Exchange-traded funds have recently become the favorites of the fund world. But investors should not forget that closed-end funds can offer the same performance figures, if not better. TheStreet.com Ratings uses proprietary quantitative models to generate ratings on approximately 470 closed-end funds and 130 ETFs. Over a number of years, the output from our models has consistently shown that foreign/international funds have been among the top performers in either category. A subset of these foreign funds are the so-called country funds, which are distinguished by their specific focus on a particular country, as opposed to a region. My pick among the top-ranked closed-end country funds is the Mexico Equity & Income Fund ( MXE). Its returns are outstanding: year to date it has achieved 30.26%, over one year it has returned 57.95%, and its three-year record is 45.97%. The fund's sponsor is Phicardo Asset Management, and Gerald Hellerman is its manager. The fund's top holdings include America Telecolm SA, Cemex ( CX) and Empresas ICA ( ICA). The mystery of closed-end funds is that some discounts that exist between the share price and net asset value (NAV), or the sum of assets minus liabilities in the portfolio, do not narrow irrespective of the fund's performance. MXE is no exception, with the share price of $20.42 trading at a nearly 14% discount to its NAV of $23.73. Since August 2005, the fund's discount has oscillated between 16% and 9%. The 9% discount was recorded in May 2006, and has since increased to the current 13.3%. Two things in particular may have caused the increase -- the market jitters earlier this year regarding emerging economies and the recent political chaos in Mexico.