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Emerging market exposure has helped the Sararin International Equity fund to top-decile performance over one year, according to its manager.

Mark Whitehead said returns from the sector had recently been excellent and company reporting and transparency had improved.

"China was uninvestable for me, maybe, five years ago, but there are now some very interesting companies one can access," he said.

"One of our top picks is Shanghai Industrial, which is a conglomerate but is pretty heavily subsidised by the government. It operates toll roads and does quite a lot of infrastructure build for the Shanghai district. That company is yielding about 3.5 per cent and the dividend is growing."

Another Chinese company in which Mr Whitehead has invested is Hengan. The firm produces hygiene products and is strongly linked to GDP and the rise of disposable income in China.

In spite of his enthusiasm for emerging markets, the manager maintained there were still opportunities in Europe and the US.

"Europe has historically always produced a high dividend yield and payout ratio, and a lot of US companies are getting better at progressive dividend policy."

European companies on which the manager was bullish included Norwegian company Fred Olsen Energy, which operates drilling rigs in the North Sea. It is currently producing a yield of roughly 5 per cent, but also recently paid a special dividend.

In North America, Mr Whitehead was still content to hold financials such as Canadian banks, including the Bank of Nova Scotia, as it has maintained a strong balance sheet and has been relatively untouched by the global downturn.

The fund, which lost 16 per cent over one year to June 1 against 22.1 per cent for the IMA Global Growth sector, takes its dividend stream from a widely diversified portfolio of global equities and can avoid the concentration risk of a single market, which many UK equity income funds have fallen into.

Mr Whitehead said many of the problems for UK investors stemmed from low yields on cash and government bonds. In the equity markets, financials generated 30 per cent of the dividend yield on the FTSE 100. Much of that 30 per cent has now disappeared.

"If you look at the top five contributors to dividend yield in the UK market – Royal Dutch Shell, HSBC, BP, GlaxoSmithKline and Vodafone – they have been producing more than 40 per cent of the dividend for the whole market."

By being benchmarked to the MSCI World ex UK index, Mr Whitehead said, he had a much greater range of firms to choose from. While sceptics maintain international companies do not produce as large a dividend as their UK-based counterparts, Mr Whitehead pointed out 584 stocks were producing a yield of more than 4 per cent at the end of last month.