Bestinvest says
Dudding's style looks for companies with a strong, sustainable competitive advantage. Once he has identified such a company he will look to hold these companies for a substantial period until there is a fundamental change in the business. To this extent valuation and the market cycle are less important. Dudding's style could be described as Growth At a Reasonable Price.
This process has served investors well for the substantial period that Dudding has run the fund. This is the stand out European Smaller companies fund available to UK investors.
The Fund’s aim is to achieve capital growth through investing primarily in the equity of smaller companies domiciled in Continental Europe or with significant Continental European operations.
Dudding's focus is on quality businesses with a strong, sustainable competitive advantage. Examples include companies in relatively consolidated industries especially where there are high barriers to entry.
Typically the fund will therefore have a large amount of industrial stocks as there are lots of niche manufacturers who are vital to companies' industrial process. Similarly the financial weighting is likely to be low as Dudding views these companies as selling homogenous products.
The primary risk control for the fund is therefore that in weak markets the earnings of his companies are more secure and transparent and therefore their shareprices will fall less. This has typically been the case and the process has been tested over a sustained period.