A £450m money market fund, regarded as an ultra safe alternative to cash, has lost millions of pounds after putting small investors' money in investments whose value has slumped because of the credit crunch, reports The Guardian.
The capital value of the Threadneedle UK Money Securities fund has fallen virtually every month since the credit crunch first began last summer, in contrast to most other money market funds in the sector. The fund's accounts reveal that it invested in securities such as Cullinan Finance, a structured investment vehicle managed by HSBC which had to be bailed out by the bank late last year. The fund's performance could dismay many investors and financial advisers who consider money market funds to be a rock-solid alternative to cash. The fund's own marketing material states that its objec...
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