Go Slow on Brazil and Russia, Matlock Says

CINCINNATI (TheStreet) -- Madelynn Matlock, manager of the Huntington International Equity Fund(HIETX), sees potential in Asia, but is concerned that stock prices have climbed too much in some emerging markets.

The fund, which garners a four-star rating from Morningstar(MORN), has risen 34% this year, running in the middle of the pack. During the past five years, the Huntington International Equity Fund has returned an average of 7.4% annually, better than 77% of its 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 bullish or bearish?

Matlock: We are neutral. Equity markets are moving from price-to-earnings multiple expansion to earnings-growth mode, which is more volatile. We are still finding opportunities but are watching risk and valuation carefully. Ways to do this are to cut back positions that have grown too big with price gains, add some more defensive or yield-based stocks and take some of the more cyclical stocks out.

What is your top stock pick?

Matlock: We have two favorites at the moment, one of which is Fast Retailing, a Japanese company now expanding into new markets like China. Fast Retailing has two advantages right now: Its products are stylish, of good quality and priced right for a conservative consumer, and they are in floor-space growth mode, so the top line is gaining even with a cautious consumer.

Standard Chartered Bank in the U.K. has grown mainly with strong Asian-based banking operations, branching from Hong Kong into other underserved markets. It largely avoided the bad loan and investment issues that have plagued other U.K. banks, and has grown throughout the credit crisis.