The largest upgrades to the closed-end fund universe for the month of May came predominantly from global equity, municipal state and energy/natural resources.

The pick of the list below are represented by the top five funds -- two global equity funds and one municipal fund from BlackRock -- and two municipal funds from Nuveen Investments.

If energy and natural resources is more your sector then there are three to choose from: ING Risk Managed Nat Resources ( IRR), Tortoise North American Energy ( TYN) and the Tortoise Energy Capital Fund ( TYY).

Whether the current run-up in oil prices is a function of easy money combined with actions of hedge funds or the result of supply and demand imbalances or both will be made clearer if the Federal Reserve is forced to raise rates later this year.

If you're of the view that this is a supply and demand issue that won't be corrected in the near term, energy (especially oil) is the place to be. If you think oil prices are a result of lax monetary policy and higher rates will bring commodity prices down, energy may not be for you.

If rates are set to rise, you may also want to stay out of the way of municipals as their prices will fall in sympathy with rate rises.

Fund Name Ticker Current Rating Previous Rating Category
Defined Strategy Fund DSF D C+ Equity Income
Eaton Vance PA Muni Inc Tr EVP D- C Municipal Single State
BlackRock MD Muni Bond Trust BZM C+ A- Municipal Single State
BlackRock CA Muni Bond Trust BZA B- A Municipal Single State
BlackRock S&P Qual Rkg Glob Eq Mgd BQY B- A Global Equity

In terms of the largest downgrades, municipal funds focused on Maryland, California and Pennsylvania were downgraded during the month (as opposed to the municipals that received upgrades, which invested in Vermont and Connecticut).

Fund Name Ticker Current Rating Previous Rating Category
Tortoise North American Energy TYN B D- Sector - Energy/Natural Res
BlackRock Enhanced Government EGF B- D Government Bond
Tortoise Energy Capital TYY C E Sector - Energy/Natural Res
Claymore Raymond James SB1 Ety Fd RYJ C E+ Equity Income
ING Risk Managed Nat Resources Fund IRR B- D+ Sector - Energy/Natural Res
BlackRock World Investment Trust BWC A- C Global Equity
BlackRock Global Opportunities Eq BOE B C- Global Equity
Nuveen CT Div Adv Muni NFC B+ C Municipal Single State
Nuveen CT Div Adv Muni Fund 2 NGK A C+ Municipal Single State
BlackRock VA Muni Bond Trust BHV A B- Municipal Single State

Sam Patel, CFA, is the manager of mutual fund research for the Ratings.

In keeping with TSC's Investment Policy, employees of Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.

While Patel cannot provide investment advice or recommendations, he appreciates your feedback; click here to send him an email.