Legal & General Investment Management plans to merge its £34m Japanese trust into its tracker equivalent, with manager Andrew Nagele and team set to leave the group.
The fund - which was launched in October 1986 - is bottom-quartile over three and five years, significantly underperforming the group's £357m Japan Index fund.
It currently has just £4m of external money and the merger will see its AMC drop from 1.5% to 65bp.
Nagele joined LGIM in 1990 and is responsible for managing the Japanese equities team.
LGIM's Japan Index fund is top-quartile over five years, up 12.4%.
"At Legal & General Investments, we remain of the firm belief that both active and passive solutions can co-exist, " LGIM sales director Ben Waterhouse says.
"Managed correctly, these approaches complement each other to meet a range of investor needs.
"But we only want to offer active fund management where we have a distinct competitive advantage to deliver outperformance. In Japan, we simply did not have the competitive advantage to continue with the active approach."
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October