BlackRock Continental European Income Fund Class D - Income (GBP)

Zoellinger has managed the fund since launch in May 2011. Over this period, the fund has outperformed the FTSE Developed Europe ex UK index and the average return of peers in the IA Europe excluding UK sector. Our analysis suggests this has been driven by the managers' ability to select outstanding companies, regardless of their size or what sector they're in.

Over the long run, the fund has delivered an attractive yield for investors, above the one produced by the market, though income is not guaranteed, and yields aren't a reliable indicator of future income. Please note the fund's charges can be taken from capital rather than income. This increases the yield but reduces the potential for capital growth.

The fund has also delivered this performance with far less ups and downs than the market and its peers in the IA Europe Excluding UK sector. The managers' more cautious approach and the defensive nature of the fund mean we don't expect it to fall as much as others in periods of uncertainty. But we would expect it to lag when markets rise. Though all investments fall as well as rise in value, so you could get back less than you invest.

The managers look for companies that can help them deliver a growing income, with the potential for long-term growth. They want to achieve this while experiencing less volatility than peers in the European sector, providing some resilience in tough markets.

They'll invest in companies they feel have a competitive advantage or brand that others struggle to replicate, strong balance sheets, and high-quality management teams. And to help achieve lower levels of volatility compared to other European funds, the team also consider how cash generative a business is, as well as how resilient they think it'll be in a market downturn.

A blended balance of quality, income, and growth opportunities across a market cycle is therefore crucial.

To help achieve this blend, the fund is split into three buckets - high yield, steady dividend growth and structural growth. The managers tend to invest in larger, more established European businesses, but can also invest in some higher-risk small and medium-sized businesses as well.

- High yield companies currently make up roughly half of the fund and typically offer an average yield above 4%. These must be run by high quality management teams and tend to be very cash generative.

- Steady dividend growth companies are considered the more resilient investments. They form the backbone of the fund due to their more resilient income streams. They typically yield 2-4% and currently make up around 30% of the fund.

- Structural growth companies have lower yields but offer greater potential for capital and dividend growth. The stocks in this bucket tend to be 'unique franchises', which the team view as world leading companies, like luxury goods provider LVMH or semiconductor manufacturer ASML. It currently makes up around 20% of the fund.

The amount invested in each bucket is driven by the opportunities in the market, and the amount invested in each company depends on the managers conviction, its prospects for dividend growth, its ability to be bought or sold quickly (also known as liquidity) and its growth potential. Individual investments tend to make up no more than 4% and no less than 1%.