CORRECTED - FUND Q&A-Optique's Perkins sees oil risks, likes Citi

(Corrects S&P 500 three-year return in fourth paragraph)

By Ellis Mnyandu

NEW YORK, May 22 (Reuters) - A relentless surge in oil prices could be what eventually tips the U.S. economy into recession as soaring energy costs add to consumers' woes, says Wendell Perkins, chief investment officer of Optique Capital Management, based in Racine, Wisconsin.

Wendell, who oversees $1.7 billion in assets, is also portfolio manager of the Optique Large Cap Value Fund OPLCX.O, the Optique International Value Fund, and the Optique Small Cap Value Fund.

His funds' top five holdings are Exxon Mobil Corp (XOM.N: Quote, Profile, Research), Chevron Corp (CVX.N: Quote, Profile, Research), Bank of America Corp (BAC.N: Quote, Profile, Research), ConocoPhillips (COP.N: Quote, Profile, Research) and Citigroup Inc (C.N: Quote, Profile, Research). On percentage weighting, his fund's asset allocation is 96.7 percent stocks, 3.3 percent cash, and no bonds.

According to data from research firm Morningstar, Optique Large Cap Value fund's average annual return as of May 14, on a three-year trailing basis, is a positive 5.52 percent, lagging the S&P 500 .SPX by 3.41 percentage points.

Perkins spoke to Reuters about the state of the markets and investing:

Reuters: What's driving up the oil price?

Perkins: "The increase in oil prices has to do with the supply and demand issue, but there's certainly a degree of speculation. People go with what's working, so oil is a momentum play and when momentum trades break, they usually have no fundamental story, their break just happens."