The Lord Abbett Growth Opportunities Fund has gained 1.7% annually, on average, during the past three years, beating 96% of its peers during a volatile period for stocks, according to Morningstar. This year, the fund is up 37% this year, outperforming two-thirds of its peers.

Welcome to the TheStreet.com's "Fund Manager Five Spot," where America's top mutual fund managers give their best picks during a rapid-fire Q&A.

Are you bullish or bearish?

Volovich: We're bullish on the market. We believe that the market has recovered from the financial crisis and will continue to move higher as the economy grinds its way out of the recession. The economic recovery will strengthen so long as housing prices continue to stabilize, job losses continue to abate, and the wealth effect from the rise in the stock market begins to rebuild consumer confidence.

What is your top stock pick?

Linsen: Our top pick is CarMax, which sells used cars through a chain of retail stores. The company's superior customer offering and inventory management systems should allow it to increase market share in the used car market. CarMax's return on capital should support a reacceleration in growth, which puts the company in a unique position of expanding square footage in a retail environment in which most others are shrinking. Market share gains can then translate into strong earnings growth.

What is your top "sleeper" stock pick?

Volovich: Our sleeper pick is Nuance Communications, which develops speech-recognition software. As the world moves toward richer multimedia products, speech should play a significant role in that evolution. Speech-recognition software is gaining acceptance among multiple users, such as those in the auto, health care and communications industries.

Nuance's stock trades at a discount of about 13.5 times its 2010 earnings estimates, which is lower than the average of about 18 to 20 times for the software industry. Nuance's estimated earnings growth rate is also higher than the industry's average.

What is your favorite sector?

Linsen: We like the consumer discretionary sector for a couple of reasons. It's widely recognized that consumers have increased their savings rate during the recession, and some observers may point to that increase as a reason to avoid consumer-related stocks. But we believe a higher savings rate is a healthy development because it's better for consumers to "earn, save and spend" rather than "spend, earn and attempt to pay back." It's just going to take some time for that transition to be completed.

Companies have also cut a lot of costs during the recession, so they may benefit from higher profit margins as sales start to pick up after a substantial slide during the recession.

What sector or stock would you avoid?

Volovich: We're avoiding stocks in the hospital sector. Although there is anticipation that hospitals may see more patient volume if health care legislation passes, an increase in patient volumes won't emerge until 2012 or 2013, at the earliest.

In the meantime, hospitals will likely have to increase their capital expenditures in preparation for that eventual increase in volume. The industry has fallen behind in terms of updating its software, medical equipment and infrastructure, and when these expenditures are made, they will constrain the earnings power of the industry.

Finally, managed-care providers will reduce reimbursement payments to hospitals as they attempt to protect their profit margins in the face of lower government reimbursement rates.

-- Reported by Gregg Greenberg in New York.