Rathbones will merge its underperforming Blue Chip Income and Growth fund into the larger Rathbones Income fund.
The Rathbones Blue Chip Income and Growth fund, which is being merged into the Income fund, is £71m in size and Alan Dobbie has been its sole manager since 2016 when the current Rathbones chief investment officer, Julian Chillingworth, stepped down from the fund to focus on his other responsibilities.
The fund has lost 4 per cent over the past year, compared with a gain of 3 per cent for the average mandate in the IA UK Equity Income sector in the same time period.
Following the merger, Mr Dobbie will become deputy manager of the Rathbones Income fund.
In a statement on its website the company said: "The rationale for the proposed merger is due to Rathbone Unit Trust Management Ltd operating two funds, both of which are classified by the Investment Association within the UK Equity Income sector.
"Both funds follow the same investment process, have broadly similar investment objectives, but are managed by different managers within the same investment team. Both have good long-term records of dividend and capital growth.
"However, while the Rathbone Income fund has been attractive to a broad investor base, the Rathbone Blue Chip Income and Growth fund has failed to resonate with investors, in our view, because there has been too little differentiation between the two funds.
"We attempted to differentiate the Rathbone Blue Chip Income and Growth Fund by making it a more focussed, higher conviction portfolio, but a result has been greater volatility, which is perhaps not the best outcome for investors."
The Income fund is managed by Carl Stick, and has assets of £1.2bn. The fund has slightly under performed the IA UK Equity Income sector over the five years to 6 August, returning 38.07 per cent, compared with the 38.8 per cent for the sector average.
Over the past year it has returned 1.7 per cent, compared with 3.8 per cent for the average fund in the sector.
The company confirmed it will bear the costs of merging the two funds.
Ryan Hughes, head of fund selection at AJ Bell described Mr Stick as a "stand-out talent".