Siemens, Novartis Stand Out in Gloomy Europe

COLUMBUS, Ohio ( TheStreet) -- European equities are being overshadowed by the continent's debt woes, but there are diamonds in the rough, such as Siemens ( SI) and Novartis ( NVS), says Madelynn Matlock, manager of the Huntington International Trust ( HIETX).

The $238 million mutual fund, which garners four of five stars from Morningstar ( MORN), has fallen 4.5% this year, trailing 57% of rivals. Huntington International Trust has declined an annual average of 8.8% over three years, better than 79% of peers.

Welcome to's 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 is your view of Europe?

Matlock: Europe is going to be volatile in the near term while they're working out their problems with the European Union political structure. But, eventually, it's going to be a very interesting place to invest more money. Right now we're underweight.

Despite the euro zone's problems, you still like Germany's Siemens. Why?

Matlock: Germany is one of the biggest exporters in the world, and Siemens plays a major role in that. They make all kinds of products, everything from windmills to giant turbo diesels, and they're going to benefit from the devaluation of the euro.

Another European company you're particularly high on is Swiss drugmaker Novartis.

Matlock: First of all, the stock is very cheap and you get an excellent yield. It's a stable company with a stable business. A lot of investors have not liked the pharmaceuticals in recent years because of the concern about patents coming off, but Novartis has a lot of other operations that will serve them well. They've bought Alcon ( ACL), they have Sandoz, a big generic drug operation, and they also have consumer products.

On the other hand, your fund is overweight in Asian stocks.

Matlock: The overall growth rate is good, and there are definitely opportunities available to invest in that growth rate. China is a major engine that's pushing things along. We have a market weight in Japan, mainly in companies that are beneficiaries of sales into China and the rest of Asia, without taking the risk of going directly into the market.

Speaking of Japan, why do you own shares of electronics maker Canon (CAJ)?

Matlock: They have an excellent digital-camera business and they sell all over the world. They are also a major maker of the laser engines that go into laser printers. One of their big customers is Hewlett-Packard ( HPQ). If Hewlett-Packard does well, which it is, and laser printers are selling well, then Canon is a beneficiary of that. They're also a major player in the whole semiconductor masking and plate business.

-- Reported by Gregg Greenberg in New York.

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Before joining, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.

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