EFG Liquidates Municipal Bond Fund, Shares Plummet


Swiss wealth manager EFG International said on Friday a U.S. municipal bond fund it was distributing had to be liquidated, sending its shares sharply lower.

The Akos fund had to be liquidated after a sell-off in municipal bonds last week, causing losses for investors, an EFG spokesman said. He declined to give a figure for the losses.

"The product had to be unravelled with attendant losses for investors," company spokesman Keith Gapp said.

The news is a sign that mid-sized private banks like EFG are not immune to the credit crisis that has hit bigger rivals like UBS and Credit Suisse hard.

EFG said the Akos product had largely been distributed to institutional investors.

EFG shares were down 6.4 percent at 34.50 Swiss francs, having been as low as 30.10 francs.

The shares had dropped in early trading after Avanza Bank, Sweden's largest online broker, quoted a letter on its website that it said EFG had sent to its clients.

In the letter, EFG said it had been forced to liquidate one of its funds.