Federated Hermes Short Duration High Yield ETF
Portfolio of Investments
May 31, 2022 (unaudited)
Principal Amount or Shares | Value | ||
CORPORATE BONDS—82.7% | |||
Aerospace/Defense—1.0% | |||
$ 200,000 | TransDigm, Inc., Sr. Sub. Note, 6.375%, 6/15/2026 | $ 198,500 | |
150,000 | TransDigm, Inc., Sr. Sub., Series WI, 5.500%, 11/15/2027 | 143,607 | |
TOTAL | 342,107 | ||
Airlines—1.0% | |||
350,000 | American Airlines, Inc./AAdvantage Loyalty IP Ltd., 144A, 5.500%, 4/20/2026 | 346,188 | |
Automotive—4.3% | |||
250,000 | Dornoch Debt Merger Sub, Inc., Sr. Unsecd. Note, 144A, 6.625%, 10/15/2029 | 199,375 | |
300,000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 4.063%, 11/1/2024 | 293,988 | |
250,000 | J.B. Poindexter & Co., Inc., Sr. Unsecd. Note, 144A, 7.125%, 4/15/2026 | 247,653 | |
270,000 | KAR Auction Services, Inc., Sr. Unsecd. Note, 144A, 5.125%, 6/1/2025 | 270,675 | |
250,000 | Panther BF Aggregator 2 LP, Sr. Unsecd. Note, 144A, 8.500%, 5/15/2027 | 249,162 | |
250,000 | Real Hero Merger Sub 2, Inc., Sr. Unsecd. Note, 144A, 6.250%, 2/1/2029 | 196,664 | |
TOTAL | 1,457,517 | ||
Building Materials—3.8% | |||
250,000 | Cp Atlas Buyer, Inc., Sr. Unsecd. Note, 144A, 7.000%, 12/1/2028 | 205,000 | |
250,000 | Interface, Inc., Sr. Unsecd. Note, 144A, 5.500%, 12/1/2028 | 221,784 | |
250,000 | Srs Distribution, Inc., Sr. Unsecd. Note, 144A, 6.125%, 7/1/2029 | 214,375 | |
450,000 | Standard Industries, Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2027 | 435,937 | |
250,000 | White Cap Parent LLC, Sr. Sub. Secd. Note, 144A, 8.250%, 3/15/2026 | 230,376 | |
TOTAL | 1,307,472 | ||
Cable Satellite—4.8% | |||
300,000 | CCO Holdings LLC/Cap Corp., Sr. Sub. Secd. Note, 144A, 5.500%, 5/1/2026 | 300,270 | |
350,000 | CSC Holdings LLC, Sr. Unsecd. Note, 144A, 5.500%, 4/15/2027 | 350,424 | |
350,000 | DIRECTV Holdings LLC, Sec. Fac. Bond, 144A, 5.875%, 8/15/2027 | 330,050 | |
300,000 | DISH DBS Corp., Sec. Fac. Bond, 144A, 5.250%, 12/1/2026 | 253,815 | |
250,000 | Doyla Holdco 18 Designated Activity Co., Sr. Unsecd. Note, 144A, 5.000%, 7/15/2028 | 228,966 | |
200,000 | Telenet Finance Luxembourg, Sec. Fac. Bond, 144A, 5.500%, 3/1/2028 | 187,000 | |
TOTAL | 1,650,525 | ||
Chemicals—4.0% | |||
250,000 | Compass Minerals International, Inc., Sr. Unsecd. Note, 144A, 6.750%, 12/1/2027 | 236,262 | |
270,000 | Herens Holdco S.a.r.l., Sec. Fac. Bond, 144A, 4.750%, 5/15/2028 | 233,410 | |
200,000 | Illuminate Buyer LLC/Illuminate Holdings IV, Inc., Sr. Unsecd. Note, 144A, 9.000%, 7/1/2028 | 176,000 | |
300,000 | Koppers, Inc., Sr. Unsecd. Note, 144A, 6.000%, 2/15/2025 | 289,500 | |
250,000 | Olympus Water US Holding Corp., Sec. Fac. Bond, 144A, 4.250%, 10/1/2028 | 227,720 | |
250,000 | Polar US Borrower LLC, Sr. Unsecd. Note, 144A, 6.750%, 5/15/2026 | 200,676 | |
TOTAL | 1,363,568 | ||
Construction Machinery—0.9% | |||
300,000 | United Rentals, Inc., Sr. Unsecd. Note, 5.500%, 5/15/2027 | 302,250 | |
Consumer Cyclical Services—2.6% | |||
100,000 | Allied Universal Holdco LLC, Sec. Fac. Bond, 144A, 6.625%, 7/15/2026 | 99,106 | |
300,000 | Allied Universal Holdings Co. LLC / Allied Universal Finance Corp., Sec. Fac. Bond, 144A, 4.625%, 6/1/2028 | 268,218 | |
250,000 | Garda World Security Corp., Sec. Fac. Bond, 144A, 4.625%, 2/15/2027 | 224,941 | |
300,000 | The Brink’s Co., Sr. Unsecd. Note, 144A, 5.500%, 7/15/2025 | 299,811 | |
TOTAL | 892,076 |
1
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Consumer Products—2.8% | |||
$ 250,000 | BCPE Empire Holdings, Inc., Sr. Unsecd. Note, 144A, 7.625%, 5/1/2027 | $ 227,369 | |
300,000 | Diamond BC BV, Sr. Unsecd. Note, 144A, 4.625%, 10/1/2029 | 255,000 | |
250,000 | Edgewell Personal Care Co., Sr. Unsecd. Note, 144A, 5.500%, 6/1/2028 | 243,143 | |
250,000 | Energizer Holdings, Inc., Sr. Unsecd. Note, 144A, 4.750%, 6/15/2028 | 220,625 | |
TOTAL | 946,137 | ||
Diversified Manufacturing—2.1% | |||
250,000 | Gates Global LLC, Sr. Unsecd. Note, 144A, 6.250%, 1/15/2026 | 244,057 | |
200,000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 7.125%, 6/15/2025 | 207,650 | |
250,000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 7.250%, 6/15/2028 | 262,515 | |
TOTAL | 714,222 | ||
Finance Companies—1.3% | |||
250,000 | United Shore Financial Services, Sr. Unsecd. Note, 144A, 5.500%, 11/15/2025 | 236,250 | |
250,000 | United Wholesale Mortgage, LLC, Sr. Unsecd. Note, 144A, 5.500%, 4/15/2029 | 219,535 | |
TOTAL | 455,785 | ||
Food & Beverage—2.3% | |||
250,000 | Aramark Services, Inc., Sr. Unsecd. Note, 144A, 5.000%, 4/1/2025 | 249,525 | |
250,000 | Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 5.500%, 10/15/2027 | 245,885 | |
300,000 | US Foods, Inc., Sec. Fac. Bond, 144A, 6.250%, 4/15/2025 | 309,000 | |
TOTAL | 804,410 | ||
Gaming—3.8% | |||
250,000 | Affinity Gaming LLC, 144A, 6.875%, 12/15/2027 | 222,262 | |
250,000 | Boyd Gaming Corp., Sr. Unsecd. Note, 4.750%, 12/1/2027 | 243,125 | |
300,000 | Colt Merger Sub, Inc., Sr. Secd. Note, 144A, 6.250%, 7/1/2025 | 303,900 | |
350,000 | Mohegan Tribal Gaming Authority, 144A, 8.000%, 2/1/2026 | 323,578 | |
210,000 | Sugarhouse HSP Gaming Finance Corp., Sec. Fac. Bond, 144A, 5.875%, 5/15/2025 | 201,075 | |
TOTAL | 1,293,940 | ||
Health Care—5.4% | |||
300,000 | Ardent Health Services, Sr. Unsecd. Note, 144A, 5.750%, 7/15/2029 | 234,750 | |
250,000 | CHS/Community Health Systems, Inc., Sec. Fac. Bond, 144A, 5.625%, 3/15/2027 | 232,885 | |
350,000 | Global Medical Response, Inc., Sec. Fac. Bond, 144A, 6.500%, 10/1/2025 | 336,000 | |
250,000 | LifePoint Health, Inc., Sec. Fac. Bond, 144A, 4.375%, 2/15/2027 | 232,960 | |
250,000 | MPH Acquisition Holdings LLC, Sr. Note, 144A, 5.500%, 9/1/2028 | 235,232 | |
300,000 | Team Health Holdings, Inc., Sr. Unsecd. Note, 144A, 6.375%, 2/1/2025 | 229,500 | |
350,000 | Tenet Healthcare Corp., Sr. Secd. Note, 4.625%, 7/15/2024 | 349,813 | |
TOTAL | 1,851,140 | ||
Independent Energy—3.4% | |||
300,000 | Antero Resources Corp., Sr. Unsecd. Note, 144A, 8.375%, 7/15/2026 | 326,250 | |
250,000 | Centennial Resource Production, LLC, Sr. Unsecd. Note, 144A, 5.375%, 1/15/2026 | 241,550 | |
250,000 | Range Resources Corp., Sr. Unsecd. Note, 4.875%, 5/15/2025 | 254,375 | |
350,000 | Tap Rock Resources LLC, Sr. Unsecd. Note, 144A, 7.000%, 10/1/2026 | 347,949 | |
TOTAL | 1,170,124 | ||
Industrial - Other—0.7% | |||
300,000 | Madison Iaq LLC, Sr. Unsecd. Note, 144A, 5.875%, 6/30/2029 | 234,750 | |
Insurance - P&C—5.0% | |||
265,937 | Ardonagh Midco 2 PLC, Sr. Unsecd. Note, 144A, 11.500% / 12.750% PIK, 1/15/2027 | 284,553 | |
350,000 | AssuredPartners, Inc., Sr. Unsecd. Note, 144A, 7.000%, 8/15/2025 | 345,180 | |
400,000 | Hub International Ltd., Sr. Unsecd. Note, 144A, 7.000%, 5/1/2026 | 403,948 | |
335,000 | NFP Corp., Sr. Unsecd. Note, 144A, 6.875%, 8/15/2028 | 292,016 | |
400,000 | USIS Merger Subsidiary, Inc., Sr. Unsecd. Note, 144A, 6.875%, 5/1/2025 | 393,427 | |
TOTAL | 1,719,124 |
2
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Leisure—0.9% | |||
$ 300,000 | Six Flags Theme Parks, Sec. Fac. Bond, 144A, 7.000%, 7/1/2025 | $ 310,500 | |
Lodging—0.9% | |||
300,000 | Hilton Domestic Operating Company, Inc., Sr. Unsecd. Note, 144A, 5.375%, 5/1/2025 | 304,560 | |
Media Entertainment—5.5% | |||
250,000 | Audacy Capital Corp., 144A, 6.500%, 5/1/2027 | 163,050 | |
400,000 | Cumulus Media News Holdings, Inc., 144A, 6.750%, 7/1/2026 | 388,954 | |
400,000 | iHeartCommunications, Inc., 144A, 5.250%, 8/15/2027 | 376,132 | |
250,000 | Scripps Escrow, Inc., Sr. Unsecd. Note, 144A, 5.875%, 7/15/2027 | 236,655 | |
250,000 | Tegna, Inc., Sr. Unsecd. Note, 144A, 4.625%, 3/15/2028 | 244,875 | |
250,000 | Terrier Media Buyer, Inc., Sr. Unsecd. Note, 144A, 8.875%, 12/15/2027 | 226,875 | |
250,000 | Townsquare Media, Inc., Sec. Fac. Bond, 144A, 6.875%, 2/1/2026 | 241,653 | |
TOTAL | 1,878,194 | ||
Midstream—6.2% | |||
250,000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 3/1/2027 | 250,635 | |
300,000 | EQT Midstream Partners LP, Sr. Unsecd. Note, 4.750%, 7/15/2023 | 304,740 | |
350,000 | Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.625%, 2/15/2026 | 357,350 | |
250,000 | NuStar Logistics LP, Sr. Unsecd. Note, 5.625%, 4/28/2027 | 250,750 | |
350,000 | Rattler Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.625%, 7/15/2025 | 357,907 | |
350,000 | Solaris Midstream Holdings LLC, Sr. Unsecd. Note, 144A, 7.625%, 4/1/2026 | 350,000 | |
250,000 | Suburban Propane Partners LP, Sr. Unsecd. Note, 5.875%, 3/1/2027 | 248,225 | |
TOTAL | 2,119,607 | ||
Oil Field Services—3.5% | |||
200,000 | Archrock Partners LP / Archrock Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.250%, 4/1/2028 | 195,000 | |
100,000 | Archrock Partners LP / Archrock Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.875%, 4/1/2027 | 99,153 | |
400,000 | Nabors Industries, Inc., Sr. Unsecd. Note, 144A, 7.375%, 5/15/2027 | 403,356 | |
250,000 | Precision Drilling Corp., Sr. Unsecd. Note, 144A, 7.125%, 1/15/2026 | 249,931 | |
260,000 | USA Compression Partners LP, Sr. Unsecd. Note, Series WI, 6.875%, 4/1/2026 | 253,825 | |
TOTAL | 1,201,265 | ||
Packaging—3.0% | |||
250,000 | Ardagh Packaging Finance PLC/Ardagh Holdings, Sr. Unsecd. Note, 144A, 5.250%, 8/15/2027 | 208,750 | |
350,000 | Owens-Brockway Glass Container, Inc., Sr. Unsecd. Note, 144A, 5.375%, 1/15/2025 | 341,320 | |
260,000 | Trident Merger Subsidiary, Inc., Sr. Unsecd. Note, 144A, 6.625%, 11/1/2025 | 243,100 | |
250,000 | Trivium Packaging Finance BV, Sr. Unsecd. Note, 144A, 8.500%, 8/15/2027 | 246,109 | |
TOTAL | 1,039,279 | ||
Paper—1.1% | |||
400,000 | Clearwater Paper Corp., Sr. Unsecd. Note, 144A, 5.375%, 2/1/2025 | 391,000 | |
Pharmaceuticals—2.4% | |||
250,000 | Bausch Health Cos, Inc., Sec. Fac. Bond, 144A, 5.500%, 11/1/2025 | 235,727 | |
250,000 | Bausch Health Cos, Inc., Sr. Unsecd. Note, 144A, 5.000%, 1/30/2028 | 159,549 | |
250,000 | Grifols Escrow Issuer SA, 144A, 4.750%, 10/15/2028 | 228,438 | |
250,000 | Par Pharmaceutical Cos., Inc., Sec. Fac. Bond, 144A, 7.500%, 4/1/2027 | 195,625 | |
TOTAL | 819,339 | ||
Restaurant—0.6% | |||
200,000 | 1011778 BC Unltd. Liability Co./New Red Finance, Inc., 144A, 4.375%, 1/15/2028 | 187,940 | |
Retailers—1.2% | |||
400,000 | NMG Holding Co., Inc., 144A, 7.125%, 4/1/2026 | 396,636 | |
Technology—5.1% | |||
250,000 | Centerfield Media Parent, Sr. Note, 144A, 6.625%, 8/1/2026 | 219,922 | |
250,000 | Consensus Cloud Solutions, Inc., Sr. Unsecd. Note, 144A, 6.000%, 10/15/2026 | 233,750 | |
250,000 | Diebold Nixdorf, Inc., Sr. Secd. Note, 144A, 9.375%, 7/15/2025 | 190,000 |
3
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Technology—continued | |||
$ 250,000 | II-VI, Inc., Sr. Unsecd. Note, 144A, 5.000%, 12/15/2029 | $ 234,375 | |
250,000 | Logan Merger Sub, Inc., Sr. Secd. Note, 144A, 5.500%, 9/1/2027 | 200,148 | |
250,000 | NCR Corp., Sr. Unsecd. Note, 144A, 5.000%, 10/1/2028 | 235,647 | |
200,000 | Rackspace Technology, Inc., 144A, 3.500%, 2/15/2028 | 174,473 | |
300,000 | Veritas US, Inc./Veritas Bermuda, Ltd., Sr. Secd. Note, 144A, 7.500%, 9/1/2025 | 263,850 | |
TOTAL | 1,752,165 | ||
Transportation Services—1.8% | |||
400,000 | Stena International S.A., Sec. Fac. Bond, 144A, 6.125%, 2/1/2025 | 392,092 | |
250,000 | Watco Cos LLC/Finance Co., Sr. Unsecd. Note, 144A, 6.500%, 6/15/2027 | 237,341 | |
TOTAL | 629,433 | ||
Utility - Electric—1.3% | |||
260,000 | Enviva Partners LP/Enviva Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.500%, 1/15/2026 | �� 260,000 | |
200,000 | TerraForm Power Operating LLC, Sr. Unsecd. Note, 144A, 5.000%, 1/31/2028 | 191,726 | |
TOTAL | 451,726 | ||
TOTAL CORPORATE BONDS (IDENTIFIED COST $30,496,366) | 28,332,979 | ||
1 | FLOATING RATE LOANS—17.2% | ||
Consumer Cyclical Services—1.0% | |||
250,000 | AP Core Holdings II LLC, High-Yield Term Loan B2, 6.560% (1-month LIBOR + 5.500%), 9/1/2027 | 238,125 | |
100,000 | Century Casinos, Inc., 2022 Term Loan–1st Lien, 6.842% (SOFR CME + 6.000%), 4/2/2029 | 95,500 | |
TOTAL | 333,625 | ||
Financial Institutions—0.7% | |||
248,718 | 2 | Sedgwick Claims Management Services, Inc., 2020 Term Loan B3–1st Lien, TBD, 9/3/2026 | 243,226 |
Gaming—0.7% | |||
250,000 | 2 | Great Canadian Gaming Corp., 2021 Term Loan, TBD, 11/1/2026 | 243,000 |
Health Care—3.2% | |||
200,000 | 2 | AHP Health Partners, Inc., 2021 Term Loan B–1st Lien, TBD, 8/24/2028 | 192,876 |
250,000 | 2 | Azalea Topco, Inc., 2021 Term Loan B–1st Lien, TBD, 7/24/2026 | 241,250 |
200,000 | Curia Global, Inc., 2021 Term Loan–1st Lien, 4.810%–4.989% (1-month LIBOR +3.750%, 3-month LIBOR +3.750%), 8/30/2026 | 192,292 | |
249,367 | Curium BidCo S.a r.l., 2020 Term Loan–1st Lien, 5.000% (3-month LIBOR + 4.250%), 9/10/2027 | 238,146 | |
250,000 | MH Sub I LLC, 2021 2nd Lien Term Loan–2nd Lien, 7.310% (1-month LIBOR + 6.250%), 2/23/2029 | 241,250 | |
TOTAL | 1,105,814 | ||
Independent Energy—0.8% | |||
250,000 | Ascent Resources Utica Holdings, 2020 Fixed 2nd Lien Term Loan, 10.021% (3-month LIBOR +9.000%), 11/1/2025 | 265,313 | |
Industrial - Other—1.4% | |||
250,000 | 2 | FCG Acquisitions, Inc., Term Loan–1st Lien, TBD, 3/31/2028 | 238,542 |
250,000 | SPX Flow, Inc., 2022 Term Loan, 5.634% (SOFR CME + 4.500%), 4/5/2029 | 234,533 | |
TOTAL | 473,075 | ||
Insurance - P&C—0.6% | |||
250,000 | Asurion LLC, 2021 2nd Lien Term Loan B3–2nd Lien, 6.310% (1-month LIBOR +5.250%), 1/31/2028 | 224,168 | |
Media Entertainment—1.4% | |||
250,000 | 2 | Magnite, Inc., Term Loan–1st Lien, TBD, 4/28/2028 | 241,250 |
249,375 | NEP/NCP Holdco, Inc., Incremental Term Loan B–1st Lien, 6.500% (PRIME + 3.000%), 10/20/2025 | 238,984 | |
TOTAL | 480,234 | ||
Oil Field Services—0.4% | |||
125,000 | 2 | Championx Corp., 2022 Term Loan B1, TBD, 5/13/2029 | 122,656 |
Packaging—1.4% | |||
250,000 | Charter Nex US, Inc., 2021 Term Loan–1st Lien, 4.810% (1-month LIBOR +3.750%), 12/1/2027 | 240,625 | |
250,000 | 2 | Clydesdale Acquisition Holdings, Inc., Term Loan B–1st Lien, TBD, 4/13/2029 | 237,500 |
TOTAL | 478,125 |
4
Principal Amount or Shares | Value | ||
1 | FLOATING RATE LOANS—continued | ||
Technology—4.9% | |||
$ 250,000 | 2 | Barracuda Networks, Inc., 2022 Term Loan, TBD, 5/17/2029 | $ 241,043 |
250,000 | 2 | Greeneden U.S. Holdings II LLC, 2020 Term Loan B4–1st Lien, TBD, 12/1/2027 | 242,455 |
250,000 | 2 | Hyland Software, Inc., 2018 1st Lien Term Loan–1st Lien, TBD, 7/1/2024 | 243,507 |
249,369 | Milano Acquisition Corp., Term Loan B–1st Lien, 5.006% (3-month LIBOR + 4.000%), 10/1/2027 | 243,134 | |
250,000 | 2 | Nexus Buyer LLC, Term Loan B–1st Lien, TBD, 11/9/2026 | 241,095 |
250,000 | RL Merger Subsidiary, Inc., 2022 Incremental Term Loan–1st Lien, 5.242% (SOFR + 4.500%), 3/17/2027 | 242,970 | |
250,000 | UKG, Inc., 2021 2nd Lien Term Loan, 6.212% (3-month LIBOR + 5.250%), 5/3/2027 | 239,220 | |
TOTAL | 1,693,424 | ||
Utility - Electric—0.7% | |||
250,000 | 2 | TerraForm Power Operating LLC, 2022 Term Loan B, TBD, 5/30/2029 | 243,750 |
TOTAL FLOATING RATE LOANS (IDENTIFIED COST $6,072,269) | 5,906,410 | ||
ASSET-BACKED SECURITIES—1.3% | |||
Finance Companies—0.6% | |||
250,000 | Aimco 2020-12A, Class ER, 6.951%, 1/17/2032 | 225,698 | |
Financial Institutions—0.7% | |||
250,000 | Palmer Square Loan Funding Ltd. 2022-2A, Class D, 7.288%, 10/15/2030 | 228,412 | |
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $500,000) | 454,110 | ||
INVESTMENT COMPANIES—6.6% | |||
117,398 | Bank Loan Core Fund | 1,065,972 | |
1,198,113 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 0.83%3 | 1,197,754 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $2,328,173) | 2,263,726 | ||
TOTAL INVESTMENT IN SECURITIES—107.8% (IDENTIFIED COST $39,396,808) | 36,957,225 | ||
OTHER ASSETS AND LIABILITIES - NET—(7.8)%4 | (2,684,637) | ||
TOTAL NET ASSETS—100% | $34,272,588 |
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended May 31, 2022, were as follows:
Bank Loan Core Fund | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares | Total of Affiliated Transactions | |
Value as of 2/28/2022 | $1,687,027 | $540,297 | $2,227,324 |
Purchases at Cost | $— | $3,679,363 | $3,679,363 |
Proceeds from Sales | $(540,000) | $(3,021,977) | $(3,561,977) |
Change in Unrealized Appreciation/Depreciation | $(45,076) | $101 | $(44,975) |
Net Realized Gain/(Loss) | $(35,979) | $(30) | $(36,009) |
Value as of 5/31/2022 | $1,065,972 | $1,197,754 | $2,263,726 |
Shares Held as of 5/31/2022 | 117,398 | 1,198,113 | 1,315,511 |
Dividend Income | $20,627 | $1,882 | $22,509 |
1 | Floating/variable note with current rate and current maturity or next reset date shown. |
2 | All or a portion of the security represents unsettled loan commitments at May 31, 2022 where the rate will be determined at time of settlement. |
3 | 7-day net yield. |
4 | Assets, other than investments in securities, less liabilities. |
Note: The categories of investments are shown as a percentage of total net assets at May 31, 2022.
5
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
◾ 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, or NAV per share practical expedient, as applicable.
◾ 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.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different. The trading prices of the Fund’s shares listed on its exchange may differ from the Fund’s NAV and will normally be affected by market forces, such as supply and demand, economic conditions, the market value of the Fund’s disclosed portfolio holdings and other factors. As a result, trading prices may be lower, higher or the same as the Fund’s NAV; and investors may pay more than NAV when buying shares and receive less than NAV when selling shares through the exchange.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment’s value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
◾ With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
◾ Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;
◾ Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer’s operations or regulatory changes or market developments affecting the issuer’s industry.
The Trustees have adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from
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alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of May 31, 2022, in valuing the Fund’s assets carried at fair value:
Valuation Inputs | ||||
Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Corporate Bonds | $— | $28,332,979 | $— | $28,332,979 |
Floating Rate Loans | — | 5,906,410 | — | 5,906,410 |
Asset-Backed Securities | — | 454,110 | — | 454,110 |
Investment Companies | 2,263,726 | — | — | 2,263,726 |
TOTAL SECURITIES | $2,263,726 | $34,693,499 | $— | $36,957,225 |
The following acronym(s) are used throughout this portfolio: | ||
LIBOR | —London Interbank Offered Rate | |
PIK | —Payment in Kind | |
SOFR | —Secured Overnight Financing Rate | |
TBD | —To Be Determined |
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