Magellan Financial Group (ASX:MFG) appointed Vinva Investment Management as the investment manager of certain global equity funds, according to a Tuesday filing with the Australian bourse.

The investment strategy for the Magellan Global Fund Open Class Units Active ETF and the Magellan Global Fund Hedged, which had about AU$5.3 billion of assets under management at the close of April, will be changed to the Vinva Global Alpha Strategy.

Vinva Investment Management will be the investment manager for the funds, while Magellan Asset Management will retain responsibility for distribution, per the filing.

Effective immediately, the company is reducing the management fees for the funds to 0.89% per year from 1.35%, while also eliminating performance fees, to boost the funds' value proposition.

The investment strategy change and Vinva's appointment are expected to take effect in early June, subject to approvals from the Australian Securities Exchange. Following the changes, which aim to align the funds with evolving investor preferences, Magellan expects an average fee reduction of about 55 basis points across the funds "with continued risk of outflow over the short-medium term," it said.

The company also expects direct cost savings of about AU$7 million per year due to a reduction in the size of the global equities team and savings in fund administration costs, it added.

Additionally, Magellan Financial plans to close the Magellan Global Equities Fund (ASX:MHG), which had about AU$94 million in assets under management as of April 30.

Magellan noted that it has an existing distribution partnership with Vinva, including a 28% minority stake in Vinva's parent company.

Shares of Magellan Financial fell 7% in recent Tuesday trade.