Criterion Commodity Fund Moves From AIG-Linked Index Into Cash

The move is ''a result of uncertainty regarding the note issuer,'' Toronto-based Criterion said today in a statement. AIG got permission today from New York Governor David Paterson to enhance liquidity with $20 billion held by subsidiaries.

''The fund won't be shut,'' said Angus Fisher, a spokesman for VenGrowth Asset Management Inc., a Criterion affiliate. ''We are just moving to cash temporarily.''

AIG, the biggest U.S. insurer ranked by assets, is racing to raise cash to forestall credit-rating downgrades on further writedowns tied to subprime-mortgage securities. Shares of the New York-based company plunged 61 percent in New York Stock Exchange composite trading today.

''Substantially all'' of the Criterion fund's assets are invested in the AIG notes, with returns linked to a basket of 19 commodity futures, Criterion said in the statement. The $25.3 million Diversified Commodities Currency Hedged Fund is linked to the AIG Basis Select Index, Criterion said on its Web site.

''Criterion is looking at other ways to expose the fund to commodity futures using an index or rules-based approach,'' the company said.

The move to cash is not related to losses in commodity markets, Fisher said. The Reuters/Jefferies CRB Index of 19 raw materials fell 3.3 percent today and is down 27 percent from a July 3 record, putting it in a bear market.

Criterion remains ''confident in the underlying index'' of commodities, which includes natural gas, crude oil, gold, sugar and soybeans.

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