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The pattern within that broad universe should not be a surprise to anyone familiar with the course of events since serious evidence of the credit crunch came into being in early 2007. More specifically, investors have fled assets that are perceived to be higher risk in favour of safety.

The most notable effect has been the sell off of small and mid caps in favour of steadier large caps. It goes without saying that exposure to banks or to companies with high levels of debt has been bad for investor's financial health. Resources issues have remained strong. These trends are evident in the fund arena: The Morningstar Europe ex UK Small/Mid Cap category is down 9.1 per cent over the past year, compared with a drop of just 2.8 per cent for the Morningstar Europe ex UK Large Cap category. Similarly, top performers had, on average, more exposure to industrials and energy issues, and less exposure to financial services than did poorer performers.

All of this reflects a very short period of time, however, and picking a fund based on what has worked over the past year is about as poor a recipe for success as we can imagine. One example of this worth spending some time on is Tim McCarron's Fidelity European. Probably the best-known fund in the sector, it struggled during portions of 2007. That owed much to a huge financial services stake, and – initially - little in resources issues. The fund had a 50 per cent weight in the sector in February 2007 - about 28 per cent of this was in banks - and was still sitting at 30 per cent - roughly 16 per cent banks - by October. By year end, the stake had receded to 21 per cent and it stood at just 16 per cent at year-end. Instead, Mr McCarron piled into telecoms, healthcare, energy, and industrials. That helped him steady the fund, and it is back near the top of the charts on a one-year basis and still looks quite strong over the longer term as well.

The point here is that Mr McCarron had done well enough over time and had enough research support that getting worked up over a bad few months in the heat of the credit crisis would have been a mistake. It should also be noted that David Allen and his colleagues at Fidelity have undertaken a very sensible restructuring of the research team - one that should help position the firm well for the future.

In short, this remains a very good choice in the sector, albeit investors must recognise that with the sector bets Mr McCarron takes, there will be some rocky patches. It would be better still, however, if it were cheaper. Its 1.71 per cent TER is not egregious, but Fidelity could really seize a market leadership position here by passing economies of scale along to investors and keeping fees lower.

As for those funds that have fared best during the past year, some of them are very good investments, but not simply because of recent performance. There is not space to highlight them all, but Chris Rice at Cazenove European has shown a tremendous ability to deliver consistently strong performance with low volatility during his five plus years at the helm. Moreover, the A shares are available for a not-stratospheric £25,000 minimum with an annual TER of just 1.13 per cent. Raj Shant's Newton Continental European is also good. It has proven the strength of its thematic approach over a reasonably substantial period of time, and is well worth a look for core Europe ex UK exposure.