Hak Salih said that the company prefers larger companies because they remain “very attractive”, given their “stable earnings prospects”.

Mr Salih claimed that a slowing UK economy, future interest rate cuts and a weaker pound against the dollar and the euro is “another reason for the preference for larger caps in the UK”.

However, the expert noted that the coming year is unlikely to see a repeat of the “significant underperformance” of the equity market income sector experienced in 2007.

“Instead, with falling interest rates and a positive outlook for higher yielding larger caps, we believe the income sector should be well placed for 2008,” he remarked.

Last month, a survey of independent financial advisers conducted by the Association of Investment Companies and Unbiased.co.uk found that 77 per cent predict that the financial markets will rise in 2008.

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