Federated Hermes MDT Small Cap Growth Fund
Portfolio of Investments
April 30, 2024 (unaudited)
Shares | Value | ||
COMMON STOCKS—98.1% | |||
Communication Services—2.8% | |||
316,400 | 1 | Cinemark Holdings, Inc. | $5,423,096 |
72,205 | 1 | E.W. Scripps Co. | 271,491 |
94,692 | 1 | Madison Square Garden Spinco | 3,707,192 |
21,458 | 1 | MediaAlpha, Inc. | 434,525 |
29,110 | Shutterstock, Inc. | 1,243,288 | |
224,153 | 1 | Vimeo Holdings, Inc. | 804,709 |
15,513 | 1 | Yelp, Inc. | 624,243 |
TOTAL | 12,508,544 | ||
Consumer Discretionary—11.4% | |||
21,636 | 1 | Abercrombie & Fitch Co., Class A | 2,629,207 |
55,903 | 1 | Brinker International, Inc. | 2,996,401 |
17,108 | 1 | Carvana Co. | 1,418,595 |
340,502 | 1 | Chegg, Inc. | 1,760,395 |
240,537 | 1 | Coursera, Inc. | 2,458,288 |
6,769 | 2 | Cracker Barrel Old Country Store, Inc. | 393,888 |
21,183 | 1 | Duolingo, Inc. | 4,782,062 |
49,186 | 1 | Frontdoor, Inc. | 1,509,518 |
170,856 | 1,2 | Groupon, Inc. | 1,975,095 |
1,030 | Installed Building Products, Inc. | 242,802 | |
266,780 | 1,2 | iRobot Corp. | 2,283,637 |
30,931 | 1 | Leslie’s, Inc. | 121,559 |
10,072 | 1 | MCBC Holdings, Inc. | 203,757 |
16,815 | Murphy USA, Inc. | 6,958,383 | |
98,480 | 1 | National Vision Holdings, Inc. | 1,715,522 |
158,677 | 1 | PlayAGS, Inc. | 1,402,705 |
20,275 | 1,2 | Red Robin Gourmet Burgers | 153,076 |
17,228 | 1,2 | Revolve Group, Inc. | 343,010 |
499,736 | 1 | Rush Street Interactive, Inc. | 3,193,313 |
6,057 | 1 | Shake Shack, Inc. | 641,134 |
10,899 | 1 | Stride, Inc. | 727,508 |
7,282 | Texas Roadhouse, Inc. | 1,170,800 | |
69,422 | Upbound Group, Inc. | 2,152,776 | |
13,841 | 1 | Visteon Corp. | 1,531,230 |
16,566 | Wingstop, Inc. | 6,374,431 | |
168,073 | Wolverine World Wide, Inc. | 1,805,104 | |
TOTAL | 50,944,196 | ||
Consumer Staples—5.2% | |||
151,401 | 1,2 | Beauty Health Co./The | 489,025 |
66,087 | 1 | Bellring Brands, Inc. | 3,646,020 |
6,039 | Coca-Cola Bottling Co. | 4,988,214 | |
18,219 | 1 | elf Beauty, Inc. | 2,961,134 |
19,957 | Energizer Holdings, Inc. | 573,165 | |
52,235 | Medifast, Inc. | 1,438,030 | |
87,141 | 1 | Sprouts Farmers Market, Inc. | 5,753,920 |
22,380 | Turning Point Brands, Inc. | 645,439 | |
110,122 | 1 | Vital Farms, Inc. | 2,946,865 |
TOTAL | 23,441,812 |
1
Shares | Value | ||
COMMON STOCKS—continued | |||
Energy—3.2% | |||
4,426 | CVR Energy, Inc. | $134,462 | |
15,778 | 1 | Dorian LPG Ltd. | 651,947 |
31,081 | 1 | Expro Group Holdings NV | 583,079 |
42,258 | 1 | Kodiak Gas Services | 1,148,572 |
196,725 | Liberty Energy, Inc. | 4,327,950 | |
6,635 | Magnolia Oil & Gas Corp. | 166,339 | |
4,337 | Matador Resources Co. | 270,195 | |
29,532 | PBF Energy, Inc. | 1,573,170 | |
18,836 | SM Energy Co. | 913,358 | |
36,711 | 1 | Weatherford International PLC | 4,538,214 |
TOTAL | 14,307,286 | ||
Financials—7.0% | |||
122,448 | 1 | AvidXchange Holdings, Inc. | 1,427,744 |
99,204 | 1 | Cantaloupe, Inc. | 574,391 |
301,245 | 1,2 | Fidelis Insurance | 5,597,132 |
7,244 | HCI Group, Inc. | 827,120 | |
3,380 | Kinsale Capital Group, Inc. | 1,227,785 | |
25,245 | 1 | LendingTree, Inc. | 1,218,576 |
24,472 | PROG Holdings, Inc. | 813,449 | |
8,004 | RLI Corp. | 1,131,365 | |
8,289 | Selective Insurance Group, Inc. | 842,577 | |
246,465 | 1 | SelectQuote, Inc. | 372,162 |
267,006 | 1 | Siriuspoint Ltd. | 3,145,331 |
110,134 | 1 | Skyward Specialty Insurance Group, Inc. | 3,845,879 |
290,025 | 1 | StoneCo Ltd. | 4,524,390 |
6,811 | Tiptree, Inc. | 108,499 | |
15,165 | Universal Insurance Holdings, Inc. | 296,021 | |
103,674 | Victory Capital Holdings | 5,272,860 | |
TOTAL | 31,225,281 | ||
Health Care—20.2% | |||
6,325 | 1 | Acadia Pharmaceuticals, Inc. | 105,691 |
394,765 | 1 | ADMA Biologics, Inc. | 2,573,868 |
48,282 | 1,2 | Agenus, Inc. | 585,178 |
809,713 | 1,2 | Akebia Therapeutics, Inc. | 1,020,238 |
52,483 | 1 | Aldeyra Therapeutics, Inc. | 206,783 |
33,376 | 1 | Alector, Inc. | 169,550 |
183,338 | 1 | Alkermes, Inc. | 4,499,115 |
157,412 | 1 | Amylyx Pharmaceuticals, Inc. | 284,916 |
57,672 | 1 | Arcellx, Inc. | 2,884,753 |
117,533 | 1 | Arcutis Biotherapeutics, Inc. | 977,875 |
28,011 | 1 | Arvinas, Inc. | 889,909 |
25,394 | 1 | Assembly Biosciences, Inc. | 316,663 |
127,738 | 1 | Atea Pharmaceuticals, Inc. | 472,631 |
47,907 | 1,2 | Bioxcel Therapeutics, Inc. | 120,726 |
24,255 | 1 | Blueprint Medicines Corp. | 2,215,452 |
21,558 | 1 | Catalyst Pharmaceutical Partners, Inc. | 324,448 |
575,966 | 1 | Codexis, Inc. | 1,676,061 |
108,046 | 1 | Collegium Pharmaceutical, Inc. | 3,990,139 |
2,384 | CONMED Corp. | 162,064 | |
24,359 | 1 | Corcept Therapeutics, Inc. | 568,052 |
3,477 | 1 | Crinetics Pharmaceuticals, Inc. | 152,362 |
12,407 | 1 | Cross Country Healthcare, Inc. | 218,363 |
2
Shares | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
131,902 | 1,2 | Cutera, Inc. | $319,203 |
64,827 | 1 | Dynavax Technologies Corp. | 737,083 |
17,152 | 1 | Enanta Pharmaceuticals, Inc. | 235,668 |
7,876 | Ensign Group, Inc. | 932,203 | |
30,711 | 1 | Evolus, Inc. | 361,468 |
208,127 | 1 | EyePoint Pharmaceuticals, Inc. | 3,663,035 |
298,174 | 1 | Fate Therapeutics, Inc. | 1,177,787 |
12,902 | 1 | Glaukos Corp. | 1,238,592 |
8,218 | 1 | Haemonetics Corp. | 755,645 |
154,041 | 1 | Halozyme Therapeutics, Inc. | 5,868,962 |
163,096 | 1 | Harmony Biosciences Holdings, Inc. | 5,041,297 |
47,993 | 1,2 | Heron Therapeutics, Inc. | 111,344 |
232,564 | 1 | Hims & Hers Health, Inc. | 2,914,027 |
233,560 | 1 | Inmode Ltd. | 4,014,896 |
2,269 | 1 | Keros Therapeutics, Inc. | 127,949 |
6,667 | 1 | Kymera Therapeutics, Inc. | 224,145 |
5,038 | 1 | Lantheus Holdings, Inc. | 335,229 |
15,013 | 1 | Ligand Pharmaceuticals, Inc., Class B | 1,049,259 |
98,410 | 1 | Liquidia Technologies, Inc. | 1,264,568 |
49,729 | 1 | Livanova PLC | 2,772,392 |
28,615 | 1 | MacroGenics, Inc. | 422,930 |
393,046 | 1 | MiMedx Group, Inc. | 2,421,163 |
87,935 | 1 | Nevro Corp. | 930,352 |
315,180 | 1 | NextCure, Inc. | 381,368 |
5,425 | 1 | Omnicell, Inc. | 145,444 |
76,813 | 1 | OptimizeRX Corp | 783,493 |
165,160 | 1 | Outset Medical, Inc. | 417,855 |
21,078 | Owens & Minor, Inc. | 521,470 | |
24,095 | 1 | Pacira BioSciences, Inc. | 632,494 |
36,085 | 1 | Pennant Group, Inc./The | 754,537 |
41,382 | 1 | PetIQ, Inc. | 675,354 |
25,745 | 1 | PROCEPT BioRobotics Corp. | 1,363,970 |
113,286 | 1,2 | ProKidney Corp. | 233,936 |
159,667 | 1 | Puma Biotechnology, Inc. | 809,512 |
100,171 | 1 | RAPT Therapeutics, Inc. | 771,317 |
96,010 | 1 | Relmada Therapeutics, Inc. | 349,476 |
608,484 | 1 | Revance Therapeutics, Inc. | 2,196,627 |
107,342 | 1 | RxSight, Inc. | 5,595,738 |
335,119 | 1 | Sangamo BioSciences, Inc. | 172,553 |
308,643 | 1 | Siga Technologies, Inc. | 2,709,886 |
139,043 | 1 | Silk Road Medical, Inc. | 2,702,996 |
8,793 | 1 | SpringWorks Therapeutics, Inc. | 410,545 |
17,401 | 1 | Supernus Pharmaceuticals, Inc. | 523,770 |
150,503 | 1 | Tactile Systems Technology, Inc. | 2,072,426 |
82,281 | 1 | Travere Thrapeutics, Inc. | 455,014 |
50,969 | 1 | Vanda Pharmaceuticals, Inc. | 242,612 |
11,350 | 1 | Vericel Corp | 520,624 |
53,012 | 1 | Vir Biotechnology, Inc. | 448,482 |
263,955 | 1 | Voyager Therapeutics, Inc. | 2,064,128 |
44,474 | 1,2 | Y-mAbs Therapeutics, Inc. | 676,450 |
TOTAL | 89,966,111 |
3
Shares | Value | ||
COMMON STOCKS—continued | |||
Industrials—21.3% | |||
36,696 | Apogee Enterprises, Inc. | $2,267,079 | |
34,016 | 1 | Atkore, Inc. | 5,963,005 |
75,809 | 1 | Atmus Filtration Technologies, Inc. | 2,296,255 |
17,836 | 1 | Beacon Roofing Supply, Inc. | 1,757,381 |
114,116 | 1 | Blue Bird Corp. | 3,760,693 |
10,991 | Boise Cascade Co. | 1,453,780 | |
37,385 | 1 | Cimpress PLC | 3,187,819 |
9,702 | Comfort Systems USA, Inc. | 3,001,896 | |
25,492 | 1 | Commercial Vehicle Group, Inc. | 153,207 |
12,161 | 1 | Construction Partners, Inc. | 627,994 |
16,811 | Emcor Group, Inc. | 6,004,385 | |
17,176 | EnerSys, Inc. | 1,553,569 | |
73,827 | 1 | Exlservice Holding, Inc. | 2,140,983 |
27,314 | 1 | Fluor Corp. | 1,101,574 |
13,250 | 1 | Forrester Research, Inc. | 241,017 |
128,828 | Forward Air Corp. | 2,836,793 | |
69,728 | 1 | Franklin Covey Co. | 2,715,208 |
103,877 | 1 | GMS, Inc. | 9,610,700 |
19,475 | Griffon Corp. | 1,276,002 | |
65,063 | Heidrick & Struggles International, Inc. | 1,918,057 | |
28,986 | 1 | Huron Consulting Group, Inc. | 2,702,655 |
54,985 | Hyster-Yale Materials Handling, Inc. | 3,220,471 | |
215,978 | 1 | JELD-WEN Holding, Inc. | 4,427,549 |
26,437 | KForce Com, Inc. | 1,632,749 | |
91,880 | 1 | Legalzoom.com, Inc. | 1,097,966 |
164,960 | 1 | Mistras Group, Inc. | 1,443,400 |
34,622 | 1 | MRC Global, Inc. | 388,805 |
8,583 | 1 | MYR Group, Inc. | 1,426,924 |
128,142 | 1 | NEXTracker, Inc. | 5,483,196 |
54,721 | 1 | Parsons Corp. | 4,296,146 |
633,290 | 1,2 | SunPower Corp. | 1,304,577 |
2,278 | Tennant Co. | 265,341 | |
59,624 | Terex Corp. | 3,341,925 | |
231,579 | The Shyft Group, Inc. | 2,519,579 | |
2,094 | 1 | TriNet Group, Inc. | 210,175 |
112,200 | TTEC Holdings, Inc. | 816,816 | |
7,588 | Universal Truckload Services, Inc. | 339,032 | |
182,504 | 1 | Upwork, Inc. | 2,135,297 |
18,846 | Watts Industries, Inc., Class A | 3,740,177 | |
6,909 | 1 | Willdan Group, Inc. | 194,765 |
TOTAL | 94,854,942 | ||
Information Technology—22.2% | |||
317,058 | 1 | 8x8, Inc. | 700,698 |
55,209 | A10 Networks, Inc. | 721,030 | |
201,863 | 1,2 | Aehr Test Systems | 2,418,319 |
5,730 | 1 | Alarm.com Holdings, Inc. | 381,045 |
55,142 | 1 | Alkami Technology, Inc. | 1,327,268 |
12,134 | 1 | AppFolio, Inc. | 2,751,748 |
287,534 | 1 | Arlo Technologies, Inc. | 3,559,671 |
268,674 | 1 | AvePoint, Inc. | 2,087,597 |
13,193 | 1 | Axcelis Technologies, Inc. | 1,365,739 |
2,539 | Badger Meter, Inc. | 464,434 |
4
Shares | Value | ||
COMMON STOCKS—continued | |||
Information Technology—continued | |||
25,363 | 1 | Blackbaud, Inc. | $1,976,285 |
36,710 | 1 | Box, Inc. | 955,194 |
14,541 | 1 | Braze, Inc. | 609,268 |
92,045 | 1 | Brightcove, Inc. | 163,840 |
247,068 | 1,2 | Cambium Networks Corp. | 837,560 |
221,189 | 1 | Clear Secure, Inc. | 3,864,172 |
81,656 | 1 | Clearfield, Inc. | 2,459,479 |
49,221 | 1,2 | Coda Octopus Group, Inc. | 327,812 |
175,575 | 1 | CommScope Holdings Co., Inc. | 156,964 |
40,468 | 1 | Commvault Systems, Inc. | 4,146,756 |
135,241 | 1 | Couchbase, Inc. | 3,264,718 |
334,215 | 1 | Digital Turbine, Inc. | 638,351 |
161,146 | 1 | Expensify, Inc. | 257,834 |
96,335 | 1 | Extreme Networks, Inc. | 1,078,952 |
211,101 | 1 | Freshworks, Inc. | 3,768,153 |
20,111 | 1 | Harmonic Lightwaves, Inc. | 215,992 |
28,948 | InterDigital, Inc. | 2,858,036 | |
1,858 | 1 | Itron, Inc. | 171,159 |
9,840 | Kulicke & Soffa Industries | 455,395 | |
212,366 | 1,2 | Maxeon Solar Technologies Ltd. | 414,114 |
71,574 | 1 | MaxLinear, Inc. | 1,488,023 |
3,552 | 1,2 | MicroStrategy, Inc., Class A | 3,782,987 |
329,985 | 1 | ON24, Inc. | 2,174,601 |
64,169 | 1 | Perficient, Inc. | 3,032,627 |
18,737 | 1 | Photronics, Inc. | 513,581 |
48,799 | 1 | Q2 Holdings, Inc. | 2,507,781 |
34,035 | 1 | Qualys, Inc. | 5,578,677 |
32,918 | 1 | Rimini Street, Inc. | 87,562 |
88,159 | Sapiens International Corp. NV | 2,715,297 | |
35,241 | 1 | Secureworks Corp. | 214,618 |
32,825 | 1 | Semrush Holdings, Inc. | 401,778 |
75,175 | 1 | SMART Global Holdings, Inc. | 1,373,447 |
4,981 | 1 | SPS Commerce, Inc. | 866,046 |
140,742 | 1 | Squarespace, Inc. | 4,906,266 |
10,855 | 1 | Super Micro Computer, Inc. | 9,322,274 |
9,388 | 1 | Synaptics, Inc. | 844,544 |
216,193 | 1 | Telos Corp. | 743,704 |
24,858 | 1 | Tenable Holdings, Inc. | 1,117,864 |
452,362 | 1 | Unisys Corp. | 2,456,326 |
87,280 | 1 | Varonis Systems, Inc. | 3,818,500 |
22,239 | 1 | Verint Systems, Inc. | 673,397 |
182,263 | 1 | Weave Communications, Inc. | 1,948,391 |
767,058 | 1 | Yext, Inc. | 4,211,148 |
TOTAL | 99,177,022 | ||
Materials—3.1% | |||
7,081 | Cabot Corp. | 646,000 | |
22,402 | Commercial Metals Corp. | 1,203,884 | |
171,747 | 1 | Constellium SE | 3,381,698 |
3,043 | 1 | Ingevity Corp. | 155,619 |
19,874 | Koppers Holdings, Inc. | 1,019,139 | |
1,805 | Materion Corp | 207,467 | |
15,861 | Myers Industries, Inc. | 347,356 |
5
Shares | Value | ||
COMMON STOCKS—continued | |||
Materials—continued | |||
19,922 | 1 | O-I Glass, Inc. | $298,033 |
49,508 | Orion S.A. | 1,171,359 | |
702 | Quaker Chemical Corp. | 130,944 | |
86,100 | 1,3 | Rentech, Inc. | 0 |
55,724 | Ryerson Holding Corp. | 1,590,920 | |
50,983 | Warrior Met Coal, Inc. | 3,484,688 | |
TOTAL | 13,637,107 | ||
Real Estate—1.4% | |||
80,955 | 1 | Anywhere Real Estate, Inc. | 393,441 |
378,054 | 1,2 | Redfin Corp. | 2,120,883 |
163,729 | RMR Group, Inc./The | 3,883,652 | |
TOTAL | 6,397,976 | ||
Utilities—0.3% | |||
15,826 | Otter Tail Corp. | 1,350,907 | |
TOTAL COMMON STOCKS (IDENTIFIED COST $364,667,209) | 437,811,184 | ||
INVESTMENT COMPANIES—6.1% | |||
19,185,259 | Federated Hermes Government Obligations Fund, Premier Shares, 5.22%4 | 19,185,259 | |
8,001,960 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 5.34%4 | 8,001,960 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $27,187,826) | 27,187,219 | ||
TOTAL INVESTMENT IN SECURITIES—104.2% (IDENTIFIED COST $391,855,035) | 464,998,403 | ||
OTHER ASSETS AND LIABILITIES - NET—(4.2)%5 | (18,716,092) | ||
TOTAL NET ASSETS—100% | $446,282,311 |
An affiliated company is a company in which the Fund, alone or in combination with other Federated Hermes funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the period ended April 30, 2024, were as follows:
Affiliated | Value as of 7/31/2023 | Purchases at Cost* | Proceeds from Sales* | Change in Unrealized Appreciation/ (Depreciation)* | Net Realized Gain/ (Loss)* | Value as of 4/30/2024 | Shares Held as of 4/30/2024 | Dividend Income* |
Health Care: | ||||||||
Dynavax Technologies Corp. | $— | $829,603 | $— | $(92,520) | $— | $737,083 | 64,827 | $— |
Siga Technologies, Inc.** | $8,635,566 | $— | $(7,647,260) | $1,776,620 | $(55,040) | $2,709,886 | 308,643 | $303,379 |
Affiliated issuers no longer in the portfolio at period end | $6,068,818 | $— | $(5,037,071) | $(3,012,972) | $1,981,225 | $— | — | $— |
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS | $14,704,384 | $829,603 | $(12,684,331) | $(1,328,872) | $1,926,185 | $3,446,969 | 373,470 | $303,379 |
* | A portion of the amount shown was recorded when the Fund no longer had ownership of at least 5% of the voting shares. |
** | At April 30, 2024, the Fund no longer has ownership of at least 5% of the voting shares. |
6
Transactions with affiliated investment companies, which are funds managed by the Adviser or an affiliate of the Adviser, during the period ended April 30, 2024, 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 7/31/2023 | $14,815,356 | $4,936,612 | $19,751,968 |
Purchases at Cost | $109,480,918 | $72,678,368 | $182,159,286 |
Proceeds from Sales | $(105,111,015) | $(69,614,307) | $(174,725,322) |
Change in Unrealized Appreciation/Depreciation | $— | $(677) | $(677) |
Net Realized Gain/(Loss) | $— | $1,964 | $1,964 |
Value as of 4/30/2024 | $19,185,259 | $8,001,960 | $27,187,219 |
Shares Held as of 4/30/2024 | 19,185,259 | 8,001,960 | 27,187,219 |
Dividend Income | $479,160 | $326,310 | $805,470 |
* | 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 April 30, 2024, securities subject to this type of arrangement and related collateral were as follows: |
Fair Value of Securities Loaned | Collateral Received |
$19,185,259 | $17,396,859 |
3 | Market quotations and price valuations 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 Adviser acting through its Valuation Committee (“Valuation Committee”). |
4 | 7-day net yield. |
5 | Assets, other than investments in securities, less liabilities. |
Note: The categories of investments are shown as a percentage of total net assets at April 30, 2024.
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.
■ For securities that are fair valued in accordance with procedures established by and under the general supervision of Federated MDTA LLC (the “Adviser”), 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 Adviser’s valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser’s Valuation Committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the 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
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Fund’s Board of Trustees (the “Trustees”) has designated the Adviser as the Fund’s valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees’ oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser’s fair value determinations.
The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser’s affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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
7
Committee determines the fair value of the investment in accordance with procedures adopted by the Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser’s fair valuation and significant events procedures as part of the Fund’s compliance program and will review 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 ask 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 Adviser.
The Adviser has also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines 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 Adviser has 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 Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Adviser. The Trustees periodically review fair valuations made in response to significant events.
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 April 30, 2024, 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 | $394,169,458 | $— | $0 | $394,169,458 |
International | 43,641,726 | — | — | 43,641,726 |
Investment Companies | 27,187,219 | — | — | 27,187,219 |
TOTAL SECURITIES | $464,998,403 | $— | $0 | $464,998,403 |
8