Five Spot: AIM's Sloan Sticks to Small Banks

Ron Sloan, manager of the AIM Mid Cap Core Equity Fund(GTAGX Quote), doesn't expect consumer spending to rebound significantly. He's avoiding consumer-discretionary stocks and sticking with small banks.

The $1.3 billion fund has returned 8.6% this year, trailing the 11% gain of the Russell Midcap Index but beating the S&P 500 Index's 3.6% advance. The AIM fund has lost 5.4% annually, on average, for the past three years, outperforming both benchmarks, which fell more than 20%.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.

Are you a bull or a bear?

Sloan: That question is not as simple as it was a few years ago. I believe we are entering a period where the markets will have wide fluctuations with cyclical bull and bear markets but major indices could basically be trendless over the next several years. However, there will be opportunities to make money for active managers. Some would say this lends itself to a "traders" market, but I disagree. It's going to be all about stock selection.

We do extremely deep research on companies and industries. Going forward, we think this high level of due diligence will distinguish us from peers. You have to take active bets against broad indexes and the lack of persistent trends will be a disadvantage for index huggers and momentum investors.

What is your top stock pick?

Sloan: I prefer to think of my holdings as long-term investments rather than stock picks. Each idea stands on its own merits and we manage a tiered system. So the best ideas should gravitate to the top of the fund.