Even though the economic outlook for the UK remains weak, we have been seeing an increase in money flowing to the UK stock market, in particular into the Equity Income sector.

Investors have certainly taken a more cautious approach to investing this year compared with 2011, although we are seeing a lot more investors choosing to use their ISA this year than last.

Not only are we seeing an increase in domestic funds and equity income but bonds have also been a favourite for investors – this is because returns on cash remain below 1 per cent whilst equity income yields around 4 per cent and corporate bond funds a similar amount.

Given the continuous flow of bad news coming out of Europe it is not surprising that investors continue to stay away. The region is unpopular with many because they tend to view European corporates in the same way they view European politics – indecisive and expensive.

However, the region is full of world-class companies with low valuations. FTSE Europe ex UK has lost 9.71 per cent over the last 12 months, but has rebounded strongly since the start of 2012, returning 12.06 per cent.

There is also an appetite for risk and we are seeing investors look to the strong economies of Asia and emerging markets. However, they have shied away from country-specific funds and prefer global emerging or Asia Pacific funds.

Investors do understand the long-term benefits of investing in equity income and the growth potential of Asia and emerging markets especially after seeing the MSCI Asia Pacific Index rise 9.06 per cent so far in 2012.

Our five biggest recommendations this year are Threadneedle UK Equity Income, Fidelity South East Asia, M&G Strategic Corporate Bond, Standard Life Global Absolute Return Strategies and First State Global Emerging Markets Leaders. All are available for retail clients, with a minimum investment of either £500 or £1,000.

Adrian Lowcock is senior investment adviser at Bestinvest. The views expressed here are his own.