El-Erian, speaking at the Reuters Global Investment Outlook Summit in New York, said that markets had "overreacted" to issues in the emerging markets.

While El-Erian said the outlook for emerging markets remained "challenged," he added that there were opportunities, albeit through active strategies rather than passive exchange-traded funds.

"I wouldn't go out and buy an (emerging market) ETF," El-Erian said. "Active management is an important issue in this asset class."

El-Erian also said that the push to "audit the Fed" posed a risk to the U.S. central bank's ability to operate. He said the sole reason why the Fed was able to help the United States avoid a multiyear depression in 2008 and 2009 was because of its autonomy from the political system.

"There's now a tendency for the politicians to get more involved," El-Erian said. "I'm less worried that the Fed will behave in a certain way because it has political pressure on it, but I am worried that we risk eroding the operational autonomy of the central bank."

El-Erian was referring to congressional efforts to subject the Fed to a full audit, in addition to other measures proposed by lawmakers that would limit the central bank's authority. Republican lawmakers and some Democrats have made efforts to rein in the U.S. central bank and make it more transparent.

El-Erian also reiterated that he saw a 70 percent probability that the Fed in December would hike interest rates for the first time in nearly a decade.

El-Erian, who is widely followed for his economic and global insights because he spent 15 years at the International Monetary Fund, is the one-time heir apparent to Pimco co-founder Bill Gross, who resigned from the bond giant over a year ago.