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The managers invested heavily in technology in the fourth quarter of last year after valuations in the sector plunged following heavy selling by foreign investors and investment banks’ trading desks.

By the end of 2008, 50 per cent of the portfolio was in technology, with the fund benefiting in particular from chemical and electronics stocks that doubled in price.

But the team said it has now decided to take profits and reduce its tech overweight by selling stocks such as Sharp and Denso, as well as increase a number of defensive positions to give the portfolio a more balanced look.

According to Morningstar, over the last year to May 5, the fund has returned 8.3 per cent against the IMA Japan sector average loss of 9.3 per cent.

Since November 2008, the management team has also shifted the fund back up the size spectrum, partially reversing a previous move towards mid and large-cap stocks. The fund’s mega-cap weighting is currently more than 30 per cent, compared with just over 20 per cent in November.

In addition to its small position in defensive sectors, the fund also has no real estate or Bric-related stocks and only limited exposure to transport equipment and autos. Its overweight positions, apart from technology, include media, telecoms, brokers and mega-cap banks.

Mr Harker said: "Our large technology overweight worked so well that we believe it is time to take some profits. We have moved towards a more balanced position by investing the proceeds in defensives, which have underperformed in the last few months.

"Such rapid outperformance is an invitation to reduce weightings. We also believe large underperformance and low valuations offer investment opportunities."