With global markets on edge after former US President Donald Trump announced new tariffs on Canadian, Mexican, and Chinese imports, investors are looking for stable investment options. S Naren, Executive Director and CIO of ICICI Prudential AMC, which manages over $2.5 billion, believes asset allocation remains the key strategy to deal with market uncertainty.ICICI’s contrarian approach has been to focus on asset allocation, Naren said, highlighting that many investors have been hesitant to invest in debt, favouring smaller segments like smallcap stocks, microcaps, and SME IPOs instead.Naren prefers largecap stocks, debt, or anything else, except for NASDAQ, smallcap, and midcap stocks.
“I would say you have to be careful in small and mid caps in various capital goods or infra space…wherever the valuation has gone up too much.”Read Here | Neelkanth Mishra on the rush toward consumption stocks
Naren also noted that many hybrid funds managed by ICICI Prudential AMC have delivered returns comparable to smallcap and midcap stocks over the past year.Gold and silver, Naren believes are no longer an asset class where you can put big money in at this point of time, because they have done too well. Multi-asset strategies are the most appropriate way to include gold in portfolios, particularly in light of geopolitical risks.”Some investment in gold is okay from an asset allocation standpoint, but do we like to recommend standalone investing in gold and silver at this point of time, I don’t think so. I think that phase is over,” he noted.Also Read: Gold prices drop from all-time high: Key trends and outlookSpeaking about the Budget 2025, he believes the government’s focus on consumption over infrastructure is a logical move, though it doesn’t signify a complete shift from infrastructure development.The budget focused on consumption for the middle class and provided financial benefits. However, it remains uncertain whether this will lead to increased savings, loan repayments, or higher spending, Naren added.
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