Municipal bond funds dominated the list of TheStreet.com Ratings 10 top-rated closed-end funds.Nine of the funds in the accompanying list of the 10 highest-rated closed-end funds are munis, with three of them single-state funds and one a high-yield muni fund. This represents a recovery for the muni group, which experienced lackluster performance during the second half of last year. Single-state muni funds were handicapped by potential threats to their exemptions to state income taxes. Then there were the credit-crunch-inspired woes of muni bond insurers, along with turbulence in the auction-rate securities markets. Observers are cautioned not to refer to the lone high-yield muni on the list as a "junk-bond fund," as the Western Asset Management Municipal High Income Fund ( MHF) has returned high-quality returns of 9.78%, 18.84% and 11.68%, respectively, over the past three months, year to day and 12 months. With a three-year annualized growth rate of 10.57%, it is the only fund on the list with a double-digit compound annual return for that stretch. The lone equity fund on the top-10-ratings list, the BlackRock Real Asset Equity Trust ( BCF), sports the best three-month and 12-month performance numbers for the group, 13.09% for the quarter ended June 30 and 22.47% for the most recent 12 months. The "Real Asset" reference in BCF's name fits the current economic times: minerals that are likely to retain their values in this inflationary period. The fund's top portfolio holdings include Rio Tinto ( RTP), Companhia Vale Do Rio Doce ADS ( RIO), BHP Billiton ( BHP) and E.I. du Pont de Nemours. ( DD). The funds on the list are split evenly as to those that ended the year's first half priced at a premium to net asset value per share vs. changing hands at a discount to NAV. The PIMCO California Municipal Income Fund ( PCQ) and the BlackRock Maryland Muni Bond Trust ( BZM) both ended the second quarter priced at double-digit premiums over NAV, while the Western Asset Managed Municipals Fund ( MMU) and the BlackRock Real Asset Equity Trust ( BCF) were priced, respectively, at hefty discounts of 8.34% and 9.83%.
|TOP-RATED CLOSED-END FUNDS|
|NAME, TICKER & TheStreet.com RATINGS GRADE||3-MO. TOTAL RET'N (%)||YR.-TO- DATE RET'N (%)||12-MO. TOTAL RET'N (%)||3-YR. ANN'L RET'N (%)||DISC./ PREM. OF MKT. VS. NAV (%)|
|BlackRock MD Muni Bond Trust (BZM) A||3.69||9.96||-2.43||5.37||11.10|
|BlackRock NY Muni 2018 Income Trust (BLH) A||-0.41||-1.53||6.62||5.28||-0.32|
|BlackRock Real Asset Equity Trust (BCF) A||13.09||9.41||22.47||N/A||-9.83|
|Morgan Stanley Muni Inc Opp II (OIB) A||4.65||6.51||0.85||7.05||3.79|
|Morgan Stanley Muni Inc Opp III (OIC) A||1.54||6.88||-2.26||6.12||1.47|
|Nuveen Muni Value (NUV) A||-1.15||5.85||3.57||5.23||-0.21|
|Nuveen Select Tax-Free Inc 3 (NXR) A||2.55||8.73||9.08||6.38||-0.14|
|PIMCO CA Municipal Income Fund (PCQ) A+||-1.29||0.71||0.41||6.89||12.62|
|Western Asset Managed Municipals (MMU) A+||1.05||2.70||2.73||5.61||-8.34|
|Western Asset Municipal High Inc (MHF) A+||9.78||18.84||11.68||10.57||5.57|
|Source: TheStreet.com Ratings - Data as of 6/30/2008. |
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