Manning & Napier Goes Bearish on U.S.

FAIRPORT, N.Y. (TheStreet) -- Christian Andreach, a managing director at Manning & Napier Advisors, says his team is focusing on American companies that benefit from foreign demand, especially those in technology and health care.

The $1 billion Manning & Napier Equity Series Fund(EXEYX Quote), which is rated four stars by Morningstar(MORN Quote), has returned 30% this year, outperforming the 19% advance of the S&P 500 Index. The fund has risen 4.2% annually, on average, for the past five years, beating 92% of its peers.

Welcome to the TheStreet.com's "Fund Manager Five Spot," where America's top mutual fund managers give their best stock picks during a rapid-fire Q&A.

Are you a bull or a bear?

Andreach: We don't place our focus on setting top-down targets for the indices. Rather, we employ a bottom-up strategy to populate the portfolio with individual investments that fit both our investment strategies and pricing disciplines. That said, we've seen a sharp rally from the March lows and while the environment suggests a better opportunity in stocks relative to bonds, we've probably reached a point where stock picking and sector rotation will be much more important than it has been over the past several months.

Importantly, for some time we have been focused on seeking exposure to companies that will benefit from growth outside the U.S. given that high levels of consumer debt and potentially restrictive fiscal policy over the intermediate-term will likely cap the rate of growth in the U.S.

What is your top stock pick?

Andreach: One stock we like right now is Monsanto(MON Quote). We believe you'll see continued demand for protein out of the developing world and this, coupled with existing biofuel mandates, should lead to upward pressure on grain demand. Because it's difficult to expand your land base, you need to get ever-increasing yields from the acreage you have. This plays directly to Monsanto's strength in providing products that help increase yields and reduce farmers' growing costs. While the stock has been held back by issues, we believe the company's growth trajectory should improve as we work our way through 2010.