While there are some negatives weighing on the market, fund manager Brian Macauley has a favorable long-term outlook for equities thanks to good U.S. job growth and economic expansion.
However, the co-portfolio manager of the Morningstar five-star rated Hennessy Focus Fund champions being selective. These days, he's betting on autos and the consumer.
The fund's top holding is O'Reilly Automotive, a specialty retailer of automotive aftermarket parts.
"O'Reilly is the very best at getting parts to those customers in a very timely fashion and that is a critical competitive distinction versus their large competitors. And versus their small competitors they have much more buying power," Macauley said in an interview with CNBC's "Power Lunch" on Thursday.