The news agency, which cited a memo dated Tuesday, said the firm was no longer recommending the $28.1 billion fund on its “select” list due to concerns about performance.
Fund select lists account for a major portion of flows from large brokerages like UBS to fund companies, according to industry watchers.
Removal of the fund would be a blow for BlackRock Inc., the world's largest money manager, which raised nearly $32 billion in mutual funds in the U.S. last year, according to an estimate by Morningstar Inc.
“Performance relative to peers and to benchmarks has disappointed over a multiyear period, following the strategy's very strong run in 2007-2008,” UBS said in the memo, according to Reuters.
The fund's institutional share class, MADVX, has under performed its competitors and the S&P 500 benchmark index for three years in a row, according to Morningstar.
UBS said a BlackRock portfolio manager, Tony DeSpirito, who joined the fund's management team last year, refuted concerns he could maintain the fund's strategy.
“The fund's focus is to buy high quality companies that grow their dividend through time,” BlackRock said in a statement. “This approach provides lower volatility then the overall market and has been able to outpace the market and our peers on dividend growth over time, which is reflected in the Equity Dividend Fund's 10-year track record.”
(The fund returned 8.8% annually between 2004 and 2014, putting it in the top 5% among funds in the category over that period, according to Morningstar.)
UBS did not respond to requests for comment late Wednesday.
The fund will remain on the UBS platform, Reuters said, meaning the firms' more than 7,000 affiliated advisers in the U.S. can still use it in client portfolios.