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An introduction to the tactical

asset allocation process15 February 2011

Olaf van den Heuvel - Head of Tactical Asset Allocation

Gerard Moerman - Senior portfolio manager, TAA teamJean-Louis Guillaume - Head of Institutional Sales,

French European speaking countries


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Agenda

o AEGON Asset Management

o AEGON Tactical Asset Allocation (TAA) performance

o The Tactical Asset Allocation team

o Our philosophy

o Our Tactical Asset Allocation process

o 2011 market outlook

o Conclusion

o Illustration case

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AEGON Asset Management

o We are a global organisation with investment teams in the UK, Continental Europe and the US

o AEGON Asset Management manages215 billion

o We excel at client service and investment performance

o Award-winning expertise in equities and fixed income investment and a distinguished record inmanaging ethical and property funds

3

AEGON

Life Insurance Pension

Asset Management

AEGON Asset Management

Source: AEGON Asset Management as at 30 September 2010


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The Tactical Asset Allocation team

1. Rogier Van Aart

Real Estate/FX2. Jacob Vijverberg

Rates/Risk Management

3. Gerard Moerman

Commodities/Equities

4. Olaf van den Heuvel

Head of Tactical Asset Allocation

5. Robert-Jan van der Mark

FX/Commodities

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279.4

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10

%

Short commodities

Long Credits (CDS)

Long equities Short equities

Long real estate/short bonds

Long equities

Long USDLong v

AEGON TAA historical performance

5

Source: AEGON Asset Management as at 31 December2010. Gross of fees. Cumulative performance of the GTAA+ overlay fund managed by the Tactical Asset Allocation team, applying the

strategies of the Reference Portfolio. This fund is an alpha provider for the allocation used by our Dutch insurance company. Examples above highlight our team capabilities. For illustrative purposes

and directed only at investment professionals. This should not be distributed to, or relied upon by, private investors.


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Our philosophy

o Markets are inefficient

o This offers opportunities

o Discipline is key to succeed

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Our tactical asset allocation process

7

Step1: Ideas generation

Step 2: Ideas screening

Step 3: Reference portfolio

Step 4: Monitoring


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Step 1: Idea generationThe Investment Clock

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Step 2: Ideas screening

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Total

Score

Conviction

level

>=5 25%

+4 20%

+3 15%

+2 10%

+1 5%

0 0%

Step 3: Reference portfolio

10

Valuation

+2.0

Macro

Economics

+1.5

Technicals

+0.5

Qualitative

+0.0

Total Score

= 4 Strategies Description Allocation

Paired

Strategies

Long Equity markets

Short Commodities20%

Fixed Income Long Credit 12.5%

Flattener USD Curve 12.5%

Currencies FX Carry model G10 Currencies 10%

FX Carry model Emerging mkts 12.5%

Long South African Rand

Short Chilean Peso5%

CommoditiesLong Palladium/Platinium

Short Commodities10%

Equity Long DaxShort S&P 7.5%

High Dividend Stocks Basket 10%

Real Estate 0%

Total Portfolio 100%

Source: AEGON Asset Management. The above example is provided for illustration purposes only.


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Step 4: Monitoring

o Constant update of the quadrants leading to allocation adjustments

o VaR and diversified portfolio VaR approach to set the risk budget

o Soft stop loss / Soft stop gain

o Stress tests Review coupled with tail risk hedging

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2011 market outlook

o Recovery continues

o Inflation pressures in many parts ofthe world

o Uncertainty about stability Middle-east

o Attractive valued investments can still

be found

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Source: AEGON Asset Management as at 31 January 2011. Based on the AEGON Global Opportunities Fund.

Strategy% risk

budget

Currency

Carry Trades 12.5%

Long Mexican Peso v Short Columbian Peso 2.5%

Multi AssetsLong Equity 12.5%

Short Commodities 12.5%

RatesLong Australian Linker 2.5%

Long Investment Grade Credits 10.0%

EquitiesLong High dividend basket 7.5%

Long Dax/Short S&P 7.5%

Commodities Long WTI, Short Brent 2.5%

Use of risk budget 70%


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Conclusion

Accessing AEGON Asset Managements

Tactical Asset Allocation capabilities

o AEGON Global Opportunities

UCITS III Dublin domiciled fund

EUR share class ISIN: IE00B51NFJ61

o Managed account for an amount in excess of50m

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Provide a new

source of alpha

with minimal

human emotion

involved

in a well-defined

investment process


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Illustration case

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Illustration case: Long DAX, Short S&P 500

o Investment clock is in phase 3, which supports the trade

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Macro score: +1.0

-12,00%

-10,00%

-8,00%

-6,00%

-4,00%

-2,00%

0,00%

2,00%

4,00%

6,00%

8,00%

Long Dax, Short S&P

Performance of the DAX Index v S&P500 Index

Phase1 Phase2 Phase3 Phase4



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16

Valuation score: 0

Cur rent Average Difference Cur rent Average Difference

WORLD 21.1 16.9 4.2 OVERVALUED 16.0 17.1 1.1- FAIRLY VALUED 13.2 16.5 UNDERVALUED

US 22.1 15.8 6.3 OVERVALUED 17.7 16.2 1.5 FAIRLY VALUED 15.1 15.5 FAIRLY VALUED

EU 15.7 13.5 2.2 OVERVALUED 15.2 13.6 1.6 FAIRLY VALUED 8.8 12.2 UNDERVALUED

GERMANY 16.4 14.0 2.4 OVERVALUED 15.4 15.2 0.3 FAIRLY VALUED 10.8 13.4 UNDERVALUED

Current Average Difference Current Average Difference Current Average DifferenceWORLD 2.3 2.8 0.5- FAIRLY VALUED 1.9 2.1 0.1- FAIRLY VALUED 12% 11% 1% AVERAGE

US 1.7 3.1 1.4- OVERVALUED 2.5 2.5 0.0- FAIRLY VALUED 14% 15% -1% AVERAGE

EU 2.8 3.7 0.8- FAIRLY VALUED 1.6 1.7 0.1- FAIRLY VALUED 11% 12% -1% AVERAGE

GERMANY 2.5 2.6 0.1- FAIRLY VALUED 1.8 2.0 0.2- FAIRLY VALUED 11% 12% -1% AVERAGE

Region

Region

Graham-Dodd PE 1year PE PE using max trailing earnings

Dividend yield Price/Book Return on Equity

o Valuation screen (+0.5)

Germany: The German market is fairly valued on all measures. The US: is overvalued on G&D PE and dividend yield

o The Regional Equity model ranks the US only slightly above EU (-0.5).

o This difference decreasedSource: AEGON Asset Management. The above example is provided for illustration purposes only.


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17

Technicals score: 1.0

o Positive trend (6-months moving average moving upgreen line)

DAX lost clearly vs SPX, 6-month momentum turns negativescore -1 MDAX still has a positive uptrend versus the SPXscore 1

o DAX/SPX is oversold with an RSI of 26 (+1)

o SP500 is overbought with an RSI of 75, while DAX (48) and MDAX (57) are not (+0.5)Source: AEGON Asset Management. The above example is provided for illustration purposes only.


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o Pro Additional analysis would say that Germany could profit from the current situation (+1) Economic surprises score much better for Europe than for the US (+0.5)

o Con Positioning slightly higher in EU than US (-0.5) FED is more supportive for markets (QE2), while ECB does not want to increase purchases (-0.5)

Teams view (-0.1)o Neutral

Our proprietary profit model forecasts the same level of profit (13%)

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Qualitative score: 0

United States

-85

-60

-35

-10

15

40

65

Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

-225

-175

-125

-75

-25

25

75

125

175

225vs. Priorvs. ThresholdSurprise

Europe

-85

-60

-35

-10

15

40

65

Jun-09 Sep-09 Dec-09 Mar-10 Jun-10

-225

-175

-125

-75

-25

25

75

125

175

225vs. Prior

vs. ThresholdSurprise



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Valuation

0

Macro

Economics

+1.0

Technicals

+1.0

Qualitative

+0.0

Total Score

= 2

Total Score Conviction level

>=5 25%

+4 20%

+3 15%

+2 10%

+1 5%

0 0%

Conclusion: 10% is the conviction resulting from a total score of +2



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Appendices

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Step 1: Idea generation

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Step 1: Idea generation

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Important information

FP ID No: 2011/11348

This communication is directed at professional investment advisors. It should not be distributed to, or relied on, by private customers. The

information in this presentation is based on our understanding of the current and historical position of the markets. The views expressed should not

be interpreted as recommendations or advice. Past performance is not a guide to future performance. The value of investments and the income

from them may fall as well as rise and is not guaranteed. We refer to the full prospectus and the simplified prospectus which is available from

AEGON Asset Management UK plc, www.aegonam.co.uk.

Any investment objective, performance benchmark and yield information will be treated as a target only and should not be considered as an

assurance or guarantee of the performance of the fund or any part of it.

The Global Opportunities Fund invests primarily in financial derivatives. The fund also follows a share or bond index and the value of the assets

may greatly fluctuate as a result of the investment policy. The Global Opportunities Fund is a sub fund of AEGON Investment Company (Ireland) plc

which is registered in the Netherlands by the Netherlands Authority for the Financial Markets (AFM).

AEGON Investment Company (Ireland) plc is an umbrella type open ended investment company with variable capital registered in the Republic of

Ireland (no: 442106) registered office at 25-28 North Wall Quay, International Financial Services Centre, Dublin 1. AEGON Investment Company

(Ireland) plc is regulated by the Financial Regulator. AEGON Asset Management includes AEGON Asset Management UK plc (no: 113505) andAEGON Investment Management UK ltd (no: 212159). AEGON Asset Management is the Investment Manager and Marketing Agent for AEGON

Investment Company (Ireland) plc. AEGON Asset Management UK plc is authorised and regulated by the Financial Services Authority, (FSA

reference no: 144267).

AEGON Investment Management UK ltd is an appointed representative of Scottish Equitable plc, an AEGON company, whose registered office is 1

Lochside Crescent, Edinburgh Park, Edinburgh, EH12 9SE (FSA reference no: 165548).

AEGON Investment Management UK ltd is a subsidiary company of AEGON Asset Management UK plc and provides investment management

services to AEGON which provides pooled funds, life and pension contracts.

AEGON Investment Company Ireland is a UCITS collective investment scheme registered in Luxembourg by the Commission de Surveillance du

Secteur Financier. The Prospectus, Supplement and Simplified Prospectus of AEGON Investment Company (Ireland) are available f rom CACEISBank Luxembourg 5, alle Scheffer, L-2520 Luxembourg

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