SAN FRANCISCO ( TheStreet) -- Paul Alan Davis, manager of the Schwab Dividend Equity Select Fund ( SWDSX), expects a big year from IBM ( IBM) as the company generates more cash and rewards shareholders through dividends.The $1.4 billion fund, rated four stars by Morningstar ( MORN), has risen 21% during the past year, trailing the S&P 500 Index. However, the fund's three- and five-year performances beat more than 75% of competing funds. Welcome to TheStreet'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? Davis: We don't use cash to reflect our bullish or bearish stance as other managers do. At the same time, our stocks indicate that we are very constructive with the market going forward. The Dividend Equity fund is a more conservative fund by nature, investing in approximately 130 dividend-paying stocks. Schwab Equity Ratings doesn't specifically have a bullish or bearish stance as it attempts to pick out the best relative performers in the future. We can interpret though, by looking at the highest-rated stocks, that it favors small-cap and mid-cap stocks, as it has from the early part of 2009. From 2007 to 2008 the Schwab Equity Ratings favored large-cap stocks in more defensive industries such as pharmaceuticals, large diversified financials, defense and staples. This went a long way to explain why our fund turned in such solid performance in 2007 and 2008. This year however, we have underperformed because we didn't own enough "junk" that ran fastest from the bottom.