Vanguard is asking for shareholder approval to merge an actively-managed fund with an indexed fund, the firm announced Wednesday.

The financial giant, based in Valley Forge, Pa., is asking for shareholder approval to merge the $1.1 billion Vanguard U.S. Value Fund into the $77.2 billion Vanguard Value Index Fund. The vote on this and other fund changes will be held January 22.

For the past decade, value stocks lagged their growth counterparts as investors have flocked to tech stocks. The Vanguard U.S. Value Fund is now closed to new shareholder accounts.

Introduced in 1992, the Vanguard Value Index Fund is a broadly diversified, large-capitalization U.S. value portfolio. If approved, the combined funds would retain the Vanguard Value Index Fund name and current expense ratio of 0.05%, which is smaller than the 0.17% paid by current U.S. Value Fund shareholders, Vanguard said.

The funds have a significant overlap in holdings, similar characteristics and highly correlated returns, Vanguard said. So the firm determined that merging them would be the most beneficial path for U.S. Value Fund shareholders and result in greater efficiencies in the administration of the Value Index Fund.

"At Vanguard we have a long track record of product leadership and making changes that are in the best interest of shareholders, including merging funds, changing advisors, modifying mandates, and closing and liquidating funds. After reviewing our active lineup for a suitable match, Vanguard determined that a merger of U.S. Value into Value Index was in the best interest of shareholders," Vaguard said in an email.

Vanguard is also asking for shareholder approval to change the diversification status of five other funds: the Vanguard Health Care Fund, the Vanguard Energy Fund, the Vanguard U.S. Growth Fund, the Vanguard Variable Insurance Fund—Growth Portfolio and the Vanguard Variable Insurance Fund—Real Estate Index Portfolio.

Fund proxy materials are expected to be sent to Vanguard fund shareholders beginning in November 2020 for voting online, by phone or by mail.

“We believe the proposed changes will enable Vanguard to manage these funds more efficiently and effectively, and continue to deliver strong outcomes for investors,” said Tim Buckley, Vanguard’s chairman and CEO, in a statement.