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Best investment opportunities now: BlackRock's Koesterich

Some of the best investment opportunities are in places right now that people have been avoiding the past few years, Russ Koesterich, global chief investment strategist with BlackRock, told CNBC on Friday.

That's because so far this year, the pattern in the market is very different than last year, he said.

"The worst volatility and the worst performers are actually the U.S. Look at non-U.S. markets, both develop and emerging markets, and they're actually doing a bit better," he said in an interview with "Street Signs."

"It's not because their fundamentals are better, but outside of the U.S. there are two advantages we don't have right now: accommodative central banks and lower valuations."

Russ Koesterich, Global Chief Investment Strategist, BlackRock
Adam Jeffery | CNBC
Russ Koesterich, Global Chief Investment Strategist, BlackRock

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In the U.S., the Federal Reserve is expected to raise interest rates this year, while other central banks are providing economic stimulus. In fact, that divergence between the central banks is what is strengthening the U.S. dollar, Koesterich said.

His advice: Continue to be overweight equities. "Yes, equities are not cheap, but they are certainly cheaper than bonds."

He would also internationally diversify. He sees good opportunities in Japan and in select emerging markets, particularly Asia.

When it comes to fixed income, "pick your spots," Koesterich said, "because nothing is cheap in bond land."

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He'd look at U.S. high yield and U.S. tax exempt, particularly the long end of the curve.

Koesterich sees a bumpy road ahead because after six years of a bull market, valuations are stretched in both equities and bonds.

"Whenever there is much good news priced in you've got to expect more volatility," he said. "What's adding to that is that in the first time in nine years investors are going to have to contend with the Fed tightening rather than easing."