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Speaking after the recent AIC roundtable on the outlook for European investment companies, Mr Longden, manager of F&C's European Assets trust, said stock pickers could find value in smaller European companies that were “sellers of choice” to larger, more capital-intensive companies.

“You can find providers to the big boys, and that goes for goods and services – a lot of the big companies are outsourcing IT capability,” he added.

However, Mr Longden said investors would remain cautious about some of the newer entrants to the market, as questions remained over their funding.

Figures from the AIC show Europe’s long-term performance was solid, with the smaller companies sector witnessing 185 per cent growth over five years and 161 per cent over 10 years.

Mr Longden said some companies showed an "aversion to debt" and would not be hugely affected by the lack of credit in the market.

“The key point for small and mid caps is obviously the world has gone teetotal on its view of debt – it is not easy, and it is expensive."

Annabel Brodie-Smith, communications director at the AIC, said investors who were worried about current volatility in the markets should consider regular investing.

“Regular saving each month gives you a lower risk profile by smoothing out the highs and lows in the price of shares," she said. "And you don't have to worry about deciding when the best time to invest is."