the Move follows transfer of matt harris to head up aegon's three ailing large cap UK funds
Aegon's Japan desk is to be headed up by Craig Mercer, formerly an analyst on the desk, following the move of fund manager Matt Harris to head up Aegon's ailing large cap UK funds.
Harris officially took the helm of the group's three UK funds, Equity Growth, UK Tactical and UK Equity Income, at the start of July. He was head of the Japan desk at Aegon since September 1999 and has been in handover to the UK desk since February.
He said he does not intend to change the number of stocks in each of the funds for tactical reasons and any increase or decrease has simply been done on a stock-picking basis.
The Equity Growth fund stood at between 78 to 79 stocks when Harris took it over and this has been reduced to 75. Equity Income holdings remain the same at 50 while the Tactical fund has been lifted from 35 to 39 stocks.
The Equity Income fund might see a change in investment strategy as Harris is looking at adding around 15% in corporate bonds. This has not yet been decided, however, and a decision will be made in the next few weeks.
Volatility might be raised slightly for the Tactical fund, as Harris is looking to raise the tracking error of the fund from 1.5% against the FTSE All- Share to around 2% to 2.5%.
Across all three funds, Harris has moved overweight cyclical stocks, neutral on defensives and underweight tech, media and telecoms. He has sold holdings in software companies, Misys, Logica, Surfcontrol and Spirent across the portfolios.
Within cyclicals he likes GKN in the auto sector, Boots and Marks & Spencers in retail and William Hill and Stanley Leisure in the leisure sector.
Asked why Aegon would move a Japan manager to its UK desk, Harris said that management believes his skills will transfer to the UK market and that his performance on the Japanese desk was good.
This is a steep learning curve, he admitted and although there are new stocks to learn he said the fundamental mechanics of the Japan and the UK markets are the same.
'We always had a clear picture of where we thought the economy was going, making sure we worked on each of the industries covered, not getting hung up on stocks and selling when they underperformed and communicating with each other.'
The structure of Aegon's analysts department and how it feeds through information to the fund managers has also been altered.
This has been changed from a regional structure where analysts would work on one geographical region and report just to the fund managers on the relevant desk to a sector structure where analysts work on one industry sector on a global basis and report to all fund managers across regional desks.
Harris pointed out that whereas before the UK desk had around 15 analysts feeding through information it now has around 33 analysts who report on individual sectors.