Is your fund one of the hundreds undergoing a rebrand? Earlier this year, Citywire Amplify found that more than 200 strategies inserted terms such as ‘ESG’, ‘sustainable’ or ‘impact’ into their names in the first six months of 2022.

Rules around the world are becoming more stringent regarding fund names and goals. The Sustainable Finance Disclosure Regulation, for example, classifies funds that ‘have sustainable investment as their objective’ as Article 9.

Article 9 funds are often described as ‘dark green’: having the greatest focus on sustainability. So, combining this with sustained outperformance – enough to achieve a Citywire rating at that – is surely a tough job. Doing so across multiple such funds would be even harder.

Amplify wanted to highlight these sustainable outperformers, but to do so we had to wean out managers whose Citywire rating could be obtained from non-Article 9 funds. As a result, we have only examined managers whose funds all meet the SFDR Article 9 requirements.

Read on as we examine three managers running multiple Article 9 funds, and no non-Article 9 funds – still with us? – while beating their respective sector averages.

The three to watch

The first is Dirk Schmelzer, a senior fund manager at Plenum Investments. He is currently the only AAA-rated manager to meet our criteria.

Schmelzer manages the Plenum Cat Bond fund and the Plenum Cat Bond Dynamic fund. The former is run alongside David Strasser, who is also rated AAA – but that is his only fund, and we are analysing managers with more than one.

The funds’ assets total more than €400m, of which the Cat Bond fund makes up €354.2m. The Morningstar category containing both strategies has seen a large net outflow in 2022: €10.8bn, including €3.51bn in August.

The two funds have been performing well in their respective Citywire sectors: the Cat Bond fund ranks 12th of 355 in the Bonds – US Dollar sector over the past three years, and the Cat Bond Dynamic fund ranks 10th of 1116 in the Bonds – Global sector over the past year. Both outperformed the sector average (9.1% vs -3.1% and 3.5% vs -17%, respectively).

Schmelzer joined Plenum in 2010. Before that, he worked at Falcon Private Bank and VZ VermögensZentrum. He has managed the Cat Bond fund since 2010 but only started running Cat Bond Dynamic in 2021.

BlackRock’s Charles Lilford is one of only three AA-rated managers to meet our criteria. He has managed the BGF Future of Transport and BGF Sustainable Energy funds since 2018. A-rated Alastair Bishop co-runs both, while AA-rated Hannah Johnson manages the former.

The two funds have more than €7bn in assets, with the Sustainable Energy fund accounting for €5.85bn. Morningstar puts it in the Alternative Energy sector, which year-to-date has seen inflows of €2.82bn, including €439m in August. The Future of Transport fund is part of Morningstar’s Equity – Technology sector, which recorded outflows of €5.39bn year-to-date, including €338m in August.

The Sustainable Energy fund ranks 17th of 25 over the past three years in the Citywire Clean Energy sector, with a return of 57.9%. The Future of Transport fund performs much better in the Consumer Discretionary sector, ranking fourth of 43 over the same time with a return of 67.0%.

Lilford joined BlackRock in 2016 and has been a member of its global thematics and sector equity team since then. Before that, he worked at Treis Partners, Piper Jaffray, Commerzbank and Fieldstone Private Capital Group.

Last, we have James Rutherford. He is one of two A-rated managers to meet our criteria. He is the head of European equities at Federated Hermes and manages two funds. He has managed the Federated Hermes Sustainable European Equity fund since 2010, and the Federated Hermes Sustainable Europe ex-UK Equity fund since 2019, alongside Martin Todd.

Morningstar puts them in its Europe Large-Cap Growth Equity and Europe ex-UK Equity categories, respectively. The former category has had outflows of €5.92bn in 2022, including €350m in August, while the latter has lost €7.84bn, including €162m in August.

Although the assets in Rutherford’s funds are not as high as those of the two managers featured above – he runs a total of only €84m – the fund’s sector performance is just as good. In the Europe Growth sector, the Sustainable Europe Equity fund ranks 30th of 89 in the past three years with a return of 19.9%, while the Sustainable Europe ex-UK Equity fund ranks 19th of 114, with a return of 27.3% over the same period in the Europe ex-UK sector.

Rutherford has been at Federated Hermes since 2010. He previously worked at Sourcecap International until it was acquired by Federated Hermes, and Fidelity Investments before that.