ET Wealth Expo: Why market veteran S Naren thinks investors are getting gold, silver and asset allocation all wrong
ICICI Prudential MF's S Naren warns investors against chasing assets after spectacular rallies, highlighting how silver's 216% surge drew record ETF inflows before a 27% correction. At the ET Wealth Expo, he explained why genuine asset allocation means buying unpopular assets and why gold still deserves a place in portfolios.
Investing expert S Naren of ICICI Prudential Mutual Fund advised attendees at the ET Wealth Expo in Mumbai to resist the temptation of buying assets simply because they have delivered strong returns in the past. Naren coined the term "anti-asset allocation" to describe this behavior, where investors assume that a strong historical performance guarantees future returns. Asset allocation, on the other hand, involves purchasing an asset after it has experienced a correction and its sentiment has weakened.
Naren illustrated his point with the surge in popularity of gold and silver ETFs in January 2026, where inflows exceeded those of equity mutual funds. Silver's 216% rally sparked this interest, but Naren cautioned against treating silver as a guaranteed winner. He compared it to a small-cap stock, highlighting that it carried similar risks. However, investors were drawn to silver's applications in AI, various industries, and its current supply shortage. Silver subsequently declined by 27%, mirroring Naren's prediction.
The expert observed a similar trend with Korean stocks, known as the "Kospi index," after silver. Investors had flocked to markets and asset classes that had previously performed well, only to face the consequences of momentum reversal. Naren emphasized the difficulty of practicing genuine asset allocation, which requires conviction and patience, while anti-asset allocation involves buying after a spectacular rally.
When asked about gold's future, Naren did not dismiss the metal but explained that its valuation had shifted due to central banks reconsidering their reserve dependencies on currencies like the US dollar. Central banks began to view gold as an alternative reserve asset, supporting its price even after a substantial rally. Naren cautioned against putting all of one's money into gold, advocating for a balanced allocation that includes some gold but also maintains a diverse investment strategy.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
