United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-23174
(Investment Company Act File Number)
Federated Project and Trade Finance Tender Fund
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
Peter J. Germain, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(412) 288-1900
(Registrant's Telephone Number)
Date of Fiscal Year End: 03/31/2018
Date of Reporting Period: 03/31/2018
| Item 1. | Reports to Stockholders |
Annual Shareholder Report
Management Co.
Management Co.
| 1 | S&P 500 Index: An unmanaged capitalization-weighted index of 500 stocks designated to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Indexes are unmanaged and investments cannot be made in an index. |
| 2 | Bloomberg Economic Analysis, March 2018. |
| 3 | The Fund is a continuously-offered, non-diversified, closed-end management company. The Fund will not list shares on any securities exchange, and it is not expected that any secondary market will develop for the shares. Shareholders will not be able to tender their shares for repurchase on a daily basis. At the discretion of the Fund's board of trustees, and provided that it is in the best interests of the Fund and shareholders to do so, the Fund intends to provide a limited degree of liquidity to shareholders by conducting repurchase offers, generally quarterly. |
| 4 | The Fund pursues its investment objective primarily by investing in trade finance, structured trade, export finance, import finance, supply chain financing and project finance assets of entities, including sovereign entities. Trade finance-related securities will be located primarily in, or have exposure to, global emerging markets. As such, the Fund is subject to all of the risks typical to investments generally made in emerging markets, in addition to risks specific to the trade finance asset class. Investing in the fund involves special risks including risks associated with non-investment grade securities, interest rate risk, prepayment risk, call risk, credit risk, liquidity risk, risks of investing in derivative contracts and hybrid instruments. |
| Security Type | Percentage of Total Net Assets |
| Trade Finance Agreements | 92.6% |
| Cash Equivalents2 | 3.9% |
| Other Assets and Liabilities—Net3 | 3.5% |
| TOTAL | 100.0% |
| 1 | See the Fund's Prospectus for a description of the principal types of securities in which the Fund invests. |
| 2 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
| 3 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
| Principal Amount or Shares | Acquisition Date1 | Cost1 | Value | ||
| 1 | TRADE FINANCE AGREEMENTS—92.6% | ||||
| Basic Industry - Chemicals—3.4% | |||||
| $1,000,000 | 2 | Industries Chimiques Du Senegal, 5.53698%, (3-month USLIBOR +3.750%), 11/6/2023 | 11/3/2017 | $1,000,000 | $1,002,000 |
| 655,889 | OCP SA, 2.503%, 6/27/2018 | 3/19/2018 - 3/28/2018 | 655,889 | 657,201 | |
| TOTAL | 1,659,201 | ||||
| Basic Industry - Forestry/Paper—3.1% | |||||
| 1,500,000 | 2 | Bahia Cellulose, 4.8082%, (1-month USLIBOR +3.000%), 7/18/2023 | 11/20/2017 | 1,500,000 | 1,501,500 |
| Basic Industry - Metals/Mining Excluding Steel—2.0% | |||||
| 1,000,000 | 2 | Suek Tranche B, 4.85382%, (1-month USLIBOR +3.000%), 5/17/2022 | 10/10/2017 - 11/24/2017 | 1,000,000 | 997,000 |
| Capital Goods - Aerospace & Defense—1.7% | |||||
| 851,852 | 2 | Gulf Air BSC, 5.03638%, (1-month USLIBOR +3.250%), 1/19/2022 | 3/27/2017 | 853,130 | 852,278 |
| Consumer Cyclical - Apparel/Textiles—1.9% | |||||
| 957,721 | 2 | PT Pan Brothers TBK, 3.18719%, (3-month USLIBOR +2.300%), 6/1/2018 | 12/27/2017 - 1/31/2018 | 957,721 | 956,284 |
| Consumer Non-Cyclical/ Food-Wholesale—9.0% | |||||
| 600,000 | 2 | Agrofertil, 3.1383%, (12-month USLIBOR +1.500%), 7/16/2018 | 9/8/2017 | 585,148 | 596,400 |
| 1,071,429 | 2 | Cocobod 2017, 2.52688%, (1-month USLIBOR +0.650%), 8/31/2018 | 10/4/2017 - 12/11/2017 | 1,071,429 | 1,069,822 |
| 788,571 | 2 | Gambia, Government of, 5.012%-5.569%, (12-month USLIBOR +3.500%), 2/19/2019 | 12/21/2017 - 2/21/2018 | 788,571 | 788,571 |
| 1,001,929 | Molino Canuelas, 5.75%, 5/2/2018 | 10/12/2017 | 970,614 | 970,870 | |
| 1,000,000 | 2 | Vicentin II SIAC, 7.667%-7.742%, (3-month USLIBOR +6.000%), 1/15/2024 | 1/8/2018 - 2/21/2018 | 1,000,000 | 1,003,000 |
| TOTAL | 4,428,663 | ||||
| Energy - Exploration & Production—13.6% | |||||
| 1,166,667 | 2 | EGPC African Export-Import Bank (Afreximbank), 7.62519%, (3-month USLIBOR +5.600%), 12/6/2019 | 6/20/2017 | 1,166,667 | 1,162,000 |
| 666,667 | 2 | KMG Vitol, 3.72668%, (1-month USLIBOR +1.850%), 3/31/2020 | 3/16/2017 | 665,000 | 664,667 |
| Principal Amount or Shares | Acquisition Date1 | Cost1 | Value | ||
| 1 | TRADE FINANCE AGREEMENTS—continued | ||||
| Energy - Exploration & Production—continued | |||||
| $1,500,000 | 2 | L1E, 4.37688%, (1-month USLIBOR +2.500%), 12/30/2021 | 9/12/2017 | $1,470,000 | $1,484,250 |
| 1,212,430 | 2 | Nigerian Petro, 5.8745%, (3-month USLIBOR +3.750%), 6/17/2019 | 10/27/2017 | 1,157,871 | 1,205,156 |
| 1,045,454 | 2 | Rosneft Oil Co., 3.648%, (1-month USLIBOR +2.000%), 6/27/2019 | 9/28/2017 | 1,047,091 | 1,043,886 |
| 1,147,059 | 2 | Sonangol, 5.702%, (3-month USLIBOR +3.400%), 7/30/2021 | 4/3/2017 | 1,106,434 | 1,147,632 |
| TOTAL | 6,707,591 | ||||
| Energy - Integrated Energy—4.0% | |||||
| 500,000 | 2 | INA Industrija Nafte DD, 3.60613%, (6-month USLIBOR +1.500%), 8/19/2019 | 1/31/2017 | 500,000 | 499,000 |
| 1,500,000 | 2 | Puma International Financing SA, 4.27207%, (1-month USLIBOR +2.450%), 5/13/2019 | 6/23/2017 | 1,498,500 | 1,497,000 |
| TOTAL | 1,996,000 | ||||
| Energy - Oil Field Equipment & Services—1.5% | |||||
| 750,000 | 2 | ADES, 6.3105%, (3-month USLIBOR +4.500%), 11/12/2020 | 1/31/2017 | 750,000 | 748,875 |
| Energy - Oil Refining and Marketing—9.3% | |||||
| 750,000 | 2 | Dangote, 7.95113%, (6-month USLIBOR +5.750%), 8/28/2020 | 2/6/2017 - 12/28/2017 | 741,000 | 756,750 |
| 1,380,810 | 2 | Egypt, Government of, 3.902%-4.764%, (12-month USLIBOR +2.660%), 1/11/2019 | 7/17/2017 - 1/12/2018 | 1,380,810 | 1,380,120 |
| 2,468,472 | 2 | Pakistan, Government of, 3.723%-3.938%, (12-month USLIBOR +2.220%), 11/19/2018 | 8/3/2017 - 11/21/2017 | 2,468,472 | 2,469,706 |
| TOTAL | 4,606,576 | ||||
| Finance/Banks/Brokers—7.1% | |||||
| 1,000,000 | 2 | Bahrain Is Bank, 3.99496%, (3-month USLIBOR +1.700%), 9/28/2018 | 9/27/2017 | 1,000,000 | 1,000,000 |
| 1,500,000 | 2 | Banco Do Brasil S.A., 3.427%, (3-month USLIBOR +1.125%), 6/29/2018 | 8/11/2017 | 1,500,000 | 1,498,500 |
| 1,000,000 | 2 | United Bank for Africa PLC, 5.1775%, (3-month USLIBOR +3.000%), 12/19/2018 | 1/16/2018 | 996,575 | 998,500 |
| TOTAL | 3,497,000 | ||||
| Foreign Sovereign—20.0% | |||||
| 1,000,000 | 2 | Armenia International Airports CJSC, 7.32488%, (6-month USLIBOR +5.500%), 12/23/2022 | 12/28/2017 | 1,010,000 | 1,008,000 |
| Principal Amount or Shares | Acquisition Date1 | Cost1 | Value | ||
| 1 | TRADE FINANCE AGREEMENTS—continued | ||||
| Foreign Sovereign—continued | |||||
| $1,000,000 | 2 | Bank of Kigali Ltd., 8.02777%, (3-month USLIBOR +6.250%), 10/19/2021 | 6/19/2017 | $1,000,000 | $996,000 |
| 1,000,000 | 2 | JSC Partnership, 5.73983%, (12-month USLIBOR +4.000%), 9/22/2020 | 9/22/2017 | 1,013,700 | 1,015,500 |
| 1,300,000 | 2 | Kenya, Government of, 6.53316%, (6-month USLIBOR +5.000%), 4/18/2019 | 4/18/2017 - 4/27/2017 | 1,298,500 | 1,293,500 |
| 274,839 | 2 | Maldives, Government of, 4.022%-4.334%, (3-month USLIBOR +2.900%), 6/5/2018 | 1/24/2018 - 3/16/2018 | 274,839 | 275,251 |
| 1,000,000 | 2 | Ministry of Finance Tanzania, 7.03363%, (6-month USLIBOR +5.200%), 6/23/2022 | 6/26/2017 | 994,000 | 1,000,500 |
| 1,000,000 | 2 | Ministry of Finance Zambia, 7.90406%, (6-month USLIBOR +6.000%), 7/13/2020 | 7/17/2017 | 1,000,000 | 994,500 |
| 1,000,000 | 2 | National Bank of Egypt, 4.46125%, (6-month USLIBOR +2.750%), 6/4/2018 | 1/31/2017 | 996,800 | 1,001,000 |
| 1,500,000 | Tunisia, Government of, 2.418%, 9/18/2018 | 11/29/2017 - 3/21/2018 | 1,500,000 | 1,503,000 | |
| 803,094 | Tunisia, Government of, 2.418%, 8/22/2018 | 2/22/2018 | 803,094 | 803,897 | |
| TOTAL | 9,891,148 | ||||
| Metals & Mining—3.0% | |||||
| 1,500,000 | 2 | Ferrexpo AG, 6.802%, (3-month USLIBOR +4.500%), 12/31/2020 | 3/7/2018 | 1,483,125 | 1,497,750 |
| Services - Airlines—1.8% | |||||
| 897,436 | 2 | Pakistan International Airlines, 5.0215%, (1-month USLIBOR +3.150%), 2/24/2021 | 9/27/2017 | 888,462 | 894,744 |
| Services - Railroads—3.7% | |||||
| 658,290 | 2 | Autopistas Urbanas SA (AUSA), 5.33875%, (3-month USLIBOR +3.500%), 11/15/2022 | 5/19/2017 - 11/13/2017 | 652,261 | 655,986 |
| 1,166,667 | 2 | Ethiopian Railway Corp., 5.71625%, (6-month USLIBOR +3.750%), 7/8/2021 | 5/4/2017 | 1,166,667 | 1,164,917 |
| TOTAL | 1,820,903 | ||||
| Services - Transportation Excluding Air/Rail—1.8% | |||||
| 895,288 | 2 | Asyaport, 6.26529%, (6-month USLIBOR +4.400%), 1/10/2024 | 1/31/2017 | 895,288 | 896,631 |
| Supranational—2.0% | |||||
| 1,000,000 | 2 | PTA Bank, 4.00457%, (3-month USLIBOR +2.300%), 10/4/2018 | 2/1/2017 | 1,000,000 | 1,000,500 |
| Utility - Electric-Generation—3.7% | |||||
| 1,000,000 | 2 | Casablanca & Giacote Solar PV Project, 4.24118%, (6-month USLIBOR +2.625%), 5/15/2020 | 5/15/2017 | 980,000 | 997,500 |
| Principal Amount or Shares | Acquisition Date1 | Cost1 | Value | ||
| 1 | TRADE FINANCE AGREEMENTS—continued | ||||
| Utility - Electric-Generation—continued | |||||
| $211,542 | 2 | Egypt Electric, 7.11529%, (3-month USLIBOR +5.250%), 4/10/2020 | 8/3/2017 | $211,542 | $209,849 |
| 642,883 | 2 | Egypt Electric, 6.03698%, (3-month USLIBOR +4.250%), 5/5/2020 | 1/31/2017 | 641,681 | 637,740 |
| TOTAL | 1,845,089 | ||||
| TOTAL TRADE FINANCE AGREEMENTS (IDENTIFIED COST $45,728,754) | 45,797,733 | ||||
| INVESTMENT COMPANY—3.9% | |||||
| 1,949,742 | Federated Institutional Prime Value Obligations Fund, Institutional Shares, 1.78%3 (IDENTIFIED COST $1,949,547) | 1,949,352 | |||
| TOTAL INVESTMENT IN SECURITIES—96.5% (IDENTIFIED COST $47,678,301)4 | 47,747,085 | ||||
| OTHER ASSETS AND LIABILITIES - NET—3.5%5 | 1,737,179 | ||||
| TOTAL NET ASSETS—100% | $49,484,264 |
| Federated Institutional Prime Value Obligations Fund, Institutional Shares | |
| Balance of Shares Held 3/31/2017 | 45,042,167 |
| Purchases/Additions | 38,510,538 |
| Sales/Reductions | (81,602,963) |
| Balance of Shares Held 3/31/2018 | 1,949,742 |
| Value | $1,949,352 |
| Change in Unrealized Appreciation/Depreciation | $(9,199) |
| Net Realized Gains/(Loss) | $(582) |
| Dividend Income | $221,792 |
| 1 | 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 March 31, 2018, these restricted securities amounted to $45,797,733, which represented 92.6% of total net assets. |
| 2 | Floating/variable note with current rate and current maturity or next reset date shown. |
| 3 | 7-day net yield. |
| 4 | The cost of investments for federal tax purposes amounts to $47,678,301. |
| 5 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
| Valuation Inputs | ||||
| Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
| Debt Securities: | ||||
| Trade Finance Agreements | $— | $— | $45,797,733 | $45,797,733 |
| Investment Company | 1,949,352 | — | — | 1,949,352 |
| TOTAL SECURITIES | $1,949,352 | $— | $45,797,733 | $47,747,085 |
| Investments in Trade Finance Agreements | |
| Balance as of March 31, 2017 | $25,747,399 |
| Accrued discount/premiums | 142,346 |
| Realized gain (loss) | 24,049 |
| Change in unrealized appreciation (depreciation) | 62,531 |
| Purchases | 70,447,294 |
| (Sales) | (50,625,886) |
| Balance as of March 31, 2018 | $45,797,733 |
| The total change in unrealized appreciation (depreciation) attributable to investments still held at March 31, 2018 | $61,647 |
| Year Ended 3/31/2018 | Period Ended 3/31/20171 | |
| Net Asset Value, Beginning of Period | $10.02 | $10.01 |
| Income From Investment Operations: | ||
| Net investment income | 0.282 | 0.02 |
| Net realized and unrealized gain | 0.02 | 0.003 |
| TOTAL FROM INVESTMENT OPERATIONS | 0.30 | 0.02 |
| Less Distributions: | ||
| Distributions from net investment income | (0.32) | (0.01) |
| Distributions from net realized gain | (0.00)2 | — |
| TOTAL DISTRIBUTIONS | (0.32) | (0.01) |
| Net Asset Value, End of Period | $10.00 | $10.02 |
| Total Return4 | 3.04% | 0.22% |
| Ratios to Average Net Assets: | ||
| Net expenses | 0.67% | 0.34%5 |
| Net investment income | 2.74% | 1.37%5 |
| Expense waiver/reimbursement6 | 0.34% | 1.72%5 |
| Supplemental Data: | ||
| Net assets, end of period (000 omitted) | $49,484 | $70,873 |
| Portfolio turnover | 39% | 4% |
| 1 | Reflects operations for the period from January 31, 2017 (date of initial public investment) to March 31, 2017. During the period prior to date of initial public investment, a distribution of $0.012 per share was made to the Adviser. |
| 2 | Per share numbers have been calculated using the average shares method. |
| 3 | Represents less than $0.01. |
| 4 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
| 5 | Computed on an annualized basis. |
| 6 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
| Assets: | ||
| Investment in securities, at value including $1,949,352 of investment in an affiliated holding (identified cost $47,678,301) | $47,747,085 | |
| Cash | 218,484 | |
| Income receivable | 450,539 | |
| Income receivable from an affiliated holding | 6,341 | |
| Receivable for investments sold | 1,224,404 | |
| TOTAL ASSETS | 49,646,853 | |
| Liabilities: | ||
| Payable for drawdown fees | $8,971 | |
| Payable for transfer agent fee | 9,619 | |
| Payable for Directors'/Trustees' fees (Note 5) | 4,315 | |
| Payable for auditing fees | 59,920 | |
| Payable for portfolio accounting fees | 69,307 | |
| Payable for insurance premiums | 3,680 | |
| Accrued expenses (Note 5) | 6,777 | |
| TOTAL LIABILITIES | 162,589 | |
| Net assets for 4,950,896 shares outstanding | $49,484,264 | |
| Net Assets Consist of: | ||
| Paid-in capital | $49,350,125 | |
| Net unrealized appreciation | 68,784 | |
| Accumulated net realized gain | 7,508 | |
| Undistributed net investment income | 57,847 | |
| TOTAL NET ASSETS | $49,484,264 | |
| Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
| $49,484,264 ÷ 4,950,896 shares outstanding, no par value, unlimited shares authorized | $10.00 |
| Investment Income: | ||
| Interest | $2,083,710 | |
| Dividends received from an affiliated holding (see footnotes to Portfolio of Investments) | 221,792 | |
| TOTAL INCOME | 2,305,502 | |
| Expenses: | ||
| Investment adviser fee (Note 5) | $338,141 | |
| Custodian fees | 6,448 | |
| Transfer agent fee | 68,702 | |
| Directors'/Trustees' fees (Note 5) | 4,315 | |
| Auditing fees | 40,500 | |
| Legal fees | 11,347 | |
| Portfolio accounting fees | 121,181 | |
| Share registration costs | 31,851 | |
| Printing and postage | 15,901 | |
| Offering costs (Note 6) | 41,669 | |
| Miscellaneous (Note 5) | 4,762 | |
| TOTAL EXPENSES | 684,817 | |
| Waiver/reimbursement of investment adviser fee (Note 5) | (229,088) | |
| Net expenses | 455,729 | |
| Net investment income | 1,849,773 | |
| Realized and Unrealized Gain (Loss) on Investments: | ||
| Net realized gain on investments (including net realized loss of $(582) on sales of investments in an affiliated holding) | 23,467 | |
| Net change in unrealized appreciation of investments (including net change in unrealized appreciation of $(9,199) on investments in an affiliated holding) | 53,332 | |
| Net realized and unrealized gain on investments | 76,799 | |
| Change in net assets resulting from operations | $1,926,572 |
| Year Ended 3/31/2018 | Period Ended 3/31/20171 | |
| Increase (Decrease) in Net Assets | ||
| Operations: | ||
| Net investment income | $1,849,773 | $159,428 |
| Net realized gain | 23,467 | 3,057 |
| Net change in unrealized appreciation/depreciation | 53,332 | 15,452 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 1,926,572 | 177,937 |
| Distributions to Shareholders: | ||
| Distributions from net investment income | (1,869,310) | (82,044) |
| Distributions from net realized gain on investments | (19,016) | — |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (1,888,326) | (82,044) |
| Share Transactions: | ||
| Proceeds from sale of shares | — | 70,594,911 |
| Net asset value of shares issued to shareholders in payment of distributions declared | 1,888,326 | 82,044 |
| Cost of shares redeemed | (23,315,156) | — |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (21,426,830) | 70,676,955 |
| Change in net assets | (21,388,584) | 70,772,848 |
| Net Assets: | ||
| Beginning of period | 70,872,848 | 100,000 |
| End of period (including undistributed net investment income of $57,847 and $77,384, respectively) | $49,484,264 | $70,872,848 |
| 1 | Reflects operations for the period from October 12, 2016 (date of initial investment) to March 31, 2017. |
| Operating Activities: | |
| Change in net assets resulting from operations | $1,926,572 |
| Adjustments to Reconcile Change in Net Assets Resulting From Operations to Net Cash Provided By Operating Activities: | |
| Purchases of investment securities | (70,447,294) |
| Proceeds from disposition of investment securities | 50,625,886 |
| Purchase of short-term investment, net | 43,096,547 |
| Amortization/accretion of premium/discount, net | (142,346) |
| Amortization of deferred offering costs | 41,669 |
| Increase in income receivable | (334,908) |
| Increase in receivable for investments sold | (1,224,404) |
| Increase in accrued expenses | 68,717 |
| Net realized gain | (23,467) |
| Change in unrealized appreciation/depreciation | (53,332) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 23,533,640 |
| Financing Activities: | |
| Payment for shares redeemed | (23,315,156) |
| NET CASH USED IN FINANCING ACTIVITIES | (23,315,156) |
| Net increase in cash | 218,484 |
| Cash at beginning period | — |
| Cash at end of period | $218,484 |
| ■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
| ■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
| ■ | 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. |
| ■ | 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. |
| ■ | 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. |
| Year Ended 3/31/2018 | Period Ended 3/31/20171 | |
| Shares sold | — | 7,052,439 |
| Shares issued to shareholders in payment of distributions declared | 188,700 | 8,188 |
| Shares redeemed | (2,308,431) | — |
| NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | (2,119,731) | 7,060,627 |
| 1 | Reflects operations for the period from October 12, 2016 (date of initial investment) to March 31, 2017. |
| 2018 | 2017 | |
| Ordinary income1 | $1,888,326 | $82,044 |
| 1 | For tax purposes, short-term capital gain distributions are considered ordinary income distributions. |
| Undistributed ordinary income2 | $65,072 |
| Net unrealized appreciation | $68,784 |
| Undistributed long-term capital gains | $283 |
| 2 | For tax purposes, short-term capital gains are considered ordinary income in determining distributable earnings. |
| Purchases | $39,333,194 |
| Sales | $11,821,521 |
| Country | Percentage of Total Net Assets |
| Egypt | 10.4 |
| Pakistan | 6.8 |
| Brazil | 6.1 |
| Nigeria | 6.0 |
| Angola | 5.3 |
| Argentina | 5.3 |
| Tunisia | 4.7 |
| Kenya | 4.6 |
| Russia | 4.1 |
| Bahrain | 3.7 |
| Ukrainian Ssr | 3.0 |
| Germany, Federal Republic of | 3.0 |
| Ethiopia | 2.4 |
| Ghana | 2.2 |
| Georgia | 2.1 |
| Armenia | 2.0 |
| Senegal | 2.0 |
| Tanzania, United Republic Of | 2.0 |
| Uruguay | 2.0 |
| Rwanda | 2.0 |
| Zambia | 2.0 |
| Indonesia | 1.9 |
| Turkey | 1.9 |
| Gambia | 1.6 |
| Kazakhstan | 1.3 |
| Morocco | 1.3 |
| Paraguay | 1.3 |
| Croatia | 1.0 |
| Maldives | 0.6 |
May 25, 2018
| Beginning Account Value 10/1/2017 | Ending Account Value 3/31/2018 | Expenses Paid During Period1 | |
| Actual | $1,000 | $1,018.50 | $3.52 |
| Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,021.40 | $3.53 |
| 1 | Expenses are equal to the Fund's annualized net expense ratio of 0.70%, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half-year period). |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
| J. Christopher Donahue* Birth Date: April 11, 1949 President and Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd. |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
| Thomas R. Donahue* Birth Date: October 20, 1958 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of certain of the funds in the Federated Fund Family; Chief Financial Officer, Treasurer, Vice President and Assistant Secretary, Federated Investors, Inc.; Chairman and Trustee, Federated Administrative Services; Chairman and Director, Federated Administrative Services, Inc.; Trustee and Treasurer, Federated Advisory Services Company; Director or Trustee and Treasurer, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, and Federated Investment Management Company; Director, MDTA LLC; Director, Executive Vice President and Assistant Secretary, Federated Securities Corp.; Director or Trustee and Chairman, Federated Services Company and Federated Shareholder Services Company; and Director and President, FII Holdings, Inc. Previous Positions: Director, Federated Investors, Inc.; Assistant Secretary, Federated Investment Management Company, Federated Global Investment Management Company and Passport Research, LTD; Treasurer, Passport Research, LTD; Executive Vice President, Federated Securities Corp.; and Treasurer, FII Holdings, Inc. |
| * | Family relationships and reasons for “interested” status: J. Christopher Donahue and Thomas R. Donahue are brothers. Both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
| John T. Collins Birth Date: January 24, 1947 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Current Chair of the Compensation Committee, KLX Corp. Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO, The Collins Group, Inc. (a private equity firm). Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
| G. Thomas Hough Birth Date: February 28, 1955 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Governance Committee, Publix Super Markets, Inc.; Director, Member of the Audit Committee and Technology Committee of Equifax, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough is an Executive Committee member of the United States Golf Association, he serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. |
| Maureen Lally-Green Birth Date: July 5, 1949 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of the Federated Fund Family; Dean of the Duquesne University School of Law; Professor and Adjunct Professor of Law, Duquesne University School of Law; formerly, Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Director, Saint Vincent College; Member, Pennsylvania State Board of Education (public); and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Regent, St. Vincent Seminary; and Director and Chair, Cardinal Wuerl North Catholic High School, Inc. |
| Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant. |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
| Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). |
| P. Jerome Richey Birth Date: February 23, 1949 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.) Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). |
| John S. Walsh Birth Date: November 28, 1957 Trustee Indefinite Term Began serving: August 2016 | Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
| Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: June 2016 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
| Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: November 2016 | Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
| Richard B. Fisher Birth Date: May 17, 1923 VICE PRESIDENT Officer since: November 2016 | Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Family; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Family; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
| Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: June 2016 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
| Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Officer since: November 2016 | Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
| Ihab Salib Birth Date: December 14, 1964 VICE PRESIDENT Officer since: November 2016 Portfolio Manager since: December 2016 | Principal Occupations: Ihab Salib has been a Portfolio Manager of the Fund since December 2016. He is Vice President of the Fund. Mr. Salib joined Federated in April 1999 as a Senior Fixed-Income Trader/Assistant Vice President of the Fund's Adviser. In July 2000, he was named a Vice President of the Fund's Adviser and in January 2007 he was named a Senior Vice President of the Fund's Adviser. He has served as a Portfolio Manager since January 2002. From January 1994 through March 1999, Mr. Salib was employed as a Senior Global Fixed-Income Analyst with UBS Brinson, Inc. Mr. Salib received his B.A. with a major in Economics from Stony Brook University. |
| Chris McGinley Birth Date: July 28, 1978 Vice President Officer since: November 2016 Portfolio Manager since: December 2016 | Principal Occupations: Chris McGinley has been the Fund's Portfolio Manager since December 2016. He is Vice President of the Fund. Mr. McGinley joined Federated in 2004 as an associate research analyst in the international fixed-income department. He became an Assistant Vice President of the Fund's Adviser in 2005 and Vice President in 2013. Mr. McGinley joined the Sub-Adviser in 2013. Mr. McGinley worked in Senator Rick Santorum's office in 2001 and from 2002 to 2004 he served as Legislative Correspondent for Senator Santorum. Mr. McGinley earned his B.S. and received his M.P.I.A. from the University of Pittsburgh. |
| Patrick Bayliss Birth Date: September 25, 1968 VICE PRESIDENT Officer since: November 2016 Portfolio Manager since: December 2016 | Principal Occupations: Patrick Bayliss has been the Fund's Portfolio Manager since December 2016. He is Vice President of the Fund. Mr. Bayliss joined the Sub-Adviser in October 2013. From 2007 until September 30, 2013, Mr. Bayliss was a member of GML Capital LLP and its Trade Finance Portfolio Team. Mr. Bayliss began his career in 1990 at Saudi International Bank (now Gulf International Bank) where he became a Fund Manager, managing quantitative equity portfolios. This was followed by period at Deutsche Bank's credit trading in the Emerging Markets Division. Before joining GML Capital LLP, Mr. Bayliss was a co-founder of LTP Trade, a specialist trade finance company, and a Portfolio Manager at Bluecrest Capital Management. Mr. Bayliss holds a BSc (Econ) from Bristol University, U.K. |
| Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
| Dalia Kay Birth Date: March 13, 1970 VICE PRESIDENT Officer since: November 2016 Portfolio Manager since: December 2016 | Principal Occupations: Dalia Kay has been the Fund's Portfolio Manager since December 2016. She is Vice President of the Fund. Ms. Kay joined the Sub-Adviser in October 2013. From 1994 until September 30, 2013, Ms. Kay was a member of GML Capital LLP and its Trade Finance Portfolio Team. From December 2006 to September 30, 2013, Ms. Kay was an Investment Portfolio Adviser for GML Capital LLP's investment funds. From 1994 to December 2006, Ms. Kay was Associate Director of Trade Finance and Forfaiting with GML International Limited, where she coordinated origination, structuring, documentation and distribution of short- and medium-term trade finance transactions focusing on Turkey, Kazakhstan, Romania, Ukraine and the former Yugoslavia. Ms. Kay received a Diploma in Law and a BA in Economics from the University of Geneva. She is fluent in French. |
5800 Corporate Drive
Pittsburgh, PA 15237-7000
or call 1-800-341-7400.
Q453325 (5/18)
2018 ©Federated Investors, Inc.
| Item 2. | Code of Ethics |
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c),(d) There were no amendments to or waivers from the Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers during the period covered by this report.
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: John T. Collins, G. Thomas Hough and Thomas M. O’Neill.
| Item 4. | Principal Accountant Fees and Services |
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $43,790
Fiscal year ended 2017 – $49,500
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 – $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(d) All Other Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 – $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:
| (1) | The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided; |
| (2) | Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and |
| (3) | Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. |
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and NA respectively.
4(c)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and NA respectively.
4(d)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and NA respectively.
| (f) | NA |
| (g) | Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser: |
Fiscal year ended 2018 - $14,271
Fiscal year ended 2017 - $5,798
| (h) | The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
In its required communications to the Audit Committee of the registrant’s Board, KPMG LLP (“KPMG”), the registrant’s independent public accountant, informed the Audit Committee that KPMG and/or covered person professionals within KPMG maintain lending relationships with certain owners of greater than 10% of the shares of certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X, which are affiliates of the registrant. KPMG has advised the Audit Committee that these lending relationships implicate Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”). The Loan Rule prohibits an independent public accountant, or covered person professionals at such firm, from having a financial relationship (such as a loan) with a lender that is a record or beneficial owner of more than 10% of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the registrant, as well as all registered investment companies audited by KPMG (collectively, the “KPMG Funds”).
KPMG informed the Audit Committee that KPMG believes that these lending relationships described above do not and will not impair KPMG’s ability to exercise objective and impartial judgment in connection with financial statement audits of the registrant and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that KPMG has been and is capable of objective and impartial judgment on all issues encompassed within KPMG’s audits.
On June 20, 2016, the Division of Investment Management of the Securities and Exchange Commission (“SEC”) issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule matters as those described above (the “Letter”). In the Letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an independent public accountant where the Loan Rule was implicated in certain specified circumstances provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the Loan Rule is implicated because of lending relationships; and (3) notwithstanding such lending relationships that implicate the Loan Rule, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The circumstances described in the Letter are substantially similar to the circumstances that implicated the Loan Rule with respect to KPMG and the registrant. On September 22, 2017, the SEC extended the expiration of the Letter until the effectiveness of any amendments to the Loan Rule designed to address the concerns in the Letter.
If it were to be determined that the relief available under the Letter was improperly relied upon, or that the independence requirements under the federal securities laws were not otherwise complied with regarding the registrant, for certain periods, any of the registrant’s filings with the SEC which contain financial statements of the registrant for such periods may not comply with applicable federal securities laws, the registrant’s ability to offer shares under its current registration statement may be impacted, and certain financial reporting and/or other covenants with, and representations and warranties to, the registrant’s lender under its committed line of credit may be impacted. Such events could have a material adverse effect on the registrant and the Federated Fund Complex.
| Item 5. | Audit Committee of Listed Registrants |
The registrant has established an Audit Committee of the Board as described in Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee consists of the following Board members: John T. Collins, G. Thomas Hough, Maureen Lally-Green and Thomas M. O’Neill.
| Item 6. | Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Voting Proxies On Fund Portfolio Securities
The Board has delegated to the Adviser authority to vote proxies on the securities held in the Fund's portfolio. The Board has also approved the Adviser's policies and procedures for voting the proxies, which are described below.
Proxy Voting Policies
The Adviser's general policy is to cast proxy votes in favor of management proposals and shareholder proposals that the Adviser anticipates will enhance the long-term value of the securities being voted. Generally, this will mean voting for proposals that the Adviser believes will: (a) improve the management of a company; (b) increase the rights or preferences of the voted securities; and/or (c) increase the chance that a premium offer would be made for the company or for the voted securities. This approach to voting proxy proposals will be referred to hereafter as the “General Policy.”
The following examples illustrate how the General Policy may apply to management proposals and shareholder proposals submitted for approval or ratification by holders of the company's voting securities. However, whether the Adviser supports or opposes a proposal will always depend on the specific circumstances described in the proxy statement and other available information.
On matters related to the board of directors, generally the Adviser will vote to elect nominees to the board in uncontested elections except in certain circumstances, such as where the director: (1) had not attended at least 75% of the board meetings during the previous year; (2) serves as the company’s chief financial officer; (3) has committed himself or herself to service on a large number of boards, such that we deem it unlikely that the director would be able to commit sufficient focus and time to a particular company; (4) is the chair of the nominating or governance committee when the roles of chairman of the board and CEO are combined and there is no lead independent director; (5) served on the compensation committee during a period in which compensation appears excessive relative to performance and peers; or (6) served on a board that did not implement a shareholder proposal that Federated supported and received more than 50% shareholder support the previous year. In addition, the Adviser will generally vote in favor of (7) a full slate of directors, where the directors are elected as a group and not individually, unless more than half of the nominees are not independent; (8) shareholder proposals to declassify the board of directors; (9) shareholder proposals to require a majority voting standard in the election of directors; (10) shareholder proposals to separate the roles of chairman of the board and CEO; and (11) a proposal to require a company’s audit committee to be comprised entirely of independent directors.
On other matters of corporate governance, generally the Adviser will vote in favor of: (1) proposals to grant shareholders the right to call a special meeting if owners of at least 25% of the outstanding stock agree; (2) a proposal to require independent tabulation of proxies and/or confidential voting of shareholders; (3) a proposal to ratify the board's selection of auditors, unless: (a) compensation for non-audit services exceeded 50% of the total compensation received from the company; or (b) the previous auditor was dismissed because of a disagreement with the company; (4) a proposal to repeal a shareholder rights plan (also known as a “poison pill”) and against the adoption of such a plan, unless the plan is designed to facilitate, rather than prevent, unsolicited offers for the company; (5) shareholder proposals to eliminate supermajority requirements in company bylaws; and (6) shareholder proposals to allow shareholders owning at least 3% of the outstanding common stock for at least three years to nominate candidates for election to the board of directors (“Proxy Access”). The Adviser will generally withhold support from shareholder proposals to grant shareholders the right to act by written consent, especially if they already have the right to call a special meeting.
On environmental and social matters, generally the Adviser will vote in favor of shareholder proposals calling for enhanced disclosure of the company’s approach to (1) mitigating environmental risks, such as climate change; (2) monitoring gender pay equity; and (3) achieving and maintaining diversity on the board of directors. Generally the Adviser will not support shareholder proposals calling for limitations on political activity by the company, including political contributions, lobbying, and memberships in trade associations.
On matters of capital structure, generally the Adviser will vote against a proposal to authorize or issue shares that are senior in priority or voting rights to the voted securities, and in favor of a proposal to: (1) reduce the amount of shares authorized for issuance (subject to adequate provisions for outstanding convertible securities, options, warrants, rights and other existing obligations to issue shares); (2) grant authorities to issue shares with and without pre-emptive rights unless the size of the authorities would threaten to unreasonably dilute existing shareholders; and (3) authorize a stock repurchase program.
On matters relating to management compensation, generally the Adviser will vote in favor of stock incentive plans (including plans for directors) that align the recipients of stock incentives with the interests of shareholders, without creating undue dilution, and against: (1) the advisory vote on executive compensation plans (“Say On Pay”) when the plan has failed to align executive compensation with corporate performance; (2) the advisory vote on the frequency of the Say On Pay vote when the frequency is other than annual; (3) proposals that would permit the amendment or replacement of outstanding stock incentives having more favorable terms (e.g., lower purchase prices or easier vesting requirements); and (4) executive compensation plans that do not disclose the maximum amounts of compensation that may be awarded or the criteria for determining awards.
On matters relating to corporate transactions, the Adviser will generally vote in favor of mergers, acquisitions, and sale of assets based upon the Adviser’s analysis of the proposed business strategy, the transaction price, and the expected impact on the total return for shareholders.
In addition, the Adviser will not vote any proxy if it determines that the consequences or costs of voting outweigh the potential benefit of voting. For example, if a foreign market requires shareholders voting proxies to retain the voted shares until the meeting date (thereby rendering the shares “illiquid” for some period of time), the Adviser will not vote proxies for such shares. In addition, the Adviser is not obligated to incur any expense to send a representative to a shareholder meeting or to translate proxy materials into English.
To the extent that the Adviser is permitted to loan securities, the Adviser will not have the right to vote on securities while they are on loan. However, the Adviser will take all reasonable steps to recall shares prior to the record date when the meeting raises issues that the Adviser believes materially affect shareholder value, including, but not limited to, excessive compensation, mergers and acquisitions, contested elections and weak oversight by the audit committee. However, there can be no assurance that the Adviser will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
If proxies are not delivered in a timely or otherwise appropriate basis, the Adviser may not be able to vote a particular proxy.
For an Adviser that employs a quantitative investment strategy for certain funds or accounts that does not make use of qualitative research (“Non-Qualitative Accounts”), the Adviser may not have the kind of research to make decisions about how to vote proxies for them. Therefore, the Adviser will vote the proxies of these Non-Qualitative Accounts as follows: (a) in accordance with the Standard Voting Instructions (defined below) adopted by the Adviser with respect to issues subject to the proxies; (b) if the Adviser is directing votes for the same proxy on behalf of a regular qualitative account and a Non-Qualitative Account, the Non-Qualitative Account would vote in the same manner as the regular qualitative account; (c) if neither of the first two conditions apply, as the proxy voting service is recommending; and (d) if none of the previous conditions apply, as recommended by the Proxy Voting Committee (Proxy Committee).
Proxy Voting Procedures
The Adviser has established a Proxy Voting Committee (“Proxy Committee”), to exercise all voting discretion granted to the Adviser by the Board in accordance with the proxy voting policies. To assist it in carrying out the day-to-day operations related to proxy voting, the Proxy Committee has created the Proxy Voting Management Group (PVMG). The day-to-day operations related to proxy voting are carried out by the Proxy Voting Operations Team (PVOT) and overseen by the PVMG. This work includes, interacting with a proxy voting service on the Proxy Committee's behalf; soliciting voting recommendations from the Adviser's investment professionals, as necessary; bringing voting recommendations to the Proxy Committee from the Adviser's investment professionals; filing any required proxy voting reports; providing proxy voting reports to clients and investment companies as they are requested from time to time; keeping the Proxy Committee informed of any issues related to proxy voting; and voting client shares as directed by the Proxy Committee.
The Adviser has hired a proxy voting service to obtain, vote and record proxies in accordance with the directions of the Proxy Committee. The Proxy Committee has supplied the proxy voting services with general instructions (the “Standard Voting Instructions”) that represent decisions made by the Proxy Committee in order to vote common proxy proposals. As the Proxy Committee believes that a shareholder vote is equivalent to an investment decision, the Proxy Committee retains the right to modify the Standard Voting Instructions at any time or to vote contrary to them at any time in order to cast proxy votes in a manner that the Proxy Committee believes is: (a) in the best interests of the Adviser's clients (and shareholders of the funds advised by the Adviser); and (b) will enhance the long-term value of the securities being voted. The proxy voting service may vote any proxy as directed in the Standard Voting Instructions without further direction from the Proxy Committee. However, if the Standard Voting Instructions require case-by-case direction for a proposal, the PVOT will work with the investment professionals and the proxy voting service to develop a voting recommendation for the Proxy Committee and to communicate the Proxy Committee's final voting decision to the proxy voting service. Further, if the Standard Voting Instructions require the PVOT to analyze a ballot question and make the final voting decision, the PVOT will report such votes to the Proxy Committee on a quarterly basis for review.
Conflicts of Interest
The Adviser has adopted procedures to address situations where a matter on which a proxy is sought may present a potential conflict between the interests of the Fund (and its shareholders) and those of the Adviser or the Distributor. This may occur where a significant business relationship exists between the Adviser (or its affiliates) and a company involved with a proxy vote.
A company that is a proponent, opponent or the subject of a proxy vote, and which to the knowledge of the Proxy Committee has this type of significant business relationship, is referred to below as an “Interested Company.”
The Adviser has implemented the following procedures in order to avoid concerns that the conflicting interests of the Adviser or its affiliates have influenced proxy votes. Any employee of the Adviser or its affiliates who is contacted by an Interested Company regarding proxies to be voted by the Adviser must refer the Interested Company to a member of the Proxy Committee, and must inform the Interested Company that the Proxy Committee has exclusive authority to determine how the proxy will be voted. Any Proxy Committee member contacted by an Interested Company must report it to the full Proxy Committee and provide a written summary of the communication. Under no circumstances will the Proxy Committee or any member of the Proxy Committee make a commitment to an Interested Company regarding the voting of proxies or disclose to an Interested Company how the Proxy Committee has directed such proxies to be voted. If the Standard Voting Instructions already provide specific direction on the proposal in question, the Proxy Committee shall not alter or amend such directions. If the Standard Voting Instructions require the Proxy Committee to provide further direction, the Proxy Committee shall do so in accordance with the proxy voting policies, without regard for the interests of the Adviser with respect to the Interested Company. If the Proxy Committee provides any direction as to the voting of proxies relating to a proposal affecting an Interested Company, it must disclose annually to the Fund's Board information regarding: the significant business relationship; any material communication with the Interested Company; the matter(s) voted on; and how, and why, the Adviser voted as it did.
In certain circumstances it may be appropriate for the Adviser to vote in the same proportion as all other shareholders, so as to not affect the outcome beyond helping to establish a quorum at the shareholders' meeting. This is referred to as “proportional voting.” If the Fund owns shares of another Federated mutual fund, the Adviser will proportionally vote the client's proxies for that fund or seek direction from the Board or the client on how the proposal should be voted. If the Fund owns shares of an unaffiliated mutual fund, the Adviser may proportionally vote the Fund's proxies for that fund depending on the size of the position. If the Fund owns shares of an unaffiliated exchange traded fund, the Adviser will proportionally vote the Fund's proxies for that fund.
Downstream Affiliates
If the Proxy Committee gives further direction, or seeks to vote contrary to the Standard Voting Instructions, for a proxy relating to a portfolio company in which the Fund owns more than 10% of the portfolio company's outstanding voting securities at the time of the vote (“Downstream Affiliate”), the Proxy Committee must first receive guidance from counsel to the Proxy Committee as to whether any relationship between the Adviser and the portfolio company, other than such ownership of the portfolio company's securities, gives rise to an actual conflict of interest. If counsel determines that an actual conflict exists, the Proxy Committee must address any such conflict with the executive committee of the board of directors or trustees of any investment company client prior to taking any action on the proxy at issue.
Proxy Advisers' Conflicts of Interest
Proxy advisory firms may have significant business relationships with the subjects of their research and voting recommendations. For example, a proxy voting service client may be a public company with an upcoming shareholders' meeting and the proxy voting service has published a research report with voting recommendations. In another example, a proxy voting service board member also sits on the board of a public company for which the proxy voting service will write a research report. These and similar situations give rise to an actual or apparent conflict of interest.
In order to avoid concerns that the conflicting interests of the engaged proxy voting service have influenced proxy voting recommendations, the Adviser will take the following steps:
| 1. | A due diligence team made up of employees of the Adviser and/or its affiliates will meet with the proxy voting service on an annual basis and determine through a review of their policies and procedures and through inquiry that the proxy voting service has established a system of internal controls that provide reasonable assurance that their voting recommendations are not influenced by the business relationships they have with the subjects of their research. |
| 2. | Whenever the standard voting guidelines call for voting a proposal in accordance with the proxy voting service recommendation and the proxy voting service has disclosed that they have a conflict of interest with respect to that issuer, the PVOT will take the following steps: (a) the PVOT will obtain a copy of the research report and recommendations published by another proxy voting service for that issuer; (b) the Head of the PVOT, or his designee, will review both the engaged proxy voting service research report and the research report of the other proxy voting service and determine what vote will be cast. The PVOT will report all proxies voted in this manner to the Proxy Committee on a quarterly basis. Alternatively, the PVOT may seek direction from the Committee on how the proposal shall be voted. |
Proxy Voting Report
A report on “Form N-PX” of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund at www.FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC's website at www.sec.gov.
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
As of the date of filing of the report, the Portfolio Managers listed below are jointly and primarily responsible for managing the Fund’s assets.
Portfolio Manager Information
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager's management of a fund's investments, on the one hand, and the investments of other funds/pooled investment vehicles or accounts (collectively, including the Fund, as applicable, “accounts”) for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts can include, for example, conflicts created by specific portfolio manager compensation arrangements (including, for example, the allocation or weighting given to the performance of the Fund or other accounts or activities for which the portfolio manager is responsible in calculating the portfolio manager's compensation), and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers' compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
The following information about the Fund's Portfolio Managers is provided as of the end of the Fund's most recently completed fiscal year unless otherwise indicated.
Ihab L. Salib, Senior Portfolio Manager
Ihab L. Salib, Senior Portfolio Manager, has been the Fund’s portfolio manager since its inception December of 2016.
Mr. Salib is a Senior Portfolio Manager, Head of the International Fixed Income Group and Chairman of the Currency Management Committee. He is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. He has been with Federated since 1999; has worked in investment management since 1992; has managed investment portfolios since 2002. Education: B.A., State University of New York at Stony Brook.
| Types of Accounts Managed by Ihab Salib | Total Number of Additional Accounts Managed/Total Assets* | Additional Accounts/Assets Managed that are Subject to Advisory Fee Based on Account Performance |
| Registered Investment Companies | 13/$1.6 billion | 0/$0 |
| Other Pooled Investment Vehicles | 5/$596.3 million | 0/$0 |
| Other Accounts | 0/$0 | 2/$679.6 million |
| * | None of the Accounts has an advisory fee that is based on the performance of the account. |
Dollar value range of shares owned in the Fund: None.
Ihab Salib is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive, position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP), and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Investors, Inc. (“Federated”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., LIBOR). Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, Mr. Salib is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Salib is responsible when his compensation is calculated may be equal or can vary. In addition, Mr. Salib has oversight responsibility for other portfolios that he does not personally manage and serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income funds. A portion of the IPP score is based on Federated's senior management's assessment of team contributions. For purposes of calculating the annual incentive amount, each account or activities managed by the portfolio manager currently is categorized into one of three IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is lesser than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Christopher P. McGinley, Portfolio Manager
Christopher P. McGinley has been the Fund’s portfolio manager since December of 2016.
Mr. McGinley is Head of the Trade Finance Team and is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. He has been with Federated since 2004; has worked in investment management since 2005; has managed investment portfolios since 2009. Education: B.S., University of Pittsburgh; M.P.I.A., University of Pittsburgh.
| Types of Accounts Managed by Christopher McGinley | Total Number of Additional Accounts Managed/Total Assets* |
| Registered Investment Companies | 6/$553.7 million |
| Other Pooled Investment Vehicles | 0/$0 |
| Other Accounts | 0/$0 |
| * | None of the Accounts has an advisory fee that is based on the performance of the account. |
Dollar value range of shares owned in the Fund: None.
Christopher McGinley is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP), and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance. The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., LIBOR). Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, Mr. McGinley is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts for which Mr. McGinley is responsible when his compensation is calculated may be equal or can vary. For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of three IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts used to determine IPP (but can be adjusted periodically). Additionally, a portion of Mr. McGinley’s IPP score is based on the performance of the accounts for which he provides research and analytic support. A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Dalia Kay, Senior Portfolio Manager
Dalia Kay, Senior Portfolio Manager, has been the Fund’s portfolio manager since its inception December of 2016.
Ms. Kay is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. She has been with Federated since 2013; has worked in investment management since 1994; has managed investment portfolios since 1994. Education: Master of Sciences for “Sciences Commerciales et Industrielles – mention gestion d’enterprise” University of Geneva.
| Types of Accounts Managed by Dalia Kay | Total Number of Additional Accounts Managed/Total Assets* |
| Registered Investment Companies | 1/$553.7 million |
| Other Pooled Investment Vehicles | 0/$0 |
| Other Accounts | 0/$0 |
*None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Dalia Kay is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP), and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance. The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., LIBOR). Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, Ms. Kay is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts for which Ms. Kay is responsible when her compensation is calculated may be equal or can vary. For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of three IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts used to determine IPP (but can be adjusted periodically). Additionally, a portion of Ms. Kay’s IPP score is based on the performance of the accounts for which she provides research and analytic support. A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Patrick Bayliss, Senior Portfolio Manager
Patrick Bayliss, Senior Portfolio Manager, has been the Fund’s portfolio manager since its inception December of 2016.
Mr. Bayliss is a Senior Portfolio Manager and is responsible for day to day management of the Fund focusing on asset allocation, interest rate strategy and security selection. He has been with Federated since 2013; has worked in investment management since 1990; has managed investment portfolios since 1990. Education: BSc (Econ) from Bristol University, U.K.
| Types of Accounts Managed by Patrick Bayliss | Total Number of Additional Accounts Managed/Total Assets* |
| Registered Investment Companies | 1/$553.7 million |
| Other Pooled Investment Vehicles | 0/$0 |
| Other Accounts | 0/$0 |
*None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Patrick Bayliss is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager's experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance. The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund's benchmark (i.e., LIBOR). Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, Mr. Bayliss is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts for which Mr. Bayliss is responsible when his compensation is calculated may be equal or can vary. For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of three IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts used to determine IPP (but can be adjusted periodically). Additionally, a portion of Mr. Bayliss’ IPP score is based on the performance of the accounts for which he provides research and analytic support. A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
No such purchases this period.
| Item 10. | Submission of Matters to a Vote of Security Holders |
No changes to report.
| Item 11. | Controls and Procedures |
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not Applicable
| Item 13. | Exhibits |
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Federated Project and Trade Finance Tender Fund
By /S/ Lori A. Hensler
Lori A. Hensler, Treasurer and Principal Financial Officer
Date ___May 25, 2018____
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /S/ J. Christopher Donahue
J. Christopher Donahue, President and Principal Executive Officer
Date ___May 25, 2018____
By /S/ Lori A. Hensler
Lori A. Hensler, Treasurer and Principal Financial Officer
Date ___May 25, 2018____