Chinese ETFs surged in morning trading on Wednesday. Direxion Daily FTSE China Bull 3X Shares ETF $(YINN)$ rallied 16%; ASHR, MCHI, FXI, KWEB rose around 5%.

China’s benchmark CSI 300 index has risen more than 27% from its Sept. 13 trough, supported by a spate of policy-easing measures, while the Nasdaq Golden Dragon index of US-listed Chinese stocks has surged more than 36%.

The extended rally is driven by optimism about China’s economy and risk assets after the authorities unveiled a range of stimulus measures last week that included interest-rate cuts, freeing-up of cash for banks, and liquidity support for stocks. Four major cities also eased home-buying curbs and the central bank moved to lower mortgage rates.

The gains “reflects a fundamental shift in investor positioning as hedge funds and mutual funds, which had previously been underexposed, are now moving into Chinese assets,” said Billy Leung, an investment strategist at Global X Management in Sydney. “These moves are being supported by a broader reversal in key markets such as copper and Asia Pacific currencies, driven by renewed optimism in China’s growth.”

The attractive valuations of Chinese stocks after a three-year decline are helping to lure investors.

Even with the recent surge, the Hang Seng China Enterprises Index is still below 9 times estimated earnings for the next 12 months, less than half that of the S&P 500.