"I think it's really a matter of bringing up underweight allocations to international markets," he added. "The U.S. has done phenomenally well year to date. We still like the U.S. market. But the truth is, many investors, particularly after the last six or seven months, are very underweight international equities."
Japan was particularly attractive because of the economic structural reforms that were expected, he said.
Koesterich said that he expected to see the CBOE Volatility Index rise in the near term to the 15 or 16 level, which, he noted, was still below average. Longer term, the VIX would likely settle "in the high teens or low 20s."
Domestically, Koesterich said that certain areas of energy, technology and manufacturing held promise.
Manufacturing, specifically, would see a boost from lower energy prices, he added.
"We're seeing, as everyone knows, a renaissance in U.S. energy production," Koesterich said. "U.S. oil production last year was up by a million barrels. That was the most we've seen as a yearly increase since 1859.
"There are a lot of parts of the manufacturing sector that benefit from that — petrochemical manufacturers, fertilizers, plastics. These are all companies and parts of the manufacturing sector that benefit from very cheap energy."
— By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.