M&G is merging its two UK equity income funds in its retail Oeic range.
The firm has written to shareholders of the £208 million M&G income fund to seek their approval for the merger of this fund with the £521 million M&G Dividend fund.
If approved, the merger will take place in August.
Both funds have been managed by Alex Odd since July 2010, and the group says this has seen both funds holdings become increasingly similar.
Investors in the enlarged M&G dividend fund are expected to enjoy the same level of income – the fund has a project annual yield of 4 per cent – due to both funds being similar in nature.
Odd says: “Being able to concentrate on a single portfolio will maximise the time I can spend on research and puts the combined fund on the best possible footing to deliver long-term performance for investors.”