Oaktree Capital's Howard Marks is cautious on several high-flying technology growth stocks.
“Yes. They are great companies, but ETFs may have accentuated the flow of capital into those stocks," he said at the Delivering Alpha Conference in New York on Wednesday. “Things that are most hyped … produce the most pain.”
The investor is also concerned the rise of ETF investing is making FANG stock investing more risky as many of these funds are using the same "momentum" factor.
“A conspicuous number of ETFs are concentrated in the same stocks," he said. "When things go cold … who is going to buy it?"
"If and when it ends, it will end worse for the stocks that have had momentum and for the ETFs that hold them than for the rest,” he said.
Marks is known for his prescient investment memos, which warned about the financial crisis and the dot-com bubble implosion. Oaktree Capital had $121 billion of assets under management as of March. The investor has a net worth of $2 billion, according to Forbes.
When asked about the single risk is he sees today, Marks pointed to the widespread agreement that interest rates will rise.
“Higher interest rates will present lots of problems. It will make it hard for companies to service their debt. It will make it hard for the government to service its debt. And fixed income instruments will present competition to equities," he explained to CNBC.
However, one area Oaktree likes is emerging markets because they have been "unloved."
“The real big money in the investment world — the dependable money, the safe money — is made not betting that the things that have gone up a lot will continue but on betting that the things that have gone down and become unloved will rebound," Marks said.
—CNBC's Michelle Fox contributed to this report.