ET Wealth Expo | Only 6 of 1990's Sensex stocks survive: S Naren's case for smarter asset allocation
S Naren of ICICI Prudential Mutual Fund highlights how only six companies from the 1990 Sensex remain in the benchmark today. At ET Wealth Expo, he explained why beaten-down stocks may never recover and urged investors to distinguish between asset allocation and stock selection, while cautioning against chasing strong past returns.
At the ET Wealth Expo in Mumbai, S Naren, Chief Investment Officer of ICICI Prudential Mutual Fund, cautioned investors about the risks of relying on individual stocks after a correction, using India's stock market history as an example. In 1990, the Sensex comprised 24 companies, including ACC, Kirloskar, and Tata Power, among others.
However, only six of those companies have remained in the index since then: Tata Steel, Hindustan Unilever, Reliance Industries, Larsen & Toubro, Wipro, and ITC. Mahindra & Mahindra briefly rejoined the index after being excluded for some time. Naren argued that distinguishing between asset allocation and stock selection is crucial because stocks may not revert to their former value, while asset classes can regain popularity over time.
He cautioned investors about assets like the NASDAQ, US dollar, and Indian midcaps, which have delivered strong returns, making them popular choices despite being potentially risky.
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- ET Wealth Expo: Why market veteran S Naren thinks investors are getting gold, silver and asset allocation all wrong economictimes.indiatimes.com
