Kicking up a storm

Fuss over a contrarian view about mid- and small-cap stocks unwarranted; MF industry should show tolerance

- 

It is not clear about the exact reasons why S Naren's speech at a mutual fund distributor event in Chennai was pulled out, but it's unfortunate that it was. The chief investment officer at ICICI Prudential AMC is among the country's senior-most mutual fund professionals and his views on the risks of investing in expensive stocks, even in a staggered manner, should be heeded. Naren reportedly advised investors to pull out of mid- and small-cap stocks, warning that even long-term Systematic Investment Plans (SIPs) in these segments may struggle to deliver strong returns. To say that these views have not gone down well with stakeholders of the mutual fund industry would be an understatement. They have raised a stink and some have moved to ensure his opinions do not reach the larger investor audience. That's a sign of how powerful the mutual fund distribution fraternity is and how unwilling it is to tolerate anything but an evergreen bullish commentary on stocks.