The overvalued area of the fund is caused by rising prices. The higher the fund price, the higher the corresponding valuation and the lower the fund net value. Fund valuation refers to the process of calculating and evaluating the value of fund assets and liabilities according to fair value to determine the net asset value and net fund share value. Fund valuation mainly judges whether the fund has investment value.

When the fund is overvalued, it means that the fund has a bubble, high investment risk and higher probability of loss. When the fund is undervalued, it shows that the fund has investment value and the probability of profit is high.