According to Naren, while India and the US have outperformed over the past 15 years (between 2008 and 2025), many other markets now trade at cheaper valuations and could re-rate as global investors diversify away from an overweight dollar and US-centric exposure.
“With the exception of the US, most global markets have done very badly compared to India. 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,” he explained, speaking on Moneycontrol’s The Wealth Formula Podcast with N Mahalakshmi.Why is this Important for Indian Investors?
At present, India’s mutual fund industry faces a practical constraint, as the overseas investment quota for mutual funds has been set at about $7 billion and is reportedly fully utilised. If regulators like the RBI or SEBI lift this limit, domestic investors would get an easier channel to access cheap, underperforming foreign markets via mutual funds.
“If the option opens up, it’s a good way to invest abroad,” he noted.Naren outlined that the mutual fund route is operationally simpler for most retail investors compared to the more cumbersome Liberalised Remittance Scheme (LRS) to invest in global equities.
He further flagged that Indian markets have hit new records and investors, who are effectively the largest source of corporate funding through IPOs, QIPs and block deals, are showcasing behaviour reminiscent of the 1990s. The said era’s euphoric equity cycle ended badly when corporate earnings failed to meet expectations.
Naren also suggested that gold continued to remain a useful portfolio diversifier, especially in an environment of central bank buying and dollar weakness. However, he cautioned against placing a large and single-asset directional bet on gold or silver now.
Today, many stocks are trading at 50 – 60 times P/E multiples, and many new companies are raising money even without making profits. In the last few years, many loss-making companies have given great returns, which has further increased the confidence of investors to take risks, according to Naren.
Key Global Markets: YTD Performance
| Market | Representative Index | YTD Performance |
| Brazil | Ibovespa Brasil, Sao Paulo Stock Exchange | 12.99% |
| China | Shanghai Composite | 8.82% |
| South Korea | KOSPI Composite | 33.64% |
| Taiwan | Taiwan Stock Exchange Weighted | 4.78% |
| United States | S&P 500 | 8.63% |
| India | NSE Nifty 50 | 3.93% |
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