Sue Noffke, head of UK equities at Schroders, sold out of BT in the Schroder Income Growth fund in January in the belief it had the potential to become a value trap.
Noffke said she had been "weeding out" positions in the trust where her "degree of confidence has ebbed".
Having identified BT as one of those positions, Noffke sold out of the holding in its entirety in January this year and topped up the portfolio's position in British American Tobacco.
"BT has had a period of difficulty we looked at the company in some depth in January and felt that, although the valuation was quite cheap, it had the potential to be a value trap," she said, adding "where we were not convinced about the potential for growing the business was around the consumer franchise, where there was just a bit more competition at the edges".
"I topped up the position in British American Tobacco, which had had a very difficult year in 2018, but through 2019 had really shown that its geographic mix and its diversity in next generation products put it in a strong position," she added.
At the end of January, the portfolio had 6.4% in British American Tobacco.
Meanwhile, Noffke has been reducing the portfolio's exposure to oil, having built exposure to the commodity in late 2015 to early 2016 through stocks such as BP and Royal Dutch Shell.
"I felt that with oil prices at very low levels and a lot of controversy around the sustainability of dividends in a low oil price environment, the work we had done suggested those dividends were not sustainable," she explained.
"I have reduced mostly through Shell and a little bit of BP so they are no longer both present in the top ten."
The manager said that by the end of February this year BP was 4% of the portfolio and Royal Dutch Shell accounted for 2.6%, down from 5.4% and 4.4% respectively at 31 January.
At the same time, she established a new initial position in National Grid, which represented 1.5% of the fund at the end of February.
"We have been looking at utilities for quite some time; before the election, over the course of 2019, and particularly post the General Election," she said.
The hit to stockmarkets following the outbreak of the coronavirus has left Noffke in "opportunity-finding mode rather than running away in fear mode", she explained.
"It may be in the current market where most things have sold off to the same degree, to sift through and seek opportunities for things that perhaps should not have sold off as aggressively and make tactical purchases or further additions to existing portfolio positions within that," Noffke said.
"I think Whitbread is going to be one that we might look for opportunities to top up. It could provide opportunities for the company to accelerate their bolt-on acquisition strategy in Germany. We will have to be patient and see."
Noffke added that during a volatile market environment, "we use our experience, we stick to our process and we look for those mispriced opportunities".
The vehicle is down 17.3% over one year to 12 March, according to FE fundinfo, against the AIC IT UK Equity Income average of 15.9%. But over ten years, Schroder Income Growth has delivered an 86.2% return, slightly above the sector average of 82.9%.