umbrella of Allianz Global Investors, became the largest unleveraged closed-end IPO in history when it raised just under $2.5 billion.

And the pipeline for new product remains full, even after the yearlong blitz. New offerings in the category are soon to be released from closed-end powerhouses such as Blackrock, Nuveen and Pimco.

"This fund style is positioned to outperform in three of four markets: down, flat and modestly positive," says Tom Faust, chief investment officer at Eaton Vance. The firm has brought three covered-call funds to market in the past year, including April's $450 million IPO for the Eaton Vance Tax-Managed Buy-Write Income Fund ( ETB).

"Only during rampant bull markets do covered-call funds have difficulty, but nowadays people's expectations are modest, so these funds should continue to be popular," Faust adds.

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