"Whether it is 7% or 5% growth, nobody knows for sure, but overall, they are still growing," said Cavanaugh. "It's a great long-term opportunity. Every company that wants to grow wants a footprint in China."
Worries over the Chinese economy were highlighted again this week when the preliminary Caixin China manufacturing purchasing managers' index fell to a six-and-a-half-year low of 47 in September. This compares with a final reading of 47.3 in August, which was the lowest level since March 2009. A reading above 50 indicates an manufacturing activity is expanding, while an number below 50 indicates that it's contracting.
On Tuesday, the Asian Development Bank slashed its estimate for China's growth rate for 2015 to 6.8% from its prior forecast of 7.2%, and below last year's 7.3% growth rate. The bank forecast growth in China would drop further in 2016 to 6.7%. Elsewhere, Barclays chopped its China growth outlook Tuesday to 6.6% and 6% percent for 2015 and 2016, down from 6.8% and 6.6% previously.
Yet despite all the gloomy predictions, Cavanaugh said the world's second-largest economy will right itself once its more than 1 billion consumers start spending.
"China has been more of an export-driven economy," said Cavanaugh. "They are transitioning to a consumer-driven economy, and there are a lot of consumers in China."
Cavanaugh said the best investment opportunities in the current market are in companies that aregrowing their market shares in China. Meanwhile, she asserted, China's troubles are not large enough to sink the improving U.S. economy, even though the Federal Reserve postponed its rate hike due to worries about China's stability.
"China does not have a huge impact on the U.S. economy. We don't sell that much stuff to China," said Cavanaugh. "That's not troubling me right now. I don't see that as a big hurdle to get over with regard to domestic growth."
As for the U.S. stock market, Cavanaugh is also looking for the consumer to carry the load, primarily due to the low unemployment rate. She likes the consumer discretionary and housing sectors.
"We have household wealth at all-time highs," said Cavanaugh. "We have a good employment market, low oil prices. So the consumer is feeling very good and they are 70% of our economy."