In the latest in a series of changes to E*Trade Asset Management’s line of proprietary index products, the firm is seeking to convert its Bond Index Fund to active management, according to a company document filed today with the Securities and Exchange Commission.

In past months, the online broker has sought shareholder approval to merge two of its proprietary index funds as well as liquidate two others. Currently, E*Trade’s Bond Index Fund tracks the Lehman Brothers Corporate/Government Bond Index.

Because the fund would become actively managed, the board has recommended that the advisory fee be increased from 0.10% of the Fund’s daily net assets to 0.25%. E*Trade is also proposing to raise the minimum initial investment to $2,500 from $1,000 as well as raise the minimum IRA contribution from $250 to $1000.

Further details about the proposed changes will be described in a preliminary proxy statement, which is expected to be filed tomorrow with the SEC. Shareholders will vote on the proposal at a November 2 meeting and, if approved, the conversion to active management is expected by the end of the year, according to the filing.

Representatives at E*Trade were unavailable for comment.

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