The year's top-performing U.S.-listed global equities fund as rated by Morningstar sees Asian and emerging market stocks as undervalued and primed to outperform in 2016.

Kristian Heugh, whose $641 million Morgan Stanley Global Opportunity fund gained 20 percent for the year through Dec. 29, said his fund has been adding positions in South Korean companies such as Hotel Shilla Co Ltd and database company NAVER Corp that have attractive valuations, while trimming some positions in technology companies that have rallied this year.

"With the U.S. and developed markets in general outperforming over recent years, it makes sense that some of the other markets might represent better value now," he said.

The move is a slight shift for Heugh, whose strong performance in 2015 was largely due to his position in U.S. companies. His three largest holdings this year - Facebook Inc, software company EPAM Systems Inc, and Inc - rose at least 37 percent over the year to date. His largest non-U.S.-based stock, Danish transport logistics company DSV A/S, gained 45 percent for the year to date.

Overall, Heugh, who is based in Hong Kong, has approximately 48 percent of his portfolio in U.S. stocks, 40 percent in international stocks, and 10 percent in cash. He is looking for companies with "strong barriers to entry" and high levels of cash, he said.

Heugh tends to own more companies in the technology and consumer discretionary sectors because they often have higher returns on invested capital and lower leverage, while shying away from higher-levered financials and materials companies, he said.

Over the last five years, Heugh's fund has gained an average 13.8 percent a year, a performance that puts it among the top 1 percent of the 773 U.S.-listed global stock funds tracked by Morningstar.