ICICI Pru Mutual Fund's Sankaran Naren Warns Against Treating Silver Like Small-Cap Stocks

ICICI Prudential Mutual Fund Warns Against Treating Silver as a Long-Term Asset Class

Executive Director and Chief Investment Officer Sankaran Naren cautioned investors against treating silver as a long-term asset class, citing its high risk profile and volatility. Speaking at the MFD Galaxy 16th Knowledge Summit 2026, Naren emphasized that silver behaves more like a small-cap stock, with significantly higher risk compared to traditional asset classes.

According to Naren, many investors mistakenly classify silver alongside gold as a core portfolio asset. However, he argued that the risk profile of silver is much closer to equities, particularly small-cap stocks, which are known for their high volatility and uncertain long-term outcomes.

Risk Profile of Silver

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Naren urged investors to exercise caution when allocating money to silver, citing its high risk profile. He noted that silver can deliver sharp gains in the short term, but it should not be considered a stable investment category like gold. Instead, silver's appeal largely lies in its potential for sharp price swings, which can attract investors looking for excitement rather than stability.

Gold as an Asset Class

In contrast, Naren suggested that gold can still qualify as an asset class under certain macroeconomic conditions, specifically when investors have a clear view on the global currency environment. He outlined the framework used by ICICI Prudential Mutual Fund in evaluating gold investments, which involves being very negative on the US dollar.

Diversified Vehicles

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Naren suggested that gold exposure may be more appropriate through diversified vehicles such as multi-asset funds rather than direct allocations. He emphasized the importance of clearly understanding the risks involved before treating silver as part of a long-term portfolio.

Key Takeaways

• Silver behaves like a small-cap stock, with high risk and volatility.
• Investors should exercise caution when allocating money to silver.
• Gold can still qualify as an asset class under certain macroeconomic conditions.
• Diversified vehicles such as multi-asset funds may be more appropriate for gold exposure.
• Investors should clearly understand the risks involved before treating silver as part of a long-term portfolio.