ROCHESTER, N.Y. (TheStreet) -- Matthew Kaufler, co-manager of the Federated Clover Value Fund (VFCAX) , says he's "warming up" to financial stocks, expanding the portfolio's weighting to 23% from 19% in March.

The $851 million fund, which is rated four stars by


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, has risen 2.5% annually, on average, in the past five years, outperforming 90% of its peers. This year, the fund has been hurt by big bets on

General Electric

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Exxon Mobil

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. Its 15% increase trails the 18% gain of the

S&P 500 Index


Welcome to the'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 bear?


Sensibly bullish right now, as I expect the market to grind higher in the near term.

What is your top stock pick?




. Management at this company made the decision to fundamentally change their operating strategy. The company is going to slow its top-line growth in order to grow their bottom line. Instead of opening new stores at the pace that the company has over the last few years, the company will focus on letting the existing stores mature. We expect that decision, along with a trend toward generic substitution, which is more profitable for drugstores, to provide earnings leverage for Walgreen.

What is your top "under-the-radar" stock pick?


Liberty Media, Interactive


. Liberty Interactive is interesting because it owns a unique consumer franchise in the shop-from-home network QVC. Liberty can ride the coattails of an expanding global trend of shopping from home. QVC has been successful in international markets such as Japan -- where it is huge -- and Germany. They will be entering Italy within a year and we expect there will be other new market expansion opportunities as well.

What is your favorite sector?


We're warming up to the financial sector. In many cases, share prices still aren't reflecting long-run earnings power.

What sector or stock would you avoid?


Telecommunications. The commoditization of services and equipment will continue unabated.

-- Reported by Danielle Kost in Boston


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