NEW YORK (BestCredit) -- The current market environment posts some key challenges for investors. Relatively strong corporate earnings have brought several stock benchmarks to their all-time highs. While this should support valuations in equity markets for the remainder of the year, the upside is limited. Investors entering into long positions at current levels could be vulnerable to downside shocks if the Federal Reserve starts tapering stimulus at a more aggressive rate. At the same time, stalling results in macroeconomic data reports suggest that we will be held in a low-interest rate environment for the foreseeable future.

One strategy for navigating these difficulties is the closed-end fund. Many closed-end funds will actually trade at a discount relative to net asset value. This creates unique opportunities in the current market environment, where cheap stocks are difficult to find.

In addition to these NAV valuation discounts, many closed-end funds offer special advantages like elevated dividend payouts or exposure to the beaten-down commodities sector. Here, we will look at a few funds that can be used to establish long positions that can still benefit despite this complicated market environment.

Fund Choices

Gabelli Equity Trust (GAB - Get Report) looks to capitalize on value opportunities in common stocks. Some of the fund's larger holdings include Honeywell (HON - Get Report), Deere (DE - Get Report) and American Express (AXP - Get Report). In addition to a well-diversified portfolio, the fund has a total expense ratio below 1.5% and has a great deal of momentum supporting its outlook. In 2013, GAB posted returns of nearly 40% on its NAV. Distribution increases this year should keep the fund in the market's spotlight. We have seen slight pullbacks in the fund during the early part of this year, but these moves should be used as a buying opportunity given the long-term performance history of Gabelli funds.

But where GAB has seen a massive run-up, much better valuation levels can be seen in the Center Coast MLP & Infrastructure Fund (CEN - Get Report), which trades at a discount of 8.29% relative to NAV. CEN offers excellent positioning opportunities, with the ability to capitalize on potential gains in the energy sector, where the majority of the assets in the fund are centered. Energy markets posted a relatively lackluster performance last year, but consistent gains in global macroeconomic data suggest that we will continue to see rising demand through the rest of this year. With a market cap above $250 million, the fund's total leverage ratio is near 26%. This is well below many of the other funds in this space and  helps to shield against price volatility if markets turn defensive. For those looking to positions for gains in the sector, CEN offers of the the best market values at current levels.

Dividend funds should be the last area to consider, given the current rate environment. One of the best opportunities in this space is the Nuveen Diversified Currency Opportunities Fund (JGT), which is likely to benefit from any progress in emerging market currencies. This is another area of the market that saw significant selling pressure last year. This widened the fund's discount to 15.8%. The fund's focus on high-yielding currencies should benefit from reductions in risk aversion, something that is increasingly likely given the strengthening macroeconomic data we are seeing in most parts of the world. JGT offers a 9.4% yield. We should see the discount start to narrow as long as we do not see any major shocks this year in the world economy.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.