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How two fund managers are playing the global markets

As slowing global growth weighed on markets around the world Friday, two portfolio managers saw opportunities abroad in spite of those concerns.

For Ben Kirby, manager of the five-star Morningstar rated Thornburg Developing World Fund, China looks extremely cheap on a valuation basis. It is concerns about that country's economic growth that has helped fuel the global selloff. The Chinese stock market has also been in a downward spiral from its record highs despite the government's attempts at stimulus.

"Although we see a lot of the global risks emanating from China, we're seeing a lot of the really good companies in China actually trade at interesting valuations and discounts to what we think they're worth," Kirby said in an interview with CNBC's "Power Lunch."

Alibaba Group Holdings Ltd.
Chance Chan | Reuters

He is interested in higher-quality names that will be around for decades, and has been reducing the fund's exposure to lower-quality China names in favor of those high-quality secular growers. About 20 percent of his fund is invested in China.

Top holdings include China Mobile, Baidu and Alibaba, which Kirby thinks may have been punished a bit unfairly. He sees a near-term catalyst in Alibaba's rapidly increasing mobile take rates, which is the profit it makes on every mobile transaction.

Once that surpasses PC take rates, "we think that drives the revenue acceleration and we have a stock that's worth closer to $100 than the current $69," said Kirby.

However, he admitted the sentiment on China can get worse, noting that international investors have been selling their Chinese stocks. Earlier Friday, short seller Jim Chanos told CNBC what's happening in China is "worse than you think."

Read MoreShort seller Chanos on China: 'It's worse than you think'

That said, Kirby believes the government still has a lot of policy tools it can implement to stabilize the system.

"Even if the currency does start to appreciate a bit more, at some level that would even be a good thing for the Chinese economy," he said.

"That's one of the levers they haven't pulled recently that they can pull in the future, and we think it probably puts a floor under stocks, maybe at a lower level, but it does prevent the sort of catastrophic banking crisis in China that some people are concerned about."

Banking on Europe

European stock markets also plunged Friday, but portfolio manager Katrina Dudley still sees opportunities on the continent.

While growth concerns are weighing on the market in the United States, it is a different situation in Europe because its market hasn't grown and its economy has been very slow growth, she told CNBC's "Power Lunch."

"As we look at the earnings of European companies, they're still 30 percent below their peak earnings level," the manager of the four-star Morningstar rated Franklin Mutual European Fund said. "So we see a lot of runway despite the growth scares that you're seeing in the U.S."

Read MoreHow to play the market selloff: Buy boring

Major European markets fell more than 2.5 percent Friday.

The pan-European FTSEurofirst 300 closed down 3 percent, its worst one day fall since October 2014. London's FTSE 100 finished 2.8 percent lower, closing out its worst weekly loss in 2015. The French CAC plunged 3.2 percent while Germany's DAX finished just under 3 percent.

Dudley, whose fund is up almost 10 percent year to date, called the recent move in the euro a "very, very small headwind." The currency is at a two-month high, but she said she's focusing on the massive decline over the last year, which she believes benefits various markets.

Germany and Italy are her regional picks and she specifically likes Enel and Deutsche Post, both of which are in her fund and have ADRs (American Depository Receipts).

—CNBC's Kerima Greene contributed to this report.

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