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Hedge funder: The winning strategy this year is…

Investment funds that are truly hedged have been the winners in this year's up-and-down stock market, Morgan Creek Capital Management CEO Mark Yusko said Monday.

The outperforming strategy in the market right now is "being long and short," while overall stock valuations "look at the top end of their long-term range," he told CNBC's "Squawk Box,"

Yusko's Morgan Creek, with about $4.5 billion in assets under management, is primarily a hedge fund allocator, which means it invests in other funds on behalf of clients. The firm also makes its own bets on certain stocks.

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It's been a tough year for hedge funds, with many high-profile managers suffering losses such as David Einhorn's Greenlight Capital, down 16.3 percent for the year through October, and Bill Ackman's Pershing Square, down 15.9 percent through Oct. 27.

Yusko has been looking outside the U.S. for value, particularly in China and Japan.

"The real story in Japan is profits," he said. "Their companies are creating record profits, partly because of the weakening yen over the last couple of years, but partly because they were cyclically at a downturn."

Investors get to buy in at "near trough earnings, on near trough multiples with rising earnings," he said, compared with getting in the U.S. "peak margins at peak multiples, with maybe falling earnings."

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"We think there are a lot of assets that have been punished unnecessarily, and maybe are showing some good value," Yusko said, citing China, which has seen stocks plunge in the past 12 months. "China is at just the very beginning of a very long bull market."

He said cheap oil is one of the drivers behind a positive story for China, which benefits from the battered energy sector.

Yusko said he sees depressed crude prices for longer, basing on his discussions with the "world's greatest oil trader," Pierre Andurand of London-based Andurand Capital Management.

He said Andurand still sees oil per-barrel in the "$30s and $40s until middle of next year" because demand doesn't look like it's going to appreciably increase and supply doesn't appear to be going down much, even with U.S. stockpiles starting to decline.

Morgan Creek was founded in July 2004 by Yusko, a former chief investment officer of The University of North Carolina at Chapel Hill Endowment. He has close ties with investment legend Julian Robertson, who provided seed funding.