New Delhi, Feb. 11 -- ICICI Prudential AMC's S. Naren recently cautioned investors against putting their money into small-cap and mid-cap funds through systematic investment plans or SIP, calling these an "overvalued asset class".

Speaking to mutual fund distributors at an event, the executive director and chief investment officer at ICICI Prudential Asset Management Company said the risk in the financial system had shifted from banks to SIP investors. His remarks triggered a heated debate among industry leaders, with some fund managers dismissing his concerns as fear-mongering.

Mint explains what Naren's advice means for SIP investors and the broader market.

Naren presented four key arguments for pausing SIPs in mid and small-cap fund...