Old Mutual Asset Managers has proposed to merge two of its UK equity income funds both managed by Stephen Message.

The £23.2 million Old Mutual Extra Income will be merged into the £31.9 million Old Mutual Equity Income fund under proposals, subject to shareholder and regulatory approval.

The funds are being merged as, according to Old Mutual, the 'have broadly similar investment policies and objectives'.

The asset manager says the similarity in charging structures and quarterly distribution dates will ensure a 'smooth merger and minimal disruption for investors'. If approved the merger will occur at the end of February or early March 2011.

The Extra Income fund, currently located in the IMA UK Equity & Bond Income sector, had a 22.6 per cent allocation to bonds  at 30 November.

However, the Extra Income fund's bond allocation is set to be disposed of prior to merging, allowing the merged fund to remain in the IMA UK Equity Income sector.