Newton Investment Management is trying again to merge its £66m Managed Income fund into the £69m Multi Asset Income fund, after its first attempt was rejected by shareholders.
The move had previously been planned for March 2016 but was rejected by shareholders as the original cost of the merger would have been taken on by the fund.
Its latest proposal is yet to be accepted by shareholders but the authorised corporate director (ACD) will now pay related costs, instead of the fund.
The firm said the reason behind the merger, which is due to come into effect on 27 January, was the two funds deliver similar outcomes, but Multi Asset Income has more flexibility to invest across a number of asset classes. In contrast, Managed Income is a fund-of-funds, mainly invested in other Newton vehicles.
Newton IM said: "By bringing the two funds together, the overall costs to investors should reduce owing to the economies of scale and efficiencies that can be obtained from the management of a larger combined fund."
Paul Flood will continue to manage the Multi Asset Income fund, which aims to pay a monthly income through eleven smoothed payments with the remaining balance paid in the final month.
According to FE, the Multi Asset Income fund has returned 29.2% since its launch in February 2015 versus 23.6% for the IA Flexible Investment sector, as at 7 December.
Managed by Newton's head of strategic asset allocation Tim Wilson since launch in September 2012, the Managed Income fund has returned 17.8% over the past three years, in line with the IA Mixed Investment 20%-60% Shares sector average.
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