S Naren, Chief Investment Officer of ICICI Prudential Mutual Fund, warned investors against the pitfalls of chasing high-performing assets at the ET Wealth Expo in Mumbai. He introduced the concept of anti-asset allocation, where investors flock to assets that have already surged in value, often missing the best part of the rally. Naren highlighted the unprecedented inflows into gold and silver ETFs in January 2026, which exceeded equity mutual fund inflows, driven by silver's 216% rally and gold's 116% gain. He cautioned that such behavior resembles chasing small-cap stocks, emphasizing the risks when momentum reverses, as seen in silver's subsequent 27% correction.
Naren extended this observation to South Korea's Kospi index, noting how investors repeatedly chase markets that have already delivered strong returns. He stressed that genuine asset allocation, buying after a correction or when an asset is unpopular, requires patience and conviction, unlike the comfort of joining a popular rally. He also discussed gold's structural appeal, citing central banks' increased interest in gold as a reserve asset following the impounding of Russia's reserves, which may prevent gold from reverting to earlier valuation levels.
Despite gold's potential, Naren advised against allocating an entire portfolio to it. His broader message underscored the importance of distinguishing between strategic asset allocation and performance chasing. When an investment becomes overly popular, it may be time to scrutinize allocation decisions carefully, as past performance does not guarantee future returns.