Federated Hermes MDT Small Cap Growth Fund
Portfolio of Investments
October 31, 2021 (unaudited)
Shares | Value | ||
COMMON STOCKS—98.1% | |||
Communication Services—3.6% | |||
233,435 | 1 | AMC Networks, Inc. | $9,288,379 |
253,949 | 1 | Cars.com, Inc. | 3,306,416 |
58,315 | Cogent Communications Holdings, Inc. | 4,466,346 | |
99,975 | 1 | iHeartMedia, Inc. | 1,937,515 |
384,731 | 1 | Yelp, Inc. | 14,862,158 |
TOTAL | 33,860,814 | ||
Consumer Discretionary—16.3% | |||
129,701 | Abercrombie & Fitch Co., Class A | 5,128,378 | |
135,086 | 1 | Academy Sports and Outdoors, Inc. | 5,778,979 |
9,319 | 2 | American Eagle Outfitters, Inc. | 221,233 |
11,470 | Bed Bath & Beyond, Inc. | 161,039 | |
176,110 | 1 | Bloomin Brands, Inc. | 3,807,498 |
82,248 | 1 | Boot Barn Holdings, Inc. | 8,594,094 |
153,672 | Camping World Holdings, Inc. | 5,724,282 | |
83,580 | 1 | CROCs, Inc. | 13,493,991 |
194,247 | 1 | Everi Holdings, Inc. | 4,661,928 |
18,965 | 1 | Fox Factory Holding Corp. | 3,052,417 |
37,605 | 1 | Funko, Inc. | 616,346 |
64,215 | 1,2 | Groupon, Inc. | 1,362,642 |
130,032 | 1 | Houghton Mifflin Harcourt Co. | 1,845,154 |
78,097 | 1 | International Game Technology PLC | 2,303,081 |
26,293 | 1,2 | iRobot Corp. | 2,193,362 |
35,591 | Jack in the Box, Inc. | 3,521,729 | |
33,030 | 1,2 | Kirkland’s, Inc. | 742,514 |
9,612 | Kontoor Brands, Inc. | 509,436 | |
51,427 | 1 | Lakes Gaming, Inc. | 2,672,661 |
21,466 | 1 | National Vision Holdings, Inc. | 1,323,164 |
8,085 | 1 | Onewater Marine, Inc. | 358,489 |
15,766 | Papa Johns International, Inc. | 1,956,245 | |
239,681 | 1 | Party City Holdco, Inc. | 1,742,481 |
139,473 | 1 | Perdoceo Education Corp. | 1,481,203 |
177,104 | 1 | Red Rock Resorts, Inc. | 9,636,229 |
89,309 | 1 | Revolve Group, Inc. | 6,701,747 |
233,544 | 1 | Sally Beauty Holdings, Inc. | 3,563,881 |
44,021 | 1 | Scientific Games Corp. | 3,523,881 |
9,724 | 1 | SeaWorld Entertainment, Inc. | 617,474 |
101,357 | Shutterstock, Inc. | 12,279,401 | |
5,647 | Signet Jewelers Ltd. | 503,599 | |
15,189 | 1 | Sleep Number Corp. | 1,341,796 |
25,214 | Smith & Wesson Brands, Inc. | 542,101 | |
276,879 | 1 | Sonos, Inc. | 9,031,793 |
8,686 | The Aaron’s Company, Inc. | 203,166 | |
98,461 | Wingstop, Inc. | 16,981,569 | |
24,633 | 1,3 | XPEL, Inc. | 1,869,645 |
154,781 | 1 | YETI Holdings, Inc. | 15,219,616 |
TOTAL | 155,268,244 |
1
Shares | Value | ||
COMMON STOCKS—continued | |||
Consumer Staples—2.9% | |||
159,717 | 1 | Bellring Brands, Inc. | $4,283,610 |
131,153 | 1 | BJ’s Wholesale Club Holdings, Inc. | 7,664,581 |
18,031 | 1 | Celsius Holdings, Inc. | 1,740,352 |
33,928 | 1 | Central Garden & Pet Co., Class A | 1,567,473 |
20,765 | Coca-Cola Bottling Co. | 8,335,071 | |
35,402 | Energizer Holdings, Inc. | 1,291,111 | |
16,648 | 1 | The Simply Good Foods Co. | 660,093 |
34,635 | 1 | United Natural Foods, Inc. | 1,502,813 |
41,686 | 1,2 | Veru, Inc. | 340,575 |
TOTAL | 27,385,679 | ||
Energy—2.4% | |||
152,159 | 1 | Antero Resources Corp. | 3,023,399 |
45,962 | 1 | Aspen Aerogels, Inc. | 2,503,091 |
28,063 | Cactus, Inc. | 1,220,740 | |
48,549 | 1,2 | Callon Petroleum Corp. | 2,511,440 |
107,524 | 1 | Centennial Resource Development, Inc. | 774,173 |
27,427 | 1,2 | Laredo Petroleum | 2,067,996 |
435,941 | Magnolia Oil & Gas Corp. | 9,102,448 | |
29,345 | Matador Resources Co. | 1,228,088 | |
TOTAL | 22,431,375 | ||
Financials—6.1% | |||
168,505 | Artisan Partners Asset Management, Inc. | 8,347,738 | |
24,541 | CNB Financial Corp. | 629,967 | |
41,164 | Cowen Group, Inc. | 1,553,118 | |
62,839 | 1 | Customers Bancorp, Inc. | 3,348,690 |
120,802 | 1 | Donnelley Financial Solutions, Inc. | 4,629,133 |
402,184 | Eastern Bankshares, Inc. | 8,353,362 | |
158,896 | 1 | Green Dot Corp. | 6,730,835 |
36,685 | Guaranty Bancshares, Inc. | 1,377,155 | |
39,779 | Houlihan Lokey, Inc. | 4,458,430 | |
197,625 | Moelis & Co. | 14,375,242 | |
19,166 | Origin Bancorp, Inc. | 854,804 | |
72,336 | StepStone Group, Inc. | 3,398,345 | |
TOTAL | 58,056,819 | ||
Health Care—25.9% | |||
319,467 | 1 | Acadia Pharmaceuticals, Inc. | 5,734,433 |
51,904 | 4 | Adeptus Health, Inc. | 0 |
962,850 | 1 | Akebia Therapeutics, Inc. | 2,763,379 |
37,653 | 1 | Alector, Inc. | 818,576 |
155,190 | 1 | Alkermes, Inc. | 4,700,705 |
6,859 | 1 | AMN Healthcare Services, Inc. | 676,983 |
33,798 | 1 | Amphastar Pharmaceuticals, Inc. | 631,347 |
23,779 | 1 | AnaptysBio, Inc. | 782,329 |
135,073 | 1 | ANI Pharmaceuticals, Inc. | 5,049,029 |
420,968 | 1 | Antigenics, Inc. | 1,616,517 |
33,931 | 1 | Aravive, Inc. | 120,455 |
362,368 | 1 | Assembly Biosciences, Inc. | 1,141,459 |
60,920 | 1 | Athenex, Inc. | 154,737 |
10,419 | 1 | AtriCure, Inc. | 782,050 |
75,651 | 1 | Avid Bioservices, Inc. | 2,320,973 |
55,080 | 1 | AxoGen, Inc. | 836,665 |
354,104 | 1 | BioCryst Pharmaceuticals, Inc. | 5,286,773 |
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Shares | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
97,540 | 1 | Biohaven Pharmaceutical Holding Co. Ltd. | $13,881,893 |
40,902 | 1 | C4 Therapeutics, Inc. | 1,816,867 |
373,362 | 1 | Catalyst Pharmaceutical Partners, Inc. | 2,202,836 |
9,133 | 1 | Codexis, Inc. | 317,554 |
48,932 | 1 | Co-Diagnostics, Inc. | 401,732 |
100,147 | 1 | Collegium Pharmaceutical, Inc. | 1,965,886 |
260,964 | 1 | Community Health Systems, Inc. | 3,418,628 |
29,453 | 1 | Corcept Therapeutics, Inc. | 530,154 |
39,361 | 1,2 | Cortexyme, Inc. | 519,565 |
281,779 | 1 | Cross Country Healthcare, Inc. | 5,841,279 |
120,144 | 1 | Cutera, Inc. | 5,166,192 |
76,033 | 1 | Cytokinetics, Inc. | 2,654,312 |
478,874 | 1 | Cytomx Therapeutics, Inc. | 2,839,723 |
41,440 | 1 | Denali Therapeutics, Inc. | 2,003,624 |
110,127 | 1 | Dicerna Pharmaceuticals, Inc. | 2,291,743 |
73,633 | 1 | Eagle Pharmaceuticals, Inc. | 3,856,160 |
222,265 | 1 | Evolent Health, Inc. | 6,505,696 |
70,764 | 1 | Evolus, Inc. | 553,374 |
531,639 | 1 | FibroGen, Inc. | 5,911,826 |
42,669 | 1,2 | G1 Therapeutics, Inc. | 618,274 |
212,114 | 1,2 | GlycoMimetics, Inc. | 405,138 |
7,470 | 1 | Halozyme Therapeutics, Inc. | 284,383 |
91,049 | 1 | Harpoon Therapeutics, Inc. | 569,967 |
53,983 | 1 | Health Catalyst, Inc. | 2,841,665 |
108,828 | 1 | Hookipa Pharma, Inc. | 529,992 |
70,370 | 1 | IDEAYA Biosciences, Inc. | 1,508,733 |
11,554 | 1 | Inogen, Inc. | 458,116 |
9,634 | 1 | Inspire Medical Systems, Inc. | 2,597,134 |
93,552 | 1 | Intellia Therapeutics, Inc. | 12,440,545 |
316,943 | 1 | Ironwood Pharmaceuticals, Inc. | 4,047,362 |
67,201 | 1,2 | Kala Pharmaceuticals, Inc. | 116,930 |
11,804 | 1 | Lantheus Holdings, Inc. | 276,095 |
96,760 | LeMaitre Vascular, Inc. | 5,032,488 | |
3,723 | 1 | LHC Group, Inc. | 501,079 |
9,007 | 1 | Ligand Pharmaceuticals, Inc., Class B | 1,314,482 |
3,298 | 1 | Madrigal Pharmaceuticals, Inc. | 256,419 |
84,062 | 1 | Magenta Therapeutics, Inc. | 537,997 |
101,846 | 1,2 | Mannkind Corp. | 479,695 |
45,557 | 1 | MeiraGTx Holdings PLC | 979,475 |
14,699 | 1 | Merit Medical Systems, Inc. | 988,655 |
15,493 | 1 | Morphic Holding, Inc. | 890,847 |
374,788 | 1,2 | NextCure, Inc. | 3,080,757 |
42,419 | 1 | NextGen Healthcare, Inc. | 698,217 |
61,430 | 1 | NuVasive, Inc. | 3,277,905 |
1,782 | 1 | Omnicell, Inc. | 317,463 |
44,211 | 1,2 | Ontrak, Inc. | 380,215 |
113,620 | 1 | OptimizeRX Corp. | 10,987,054 |
59,318 | 1 | Organogenesis Holdings, Inc. | 651,312 |
84,013 | 1 | Ortho Clinical Diagnostics Holdings PLC | 1,660,937 |
34,780 | 1 | Orthofix Medical, Inc. | 1,251,384 |
95,651 | Owens & Minor, Inc. | 3,431,958 | |
21,565 | 1 | Pacira BioSciences, Inc. | 1,127,418 |
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Shares | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
38,233 | 1 | Precision Biosciences, Inc. | $362,831 |
46,601 | 1 | Prestige Consumer Healthcare, Inc. | 2,795,594 |
170,856 | 1 | Progyny, Inc. | 10,495,684 |
54,552 | 1 | Prothena Corp. PLC | 3,019,453 |
148,540 | 1 | Puma Biotechnology, Inc. | 757,554 |
144,208 | Select Medical Holdings Corp. | 4,790,590 | |
225,611 | 1 | Selecta Biosciences, Inc. | 809,943 |
328,910 | 1,2 | Senseonics Holdings, Inc. | 1,151,185 |
7,837 | 1 | Sharps Compliance Corp. | 64,655 |
95,685 | 1 | Shockwave Medical, Inc. | 20,447,884 |
100,555 | 1 | Stoke Therapeutics, Inc. | 2,295,671 |
14,041 | 1 | Surgery Partners, Inc. | 577,647 |
68,829 | 1 | The Joint Corp. | 6,021,161 |
207,043 | 1 | Vanda Pharmaceuticals, Inc. | 3,544,576 |
243,534 | 1 | Varex Imaging Corp. | 6,538,888 |
57,869 | 1 | Verastem, Inc. | 150,459 |
32,937 | 1 | Viracta Therapeutics, Inc. | 193,670 |
269,277 | 1 | Vocera Communications, Inc. | 15,235,693 |
321,127 | 1,2 | Voyager Therapeutics, Inc. | 1,162,480 |
99,374 | 1 | Xencor, Inc. | 3,931,235 |
14,744 | 1 | Zentalis Pharmaceuticals, LLC | 1,186,007 |
TOTAL | 246,168,405 | ||
Industrials—12.6% | |||
96,202 | Advanced Drainage System, Inc. | 10,851,586 | |
5,627 | 1 | Allegiant Travel Co. | 986,244 |
67,000 | Apogee Enterprises, Inc. | 2,809,310 | |
116,227 | 1 | Atkore, Inc. | 10,986,938 |
79,688 | 1 | Atlas Air Worldwide Holdings, Inc. | 6,464,291 |
15,204 | 1 | Avis Budget Group, Inc. | 2,635,005 |
97,512 | 1 | Beacon Roofing Supply, Inc. | 5,155,459 |
3,145 | 1 | BlueLinx Holdings, Inc. | 149,796 |
184,289 | Boise Cascade Co. | 10,434,443 | |
36,543 | 1 | Evoqua Water Technologies Corp. | 1,528,594 |
108,824 | 1 | Franklin Covey Co. | 4,597,814 |
99,652 | 1 | GMS, Inc. | 4,935,764 |
113,267 | Heidrick & Struggles International, Inc. | 5,309,957 | |
44,514 | Herc Holdings, Inc. | 8,103,329 | |
129,054 | 1 | Infrastructure and Energy Alternatives, Inc. | 1,428,628 |
196,159 | 1 | Mistras Group, Inc. | 1,926,281 |
303,184 | 1 | MRC Global, Inc. | 2,516,427 |
58,981 | 1 | MYR Group, Inc. | 6,024,909 |
208,925 | Pitney Bowes, Inc. | 1,449,940 | |
3,706 | Regal Rexnord Corp. | 564,535 | |
230,931 | 1 | Resideo Technologies, Inc. | 5,694,758 |
81,329 | REV Group, Inc. | 1,228,881 | |
13,246 | 1 | Saia, Inc. | 4,141,229 |
28,082 | Tennant Co. | 2,231,396 | |
5,839 | Terex Corp. | 261,587 | |
101,217 | 1 | TriNet Group, Inc. | 10,248,221 |
18,474 | 1 | Upwork, Inc. | 870,495 |
3,253 | Watts Industries, Inc., Class A | 618,135 | |
19,412 | 1 | WESCO International, Inc. | 2,515,019 |
4
Shares | Value | ||
COMMON STOCKS—continued | |||
Industrials—continued | |||
84,531 | Zurn Water Solutions Corp. | $3,066,785 | |
TOTAL | 119,735,756 | ||
Information Technology—22.7% | |||
132,895 | 1 | Altair Engineering, Inc. | 10,337,902 |
60,736 | 1 | Ambarella, Inc. | 11,286,571 |
98,342 | 1 | Asana, Inc. | 13,354,844 |
142,936 | 1 | Axcelis Technologies, Inc. | 7,851,474 |
8,555 | 1 | Blackbaud, Inc. | 607,491 |
58,664 | 1 | Box, Inc. | 1,515,291 |
164,858 | 1 | Brightcove, Inc. | 1,635,391 |
109,589 | 1 | Cambium Networks Corp. | 3,092,602 |
150,254 | 1 | ChannelAdvisor Corp. | 3,832,980 |
84,532 | 1,2 | Coda Octopus Group, Inc. | 713,450 |
190,362 | 1 | Commvault Systems, Inc. | 11,707,263 |
17,944 | 1 | Digitalocean Holdings, Inc. | 1,751,155 |
114,994 | 1 | Domo, Inc. | 10,159,720 |
25,737 | Evertec, Inc. | 1,163,570 | |
21,248 | 1 | Evo Payments, Inc. | 460,657 |
33,385 | 1 | Exlservice Holding, Inc. | 4,094,003 |
357,846 | 1 | Extreme Networks, Inc. | 3,517,626 |
215,794 | 1 | Grid Dynamics Holdings, Inc. | 6,204,077 |
12,079 | 1 | Ichor Holdings Ltd. | 528,094 |
161,433 | 1 | MA-COM Technology Solutions Holdings, Inc. | 11,271,252 |
24,036 | 1 | MaxLinear, Inc. | 1,514,268 |
155,772 | 1 | Mimecast Ltd. | 11,751,440 |
7,212 | 1 | OSI Systems, Inc. | 671,509 |
9,822 | 1 | Qualys, Inc. | 1,222,643 |
145,538 | 1 | Rapid7, Inc. | 18,738,017 |
29,216 | 1 | Rimini Street, Inc. | 304,139 |
159,693 | 1 | Secureworks Corp. | 2,941,545 |
9,544 | 1 | Semtech Corp. | 811,526 |
38,268 | 1 | Sitime Corp. | 10,136,810 |
18,294 | 1 | SMART Global Holdings, Inc. | 977,997 |
119,977 | 1 | Sprout Social, Inc. | 15,318,663 |
64,564 | 1 | SPS Commerce, Inc. | 9,860,860 |
16,938 | 1 | Varonis Systems, Inc. | 1,096,566 |
159,574 | 1 | Workiva, Inc. | 23,864,292 |
534,113 | 1 | Zuora, Inc. | 11,675,710 |
TOTAL | 215,971,398 | ||
Materials—1.6% | |||
5,690 | Avient Corp. | 306,577 | |
9,360 | Greif, Inc., Class A | 605,405 | |
132,089 | 1 | Koppers Holdings, Inc. | 4,635,003 |
31,793 | 1 | Livent Corp. | 897,199 |
15,427 | Louisiana-Pacific Corp. | 909,113 | |
19,079 | Myers Industries, Inc. | 392,646 | |
90,929 | 1 | O-I Glass, Inc. | 1,186,623 |
14,726 | 1 | Orion Engineered Carbons S.A. | 276,849 |
86,100 | 4 | Rentech, Inc. | 0 |
103,128 | Ryerson Holding Corp. | 2,718,454 | |
53,398 | Trinseo PLC | 2,993,492 | |
TOTAL | 14,921,361 |
5
Shares | Value | ||
COMMON STOCKS—continued | |||
Real Estate—4.0% | |||
13,697 | 1 | Marcus & Millichap Co., Inc. | $645,129 |
239,659 | National Storage Affiliates Trust | 14,969,101 | |
12,674 | NexPoint Residential Trust, Inc. | 897,573 | |
117,017 | Plymouth Industrial REIT, Inc. | 2,990,954 | |
197,738 | RMR Group, Inc./The | 6,879,305 | |
802,654 | Uniti Group, Inc. | 11,485,979 | |
TOTAL | 37,868,041 | ||
TOTAL COMMON STOCKS (IDENTIFIED COST $712,901,744) | 931,667,892 | ||
INVESTMENT COMPANIES—2.9% | |||
9,926,932 | Federated Hermes Government Obligations Fund, Premier Shares, 0.03%5 | 9,926,932 | |
17,595,638 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 0.02%5 | 17,600,917 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $27,526,900) | 27,527,849 | ||
TOTAL INVESTMENT IN SECURITIES—101.0% (IDENTIFIED COST $740,428,644) | 959,195,741 | ||
OTHER ASSETS AND LIABILITIES - NET—(1.0)%6 | (9,600,098) | ||
TOTAL NET ASSETS—100% | $949,595,643 |
An affiliated company is a company in which the Fund, alone or in combination with other funds, has ownership of at least 5% of the voting shares. Transactions with the affiliated companies during the period ended October 31, 2021, were as follows:
Value as of 7/31/2021 | Purchases at Cost* | Proceeds from Sales* | Change in Unrealized Appreciation/ Depreciation* | Net Realized Gain/ (Loss)* | Value as of 10/31/2021 | Shares Held as of 10/31/2021 | Dividend Income* | |
Financials: | ||||||||
StepStone Group, Inc. | $3,292,011 | $— | $— | $106,334 | $— | $3,398,345 | 72,336 | $5,064 |
Health Care: | ||||||||
Alector, Inc. | $904,990 | $— | $— | $(86,414) | $— | $818,576 | 37,653 | $— |
Amphastar Pharmaceuticals, Inc. | $708,068 | $— | $— | $(76,721) | $— | $631,347 | 33,798 | $— |
AnaptysBio, Inc. | $546,441 | $— | $— | $235,888 | $— | $782,329 | 23,779 | $— |
IDEAYA Biosciences, Inc. | $936,610 | $825,866 | $— | $(253,743) | $— | $1,508,733 | 70,370 | $— |
Information Technology: | ||||||||
Domo, Inc. | $12,358,604 | $— | $(1,942,110) | $(62,671) | $(194,103) | $10,159,720 | 114,994 | $— |
Grid Dynamics Holdings, Inc.** | $4,542,464 | $— | $— | $1,661,613 | $— | $6,204,077 | 215,794 | $— |
Affiliated Issuers no longer in the portfolio at period end | $6,153,248 | $— | $(7,316,922) | $(1,566,491) | $2,730,165 | $— | — | $— |
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS | $37,703,004 | $9,538,734 | $(9,259,032) | $(34,072) | $2,536,062 | $40,484,696 | 667,185 | $15,365 |
* | A portion of the amount shown was recorded when the Fund no longer had ownership of at least 5% of the voting shares. |
** | At October 31, 2021, the Fund no longer has ownership of at least 5% voting shares |
6
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended October 31, 2021, were as follows:
Federated Hermes Government Obligations Fund, Premier Shares* | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares | Total of Affiliated Transactions | |
Value as of 7/31/2021 | $6,436,827 | $16,730,982 | $23,167,809 |
Purchases at Cost | $30,570,912 | $39,617,759 | $70,188,671 |
Proceeds from Sales | $(27,080,807) | $(38,746,077) | $(65,826,884) |
Change in Unrealized Appreciation/Depreciation | N/A | $949 | $949 |
Net Realized Gain/(Loss) | N/A | $(2,696) | $(2,696) |
Value as of 10/31/2021 | $9,926,932 | $17,600,917 | $27,527,849 |
Shares Held as of 10/31/2021 | 9,926,932 | 17,595,638 | 27,522,570 |
Dividend Income | $525 | $818 | $1,343 |
* | All or a portion of the balance/activity for the fund relates to cash collateral received on securities lending transactions. |
1 | Non-income-producing security. |
2 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers. As of October 31, 2021, securities subject to this type of arrangement and related collateral were as follows: |
Market Value of Securities Loaned | Collateral Received |
$9,417,162 | $9,926,932 |
3 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or availing of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At October 31, 2021, these restricted securities amounted to $1,869,645, which represented 0.2% of total net assets. |
Security | Acquisition Date | Cost | Value |
XPEL, Inc. | 10/12/2020 | $786,361 | $1,869,645 |
4 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established by and under the general supervision of the Fund’s Board of Trustees (the “Trustees”). |
5 | 7-day net yield. |
6 | Assets, other than investments in securities, less liabilities. |
Note: The categories of investments are shown as a percentage of total net assets at October 31, 2021.
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
■ Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
■ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the
7
investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determine that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment’s value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
■ With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■ Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;
■ Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer’s operations or regulatory changes or market developments affecting the issuer’s industry.
The Trustees have adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of October 31, 2021, in valuing the Fund’s assets carried at fair value:
Valuation Inputs | ||||
Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | $873,711,704 | $— | $0 | $873,711,704 |
International | 57,956,188 | — | — | 57,956,188 |
Investment Companies | 27,527,849 | — | — | 27,527,849 |
TOTAL SECURITIES | $959,195,741 | $— | $0 | $959,195,741 |
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