The New Zealand arm of Dutch financial group ING plans to close four investment funds after their value tumbled amid the global financial crisis.

Two of the funds, the Diversified Yield and the Regular Income, were suspended in March this year in the wake of the US subprime mortgage crisis, which hit the funds’ values. ING said it had approved a $100 million loan to provide investors in the fund with cash immediately.

The proposal to shut the funds down comes at a time when a number of banks offering funds linked to fixed income markets have shut or restructured portfolios, such as US insurance giant AIG.

“Investors have told us they would like to see a path out of suspension of these funds,” Helen Troup, chief executive of ING New Zealand, said in a statement on the fund closures. A meeting of fund unit-holders will be held on 31 March next year to approve the measures proposed by the Dutch firm.

ING, meanwhile, also said it would wind up two other New Zealand-registered funds: the $8 million Credit Opportunities and $27 million Enhanced Yield.

“The two funds were established in a fundamentally different market environment from the world it now finds itself in,” Ms Troup said.

No further withdrawals from the funds will be processed and both portfolios will be wound up, ING said.