Ameriprise Financial's largest mutual fund, the $8.5 billion RiverSource New Dimensions Fund, suffered withdrawals of $5.9 billion last year, and so the firm has decided to merge the fund with a smaller and younger fund, the RiverSource Large-Cap Equity Fund, to end withdrawals and improve performance, according to St. Paul Pioneer Press.

The smaller, four-year-old fund was ranked in the top third of its peer funds last year, and 38-year-old New Dimensions was at the bottom.

The shareholders voted on the merger and results will be announced today. The company also plans to merge six pairs of other funds.

Analysts reportedly view the merge as a good decision. "[New Dimensions] has not been performing that well lately," said Aridit Dutta, a fund analyst at Chicago-based Morningstar. "It's part of an effort looking at what's not working and if there's a better solution in the shop to try that. From that perspective, it's a good thing."

Paul Johnson, an Ameriprise spokesman, revealed that the retirement of the portfolio manager of the New Dimension fund is what started discussions to merge the fund.

Analysts say that the only worry is that the new fund could possible lose investors who were attached to a particular manager or investment strategy.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.