Investec is asking shareholders in the £26 million (around $42 million) Investec European Fund if they want to merge it into another vehicle in January, as the former portfolio’s sector has fallen out of favour.

The firm has asked investors if they want to add their holdings to the OEIC Global Franchise Fund that was set up in September this year.

Explaining its reasons, Investec said that the IMA European (ex UK) fund sector has declined in popularity and size over recent years, hence the modest size of the Investec European Fund with its current value.

“We believe that a wider geographical scope provides both greater opportunity for diversification and a broader universe from which to select interesting investment opportunities,” the firm said in a statement.

“The fund aims to achieve long-term capital growth primarily through investment in shares of companies around the world. The long-term growth objective is shared with the European Fund, however, being a global fund, the Global Franchise Fund has a greater geographic investment universe from which to seek and select attractive investment opportunities,” the firm added.