Time to get out of US stocks: Mobius

Investors should rotate out of the U.S. markets into better-performing emerging markets, says veteran investor Mark Mobius, warning that corporate earnings in world's number one economy are poised to disappoint.

"[U.S.] earnings will not be as good as people expect simply because they have a lot of headwinds," Mobius, executive chairman of Templeton Emerging Markets Group.

The first reason, he said, is that the U.S. recovery is still at a nascent stage. On top of this "government pressure on businesses has been very, very great under this administration."

Gains in emerging market equities have far outpaced their U.S. counterparts this year. The MSCI Emerging Markets Index is up 8.5 percent year-to-date, trouncing the S&P 500's 2 percent rise.

Within the Asian emerging markets sphere, China is "number one", says Mobius. The notoriously volatile Chinese market has risen dramatically since the start of 2015, up over 30 percent year to date.

Fears of an equities selloff have been building after China's securities regulator last week issued a strong warning about the country's spiraling stock market and tightened rules on margin lending.

"I think the Party's realized that it's becoming a little bit like a casino for some people, and they want to contain it. But they won't want to stop it, because part of their plan, I believe, is to put more money in the hands of the public," he said.

In any case, Mobius says any corrections in the China market should be seen as a buying opportunity, adding that the bull market is not ending any time soon.