(Bloomberg) -- A Pacific Investment Management Co.’s quantitative fund that delivered returns despite China’s slumping stock market is turning to beaten-down tech giants.

“We’re getting closer to the point where we would put those positions into our portfolios,” as valuations have become cheap, said Chris Brightman — chief investment officer at Research Affiliates LLC — who co-manages some Pimco funds. 

Internet platform companies such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have become attractive after years of regulatory crackdown reduced valuations to historical lows, he said in an interview last week. Slower growth and intense competition have also battered these once high-flying stocks. 

Brightman’s view echoes that of his peers. Some funds have begun accumulating shares in China, given the potential for a rebound once the right catalysts arrive. Further signs that the country’s economic recovery is building momentum and recent gains in Chinese equities have raised hope that the market is bottoming out.

Significant holdings in Chinese stocks have helped the $1.6 billion Pimco RAE Emerging Markets fund beat 94% of peers over the past one year, according to Bloomberg-compiled data, even as some big-name investors cut exposure to the market during the period. 

The fund was able to deliver decent returns thanks to its quant model that invests based on factors including book value, sales to earnings, cash flow and dividends, said Brightman. It owns stakes in China Construction Bank Corp., Bank of China Ltd. and PetroChina Co.

“China’s looking pretty attractive right now from a value perspective. Contrast that with very expensive stocks, for example, in India,” Brightman said.

Read: Chinese Stocks Gain 20% From Lows, Fueling Market Bottom Calls

The path forward for China’s shares remains uncertain. Deflationary pressure persists in Asia’s largest economy and its property crisis is showing little signs of a turnaround. The external environment also continues to be challenging with Sino-US tensions a lingering concern.  

Still, Chinese stocks are “providing handsome compensation for significant geopolitical risk,” said Brightman.

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