BMO Global Asset Management is closing the F&C Global Bond fund on 13 August due to dwindling assets.
The £13.39m fund launched in 1981 and has been managed by Sujay Shah - fund manager in the global rates team - since 2014.
A spokesperson for BMO GAM commented: "We regularly review the viability of our product range. As part of this, we recognised that the F&C Global Bond fund was no longer sustainable in size, and it is in the best interest of investors to close the fund."
Over three years, the F&C Global Bond 1 fund (AMC of 1% and minimum investment of £1,000) has underperformed its peers, returning 3% compared to the 21% average of the IA Global Bonds sector to the end of July. Its Bloomberg Barclays Glo Treas Majors ex Jpn TR GBPH benchmark returned 4.3% over the period. The F&C Global Bond 2 (AMC of 0.25% and minimum investment of £500,000) returned 5.74%.
FE notes on its manager fact sheet that overall Shah is performing worse than the peer group composite.
"Over a short track record, the manager has, period by period, consistently under-performed the peer group.
"Poor stock picking has had a material downward effect on results, which have not been particularly exposed to falling markets."
A spokesperson for BMO GAM responded: "Comparing the fund's performance to a peer group composite which includes corporate bond, index funds and funds able to take currency and emerging market positions, is flawed. Looking at the fund's performance relative to its benchmark shows the team has outperformed over both three and five years.
"It is also simply not true to state there has been poor stock picking in this fund. Over the last three years Sujay and the team have added value to this strategy through short duration positioning, relative value government bond strategies and exposure to securitised and government-related debt."