Threadneedle is hurt by crunch

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The money-market fund has seen its capital value plunge since market conditions soured last summer on investments in HSBC's structured finance vehicle Cullinan Finance.

The fund has fallen by 4% over the past year, according to figures from Trustnet.

Cullinan, established in 2005, had to be bailed out by HSBC late last year with the bank moving the structured investment vehicles (SIVs) on to its balance sheet and providing up to $35 billion (£17.7 billion).

Money market funds are generally considered as rock solid and almost as safe as cash but the current market turmoil is testing those assumptions.

Standard Life this week said it took a £37 million hit after bailing out one of its money market funds and shifting it on to its own balance sheet.

Threadneedle said its woeful performance was due to "unprecedented external market conditions" and partly to "holdings in floating rate notes which have been marked down during the credit crunch".