ICICI Prudential’s S Naren cautions investors against chasing post‑rally assets, cites silver’s boom and bust

ICICI Prudential Mutual Fund’s chief investment strategist S Naren warned investors not to chase assets after spectacular rallies, pointing to the recent silver surge as a cautionary tale. Silver jumped 216% over the past year, pulling in record inflows into silver exchange‑traded funds. The metal then slipped 27%, wiping out much of the recent gains. At the ET Wealth Expo, Naren said true asset allocation means buying assets that are out of favour rather than those that have just run up. He added that gold should still hold a place in a balanced portfolio despite its modest returns. Naren’s remarks came as market participants look for guidance amid volatile equity and commodity moves. He cautioned that chasing momentum can lead to sharp corrections and erode long‑term wealth. The fund’s stance reflects a broader view that disciplined diversification beats short‑term hype. He noted that many investors had poured money into silver ETFs during the rally, hoping to ride the upside. After the inflows peaked, the price pull‑back reminded investors how quickly sentiment can shift. Naren also warned that gold’s role is not to chase high returns but to act as a stabiliser when other markets tumble. He urged portfolio managers to keep a modest allocation to gold even if its price moves sideways.

Context

Chasing assets that have already surged often ends in losses when prices revert. Gold is traditionally used as a safe‑haven and diversification tool, while less‑popular assets can offer better risk‑adjusted returns over time.