Source AP ©

Columbia Strategic Cash Portfolio fund to be closed off to new investors due to recession

Bank of America is closing off an enhanced money fund to new investors.

The Columbia Strategic Cash Portfolio fund for institutional investors that was worth $40 billion (27.2 billion EUR) only a couple months currently has about $12 billion (8.2 billion EUR) in assets, the bank said.

The loss is related to the subprime-mortgage crisis that has rippled around the globe, Bank of America spokesman Jon Goldstein said.

"The conditions have really weakened the performance across the industry, including this one," Goldstein said.

The enhanced money fund was a short-term investment pool that offered higher yields than a traditional money-market fund.

Unlike traditional money-market funds, the Strategic Cash fund did not offer investors a guarantee that it would maintain a $1-per-share net asset value, although the fund was managed toward that goal, Goldstein said.

The Strategic Cash portfolio was open only to investors with a minimum of $25 million (17 million EUR) or more.

Bank of America Corp. shares were up $1.10, or 2.4 percent, to $46.47 in midday trading.