Mirae Asset Global Investments (India) is bullish on the commodities space and says that

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China concerns are exaggerated, according to a top official.

“Commodities are a new and alternative asset class. The commodities bull run lasts for a longer period of 15-20 years or what we call as a super cycle. With the ever growing demand for commodities from emerging markets such as India and China, commodity prices are only going to move up,” Neelesh Surana, senior fund manager, Equity at Mirae Asset Global Investments, said.

He also said that concerns about emerging bubbles in China, the world’s top consumer of many commodities, is blown up and it will keep driving the commodity prices for long.

Commodity sector funds were in the limelight and absorbed over $17 billion in net inflows in 2009, fueled at various stages by anticipation of future growth, concerns about dollar weakness and China’s stockpiling strategy, according to fund tracker EPFR Global. However, for the week ending February 10, investors redeemed $526 million from such funds, due to a stronger US dollar, fresh doubts about the strength of the global economic recovery and falling prices.

“Commodities offer portfolio diversification, hedge against inflation and help optimise returns. Those looking to invest in commodities should be ready to face volatility movements ,” he added.