Investment firm Barings is to merge its floundering Absolute Return Global Bond Trust into its £90 million Multi Asset fund due to 'difficult' market conditions.

The £74 million Absolute Return fund was launched in 2004 under the management of Colin Harte (pictured) but has struggled, returning -1.86 per cent over three years against an IMA Absolute Return sector average of 12.74 per cent.

Barings said it had entered a 'consultation period' with Harte, casting his future with the group into doubt. He also manages the Baring Global Bond Trust.

In a statement, Barings said, 'It has become clear that a wider, multi asset opportunity set offers a better environment in which to deliver strong cash plus performance for our clients. That is why we are proposing to merge the Absolute Return Global Bond Trust into our top performing Multi Asset fund.'

It continued, 'During the last few years, the behaviour of bond and currency markets has made it difficult for us, along with many competitors, to generate consistent and positive absolute returns using a long/short strategy. 

'We think the economic environment is such that this is likely to remain the case for the foreseeable future.'

The Multi Asset fund is managed by Andrew Cole and has enjoyed a good year-to-date against its sector, returning 1.53 per cent compared with -1.11 per cent.

Dagmar Dvorak, co-manager of the Global Bond Trust, will run the fund during Harte's consultation period.

Harte has been with Barings since joining from Norwich Union in 2000. He previously worked at Gartmore Investment Management.