Colonial First State (CFS) Investments has decided to terminate its CFS Wholesale Income Fund as per 7 September.
CFS said it would distribute "at least" 80 per cent of the value of a client's investment in the fund on that day.
It said it had considered a number of alternatives, but concluded that making a large distribution to all investors and then terminating the fund was in the best interests of all investors.
The fund had previously limited redemption options, limiting access to investments through periodic withdrawal offers.
After the termination of the fund, the remaining balance will be paid as periodic termination payments.
Termination payments will occur as the underlying assets mature and CFS receives the proceeds from those assets.
These payments are likely to be made quarterly, with the first in December 2012 and the final estimated to occur in 2014.
The fund will no longer pay monthly income distributions, but instead will pay annual income distributions.
The CFS Wholesale Income Fund was one among many mortgage funds to suspend redemptions during the global financial crisis.
The fund invested in Australian mortgages, fixed interest and cash investments.
There are still more than 100 managed funds with limited or suspended redemptions in the market as a result of the economic downturn.
