United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-23730
(Investment Company Act File Number)
Federated Hermes ETF Trust
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Peter J. Germain, Esquire
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 02/28/23
Date of Reporting Period: 02/28/23
Item 1. | Reports to Stockholders |
NYSE Arca | FHYS |
Federated Hermes Short Duration High Yield ETF
A Portfolio of Federated Hermes ETF Trust
1 Year | Since Inception | |
Market Price | -2.70% | -3.40% |
NAV | -2.67% | -3.64% |
IBA0-3HY | -0.52% | -1.61% |
Index Classification | Percentage of Total Net Assets |
Technology | 8.6% |
Gaming | 7.1% |
Insurance - P&C | 6.3% |
Automotive | 5.4% |
Packaging | 5.3% |
Health Care | 4.4% |
Midstream | 4.0% |
Independent Energy | 3.9% |
Diversified Manufacturing | 3.6% |
Other2 | 39.2% |
Bank Loan Core Fund | 1.4% |
Cash Equivalents3 | 9.1% |
Other Assets and Liabilities - Net4 | 1.7% |
Total | 100% |
1 | Index classifications are based upon, and individual portfolio securities are assigned to, the classifications and sub-classifications of the Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index (BHY2%ICI). Individual portfolio securities that are not included in the BHY2%ICI are assigned to an index classification by the Fund’s Adviser. |
2 | For purposes of this table, index classifications which constitute less than 3.5% of the Fund’s total net assets have been aggregated under the designation “Other.” |
3 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements other than those representing cash collateral for securities lending. |
4 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount or Shares | Value | ||
CORPORATE BONDS— 60.7% | |||
Aerospace/Defense— 1.2% | |||
$ 200,000 | TransDigm, Inc., Sr. Sub. Note, 6.375%, 6/15/2026 | $ 193,966 | |
150,000 | TransDigm, Inc., Sr. Sub., Series WI, 5.500%, 11/15/2027 | 138,118 | |
TOTAL | 332,084 | ||
Airlines— 1.2% | |||
350,000 | American Airlines, Inc./AAdvantage Loyalty IP Ltd., 144A, 5.500%, 4/20/2026 | 340,637 | |
Automotive— 4.7% | |||
150,000 | Mercedes-Benz Finance NA LLC, Sr. Unsecd. Note, 144A, 5.500%, 11/27/2024 | 150,380 | |
100,000 | Adient Global Holdings Ltd., Sr. Secured. Note, 144A, 7.000%, 04/15/2028 | 100,000 | |
110,000 | American Honda Finance Corp., Sr. Unsecd. Note, 4.750%, 1/12/2026 | 109,027 | |
100,000 | Dornoch Debt Merger Sub, Inc., Sr. Unsecd. Note, 144A, 6.625%, 10/15/2029 | 75,500 | |
500,000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 4.063%, 11/1/2024 | 480,725 | |
120,000 | J.B. Poindexter & Co., Inc., Sr. Unsecd. Note, 144A, 7.125%, 4/15/2026 | 115,649 | |
60,000 | KAR Auction Services, Inc., Sr. Unsecd. Note, 144A, 5.125%, 6/1/2025 | 58,482 | |
250,000 | Panther BF Aggregator 2 LP, Sr. Unsecd. Note, 144A, 8.500%, 5/15/2027 | 248,572 | |
TOTAL | 1,338,335 | ||
Building Materials— 0.9% | |||
100,000 | Srs Distribution, Inc., Sr. Unsecd. Note, 144A, 6.125%, 7/1/2029 | 83,629 | |
180,000 | Standard Industries, Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2027 | 166,289 | |
TOTAL | 249,918 | ||
Cable Satellite— 2.5% | |||
150,000 | CCO Holdings LLC/Cap Corp., Sr. Sub. Secd. Note, 144A, 5.500%, 5/1/2026 | 144,750 | |
200,000 | CSC Holdings LLC, Sr. Unsecd. Note, 144A, 5.500%, 4/15/2027 | 173,994 | |
200,000 | DIRECTV Holdings LLC, Sec. Fac. Bond, 144A, 5.875%, 8/15/2027 | 178,804 | |
200,000 | DISH Network Corp., Sec. Fac. Bond, 144A, 11.750%, 11/15/2027 | 202,645 | |
TOTAL | 700,193 | ||
Chemicals— 2.0% | |||
200,000 | Cheever Escrow Issuer, Sec. Fac. Bond, 144A, 7.125%, 10/1/2027 | 192,000 | |
200,000 | Illuminate Buyer LLC/Illuminate Holdings IV, Inc., Sr. Unsecd. Note, 144A, 9.000%, 7/1/2028 | 179,000 | |
200,000 | Koppers, Inc., Sr. Unsecd. Note, 144A, 6.000%, 2/15/2025 | 193,354 | |
TOTAL | 564,354 | ||
Construction Machinery— 0.7% | |||
200,000 | United Rentals, Inc., Sr. Unsecd. Note, 5.500%, 5/15/2027 | 196,020 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS— continued | |||
Consumer Cyclical Services— 1.3% | |||
$ 100,000 | Allied Universal Holdco LLC, Sec. Fac. Bond, 144A, 6.625%, 7/15/2026 | $ 94,976 | |
100,000 | Garda World Security Corp., Sec. Fac. Bond, 144A, 4.625%, 2/15/2027 | 88,567 | |
200,000 | The Brink’s Co., Sr. Unsecd. Note, 144A, 5.500%, 7/15/2025 | 194,701 | |
TOTAL | 378,244 | ||
Consumer Products— 1.3% | |||
250,000 | BCPE Empire Holdings, Inc., Sr. Unsecd. Note, 144A, 7.625%, 5/1/2027 | 228,829 | |
150,000 | Edgewell Personal Care Co., Sr. Unsecd. Note, 144A, 5.500%, 6/1/2028 | 140,071 | |
TOTAL | 368,900 | ||
Diversified Manufacturing— 2.5% | |||
250,000 | Gates Global LLC, Sr. Unsecd. Note, 144A, 6.250%, 1/15/2026 | 244,273 | |
350,000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 7.125%, 6/15/2025 | 353,173 | |
100,000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 7.250%, 6/15/2028 | 101,335 | |
TOTAL | 698,781 | ||
Finance Companies— 0.5% | |||
150,000 | United Shore Financial Services, Sr. Unsecd. Note, 144A, 5.500%, 11/15/2025 | 139,350 | |
Financial Institutions— 0.8% | |||
225,000 | 1 | JPMorgan Chase & Co., Sr. Unsecd. Note, 5.705% (3-month USLIBOR +0.890%), 7/23/2024 | 225,343 |
Food & Beverage— 2.1% | |||
250,000 | Aramark Services, Inc., Sr. Unsecd. Note, 144A, 5.000%, 4/1/2025 | 242,506 | |
100,000 | Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 5.500%, 10/15/2027 | 94,829 | |
250,000 | US Foods, Inc., Sec. Fac. Bond, 144A, 6.250%, 4/15/2025 | 249,086 | |
TOTAL | 586,421 | ||
Gaming— 5.7% | |||
100,000 | Affinity Gaming LLC, 144A, 6.875%, 12/15/2027 | 89,195 | |
250,000 | Boyd Gaming Corp., Sr. Unsecd. Note, 4.750%, 12/1/2027 | 234,375 | |
50,000 | Caesars Entertainment Corp., Sec. Fac. Bond, 144A, 7.000%, 2/15/2030 | 50,375 | |
100,000 | Churchill Downs, Inc., Sr. Unsecd. Note, 144A, 5.500%, 4/1/2027 | 94,837 | |
300,000 | Colt Merger Sub, Inc., Sr. Secd. Note, 144A, 6.250%, 7/1/2025 | 297,505 | |
225,000 | MGM Resorts International, Sr. Unsecd. Note, 6.000%, 3/15/2023 | 225,000 | |
200,000 | Mohegan Tribal Gaming Authority, 144A, 8.000%, 2/1/2026 | 187,354 | |
210,000 | Sugarhouse HSP Gaming Finance Corp., Sec. Fac. Bond, 144A, 5.875%, 5/15/2025 | 198,005 | |
250,000 | VICI Properties LP/VICI Note Co., Inc., Sr. Unsecd. Note, 144A, 5.625%, 5/1/2024 | 248,205 | |
TOTAL | 1,624,851 | ||
Health Care— 2.8% | |||
150,000 | Ardent Health Services, Sr. Unsecd. Note, 144A, 5.750%, 7/15/2029 | 125,520 | |
200,000 | Global Medical Response, Inc., Sec. Fac. Bond, 144A, 6.500%, 10/1/2025 | 150,000 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS— continued | |||
Health Care— continued | |||
$ 100,000 | MPH Acquisition Holdings LLC, Sr. Note, 144A, 5.500%, 9/1/2028 | $ 75,765 | |
150,000 | Team Health Holdings, Inc., Sr. Unsecd. Note, 144A, 6.375%, 2/1/2025 | 102,941 | |
350,000 | Tenet Healthcare Corp., Sr. Secd. Note, 4.625%, 7/15/2024 | 344,313 | |
TOTAL | 798,539 | ||
Independent Energy— 3.0% | |||
150,000 | Permian Resources Operating LLC, Sr. Unsecd. Note, 144A, 5.375%, 1/15/2026 | 141,330 | |
250,000 | Range Resources Corp., Sr. Unsecd. Note, 4.875%, 5/15/2025 | 243,899 | |
250,000 | SM Energy Co., Sr. Unsecd. Note, 6.750%, 9/15/2026 | 241,198 | |
250,000 | Tap Rock Resources LLC, Sr. Unsecd. Note, 144A, 7.000%, 10/1/2026 | 228,750 | |
TOTAL | 855,177 | ||
Industrial - Other— 0.4% | |||
150,000 | Madison Iaq LLC, Sr. Unsecd. Note, 144A, 5.875%, 6/30/2029 | 119,419 | |
Insurance - P&C— 4.3% | |||
282,890 | Ardonagh Midco 2 PLC, Sr. Unsecd. Note, 144A, 11.500% / 12.750% PIK, 1/15/2027 | 264,409 | |
200,000 | AssuredPartners, Inc., Sr. Unsecd. Note, 144A, 7.000%, 8/15/2025 | 195,890 | |
300,000 | Hub International Ltd., Sr. Unsecd. Note, 144A, 7.000%, 5/1/2026 | 294,912 | |
185,000 | NFP Corp., Sr. Unsecd. Note, 144A, 6.875%, 8/15/2028 | 157,546 | |
300,000 | USIS Merger Subsidiary, Inc., Sr. Unsecd. Note, 144A, 6.875%, 5/1/2025 | 294,750 | |
TOTAL | 1,207,507 | ||
Leisure— 0.5% | |||
151,000 | Six Flags Theme Parks, Sec. Fac. Bond, 144A, 7.000%, 7/1/2025 | 152,601 | |
Lodging— 1.4% | |||
400,000 | Hilton Domestic Operating Company, Inc., Sr. Unsecd. Note, 144A, 5.375%, 5/1/2025 | 394,978 | |
Media Entertainment— 1.7% | |||
100,000 | Cumulus Media News Holdings, Inc., 144A, 6.750%, 7/1/2026 | 85,876 | |
200,000 | iHeartCommunications, Inc., 144A, 5.250%, 8/15/2027 | 174,044 | |
150,000 | Scripps Escrow, Inc., Sr. Unsecd. Note, 144A, 5.875%, 7/15/2027 | 120,108 | |
100,000 | Townsquare Media, Inc., Sec. Fac. Bond, 144A, 6.875%, 2/1/2026 | 91,628 | |
TOTAL | 471,656 | ||
Midstream— 4.1% | |||
250,000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 3/1/2027 | 236,003 | |
350,000 | Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.625%, 2/15/2026 | 340,609 | |
100,000 | NuStar Logistics LP, Sr. Unsecd. Note, 5.625%, 4/28/2027 | 93,088 | |
250,000 | Solaris Midstream Holdings LLC, Sr. Unsecd. Note, 144A, 7.625%, 4/1/2026 | 246,913 | |
250,000 | Suburban Propane Partners LP, Sr. Unsecd. Note, 5.875%, 3/1/2027 | 237,489 | |
TOTAL | 1,154,102 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS— continued | |||
Oil Field Services— 2.7% | |||
$ 100,000 | Archrock Partners LP / Archrock Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.875%, 4/1/2027 | $ 97,013 | |
300,000 | Nabors Industries, Inc., Sr. Unsecd. Note, 144A, 7.375%, 5/15/2027 | 289,134 | |
250,000 | Precision Drilling Corp., Sr. Unsecd. Note, 144A, 7.125%, 1/15/2026 | 245,962 | |
25,000 | Transocean Titan Financial Ltd., 144A, 8.375%, 2/1/2028 | 25,518 | |
110,000 | USA Compression Partners LP, Sr. Unsecd. Note, Series WI, 6.875%, 4/1/2026 | 105,423 | |
TOTAL | 763,050 | ||
Packaging— 4.1% | |||
150,000 | Ardagh Packaging Finance PLC/Ardagh Holdings, Sr. Unsecd. Note, 144A, 5.250%, 8/15/2027 | 123,188 | |
200,000 | Bway Holding Co., 144A, 7.875%, 8/15/2026 | 201,250 | |
350,000 | Owens-Brockway Glass Container, Inc., Sr. Unsecd. Note, 144A, 5.375%, 1/15/2025 | 340,120 | |
25,000 | Sealed Air Corp., Sr. Unsecd. Note, 144A, 6.125%, 2/1/2028 | 24,624 | |
260,000 | Trident Merger Subsidiary, Inc., Sr. Unsecd. Note, 144A, 6.625%, 11/1/2025 | 239,200 | |
250,000 | Trivium Packaging Finance BV, Sr. Unsecd. Note, 144A, 8.500%, 8/15/2027 | 237,467 | |
TOTAL | 1,165,849 | ||
Paper— 1.4% | |||
400,000 | Clearwater Paper Corp., Sr. Unsecd. Note, 144A, 5.375%, 2/1/2025 | 387,860 | |
Pharmaceuticals— 0.3% | |||
100,000 | Bausch Health Cos, Inc., Sec. Fac. Bond, 144A, 5.500%, 11/1/2025 | 86,970 | |
Technology— 2.9% | |||
200,000 | AMS AG, Sr. Unsecd. Note, 144A, 7.000%, 7/31/2025 | 190,000 | |
250,000 | Boxer Parent Co., Inc., 144A, 7.125%, 10/2/2025 | 247,631 | |
150,000 | Coherent Corp., Sr. Unsecd. Note, 144A, 5.000%, 12/15/2029 | 131,415 | |
150,000 | Consensus Cloud Solutions, Inc., Sr. Unsecd. Note, 144A, 6.000%, 10/15/2026 | 136,509 | |
150,000 | Veritas US, Inc./Veritas Bermuda Ltd., Sr. Secd. Note, 144A, 7.500%, 9/1/2025 | 115,488 | |
TOTAL | 821,043 | ||
Transportation Services— 2.2% | |||
400,000 | Stena International S.A., Sec. Fac. Bond, 144A, 6.125%, 2/1/2025 | 385,842 | |
250,000 | Watco Cos LLC/Finance Co., Sr. Unsecd. Note, 144A, 6.500%, 6/15/2027 | 228,574 | |
TOTAL | 614,416 | ||
Utility - Electric— 0.8% | |||
260,000 | Enviva Partners LP/Enviva Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.500%, 1/15/2026 | 243,740 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS— continued | |||
Wireless Communications— 0.7% | |||
$ 200,000 | 1 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.964%, (3-month USLIBOR +1.100%), 5/15/2025 | $ 203,099 |
TOTAL CORPORATE BONDS (IDENTIFIED COST $18,323,412) | 17,183,437 | ||
1 | FLOATING RATE LOANS— 23.8% | ||
Aerospace/Defense— 0.7% | |||
198,457 | Peraton Corp., Term Loan B–1st Lien, Series B, 8.385% (1-month USLIBOR +3.750%), 2/1/2028 | 196,318 | |
Automotive— 0.7% | |||
100,000 | American Axle and Manufacturing, Inc., 2022 Term Loan B–1st Lien, 8.160% (SOFR CME +3.600%), 12/13/2029 | 99,800 | |
100,000 | DexKo Global, Inc., 2022 USD Term Loan–1st Lien, 11.080% (SOFR CME +6.500%), 10/4/2028 | 95,000 | |
TOTAL | 194,800 | ||
Building Materials— 0.5% | |||
150,000 | Cornerstone Building Brands, Inc., 2022 Term Loan–1st Lien, 10.187% (SOFR CME +5.625%), 8/1/2028 | 142,875 | |
Chemicals— 1.1% | |||
100,000 | 2 | Axalta Coating Systems Dutch Holding B B.V, 2022 USD Term Loan B–1st Lien, 7.506% (SOFR CME +3.000%), 12/20/2029 | 100,357 |
221,004 | Messer Industries GmbH, 2018 USD Term Loan–1st Lien, 7.230% (3-month USLIBOR +2.500%), 3/2/2026 | 220,149 | |
TOTAL | 320,506 | ||
Consumer Cyclical Services— 0.4% | |||
100,000 | AP Core Holdings II, LLC, High-Yield Term Loan B2–1st Lien, Series B2, 10.135% (1-month USLIBOR +5.500%), 9/1/2027 | 96,083 | |
Consumer Products— 0.5% | |||
148,875 | BCPE Empire Holdings, Inc., 2022 Incremental Term Loan–1st Lien, 9.343% (SOFR CME +4.625%), 6/11/2026 | 147,041 | |
Diversified Manufacturing— 1.1% | |||
199,500 | Gates Global, LLC, 2022 Term Loan B4–1st Lien, 8.118% (SOFR CME +3.500%), 11/16/2029 | 199,297 | |
100,000 | Watlow Electric Manufacturing Co., 2022 Incremental Term Loan B–1st Lien, 9.938% (SOFR CME +5.000%), 3/2/2028 | 99,375 | |
TOTAL | 298,672 | ||
Gaming— 1.4% | |||
50,000 | Caesars Entertainment Corp., Term Loan B–1st Lien, 7.968% (SOFR CME +3.250%), 2/6/2030 | 49,882 | |
99,250 | Century Casinos, Inc., 2022 Term Loan–1st Lien, 10.668% (SOFR CME +6.100%), 4/2/2029 | 95,404 | |
248,750 | Great Canadian Gaming Corp., 2021 Term Loan–1st Lien, 8.753% (3-month USLIBOR +4.000%), 11/1/2026 | 247,974 | |
TOTAL | 393,260 |
Principal Amount or Shares | Value | ||
1 | FLOATING RATE LOANS— continued | ||
Health Care— 1.6% | |||
$ 198,493 | AHP Health Partners, Inc., 2021 Term Loan B–1st Lien, Series B, 8.135% (1-month USLIBOR +3.500%), 8/24/2028 | $ 196,855 | |
122,811 | Curium BidCo S.a.r.l., 2020 USD Term Loan–1st Lien, 8.980% (3-month USLIBOR +4.250%), 12/2/2027 | 120,509 | |
150,000 | MH Sub I, LLC, 2021 Term Loan–2nd Lien, 10.868% (SOFR CME +6.250%), 2/23/2029 | 137,875 | |
TOTAL | 455,239 | ||
Independent Energy— 0.9% | |||
250,000 | Ascent Resources Utica Holdings, LLC, 2020 Fixed Term Loan–2nd Lien, 13.815% (3-month USLIBOR +9.000%), 11/1/2025 | 265,000 | |
Industrial - Other— 1.5% | |||
248,115 | Filtration Group Corp., 2021 Incremental Term Loan–1st Lien, 8.135% (1-month USLIBOR +3.500%), 10/21/2028 | 244,084 | |
98,491 | Fluid-Flow Products, Inc., Term Loan–1st Lien, 8.480% (3-month USLIBOR +3.750%), 3/31/2028 | 96,348 | |
87,141 | SPX Flow, Inc., 2022 Term Loan–1st Lien, 9.218% (SOFR CME +4.500%), 4/5/2029 | 82,542 | |
TOTAL | 422,974 | ||
Insurance - P&C— 1.2% | |||
149,625 | AssuredPartners, Inc., 2022 Term Loan B4–1st Lien, 8.868% (SOFR CME +4.250%), 2/12/2027 | 149,110 | |
100,000 | Hub International Ltd., 2022 Term Loan B–1st Lien, 8.728% (3-month USLIBOR +4.000%), 11/10/2029 | 99,850 | |
99,750 | USI, Inc., 2022 Incremental Term Loan–1st Lien, 8.330% (SOFR CME +3.750%), 11/22/2029 | 99,459 | |
TOTAL | 348,419 | ||
Leisure— 0.5% | |||
150,000 | Formula One Holdings Ltd., Term Loan B–1st Lien, 7.868% (SOFR CME +3.250%), 1/15/2030 | 150,262 | |
Lodging— 0.5% | |||
150,000 | Four Seasons Hotels Ltd., 2022 Term Loan B–1st Lien, 7.968% (SOFR CME +3.250%), 11/30/2029 | 150,499 | |
Media Entertainment— 1.6% | |||
120,893 | 2 | Emerald Expositions Holding, Inc., 2017 Term Loan B–1st Lien, TBD, 5/22/2024 | 118,877 |
148,364 | Magnite, Inc., Term Loan–1st Lien, 9.635%–10.235% (1-month USLIBOR +5.000%, 3-month USLIBOR +5.000%, 6-month USLIBOR +5.000%), 4/28/2028 | 141,440 | |
97,878 | NEP Group, Inc., Incremental Term Loan B–1st Lien, Series B, 8.635% (1-month USLIBOR +4.000%), 10/20/2025 | 91,516 | |
99,500 | Univision Communications, Inc., 2022 First Lien Term Loan B–1st Lien, Series B, 8.830% (SOFR CME +4.250%), 6/24/2029 | 99,293 | |
TOTAL | 451,126 |
Principal Amount or Shares | Value | ||
1 | FLOATING RATE LOANS— continued | ||
Oil Field Services— 0.4% | |||
$ 124,687 | ChampionX Corp., 2022 Term Loan B1–1st Lien, Series B1, 7.917% (SOFR CME +3.250%), 6/7/2029 | $ 124,181 | |
Packaging— 1.2% | |||
248,101 | Charter NEX US, Inc., 2021 Term Loan–1st Lien, 8.482% (1-month USLIBOR +3.750%), 12/1/2027 | 243,799 | |
99,126 | Clydesdale Acquisition Holdings, Inc., Term Loan B–1st Lien, Series B, 8.893% (SOFR CME +4.175%), 4/13/2029 | 97,631 | |
TOTAL | 341,430 | ||
Services— 0.4% | |||
125,000 | Covetrus, Inc., Term Loan–1st Lien, 9.580% (SOFR CME +5.000%), 10/13/2029 | 117,683 | |
Technology— 5.8% | |||
99,375 | Barracuda Networks, Inc., 2022 Term Loan–1st Lien, 9.176% (SOFR CME +4.500%), 8/15/2029 | 95,737 | |
150,000 | CDK Global, Inc., 2022 USD Term Loan B–1st Lien, 9.080% (SOFR CME +4.500%), 7/6/2029 | 149,423 | |
170,131 | Digi International, Inc., Term Loan–1st Lien, Series B, 9.635% (1-month USLIBOR +5.000%), 11/1/2028 | 169,918 | |
97,856 | Gainwell Acquisition Corp., Term Loan B–1st Lien, Series B, 8.730% (3-month USLIBOR +4.000%), 10/1/2027 | 94,211 | |
98,863 | Greeneden U.S. Holdings II, LLC, 2020 USD Term Loan B4–1st Lien, Series B4, 8.635% (1-month USLIBOR +4.000%), 12/1/2027 | 97,874 | |
98,448 | Hyland Software, Inc., 2018 1st Lien Term Loan–1st Lien, 8.135% (1-month USLIBOR +3.500%), 7/1/2024 | 98,106 | |
248,067 | Marcel LUX IV S.a.r.l., USD Term Loan B1–1st Lien, Series B, 7.674% (SOFR CME +3.250%), 3/15/2026 | 246,827 | |
248,082 | NEXUS Buyer LLC, Term Loan B–1st Lien, Series B, 8.385% (1-month USLIBOR +3.750%), 11/9/2026 | 243,341 | |
100,000 | 2 | Open Text Corp., 2022 Term Loan B–1st Lien, TBD, 8/24/2029 | 99,797 |
99,126 | Renaissance Holding Corp., 2022 Incremental Term Loan–1st Lien, Series B, 9.065% (SOFR CME +4.500%), 4/1/2027 | 97,536 | |
100,000 | Ultimate Software Group, Inc. (The), Term Loan–2nd Lien, 10.032% (3-month USLIBOR +5.250%), 5/3/2027 | 97,083 | |
148,343 | VS Buyer, LLC, Term Loan B–1st Lien, Series B, 9.500% (PRIME +2.000%), 2/28/2027 | 146,266 | |
TOTAL | 1,636,119 | ||
Transportation Services— 0.9% | |||
237,500 | SkyMiles IP Ltd., 2020 Skymiles Term Loan B–1st Lien, 8.558% (3-month USLIBOR +3.750%), 10/20/2027 | 245,665 | |
Utility - Electric— 0.9% | |||
248,750 | TerraForm Power Operating, LLC, 2022 Term Loan B–1st Lien, 7.430% (SOFR CME +2.750%), 5/21/2029 | 248,285 | |
TOTAL FLOATING RATE LOANS (IDENTIFIED COST $6,689,070) | 6,746,437 |
Principal Amount or Shares | Value | ||
ASSET-BACKED SECURITIES— 3.3% | |||
Automotive— 0.3% | |||
$ 100,000 | Volkswagen Auto Lease Trust 2022-A, Class A3, 3.440%, 7/21/2025 | $ 97,780 | |
Finance Companies— 3.0% | |||
50,000 | DLLAD LLC 2023-1A, Class A2, 5.190%, 4/20/2026 | 49,946 | |
100,000 | Enterprise Fleet Financing LLC 2022-4, Class A2, 5.760%, 10/22/2029 | 100,497 | |
150,000 | Evergreen Credit Card Trust 2022-CRT2, Class B, 6.560%, 11/16/2026 | 148,839 | |
200,000 | MMAF Equipment Finance LLC 2022-B, Class A2, 5.570%, 9/9/2025 | 199,910 | |
100,000 | 1 | Palmer Square Loan Funding Ltd. 2022-2A, Class D, 10.858% (SOFR +6.200%), 10/15/2030 | 91,542 |
150,000 | 1 | Palmer Square Loan Funding Ltd. 2022-5A, Class C, 8.568% (SOFR +3.910%), 1/15/2031 | 149,439 |
100,000 | 1 | Stratus CLO 2022-1A, Class D, 8.889% (SOFR +4.250%), 7/20/2030 | 98,051 |
TOTAL | 838,224 | ||
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $942,427) | 936,004 | ||
INVESTMENT COMPANIES— 10.5% | |||
46,235 | Bank Loan Core Fund | 406,871 | |
2,575,116 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 4.61%3 | 2,575,116 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $2,993,157) | 2,981,987 | ||
TOTAL INVESTMENT IN SECURITIES—98.3% (IDENTIFIED COST $28,948,066)4 | 27,847,865 | ||
OTHER ASSETS AND LIABILITIES - NET—1.7%5 | 494,583 | ||
TOTAL NET ASSETS—100% | $28,342,448 |
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 | $250,000 | $13,584,848 | $13,834,848 |
Proceeds from Sales | $(1,430,000) | $(11,550,166) | $(12,980,166) |
Change in Unrealized Appreciation/Depreciation | $7,841 | $461 | $8,302 |
Net Realized Gain/(Loss) | $(107,997) | $(324) | $(108,321) |
Value as of 2/28/2023 | $406,871 | $2,575,116 | $2,981,987 |
Shares Held as of 2/28/2023 | 46,235 | 2,575,116 | 2,621,351 |
Dividend Income | $44,919 | $32,909 | $77,828 |
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 February 28, 2023 where the rate will be determined at time of settlement. |
3 | 7-day net yield. |
4 | The cost of investments for federal tax purposes amounts to $29,082,589. |
5 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
The following is a summary of the inputs used, as of February 28, 2023, 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 | $— | $17,183,437 | $— | $17,183,437 |
Floating Rate Loans | — | 6,746,437 | — | 6,746,437 |
Asset-Backed Securities | — | 936,004 | — | 936,004 |
Investment Companies | 2,981,987 | — | — | 2,981,987 |
TOTAL SECURITIES | $2,981,987 | $24,865,878 | $— | $27,847,865 |
The following acronym(s) are used throughout this portfolio: | ||
LIBOR | —London Interbank Offered Rate | |
PIK | —Payment in Kind | |
SOFR | —Secured Overnight Financing Rate |
Year Ended 2/28/2023 | Period Ended 2/28/20221 | |
Net Asset Value, Beginning of Period | $24.32 | $25.02 |
Income From Investment Operations: | ||
Net investment income (loss) | 1.28 | 0.43 |
Net realized and unrealized gain (loss) | (1.96) | (0.86) |
TOTAL FROM INVESTMENT OPERATIONS | (0.68) | (0.43) |
Less Distributions: | ||
Distributions from net investment income | (1.39) | (0.27) |
Net Asset Value, End of Period | $22.25 | $24.32 |
Total Return2 | (2.67)% | (1.74)% |
Ratios to Average Net Assets: | ||
Net expenses3 | 0.50% | 0.50%4 |
Net investment income | 5.70% | 4.67%4 |
Expense waiver/reimbursement5 | 0.10% | 0.14%4 |
Supplemental Data: | ||
Net assets, end of period (000 omitted) | $28,342 | $28,069 |
Portfolio turnover6 | 109% | 7% |
1 | Reflects operations for the period from December 16, 2021 (commencement of operations) to February 28, 2022. |
2 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
4 | Computed on an annualized basis. |
5 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest. |
6 | Securities that mature are considered sales for purposes of this calculation. |
February 28, 2023
Assets: | |
Investment in securities, at value including $2,981,987 of investments in affiliated holdings* (identified cost $28,948,066, including $2,993,157 of identified cost in affiliated holdings) | $27,847,865 |
Income receivable | 335,144 |
Income receivable from affiliated holdings | 17,828 |
Receivable for investments sold | 620,046 |
Total Assets | 28,820,883 |
Liabilities: | |
Payable for investments purchased | 315,777 |
Income distribution payable | 151,606 |
Payable for investment adviser fee (Note 5) | 10,700 |
Accrued expenses (Note 5) | 352 |
Total Liabilities | 478,435 |
Net assets for 1,274,000 shares outstanding | $28,342,448 |
Net Assets Consist of: | |
Paid-in capital | $32,048,547 |
Total distributable earnings (loss) | (3,706,099) |
Total Net Assets | $28,342,448 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | |
$28,342,448 ÷ 1,274,000 shares outstanding, no par value, unlimited shares authorized | $22.25 |
* | See information listed after the Fund’s Portfolio of Investments. |
Year Ended February 28, 2023
Investment Income: | |
Interest | $1,762,401 |
Dividends (including $77,828 received from affiliated holdings*) | 68,812 |
TOTAL INCOME | 1,831,213 |
Expenses: | |
Investment adviser fee (Note 5) | 177,137 |
Share registration costs | 352 |
TOTAL EXPENSES | 177,489 |
Waiver/reimbursement of investment adviser fee (Note 5) | (28,428) |
Net expenses | 149,061 |
Net investment income | 1,682,152 |
Realized and Unrealized Gain (Loss) on Investments: | |
Net realized loss on investments (including net realized loss of $(108,321) on sales of investments in affiliated holdings*) | (2,440,471) |
Net change in unrealized depreciation of investments (including net change in unrealized depreciation of $8,302 on investments in affiliated holdings*) | (354,684) |
Net realized and unrealized gain (loss) on investments | (2,795,155) |
Change in net assets resulting from operations | $(1,113,003) |
* | See information listed after the Fund’s Portfolio of Investments. |
Year Ended 2/28/2023 | Period Ended 2/28/20221 | |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $1,682,152 | $256,772 |
Net realized gain (loss) | (2,440,471) | (5,474) |
Net change in unrealized appreciation/depreciation | (354,684) | (745,517) |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (1,113,003) | (494,219) |
Distributions to Shareholders | (1,803,036) | (295,841) |
Share Transactions: | ||
Proceeds from sale of shares | 10,695,223 | 28,858,696 |
Cost of shares redeemed | (7,505,372) | — |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 3,189,851 | 28,858,696 |
Change in net assets | 273,812 | 28,068,636 |
Net Assets: | ||
Beginning of period | 28,068,636 | — |
End of period | $28,342,448 | $28,068,636 |
1 | Reflects operations for the period from December 16, 2021 (commencement of operations) to February 28, 2022. |
Year Ended 2/28/2023 | Period Ended 2/28/20221 | |
Shares sold | 460,000 | 1,154,000 |
Shares issued to shareholders in payment of distributions declared | — | — |
Shares redeemed | (340,000) | — |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | 120,000 | 1,154,000 |
1 | Reflects operations for the period from December 16, 2021 (commencement of operations) to February 28, 2022. |
2023 | 2022 | |
Ordinary income | $1,803,036 | $295,841 |
Undistributed ordinary income | $32,741 |
Net unrealized depreciation | $(1,234,724) |
Capital loss carryforwards | $(2,504,116) |
TOTAL | $(3,706,099) |
Short-Term | Long-Term | Total |
$2,347,347 | $156,769 | $2,504,116 |
Purchases | $33,336,971 |
Sales | $33,941,077 |
April 21, 2023
Beginning Account Value 9/1/2022 | Ending Account Value 2/28/2023 | Expenses Paid During Period1 | |
Actual | $1,000 | $1,029.90 | $2.52 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,022.32 | $2.51 |
1 | Expenses are equal to the Fund’s annualized net expense ratio of 0.50%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half-year period). |
Name Birth Date Positions Held with Trust 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: February 2021 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Hermes Fund Family; Director or Trustee of the Funds in the Federated Hermes Fund Family; President, Chief Executive Officer and Director, Federated Hermes, 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 Trust 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: February 2021 | Principal Occupations: Director or Trustee of certain of the funds in the Federated Hermes Fund Family; Chief Financial Officer, Treasurer, Vice President and Assistant Secretary, Federated Hermes, 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 Hermes, 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. |
Name Birth Date Positions Held with Trust 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: February 2021 | Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Hermes Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp. (aerospace). 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 of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. 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 Trust 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: February 2021 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Hermes Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Equifax, Inc.; Lead Director, Member of the Audit and Nominating and Corporate Governance Committees, Haverty Furniture Companies, Inc.; formerly, Director, Member of Governance and Compensation Committees, Publix Super Markets, 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 serves on the President’s Cabinet and Business School Board of Visitors for the University of Alabama. Mr. Hough previously served on the Business School Board of Visitors for Wake Forest University, and he previously served as an Executive Committee member of the United States Golf Association. |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Indefinite Term Began serving: February 2021 | Principal Occupations: Director or Trustee of the Federated Hermes Fund Family; Adjunct Professor Emerita of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and 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 (natural gas). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as Associate General Secretary of the Diocese of Pittsburgh, a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally- Green was appointed by the Supreme Court of Pennsylvania to serve on the Supreme Court’s Board of Continuing Judicial Education and the Supreme Court’s Appellate Court Procedural Rules Committee. 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; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); Director, Catholic Charities, Pittsburgh; and Director CNX Resources Corporation (natural gas). 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; Director, St. Vincent College; Director and Chair, North Catholic High School, Inc.; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; and Director and Vice Chair, Saint Francis University. |
Name Birth Date Positions Held with Trust 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: February 2021 | Principal Occupations: Director or Trustee of the Federated Hermes 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. 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); Director, Midway Pacific (lumber); and Director, The Golisano Children’s Museum of Naples, Florida. |
Madelyn A. Reilly Birth Date: February 2, 1956 Trustee Indefinite Term Began serving: February 2021 | Principal Occupations: Director or Trustee of the Federated Hermes Fund Family; formerly, Senior Vice President for Legal Affairs, General Counsel and Secretary of Board of Directors, Duquesne University (Retired). Other Directorships Held: None. Qualifications: Ms. Reilly has served in various business and legal management roles throughout her career. Ms. Reilly previously served as Senior Vice President for Legal Affairs, General Counsel and Secretary of Board of Directors and Director of Risk Management and Associate General Counsel, Duquesne University. Prior to her work at Duquesne University, Ms. Reilly served as Assistant General Counsel of Compliance and Enterprise Risk as well as Senior Counsel of Environment, Health and Safety, PPG Industries. Ms. Reilly currently serves as a member of the Board of Directors of UPMC Mercy Hospital. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Indefinite Term Began serving: February 2021 | Principal Occupations: Director or Trustee of the Federated Hermes Fund Family; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CONSOL Energy Inc. (now split into two separate publicly traded companies known as CONSOL Energy Inc. and CNX Resources Corp.). 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, CONSOL Energy Inc. and CNX Gas Company; 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: February 2021 | Principal Occupations: Director or Trustee of the Federated Hermes 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 Address Positions Held with Trust 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: February 2021 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Hermes Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Hermes, 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: February 2021 | Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Hermes Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Hermes, 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 Hermes, Inc. 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 Hermes, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Hermes, Inc. |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: February 2021 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Hermes Fund Family; Vice President and Chief Compliance Officer of Federated Hermes, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated Hermes, Inc. 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 Hermes, Inc. Prior to joining Federated Hermes, Inc., 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. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Officer since: February 2021 | Principal Occupations: Robert J. Ostrowski joined Federated Hermes, Inc. in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated Hermes’ 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. |
Brandon L. Clark Birth Date: November 28, 1974 VICE PRESIDENT Officer since: February 2021 | Principal Occupations: Brandon L. Clark is a Vice President of the Trust. Mr. Clark joined Federated Hermes in July 2020 as a Senior Vice President and Director, ETF Business, Federated Advisory Services Company. Prior to joining Federated Hermes, Mr. Clark served as Managing Director of Legg Mason’s ETF products and Head of ETF Capital Markets with the Vanguard Group. Mr. Clark received his B.A. in Economics from the University of Pittsburgh. |
Annual Evaluation of Adequacy and Effectiveness
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
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) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(e) Not Applicable
(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: 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 2023 – $62,480
Fiscal year ended 2022 - $42,500
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2023 - $0
Fiscal year ended 2022 - $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 2023 - $0
Fiscal year ended 2022 - $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 2023 - $0
Fiscal year ended 2022 - $0
Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $63,261 and $56,742 respectively. Fiscal year ended 2023- Service fees for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2022- Service fees for analysis of potential Passive Foreign Investment Company holdings.
(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 to management its responsibilities to pre-approve services performed by the independent auditor.
The Audit Committee has delegated pre-approval authority to its chairman (the “Chairman”) for services that do not exceed a specified dollar threshold. The Chairman or Chief Audit Executive will report any such 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 will approve, if necessary, 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; with limited exception, 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 RIC’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 RIC 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; with limited exception, 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 permissible services other than audit, review or attest services the pre-approval requirement is waived if:
(1) | With respect to such services rendered to the Funds, the aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the audit client to its accountant during the fiscal year in which the services are provided; and, |
(2) | With respect to such services rendered to the Fund’s investment adviser ( the “Adviser”)and any entity controlling, controlled by to under common control with the Adviser such as affiliated non-U.S. and U.S. funds not under the Audit Committee’s purview and which do not fall within a category of service which has been determined by the Audit Committee not to have a direct impact on the operations or financial reporting of the RIC, the aggregate amount of all services provided constitutes no more than five percent of the total amount of revenues paid to the RIC’s auditor by the RIC, its Adviser and any entity controlling, controlled by, or under common control with the Adviser during the fiscal year in which the services are provided; and |
(3) | Such services were not recognized by the issuer or RIC at the time of the engagement to be non-audit services; and |
(4) | Such services are promptly brought to the attention of the Audit Committee 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 which qualify for pre-approval and which it believes are routine and recurring services, and would not impair the independence of the auditor.
The Securities and Exchange Commission’s (the “SEC”) rules and relevant guidance should be consulted to determine the precise definitions of these services and 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 the Fund’s Principal Accounting Officer and/or the Chief Audit Executive of Federated Hermes, Inc., only after those individuals have determined that 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 registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2023 – 0%
Fiscal year ended 2022 - 0%
Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(c)
Fiscal year ended 2023 – 0%
Fiscal year ended 2022 – 0%
Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(d)
Fiscal year ended 2023 – 0%
Fiscal year ended 2022 – 0%
Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
(f) | NA |
(g) | Non-Audit Fees billed to the registrant, the registrant’s Adviser, and certain entities controlling, controlled by or under common control with the Adviser: |
Fiscal year ended 2023 - $199,579
Fiscal year ended 2022 - $117,986
(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 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. |
Item 5. | Audit Committee of Listed Registrants |
Not Applicable
Item 6. | Schedule of 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 |
Not Applicable
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not Applicable
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not Applicable
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 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 Hermes ETF Trust
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date April 21, 2023
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, Principal Executive Officer
Date April 21, 2023
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date April 21, 2023