Sankaran Naren, Executive Director and CIO of ICICI Prudential AMC, emphasized that value investing means buying what others avoid. He explained that when large amounts of money flow into a sector, opportunities diminish, while neglected asset classes often present better value. His remarks highlight contrarian investing as the essence of value strategies.
Speaking at an investor event, Naren noted that true value investing requires discipline and patience. Instead of chasing popular assets, investors should focus on areas overlooked by the market, where long-term potential often lies.
Contrarian Approach
Naren explained that crowded trades rarely deliver superior returns. When investors flock to a particular sector, valuations rise, reducing opportunities. Conversely, sectors avoided by the majority may offer undervalued assets with strong future prospects.
Beyond Equities
He also stressed that value investing is not confined to equities. The principle applies across asset classes, including debt, commodities, and alternative investments. By diversifying into overlooked areas, investors can achieve better risk-adjusted returns.
Key Highlights
- Value investing means buying what others avoid
- Crowded trades reduce opportunities for superior returns
- Neglected sectors often hold undervalued assets
- Principle applies across equities, debt, and commodities
- Discipline and patience are critical for success
Market Outlook
Naren believes that maintaining asset allocation discipline and avoiding short-term reactions is vital. He expects Indian equities to perform relatively better in 2026, especially if global markets face corrections, reinforcing the importance of contrarian strategies.
Sources: MoneyControl, Outlook Money, Financial Express