Threadneedle European Select Inclusive - Class 1 - Accumulation (GBP)

Dudding has a long history of outperforming the European stock market. Our analysis suggests this performance is mainly down to the manager's stock-picking, his ability to identify stocks that go on to perform well, regardless what size they are or in which country their based. Being in the right sectors at the right time has also helped. Past performance is not a guide to future returns.

Moore has a shorter track record, though the results look promising since he became co-manager in April 2019, and while he previously worked in Threadneedle's European smaller companies team.

The managers' more conservative approach and focus on companies that could deliver more sustainable returns has seen the fund perform well in a variety of market conditions. It's held up better than the average European fund in weaker markets, though it has not tended to rise as quickly in positive markets. It has also tended to be one of the least volatile funds in the European sector, but there are no guarantees the fund will perform this way in future. All investments fall as well as rise in value, so you could get back less than you invest.

The managers look for quality companies. These are businesses with a sustainable competitive advantage, which could help them sustain long-term cash flows. They should possess a unique quality the managers think can help them maintain higher earnings than the rest of the market thinks they can. This might be because they make a product that others can't replicate, are better at keeping costs down, or have built strong relationships with their customers meaning they're less likely to switch to a competitor.

The managers focus on what's going on within individual companies, rather than trying to predict the impact of wider economic or political events that may have little bearing on a company's longer-term success. They also tend to focus on larger firms, which could bring some more stability to the fund than some other European funds. The fund mainly invests in larger or more stable European economies, such as Switzerland, France, Germany and the Netherlands.

The managers are supported by a well-resourced European equities team at Threadneedle. This group of analysts act as an important source of ideas for the managers, and helps to encourage challenge and debate in the team.

Overall the fund invests in a fairly small number of companies and this means each one could have a big impact on performance, though this approach increases risk.