Mellon Financial Corporation, the US-based financial services firm, has rescued a fund run by its UK subsidiary Newton Investment Management by injecting $4m (€4m), following a steep downgrade by Standard & Poor's.

S&P downgraded the $170m US Dollar Class Fund from AAA to D because of the decline in value of its $14m Allmerica holding. Newton bought debt issued by the US insurer in January, but following a reduction in value Newton received only 70 cents to the dollar when it sold on October 15. The fall reduced the entire fund by almost 2.4%.