David Herro has been one of the top fund managers in the world for over a decade, and he says emerging markets are looking overvalued even after recent declines.

“The selloff came after a huge period of outperformance that was driven more by the flow of money into these markets than any increase in the business value of the underlying companies,” Herro tells Barron’s. “As a result of the aggressive flow of money into emerging markets, there was a systematic overvaluation of most emerging-market companies.”

Herro says he’s high on emerging market growth over the longer term. His avoidance of EM stocks right now — his fund owns just one, Samsung Electronics — is “purely a function of finding companies that meet our value criteria. … I’m a medium- and long-term bull on the emerging-market consumer. The massive population migrating to the middle and upper classes in emerging markets will be conducive to global economic growth. It is just difficult to find specific companies with clear and transparent corporate governance selling at low prices, with good profitability and good business models.”

Herro also talks about his thoughts on Japan and Europe, as well as how emerging market index valuations can be skewed by just a couple sectors.