Don't see big scope for investing in gold, silver as standalone; prefer multi-asset approach: S Naren

Naren added that India is not in a bubble but a mature bull market where obvious sector ideas are fully discovered. “We buy when investors get frustrated after years of no returns and finally exit,” he explained. These opportunities can appear across financials, consumption, capital goods, metals, and oil & gas.

Gold today is essentially a bet on global distrust of governments particularly the US and that such fear-driven returns rarely sustain, according to ICICI Prudential AMC CIO Sankaran Naren. Speaking at the Morningstar Investment Conference in Mumbai on November 4. While he supports investing in gold, he advises a mutli-asset approach rather than a standalone one.

“I don't think there is a big scope for investing in Gold, Silver particularly standalone outside multi-asset funds unless you do not trust governments. For example, if you don't trust US government, then you can put some money in Gold, Silver otherwise you can only put in multi-asset. Gold, Silver is basically an anti-government investment at this stage,” he said.

He added their thesis is you can invest as part of multi-asset which is a small investment in the multi-asset money. “Gold, silver has gone through periods of time where for a decade it hasn't helped one bit. So you have to be very careful. Our own view is that at some point of time US will manage to handle their issues. So we would not invest in gold and silver standalone now,” he said. Naren added that they would only focus on multi asset because they are worried that at some point of time government will manage to solve their problems then gold silver will go through a long period of no return.

Naren added that India is not in a bubble but a mature bull market where obvious sector ideas are fully discovered. “We buy when investors get frustrated after years of no returns and finally exit,” he explained. These opportunities can appear across financials, consumption, capital goods, metals, and oil & gas.

He noted that in his almost four decade career this is the first cycle where all the risk is taken by investors. With banks unwilling to fund risky projects and SIP flows pouring into rigid small-cap and mid-cap mandates, pricey IPOs are being absorbed regardless of valuation.

Indian portfolios, he added have become equity-heavy. “When equity corrects, they’ll blame everyone, but the reason will be concentration,” he said. His solution is balanced advantage, debt, multi-asset—systematic allocation, not market-timed equity bets.

Biggest risk to markets in the next decade is how US AI stocks shape up, according to Naren. “We don’t know if/when there’s a big risk, but it’s non-trivial and will determine global markets. In India, we see a moderate-return environment; asset allocation is the best approach. The immediate risks aren’t domestic,” he explained.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.