Barnett says people only need to look at what is happening in countries that are addressing their deficit to see that the major problems in the region are only just beginning. "The eurozone worries me immensely," he said. "The process of deleveraging we have seen in the US and UK markets over the last four years or so has only just started on the continent."
"Europe is further away from crisis resolution than other markets in the world economy."
The manager says that despite the recent optimism that followed the ECB’s bond-buying programme, the fundamental causes of the sovereign debt crisis have yet to be addressed.
"Nothing of what [Mario] Draghi has done will change the general economic landscape," Barnett explained.
"What he has done is thrown the ball back in the politicians’ court, who will now determine if the policies are enacted. This is especially the case in countries like Spain and Italy where we still see significant levels of debt."
The manager also remains sceptical about the impact of stimulus measures implemented by the Federal Reserve.
He commented: "In terms of QE3, whilst this unlimited market stimulus is trying to boost the labour market, there is not much evidence that there has been change to employment growth."
"Ultimately, this QE3 has not changed the overall economy but it has been a good move for asset prices."
"Whether or not this new bout of quantitative easing will help boost the markets [in the long-term], I suspect not. It has not affected underlying growth rates."
In conditions such as this one, Barnett thinks an income strategy is the only way forward.
"For me, dividend yield is the strategic priority; growth in dividends is the end point of a successful business model," he said.
"The companies that will remain strong in the current poor market backdrop are ones that have consistent growth in their dividend yields."
However, he says investors should worry less about how much money a company is paying out and more about how sustainable this amount is.
"At the end of the day, the main factor is the reliability of companies delivering the growth they say they can deliver," he commented.
"There is no point investing in companies that say they return 5 per cent and end up losing 5 per cent instead."
"In the end, you will find that companies that sit in the top quartile of their sector are the companies that can consistently grow their dividend."
Mark Barnett heads up both the Invesco Perpetual UK Strategic Income fund and the closed-ended Invesco Perpetual Select UK Equity investment trust.
Performance of manager vs peer group composite over 10-yrs
Source: FE Analytics
According to FE Analytics, over 10 years the manager has returned 226.35 per cent compared with 139.32 per cent from his peer group composite. He has also been less volatile.