Being conservative while investing in stock market isn't bad: Sankaran Naren of ICICI Prudential AMC

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26 Aug, 2025 12:21

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“Being conservative while investing in the stock market is not bad at all,” believes Sankaran Naren, Chief Investment Officer, ICICI Prudential AMC.

Although Naren has made his name managing equity funds, he is a strong believer in keeping a slice of the portfolio reserved for debt as well. That’s how he plans his asset allocation.

With the S&P BSE Sensex shooting past 60,000 in October, those investing in passive funds would have earned around 47 percent in the past year.

Are you too late to invest in equities now?

The veteran fund manager says it’s never too late. This Diwali, he shares his tips on how to steer our portfolio in style and light up our investment journey and financial well-being without much effort.

Swear by asset allocation

If you’re waiting for the market to correct and looking out for the ‘right’ opportunity to enter the market, ditch that idea!

Asset allocation or rebalancing your portfolio is what Naren really recommends this Diwali. He says that instead of focusing too much on equities, other asset classes, too, must be a part of your portfolio. These other asset classes include debt, gold, global funds and real estate.

“You might never find time to do asset allocation. However, there is no right time to enter the market. Timing your market entry is only required when you are investing in a singular asset, which should ideally not be the case,” says Naren.

Your point of focus, while targeting the markets, should not be determining the entry time, but framing the best diversification strategy or working out the right combination of assets you can invest in. This can help you maximise your returns and provide you a cushion in case of a swing.

Being conservative and diligent isn’t bad!

One scheme that Naren talks about is ICICI Prudential Balanced Advantage Fund – the second largest in the hybrid-dynamic asset allocation category, with assets worth Rs 35,737 crore. Like other balanced advantage funds, IBAF too switches between equities and debt, if as per its internally set parameters, equity markets get too expensive. IBAF, therefore, is well versed with debt.

While we are all conventionally conditioned to venture into high-risk endeavours to make corresponding returns in the market, Naren sticks to his principle of staying conservative when it comes to investing. He gives due weightage to debt, despite its lower potential to generate returns, compared to equity.

Debt is essentially a capital conservation asset class, which must form an integral part of your portfolio. The same goes for gold, which should be seen more as a high-functional asset allocation tool, rather than a return-generating avenue. “Gold is best invested through products like multi-asset funds and fund of funds (FoF) strategies,” suggests Naren.

How about IPOs?

Aith a host of Initial Public Offerings (IPO) lined up across 2021, it is impossible to not be lured into the primary market, where the foremost intention remains not that of long-term investments, rather making some quick bucks.

Also read | Paytm, Mobikwik, Nykaa and others to list soon: Here’s how retail investors can pick the right IPOs

Naren strongly suggests due diligence before investing in any public issue. Discipline, commitment and research into the fundamentals and performance of the company will serve the investor a whole lot better, given that many companies have simply disappeared after floating their public issues.

What’s wrong with cryptos?

Naren cites the lack of clarity and regulation in cryptocurrency trade as the main reason why he is reluctant about crypto as an asset class. “As a base principle, we believe in any asset class that gives dividends or at least proves to have a steady cash flow. On that front, cryptocurrency is yet to prove its mettle,” he says.

It’s crucial to look ahead and consider the regulatory future of cryptocurrency in India before deep-diving into it with your hard-earned funds.