Aegon's Adams says managers 'capitulated' on BP

Aegon’s Stephen Adams says he is comfortable retaining his position in BP and claims many managers are guilty of "serious capitulation".

Head of UK equities Adams, who runs the £186.1m UK Equity fund, has been underweight BP relative to the FTSE All Share index throughout the ongoing oil spill in the Gulf of Mexico. At present, the fund is 0.5% underweight with a 4.69% holding.

"We intend to keep our current position unless they have a decent rally. There is still too much uncertainty in the short term to add at these levels but value exists in the shares longer term," Adams says.

"At the back of my mind, I also think the fund will already be overweight the stock relative to the peer group.

"I am comfortable with this given my views on the longer term and that there has been serious capitulation by our competitors."

BP shares were one of the few risers on the FTSE 100 on Monday, although it has lost about a third of its value since the crisis started.

Although Adams says there are more encouraging signs BP may be able to contain the majority of the leak, he believes it will not rally significantly until it is capped, which may be up to two months away.

Adams adds BP is likely to cut its dividend, but the move will only be temporary.