Time to venture out of the comfort zone

Time management

For Martin Wood, an analyst at Financial Express Research, the issue of time should press investors to make the leap of faith. "UK equity income funds have been the darling of investors and financial advisers for a long time because they have outperformed, but the thing that will hold them back over 2008, and possibly beyond, is the shutdown in liquidity in developed market places," he says. "The ones that will prosper are global emerging markets, which are relatively immune to that credit crunch."

Mr Wood believes global income funds are better placed to withstand this continued fallout than European funds because they will pick up dividend growth from Asian companies - although both are an improvement on their UK counterparts. "Asian markets are coming to the point where they have to join the rest of the world and start paying dividends," he says. "They have to give income, otherwise people will not invest. Singapore, Indonesia, Hong Kong - that is where the income is going to come from." All it takes now is for UK investors to wake up to this fact. "They need to cast their sights further afield," he says.

Catherine Neilan is news editor at Investment Adviser