Middlefield Mutual Funds Ltd. today announced its intention to merge Indexplus Income Fund, Middlefield Equal Sector Income Fund and HTR Total Return Fund, with Indexplus being the continuing fund.

Middefield says the merger is intended to combine three funds with substantially similar portfolio compositions in order to provide unitholders with the opportunity to hold units of a continuing fund that offers a larger market capitalization, increased trading liquidity and lower operating costs on a per unit basis.

Completion of the merger is expected to take place by May 26.

The merger will be effected on a tax-deferred “rollover” basis at an exchange ratio calculated as the net asset value per unit of each terminating fund divided by the net asset value per unit of the continuing fund, determined as at the close of trading on the Toronto Stock Exchange on the business day immediately prior to May 26.

Following completion of the merger, it is expected that Indexplus will pay distributions at Indexplus’s current annualized rate of $1.20 per unit. Assuming the merger occurs on or before May 31, 2008, new unitholders of Indexplus as a result of the merger will be entitled to the monthly distribution to be declared by Indexplus to unitholders of record on May 31, 2008, which will be paid in mid June 2008.

Unitholders who do not wish to participate in the planned merger and become unitholders of Indexplus will have the opportunity to redeem their units before the merger occurs. In order to provide unitholders with this option, the annual redemption date for Equal Sector will be moved up from November 30 to April 30, which is also the annual redemption date for HTR. The required redemption notice period for each terminating fund has been reduced to 15 business days prior to April 30, being April 9. Surrendered units will be redeemed at a price calculated with reference to the net asset value per unit in accordance with the respective terminating fund’s declaration of trust.

Indexplus trades under the symbol IDX.UN on the Toronto Stock Exchange.