To solve this problem, we must first understand several basic concepts, fund net worth, net worth estimation and valuation.
Net fund value refers to the price of each fund, also known as unit net value, which is equivalent to the unit price of goods. For example, a fund with a net value of 1 yuan and 1 ,000 yuan can buy 1 ,000 copies (ignoring the transaction cost of the fund).
Net value estimation means that each platform estimates the net value of the day according to the positions, industries and market conditions of fund positions and indexes, so the estimated net value is an estimated value, not the actual price of the fund.
The estimated net value of the fund is usually accompanied by the net value of the fund, so when we enter a platform to search for funds, we will first see the net value of the fund and generally see the estimated net value.
Different fund platforms have different estimation methods, so the estimated value of fund net value will be different.
Literally speaking, valuation is to estimate the value of investment varieties and see how much this thing is worth. So the estimate is approximate, not absolute. We can see that some indexes have different valuations on different platforms. For example, CSI 500 is undervalued on some platforms and neutral on others, but we can't simply think that the valuation of a platform is right and which platform is wrong.
What is the significance of valuation for our usual investment funds?
Buy when undervalued and sell when overvalued. This is the application method of valuation.
Of course, the valuation of funds is relative, so we need a reference, which can be similar funds or our own historical performance.
The percentile of valuation given by many platforms is actually compared with the historical data of the index itself. Generally, the interval boundary is 20%-80%. For example, the index is in the historical percentile of 20%, that is to say, relative to history, the valuation is around 20%, which is relatively underestimated; If the valuation is in the 80% percentile, then it is overestimated.
But this relative valuation method is not absolute. Sometimes the industry will compare funds, exceeding the highest or lowest value of the historical market. At this time, the historical data interval will be widened. So there is no absolute buy low and sell high.
There are many valuation indicators, such as price-earnings ratio, price-to-book ratio, dividend yield, return on net assets, profitability, marketing rate and so on. Using too many indicators at the same time will cause confusion in our judgment, so the simpler the use of indicators, the better.
Among the indices of index funds, we will use P/E ratio for most broad-based indices and industry indices, and P/B ratio and dividend yield index are suitable for industries with unstable and cyclical earnings.