Index fund refers to a fund product that is based on a specific index, takes the constituent stocks of the index as the investment object, forms a portfolio by buying all or part of the stocks of the index, and then tracks the performance of the underlying index.

Why is the low valuation of index funds still rising?

The low valuation of index funds is still rising, probably because the fund valuation is underestimated, and its actual valuation may not be low, so the low valuation of index funds has been rising. Moreover, the top valuation of the fund does not mean that the valuation has been very low in the future. The low valuation of the fund can only show that the fund has been in a state of decline for some time. When the fund is undervalued or undervalued, investors can buy it, and once the market starts to rise, they can get a great rate of return.

How to judge the overvaluation and underestimation of index fund valuation?

1 According to the P/E ratio of index funds, when the PE percentage is less than 20%, it means that the attraction is underestimated at this time; When the percentage is higher than 80%, it means that it is overvalued at this time. You can see the percentile of PE and the percentile of PB of general trading software manufacturers.

According to the traffic lights of index funds, you can see this function on Alipay's investment homepage. When the Alipay index is in the green light, it means that the fund is undervalued; when the Alipay index is in the red light, it means that it is overvalued.

Index fund is a high-risk fund investment. When investors buy index funds, it is best to start from their own risk tolerance. Once the index fund loses money, the share of the loss principal will be large.