Calvert's England Says Health Care Will Rally

BETHESDA, Md. (TheStreet) -- Richard England, co-manager of the Calvert Social Investment Equity Fund(CSIEX Quote), says health care stocks will be helped, not hurt, by reform. He's avoiding telecom stocks, whose earnings are unsteady.

The fund, which garners four stars from Morningstar(MORN Quote), has risen 32% this year, beating the S&P 500 Index by 7.7 percentage points. Over the past 10 years, the portfolio has returned an average of 3.7% annually, better than 95% of its Morningstar rivals.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers share their investment views in five fast and furious questions.

Are you a bull or bear?

England: I am a bull. I believe that the increase in the market to date has been completely justified by improvements in the credit markets, better-than-worse economic news and a steady recovery in corporate earnings. We think all that will continue. The economy will keep improving, probably in a "two steps forward, one step back" fashion. The economic recovery and the weaker dollar will propel earnings higher over the next eight to 12 quarters. We expect earnings to keep surprising on the upside, as they are doing here in the third quarter. We see the stock market solidly higher 12 months from now.

What is your top stock pick?

England: We like Gilead Sciences(GILD Quote) quite a bit. The health care reform debate has left most health care stocks for dead the last several months. Gilead, the leading maker of drugs for treating HIV, is largely immune from whatever fallout reform produces. The company benefits from increased detection and earlier treatment. It also has several new compound opportunities that will allow them expand their already strong position. Earnings estimates are rising as they have positively surprised. Valuation is downright cheap, and Wall Street concerns about patents in 2017 are misplaced.