Mohamed El-Erian says he expects volatility to increase in the stock market, and says it’s not a time to be buying broad index funds.

“Investors should expect a lot more volatility and they should expect more of what they saw in the first quarter, which is the beta trade in U.S. equities not going to be as satisfying as it has been in the past,” El-Erian told CNBC. He said he expects the European Central Bank to further loosen monetary policy, and the Federal Reserve to raise rates at or by its September meeting. European stocks should benefit from the QE trade, he says. In the US, he says, be wary of broad indices and look for specific names, particularly companies that are going to be involved in corporate actions. “There is a lot of cash on the sideline,” he said.

El-Erian says to be careful of currency exposure, as he expects the U.S. dollar to get stronger. He doesn’t expect the Fed to delay raising rates because of a stronger dollar, however.