S Naren Warns Against Misguided Investment Trends at ET Wealth Expo
At the ET Wealth Expo, S Naren cautioned investors about the pitfalls of chasing popular assets like gold and silver, emphasizing the importance of true asset allocation.
S Naren highlights the risks of 'anti-asset allocation' among investors.
Silver's recent 216% rally attracted significant ETF inflows, prompting caution.
Naren advises against over-investing in gold despite its appeal as a reserve asset.
During the ET Wealth Expo held in Mumbai, S Naren, the Chief Investment Officer of ICICI Prudential Mutual Fund, expressed concerns regarding current investment behaviors, particularly the tendency of investors to chase assets based on past performance. He introduced the term 'anti-asset allocation' to describe this phenomenon, where investors are misled by previous gains into believing that similar returns are guaranteed in the future.
Naren emphasized that genuine asset allocation involves purchasing assets after they have undergone corrections, rather than following trends that have already peaked. He illustrated this point by referencing the recent surge in interest for gold and silver ETFs, particularly in January 2026, when inflows into these funds surpassed those of equity mutual funds for the first time. This surge was largely driven by silver's impressive 216% return, which he warned could lead to a speculative bubble.
In discussions with investors, Naren noted a common misconception that silver's industrial applications and supply shortages would ensure its continued price increase. However, he cautioned that such assumptions often lead to significant risks, as evidenced by silver's subsequent 27% correction. Gold, while also experiencing heightened interest, saw lower inflows compared to silver due to its comparatively modest 116% gain during the same period.
Naren's insights extend beyond precious metals, as he pointed out a broader trend where investors flock to markets that have recently shown strong performance, only to face challenges when market momentum shifts. He highlighted the South Korean stock market as another example of this behavior, reiterating that true asset allocation requires a disciplined approach, especially during periods of market correction.
Looking ahead, Naren does not dismiss gold's potential as a valuable asset but suggests that investors should not allocate their entire portfolios to it. He believes that while gold may continue to attract interest due to changing central bank policies regarding reserves, it is crucial for investors to maintain a balanced approach and avoid the pitfalls of chasing returns based solely on recent performance.
