For winning trades of 2016, some look around the globe

It's shaping up to be an eventful start to the year for stock markets, with Asian, European and U.S. shares all kicking off 2016 on a down note.

That said, 2015 was a strong one for a select group of international markets — specifically Europe and Japan, both of whose major indexes vastly outperformed the S&P 500.

The European Stoxx 600 finished 2015 up 6.8 percent, while the Japanese Nikkei gained 9.1 percent. The S&P 500 benchmark closed around a half percent lower on the year.

That leaves a lot of people wondering where their stock investments will perform best this year.

Europe and Japan

Both European and Japanese markets have been aided by massive bond-buying programs and supportive central banks. Earnings of companies in these two regions that rely on exports have also been helped by a favorable currency environment — that is, currencies that are mostly declining against the U.S. dollar.

And both regions may be a winning trade in 2016, according to Jeffrey Kleintop, chief global investment strategist at Charles Schwab.

A trader works at Frankfurt's stock exchange.
Ralph Orlowski | Reuters
A trader works at Frankfurt's stock exchange.

"We like international — specifically Europe and developed Asia — which are benefiting from earnings growth, attractive valuations and central bank policy," Kleintop told CNBC.

Charles Schwab recommends that investors who want to move money into European and Japanese shares should use investment vehicles that hedge against currency fluctuations. Kleintop pointed out that some popular ETFs and mutual funds protect investors from currency exposure.

Other market pros like David Stubb, global macro strategist at JPMorgan Asset Management, are also forecasting gains in developed international markets. "We continue to be most excited about euro zone equities, followed by Japan," he said.

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Rebecca Patterson, chief investment officer at wealth management firm Bessemer Trust, agreed that Europe looks attractive, thanks to monetary policy. Other factors like bank lending and data on the European consumer have improved the outlook for European stocks.

"We could easily see higher multiples this year. Bank lending is picking up, as is consumption. Another plus are low energy costs (most of Europe has less production exposure compared with the U.S.)," Patterson wrote in an email to CNBC.

But according to Patterson, Europe doesn't come without a laundry list of risks. She cited political risks from an ongoing influx of migrants from the Middle East and Africa, as well as the possibility of a so-called Brexit — an exit from the European Union by the United Kingdom, which is an idea some conservative British politicians support.

Europe's handling of the influx of migrants over the past six months has been widely criticized, with some economists forecasting rising unemployment in some regions. Others say that long-term employment will get a boost from the number of skilled workers that have found refuge in Europe. And with the Continent's aging population, especially in Northern Europe, some say migrants could help boost productivity there.

Separately, the migrant crisis has polarized politics in Europe, with a resurgence among populist parties that some say could lead to a weaker and more fractious EU. At this point, however, analysts generally agree that it's too early to analyze exactly how migrants will alter Europe's economic landscape.

The other big risk that Patterson mentions — a Brexit — is seen as a major headwind for the European Union and the U.K. economy. Citizens in the United Kingdom are to vote sometime before the end of 2017 in a referendum on whether Britain should leave the EU. (The United Kingdom never joined the euro zone currency bloc.)

Read MoreMajority of Britons now want 'Brexit': Poll

If the vote is "yes," some U.K. strategists say business investment could decline and major financial institutions could move their headquarters out of the country. Sectors that are most vulnerable to a downside in the event of an exit include the banks and automobile industry, according to Marc Ostwald, a strategist at ADM Investor Services. Ostwald cautions investors not to jump to conclusions, however, as it really comes down to the terms of any British/EU negotiation. Such talks could take up to two years to finalize. Still, Brexit remains a high risk.

Emerging markets

Bessemer Trust is "underweight" on emerging markets but expects the world's rising economies to be top focal points for investors in 2016.

Among investors' worries are whether the biggest emerging economy, China, will have a hard landing, and whether its central bank will deliver the right medicine to kick start growth. So far, the People's Bank of China hasn't had much luck. Economic advisory firm The Lindsey Group says it is too early to assess whether the monetary policies introduced by the PBOC are working. But a growing number of economists say the central bank will have to fine-tune its macroeconomic policies if it wants to see a rebound in growth.

Fresh concerns around the world's second-largest economy sent the Shanghai composite lower by 7 percent on the first day of trading in 2016. Chinese shares saw steep swings over the course of 2015.

A larger question may be whether China growth fears will continue to affect global stocks in 2016. According to a CNBC survey conducted online, the answer is yes. Seventy-one percent of respondents said China's growth will have a large impact on stocks in 2016, while only 29 cited higher interest rates from the U.S. Federal Reserve.

"I think it makes sense that China is the top concern ... the Fed trajectory is baked in at this point. China on the other hand has a lot of surprises up its sleeve — how much stimulus it might inject. Plus, how much it might let its currency depreciate," said Kleintop.

The way China manages its currency in 2016 remains a source of anxiety for investors broadly. Beijing's devaluation of the yuan in August spooked global markets, sending stocks lower and volatility higher.

Larry McDonald, head of U.S. strategy at Societe Generale, said the speed at which China devalues the yuan is more important than the Fed's stated policy direction. Updated data on the PBOC's foreign reserves will be published on Thursday, which will help China watchers understand how much the central bank is spending in order to support its currency.

Stubbs pointed out that emerging markets are trading under 1.25 price to book, which is around the fifth percentile of valuations. "However, we remain underweight [emerging markets] as commodity and global trade headwinds remain in place," he cautioned.