30/03/2011 (FT Adviser) - Commodities remain a "long-term bet" for investors and an "aggressive phase" in growth is coming in the short term, fund managers in sector said today during a meeting at the Association of Investment Companies (AIC).

Evy Hambro, manager of the BlackRock World Mining Trust, claimed demand would be driven by the rise of emerging markets.

He said: "As the wealth per capita increases so does commodity consumption."

Catherine Raw, who also manages the BlackRock World Mining Trust, said the demand from emerging markets was already happening, adding that "one of the misnomers about commodities is that everybody thinks it is about emerging market demand in the future."

Will Smith, manager of City Natural Resources and portfolio manager of Geiger Counter, said he was also bullish for commodities prospects.

"We continue to favour gold whilst loose monetary policy continues, palm oil as a play on rising incomes in Asia, and copper for its particular supply/demand dynamic."

He said the risks for the commodities sector included the money and time taken to develop mines and he warned "the easy stuff has been found and the grade is declining.

"The more interesting discoveries are being found in far away places where geologists have not been able to get through in the past as a result of geography and political issues."

Mr Smith cited West Africa as an example of an area that was previously untouched and was proving to be commodity rich.

For Mr Hambro the key risks are the commodity companies themselves and risks of nationalisation.

He said: "As equity investors you want to make sure that the managers of the companies are good managers of your money.

"The second risk is resource nationalisation. That is going to continue having an impact."

Mr Hambro said this was also a problem in developed economies and pointed to the Australian natural resource tax and George Osborne's recent announcement in the Budget of a tax on North sea oil companies.