Pre-eminent in this field is the Threadneedle European smaller companies growth fund managed by Dave Dudding since 2002, backed by the strong Threadneedle European team. Over the past three years, this fund has outperformed all other 113 European funds, whether they comprise bigger companies, smaller companies or a mixture of both. The fund is up by more than 71 per cent over three years against the next best performers, Baring European select with 58 per cent, Artemis European growth with 55 per cent and Fidelity European with 52 per cent. This is a truly remarkable performance as Dudding has consistently managed to outperform the European smaller companies sector by a substantial margin. Over the same three-year period, 12 of these funds lost money for investors while over 70 of them – more than 60 per cent – made under 10 per cent profit. Many people are nervous about investing in Europe but this doubt and fear have created reasonable value in European stockmarkets as a whole. In tougher times like this, some well managed companies have learned to improve their business to survive through leaner times. These are ones where share prices can rise substantially. Dudding now has far higher weightings in Germany and Austria than many of his sector peers. He thinks the German market has about reached its natural bottom and Austria is the key beneficiary of the structural growth under way further east in Europe. This fund is strongly recommended as one likely to continue to outperform.