Why Does a Legendary Fund Manager Trust Passive Multi Asset Investing?
Every once in a while, a quiet disclosure reveals more about investing wisdom than hundreds of loud market forecasts. One such revelation is that Sankaran Naren, one of India’s most respected investment professionals and the Chief Investment Officer of a leading asset management company, has the majority of his personal net worth invested not in complex strategies or high-conviction stock picks, but in a passive multi-asset fund.
The number itself is striking, but the philosophy behind it is even more revealing. A seasoned market veteran with decades of experience, deep access to data, and oversight over multiple active strategies has chosen a rules-based, diversified, largely passive vehicle for his own long-term wealth. This choice deserves careful reflection, not superficial interpretation.
Who Is Sankaran Naren in the Indian Market Context
Sankaran Naren is widely regarded as one of India’s most thoughtful and disciplined fund managers, known for valuation awareness and risk management.
Over the years, he has been associated with some of the most prominent investment strategies in Indian mutual fund history. His market commentary is closely followed, his views on cycles and valuations are respected, and his role places him at the centre of active decision-making across asset classes.
Precisely because of this stature, his personal investment choices carry a different weight. They are not marketing statements. They are reflections of what he believes works best when incentives, emotions, and reputational pressures are stripped away.
The Investment Choice That Surprised Many
A significant portion of his personal net worth is invested in a passive multi-asset fund of funds, rather than in actively managed equity strategies.
At first glance, this appears counterintuitive. After all, he is closely associated with active fund management and has overseen actively managed multi-asset offerings. Yet, when it comes to his own capital, the preference is for a structure that relies on broad indices, systematic allocation, and periodic rebalancing.
This is not a rejection of active management. It is a recognition of where active skill adds the most value and where discipline matters more than discretion.
What a Passive Multi Asset FoF Actually Does
A passive multi-asset fund of funds spreads investments across equity, debt, gold, and other assets using index-linked exposure.
Such funds do not rely on stock picking. Instead, they focus on asset allocation, sector rotation, and rebalancing across market cycles. The idea is simple but powerful: no single asset class outperforms all the time, but a well-constructed mix can deliver smoother, more predictable outcomes.
By using passive instruments underneath, the fund reduces manager bias, lowers costs, and avoids the risk of persistent underperformance due to incorrect calls.
The intelligence is not in predicting the future, but in preparing for multiple possible futures.
Why This Matters More Than Active Versus Passive Debate
The real takeaway is not that passive is always better, but that allocation beats prediction.
Most investors obsess over which stock, which sector, or which fund will outperform next. Professionals, especially those with long experience, think differently. They focus on avoiding large mistakes rather than chasing maximum returns.
A diversified, rules-based approach protects capital during downturns, reduces emotional decision-making, and allows compounding to work uninterrupted. This becomes especially important as portfolio size grows, where preserving wealth matters as much as growing it.
For large personal portfolios, volatility itself becomes a risk. Passive multi-asset structures are designed precisely to manage this.
Why Even Experts Avoid Constant Stock Picking for Themselves
Expertise does not eliminate uncertainty, it merely recognises it faster.
Market professionals understand better than anyone how unpredictable markets can be. They see false narratives, crowded trades, and valuation distortions forming long before retail investors do. This awareness often leads to humility, not overconfidence.
For personal wealth, many seasoned investors choose frameworks that remove the need for frequent decisions. This reduces behavioural errors, which are among the biggest destroyers of long-term returns.
In other words, the more you know, the less you want to rely on constant judgement calls.
What This Says About Long-Term Wealth Creation
Wealth is built by consistency, not brilliance.
Multi-asset investing works because it accepts a fundamental truth: different assets shine in different environments. Equity thrives in growth phases, debt protects during slowdowns, and gold acts as insurance during crises.
By rotating and rebalancing within a structured framework, investors capture these cycles without needing to predict them perfectly. This is particularly powerful over long horizons, where compounding rewards discipline more than insight.
The choice of a passive multi-asset FoF reflects confidence in systems rather than stories.
Why This Lesson Is Relevant for Retail Investors
If experts simplify, retail investors should be cautious about overcomplicating.
Retail investors often assume that sophistication means complexity. In reality, complexity increases the chance of mistakes. Chasing themes, timing markets, and switching funds frequently usually erodes returns.
A well-structured multi-asset approach allows investors to stay invested through cycles without constant intervention. It reduces regret, second-guessing, and emotional stress.
The quiet lesson here is not to copy a specific fund, but to understand the philosophy behind the choice.
Investor Takeaway
The most powerful insight from this revelation is not about passive versus active funds. It is about mindset. When a highly experienced market professional entrusts his own wealth to a disciplined, diversified, largely passive structure, it reinforces a timeless principle.
Asset allocation, cost control, and emotional discipline matter more than clever predictions. Systems outperform stories over long periods. The lesson is clear for anyone serious about wealth creation: simplify, diversify, and stay invested.
Read more long-term investing insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
