S Naren’s Big Bet: From China to Brazil, the next big boom isn’t in India or the US

S Naren, chief investment officer of ICICI Prudential Mutual Fund

Indian investors could gain much from tapping into global equities outside the US and India, according to S Naren, chief investment officer of ICICI Prudential Mutual Fund. Speaking exclusively on The Wealth Podcast with N Mahalakshmi, Naren said most foreign markets — especially emerging economies like Korea, Brazil, Taiwan and China— are trading at cheap valuations and have severely underperformed India over the past decade and a half.

“With the exception of the US, most global markets have done very badly compared to India,” Naren said. “If you had a way of investing in them ex-US, there are pockets that have underperformed by a very large magnitude. That’s another opportunity that exists.”

Currently, Indian mutual funds face a $7 billion cap on overseas investments, a limit that has been fully used. Naren said any decision by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) to lift that ceiling could give domestic investors easier access to these undervalued markets. “If the option opens up, it’s a good way to invest abroad,” he said, adding that mutual fund channels would be simpler than the Liberalised Remittance Scheme (LRS), which he called “a much more complicated model.”

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From 2008 to 2025, he noted, many markets — particularly in emerging economies — have underperformed the US drastically. “There is scope for a multi-year move in many of the markets,” he said, stressing the potential for upward re-rating as global investors diversify out of the US dollar.

Naren also touched on gold, saying the metal still makes sense as part of a diversified portfolio given central bank buying and the shift away from the US dollar. However, he is no longer bullish on taking a concentrated position. “The time for one big bet on gold and silver is over.” he said.

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