NEW YORK (TheStreet) -- The stock market may be choppy this summer, but cheap financial and technology shares will help investors generate gains for the year, says Tom Villalta, manager of the Jones Villalta Opportunity Fund (JVOFX) .
The mutual fund, which was started at the beginning of 2009, has returned 14% over the past year, putting it in
90th percentile for large-cap value stocks.
Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.
What's your outlook for the market over the course of the summer?
We think it's going to be rocky for the next couple of months. Once we get deeper into the second half of the year, however, we're anticipating much better returns for investors. We just need to put this rough second quarter behind us.
We've seen oil spike because OPEC can't seem to get it together. What's your outlook for oil?
Oil is a concern of ours on many fronts. Energy is an area you want to have a market-like weight in. We wouldn't be overweight, but we wouldn't be underweight. Oil concerns us from a number of parameters, though. It's not only the effect that those stock prices have on your relative performance, but it's also the effect they have on other holdings in your portfolio. Consumer-discretionary stocks and even technology are all affected by the price of oil, and whenever you talk about the consumer's pocketbook, it's a concern.
What are your favorite energy stocks now? How are you playing the industry?
We're playing it with big names. We do like natural gas too. So if they have some natural gas exposure that we think can expand, we think that's a real upside for some of these companies.
is a big holding of ours, as well as
. The big ones are a good way to play in this area. That said, we've also dipped into some more value-oriented issues within that area, including
The banks just can't seem to get a break. You own a number of financial stocks in your portfolio. What do you think of the banking sector?
This is an area of the market where you simply can't get a more disparaged, negative outlook than you are seeing right now. At the end of the day, these stocks are trading at worst-case-scenario valuations. They look very cheap, and things can't get much worse.
And, finally, what's your view on large-cap technology -- do you have a favorite play?
We do. We are very high on large-cap technology. We have a couple favorites in that area. We've got
as well as
in the fund. Those are the safer ways to play that market, but you can't argue with their valuations in our view.
-- Reported by Gregg Greenberg in New York.
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