(Bloomberg) -- A strong rebound in Chinese stocks is set to trigger a shift in global portfolios as some investors rush to catch the rally.

Most Read from Bloomberg

• The Corner Store Comeback

• A Housing Crisis Brews in Rwanda’s Capital City

• Gang Violence Is Moving to the Amazon’s Fast-Growing Cities

• A 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High Rents

• Roofs of Mexico City’s Massive Food Market Will Power Public Buses

A wave of money which earlier left Chinese equities in favor of stocks from Japan and Southeast Asia is poised to reverse course after Beijing’s latest stimulus blitz, according to market watchers. The shift is already underway: shares in South Korea, Indonesia, Malaysia and Thailand posted net outflows last week while BNP Paribas SA said over $20 billion was withdrawn from Japan’s equities in the first three weeks of September.

The nascent rotation may spell the end of a stellar run for Asia ex-China equities, which previously benefited as money managers hunted for better returns outside the world’s second-largest stock market. For much of this year, Taiwan shares got a boost as chipmakers soared while Indian stocks rallied on the back of quickening economic growth. Southeast Asia’s markets were lifted by lower US interest rates.

“We are trimming our long positions across Asia to fund China purchases,” said Eric Yee, senior portfolio manager at Atlantis Investment Management in Singapore. “Everyone is doing so. It’s a good policy-driven recovery from rock bottom. You wouldn’t want to miss out on such opportunity.”

The MSCI China Index has risen more than 30% from a recent low as authorities announced a barrage of measures to revive growth. Trading turnover in both China and Hong Kong hit a record high on Monday.

Attractive valuations have also helped. Even with the recent rally, the MSCI China gauge is still trading at 10.8 times forward earnings, below its five-year average of 11.7 times.

Mutual funds worldwide have a 5% allocation in Chinese equities in aggregate, the lowest level in a decade, according to EPFR data as of end-August, underscoring room for funds to boost their holdings.

“We believe some foreign investors are reducing their Japan overweight and reallocating back to China,” BNP strategists including Jason Lui wrote in a note on Wednesday.

To be clear, the shift is still at an initial stage and BNP notes that there hasn’t been a meaningful withdrawal of foreign money from India and emerging market ex-China products.

Some, like Jeffrosenberg Chenlim, an analyst at Maybank Investment Bank Bhd. see the fund flow as “a temporary event.” A gauge of Chinese stocks listed in Hong Kong fell as much as 4.9% on Thursday, set to snap a 13-day winning streak.