(Bloomberg) -- Bridgewater Associates’ onshore China hedge fund was adding exposure to local stocks after a rally last month boosted the fund’s returns to 31% for the year, saying valuations remained attractive.

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Chinese stock prices were still “relatively low” compared with their profit outlook despite the rebound, and Bridgewater would continue to “moderately increase” holdings, the Shanghai-based fund said in its third-quarter letter to investors. The fund was also long on bonds, and took a “neutral” stance on commodities, according to the letter that shared its views as of Sept. 30, seen by Bloomberg News.

Bridgewater declined to comment via email.

China unleashed a massive stimulus package to boost the economy and prop up the ailing property and stock markets, fueling a 21% surge in the CSI 300 Index last month. That sent a policy signal that “significantly” bolstered investors’ risk appetite, Bridgewater said. Meanwhile, the US Federal Reserve’s interest-rate cut improved global liquidity, increasing the appeal of risk assets, the firm said.

While it remains unclear if the stimulus measures will be followed by strong fiscal support to sustain a recovery, “we expect the policy environment to stay accommodative, and such an environment is relatively conducive to risk assets overall,” the company said.

Chinese stocks have retreated about 5% this month on concerns that the stimulus may not be enough, reducing the gain for the CSI index to 11% for the year.

Bridgewater’s All Weather Plus strategy recorded a 19% return before fees in September, lifting the gain for the first nine months to 31%.

The systematic All Weather multi-asset portfolio contributed 8% on the month, while active management added 10.8% thanks to gains in both equities and bonds, the letter showed. Reuters reported the returns earlier.

Bridgewater, which boosted onshore assets under management to more than 40 billion yuan ($5.6 billion) earlier this year, was “moderately” long on short-term bonds as policymakers are expected to remain supportive. It also intended to increase long-term debt exposure. It still sees opportunities there even as the market has priced in expectations for a tighter policy stance in the next few years, according to the letter.