S Naren of ICICI Prudential Mutual Fund highlighted that just six original companies from the 1990 Sensex lineup have managed to remain continuously in the index today. He explained that relying on individual equities to inevitably bounce back is dangerous because companies can easily lose their competitive moats or exit benchmark indices entirely. Meanwhile, he identified several popular modern trades as anti-asset allocation bets, citing the significant rise of the US dollar against the Japanese yen from 80 to 157.
Key points
Investors face severe capital risks when they mistake individual stock picking for a disc…: Investors face severe capital risks when they mistake individual stock picking for a disciplined asset allocation strategy.
Market participants should exercise caution regarding Indian midcaps and smallcaps after…: Market participants should exercise caution regarding Indian midcaps and smallcaps after their sharp gains achieved since 2020.
Gold remains viable for a small portfolio allocation due to ongoing structural reserve ac…: Gold remains viable for a small portfolio allocation due to ongoing structural reserve accumulation by central banks.
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S Naren, Chief Investment Officer of ICICI Prudential Mutual Fund, made this point at the ET Wealth Expo in Mumbai, using an interesting piece of Indian stock market history to explain why asset allocation in stocks can be considerably riskier than allocating money across asset classes.
His starting point was the composition of the Sensex in 1990. The index included companies such as ACC, Kirloskar, Cummins, Mukand, Glaxo, Mahindra & Mahindra, Voltas, Indian Hotels, Premier Automobiles, Futura Polyester, Philips, Tata Power, Hindustan Motors and Zenith Birla, among others.
Looking at that list today, it is difficult to imagine that these companies once formed India's benchmark equity index. Yet, that is precisely the point Naren wanted investors to consider.
Only six Sensex stocks from 1990 have survived the test of time
The changing composition of the Sensex offers a striking illustration of how difficult it is to identify long-term winners in the stock market.Naren pointed out that only six companies from the 1990 Sensex have remained in the benchmark over the years: Tata Steel, Hindustan Unilever, Reliance Industries, Larsen & Toubro,…
Investors face mixed technical signals as the benchmark index tests a critical 23,450 hurdle despite finding solid support at its 200-week moving average. Market participants are prioritizing selective stock positioning and disciplined risk management while leadership rotates across sectoral indices. A failure to hold current technical levels could trigger renewed downside pressure on broader equities.
Investment strategists at Deutsche Bank suggest that recent downward pressure across the market has created an attractive entry point for investors targeting the technology sector. The valuation adjustments provide a more balanced risk dynamic compared to the potential upside ahead. This shift offers institutional portfolios an opportunity to reconsider exposure to tech assets under improved terms.
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