The Charities Aid Foundation has announced plans for a new socially responsible investment fund for charities, to be managed by F&C Asset Management.
The fund, which is scheduled to be launched in the late autumn, would replace CAF's current SRI fund, which is managed by Norwegian investment company Storebrand.
Ron Green, senior manager in product development and distribution at CAF, said the Storebrand fund, which has £11.5m under management, had not reached the expected targets.
"The performance has not been as good as we had hoped," Green said. "The fund was launched at the start of 2000, just at the cusp of the stock exchange going into a bear market, so historically its performance looks quite weak.
"We decided that the best way forward was to close the fund down and have a new product that was more financially sleek."
Green added that F&C had been chosen from a range of other prospective managers because of its suggestion of having two "underlying funds" within the CAF product, which would give "a greater spread of investments, thus spreading the risk".
The two proposed funds are F&C's Stewardship International Fund and the Stewardship Income Fund. The fees will be lower than if charities were to join the F&C fund directly, outside the CAF scheme.
Letters setting out the initial proposals were sent out to shareholders last week.