United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-4017
(Investment Company Act File Number)
Federated Hermes Equity Funds
______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 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: 09/30/22
Date of Reporting Period: Six months ended 03/31/22
Item 1. | Reports to Stockholders |
Share Class | Ticker | A | VSFAX | C | VSFCX | R | VSFRX |
Institutional | VSFIX | R6 | VSFSX |
Federated Hermes Clover Small Value Fund
A Portfolio of Federated Hermes Equity Funds
Sector Composition | Percentage of Total Net Assets |
Financials | 26.1% |
Industrials | 11.7% |
Real Estate | 11.6% |
Energy | 9.0% |
Information Technology | 8.6% |
Consumer Discretionary | 8.0% |
Health Care | 7.5% |
Utilities | 5.3% |
Materials | 3.8% |
Communication Services | 3.6% |
Consumer Staples | 2.3% |
Cash Equivalents2 | 3.4% |
Other Assets and Liabilities—Net3 | (0.9)% |
TOTAL | 100% |
1 | Except for Cash Equivalents and Other Assets and Liabilities, sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS. |
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. |
Shares | Value | ||
COMMON STOCKS— 97.5% | |||
Communication Services— 3.6% | |||
192,161 | Gray Television, Inc. | $ 4,240,993 | |
116,175 | 1 | Liberty Latin America Ltd. | 1,114,118 |
10,928 | Nexstar Media Group, Inc., Class A | 2,059,710 | |
TOTAL | 7,414,821 | ||
Consumer Discretionary— 8.0% | |||
25,299 | 1 | Adient PLC | 1,031,440 |
62,430 | Bloomin Brands, Inc. | 1,369,714 | |
35,906 | Boyd Gaming Corp. | 2,361,897 | |
21,712 | Jack in the Box, Inc. | 2,028,118 | |
10,186 | 1 | LGI Homes, Inc. | 994,969 |
33,132 | Macy’s, Inc. | 807,096 | |
40,816 | Monro Inc. | 1,809,781 | |
19,372 | Steven Madden Ltd. | 748,534 | |
57,959 | Travel + Leisure Co. | 3,358,144 | |
16,329 | 1 | Visteon Corp. | 1,781,984 |
TOTAL | 16,291,677 | ||
Consumer Staples— 2.3% | |||
54,638 | 1 | Hostess Brands, Inc. | 1,198,758 |
96,146 | 1 | Mission Produce, Inc. | 1,216,247 |
12,627 | PriceSmart, Inc. | 995,891 | |
87,733 | Primo Water Corp. | 1,250,195 | |
TOTAL | 4,661,091 | ||
Energy— 9.0% | |||
109,864 | 1 | Antero Resources Corp. | 3,354,148 |
43,909 | Civitas Resources, Inc. | 2,621,806 | |
90,608 | Ovintiv, Inc. | 4,899,175 | |
55,850 | PDC Energy, Inc. | 4,059,178 | |
84,792 | SM Energy Co. | 3,302,648 | |
TOTAL | 18,236,955 | ||
Financials— 26.1% | |||
62,445 | American Equity Investment Life Holding Co. | 2,492,180 | |
27,549 | Argo Group International Holdings Ltd. | 1,137,223 | |
99,462 | 1 | Blucora, Inc. | 1,944,482 |
112,177 | Cadence Bank | 3,282,299 | |
55,648 | CNO Financial Group, Inc. | 1,396,208 | |
42,685 | Cowen Group, Inc. | 1,156,764 | |
185,250 | First Commonwealth Financial Corp. | 2,808,390 |
Shares | Value | ||
COMMON STOCKS— continued | |||
Financials— continued | |||
63,584 | First Interstate BancSystem, Inc., Class A | $ 2,337,984 | |
53,041 | Hancock Whitney Corp. | 2,766,088 | |
14,770 | Hanover Insurance Group, Inc. | 2,208,410 | |
163,695 | KKR Real Estate Finance Trust, Inc. | 3,373,754 | |
221,500 | OceanFirst Financial Corp. | 4,452,150 | |
81,626 | Old National Bancorp | 1,337,034 | |
77,527 | Radian Group, Inc. | 1,721,875 | |
12,631 | Selective Insurance Group, Inc. | 1,128,706 | |
20,704 | Stifel Financial Corp. | 1,405,802 | |
91,224 | Synovus Financial Corp. | 4,469,976 | |
72,931 | United Community Banks, Inc. | 2,537,999 | |
168,080 | Valley National Bancorp | 2,188,402 | |
70,314 | Veritex Holdings, Inc. | 2,683,885 | |
42,293 | Wintrust Financial Corp. | 3,930,288 | |
48,234 | WSFS Financial Corp. | 2,248,669 | |
TOTAL | 53,008,568 | ||
Health Care— 7.5% | |||
92,216 | 1 | AdaptHealth Corp. | 1,478,223 |
94,372 | 1 | Aurinia Pharmaceuticals, Inc. | 1,168,325 |
56,034 | 1 | Envista Holdings Corp. | 2,729,416 |
53,240 | 1 | Halozyme Therapeutics, Inc. | 2,123,211 |
24,679 | 1 | Harmony Biosciences Holdings, Inc. | 1,200,633 |
18,835 | 1 | Syneos Health, Inc. | 1,524,693 |
32,690 | 1 | Tenet Healthcare Corp. | 2,810,033 |
54,555 | 1 | TransMedics Group, Inc. | 1,469,712 |
29,200 | 1 | Turning Point Therapeutics, Inc. | 784,020 |
TOTAL | 15,288,266 | ||
Industrials— 11.7% | |||
59,108 | 1,2 | APi Group Corp. | 1,243,041 |
20,395 | Arcosa, Inc. | 1,167,614 | |
3,031 | 1 | Avis Budget Group, Inc. | 798,062 |
28,600 | BWX Technologies, Inc. | 1,540,396 | |
25,246 | 1 | Casella Waste Systems, Inc. | 2,212,812 |
14,859 | Emcor Group, Inc. | 1,673,569 | |
14,242 | EnPro Industries, Inc. | 1,391,871 | |
30,799 | H&E Equipment Services, Inc. | 1,340,373 | |
8,891 | Herc Holdings, Inc. | 1,485,597 | |
35,386 | 1 | Kirby Corp. | 2,554,515 |
14,897 | 1 | NV5 Holdings, Inc. | 1,985,770 |
29,949 | Spirit AeroSystems Holdings, Inc., Class A | 1,464,207 | |
28,957 | 1 | SPX Corp. | 1,430,765 |
Shares | Value | ||
COMMON STOCKS— continued | |||
Industrials— continued | |||
28,171 | Werner Enterprises, Inc. | $ 1,155,011 | |
18,545 | 1 | WESCO International, Inc. | 2,413,446 |
TOTAL | 23,857,049 | ||
Information Technology— 8.6% | |||
12,723 | 1 | Diodes, Inc. | 1,106,774 |
157,992 | 1 | Mitek Systems, Inc. | 2,317,742 |
197,428 | 1 | Moneygram International, Inc. | 2,084,840 |
196,362 | 1 | TTM Technologies, Inc. | 2,910,085 |
58,648 | 1 | Turtle Beach Corp. | 1,248,616 |
26,818 | 1 | Ultra Clean Holdings, Inc. | 1,136,815 |
60,937 | 1 | Verint Systems, Inc. | 3,150,443 |
141,238 | Vishay Intertechnology, Inc. | 2,768,265 | |
162,986 | 1 | Voyager Digital Ltd. | 872,480 |
TOTAL | 17,596,060 | ||
Materials— 3.8% | |||
18,240 | Alcoa Corp. | 1,642,147 | |
29,651 | 1 | Allegheny Technologies, Inc. | 795,833 |
13,466 | Ashland Global Holdings, Inc. | 1,325,189 | |
24,981 | Commercial Metals Corp. | 1,039,709 | |
259,575 | 1,3 | Ferroglobe Representation & Warranty Insurance Trust | 0 |
21,458 | 1 | MP Materials Corp. | 1,230,402 |
80,516 | Tronox Holdings PLC | 1,593,412 | |
TOTAL | 7,626,692 | ||
Real Estate— 11.6% | |||
117,410 | Corporate Office Properties Trust | 3,350,881 | |
97,249 | Easterly Government Properties, Inc. | 2,055,844 | |
64,142 | EPR PPTYS | 3,509,209 | |
109,639 | Independence Realty Trust | 2,898,855 | |
133,334 | Kite Realty Group Trust | 3,036,015 | |
135,388 | LXP Industrial Trust | 2,125,592 | |
156,962 | Retail Opportunity Investments Corp. | 3,043,493 | |
38,134 | 1 | Ryman Hospitality Properties | 3,537,691 |
TOTAL | 23,557,580 | ||
Utilities— 5.3% | |||
44,632 | Idacorp, Inc. | 5,148,748 | |
102,055 | Portland General Electric Co. | 5,628,333 | |
TOTAL | 10,777,081 | ||
TOTAL COMMON STOCKS (IDENTIFIED COST $163,441,191) | 198,315,840 |
Shares | Value | ||
INVESTMENT COMPANY— 3.4% | |||
6,951,481 | Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares, 0.34%4 (IDENTIFIED COST $6,948,420) | $ 6,948,700 | |
TOTAL INVESTMENT IN SECURITIES—100.9% (IDENTIFIED COST $170,389,611)5 | 205,264,540 | ||
OTHER ASSETS AND LIABILITIES - NET—(0.9)%6 | (1,786,630) | ||
TOTAL NET ASSETS—100% | $203,477,910 |
Federated Hermes Institutional Prime Value Obligations Fund, Institutional Shares | |
Value as of 9/30/2021 | $4,837,957 |
Purchases at Cost | $34,935,849 |
Proceeds from Sales | $(32,821,851) |
Change in Unrealized Appreciation/Depreciation | $21 |
Net Realized Gain/(Loss) | $(3,276) |
Value as of 3/31/2022 | $6,948,700 |
Shares Held as of 3/31/2022 | 6,951,481 |
Dividend Income | $1,848 |
Gain Distributions Received | $764 |
1 | Non-income-producing security. |
2 | 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, 2022, these restricted securities amounted to $1,243,041, which represented 0.6% of total net assets. |
3 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established by and under the general supervision of the Fund’s Board of Trustees (the “Trustees”). |
4 | 7-day net yield. |
5 | Also represents cost of investments for federal tax purposes. |
6 | 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 March 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 | |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | $190,148,647 | $— | $0 | $190,148,647 |
International | 8,167,193 | — | — | 8,167,193 |
Investment Company | 6,948,700 | — | — | 6,948,700 |
TOTAL SECURITIES | $205,264,540 | $— | $0 | $205,264,540 |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $28.03 | $17.10 | $19.23 | $26.36 | $29.16 | $24.82 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.06 | 0.10 | 0.03 | 0.05 | 0.02 | 0.17 |
Net realized and unrealized gain (loss) | 1.00 | 10.86 | (2.09) | (3.03) | 1.47 | 4.80 |
Total From Investment Operations | 1.06 | 10.96 | (2.06) | (2.98) | 1.49 | 4.97 |
Less Distributions: | ||||||
Distributions from net investment income | (0.08) | (0.03) | (0.07) | (0.02) | (0.11) | (0.14) |
Distributions from net realized gain | (2.25) | — | — | (4.13) | (4.18) | (0.49) |
Total Distributions | (2.33) | (0.03) | (0.07) | (4.15) | (4.29) | (0.63) |
Net Asset Value, End of Period | $26.76 | $28.03 | $17.10 | $19.23 | $26.36 | $29.16 |
Total Return2 | 3.71% | 64.10% | (10.77)% | (11.25)% | 5.64% | 20.24% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 1.13%4 | 1.23% | 1.26% | 1.26% | 1.27% | 1.27% |
Net investment income | 0.45%4 | 0.38% | 0.16% | 0.26% | 0.09% | 0.64% |
Expense waiver/reimbursement5 | 0.33%4 | 0.30% | 0.21% | 0.21% | 0.16% | 0.17% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $68,900 | $70,636 | $45,527 | $62,463 | $94,210 | $102,606 |
Portfolio turnover6 | 44% | 86% | 89% | 74% | 84% | 66% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. 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. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $25.75 | $15.81 | $17.85 | $24.95 | $27.91 | $23.83 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | (0.04) | (0.09) | (0.10) | (0.09) | (0.17) | (0.03) |
Net realized and unrealized gain (loss) | 0.91 | 10.03 | (1.94) | (2.88) | 1.39 | 4.60 |
Total From Investment Operations | 0.87 | 9.94 | (2.04) | (2.97) | 1.22 | 4.57 |
Less Distributions: | ||||||
Distributions from net realized gain | (2.25) | — | — | (4.13) | (4.18) | (0.49) |
Net Asset Value, End of Period | $24.37 | $25.75 | $15.81 | $17.85 | $24.95 | $27.91 |
Total Return2 | 3.28% | 62.87% | (11.43)% | (11.94)% | 4.82% | 19.34% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 1.92%4 | 2.00% | 2.04% | 2.01% | 2.02% | 2.02% |
Net investment income (loss) | (0.35)%4 | (0.40)% | (0.63)% | (0.50)% | (0.68)% | (0.12)% |
Expense waiver/reimbursement5 | 0.31%4 | 0.28% | 0.22% | 0.18% | 0.15% | 0.16% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $7,459 | $8,074 | $5,716 | $9,446 | $16,028 | $22,462 |
Portfolio turnover6 | 44% | 86% | 89% | 74% | 84% | 66% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. 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 (loss) 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. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $27.44 | $16.74 | $18.83 | $25.93 | $28.78 | $24.51 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.05 | 0.09 | 0.03 | 0.05 | 0.02 | 0.16 |
Net realized and unrealized gain (loss) | 0.98 | 10.64 | (2.05) | (2.99) | 1.43 | 4.74 |
Total From Investment Operations | 1.03 | 10.73 | (2.02) | (2.94) | 1.45 | 4.90 |
Less Distributions: | ||||||
Distributions from net investment income | (0.08) | (0.03) | (0.07) | (0.03) | (0.12) | (0.14) |
Distributions from net realized gain | (2.25) | — | — | (4.13) | (4.18) | (0.49) |
Total Distributions | (2.33) | (0.03) | (0.07) | (4.16) | (4.30) | (0.63) |
Net Asset Value, End of Period | $26.14 | $27.44 | $16.74 | $18.83 | $25.93 | $28.78 |
Total Return2 | 3.66% | 64.12% | (10.78)% | (11.27)% | 5.58% | 20.22% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 1.22%4 | 1.25% | 1.27% | 1.32% | 1.29% | 1.28% |
Net investment income | 0.37%4 | 0.38% | 0.16% | 0.24% | 0.08% | 0.61% |
Expense waiver/reimbursement5 | 0.46%4 | 0.51% | 0.46% | 0.40% | 0.36% | 0.36% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $14,644 | $14,260 | $9,646 | $13,675 | $16,013 | $15,302 |
Portfolio turnover6 | 44% | 86% | 89% | 74% | 84% | 66% |
1 | Per share numbers have been calculated using the average shares method. |
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. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $28.11 | $17.13 | $19.29 | $26.48 | $29.30 | $24.93 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.10 | 0.16 | 0.07 | 0.10 | 0.09 | 0.24 |
Net realized and unrealized gain (loss) | 1.00 | 10.89 | (2.08) | (3.06) | 1.47 | 4.83 |
Total From Investment Operations | 1.10 | 11.05 | (2.01) | (2.96) | 1.56 | 5.07 |
Less Distributions: | ||||||
Distributions from net investment income | (0.16) | (0.07) | (0.15) | (0.10) | (0.20) | (0.21) |
Distributions from net realized gain | (2.25) | — | — | (4.13) | (4.18) | (0.49) |
Total Distributions | (2.41) | (0.07) | (0.15) | (4.23) | (4.38) | (0.70) |
Net Asset Value, End of Period | $26.80 | $28.11 | $17.13 | $19.29 | $26.48 | $29.30 |
Total Return2 | 3.83% | 64.63% | (10.57)% | (11.05)% | 5.87% | 20.56% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 0.88%4 | 0.96% | 1.01% | 1.01% | 1.01% | 1.02% |
Net investment income | 0.71%4 | 0.64% | 0.36% | 0.50% | 0.32% | 0.87% |
Expense waiver/reimbursement5 | 0.32%4 | 0.31% | 0.22% | 0.16% | 0.12% | 0.13% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $104,741 | $97,317 | $63,019 | $203,935 | $333,887 | $467,881 |
Portfolio turnover6 | 44% | 86% | 89% | 74% | 84% | 66% |
1 | Per share numbers have been calculated using the average shares method. |
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. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $28.13 | $17.15 | $19.21 | $26.39 | $29.19 | $24.84 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.11 | 0.18 | 0.09 | 0.08 | 0.14 | 0.25 |
Net realized and unrealized gain (loss) | 1.00 | 10.89 | (2.09) | (3.02) | 1.44 | 4.80 |
Total From Investment Operations | 1.11 | 11.07 | (2.00) | (2.94) | 1.58 | 5.05 |
Less Distributions: | ||||||
Distributions from net investment income | (0.17) | (0.09) | (0.06) | (0.11) | (0.20) | (0.21) |
Distributions from net realized gain | (2.25) | — | — | (4.13) | (4.18) | (0.49) |
Total Distributions | (2.42) | (0.09) | (0.06) | (4.24) | (4.38) | (0.70) |
Net Asset Value, End of Period | $26.82 | $28.13 | $17.15 | $19.21 | $26.39 | $29.19 |
Total Return2 | 3.88% | 64.64% | (10.47)% | (11.00)% | 5.98% | 20.58% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 0.81%4 | 0.91% | 0.94% | 0.94% | 0.95% | 0.95% |
Net investment income | 0.78%4 | 0.70% | 0.53% | 0.37% | 0.52% | 0.94% |
Expense waiver/reimbursement5 | 0.30%4 | 0.28% | 0.21% | 0.14% | 0.11% | 0.11% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $7,734 | $6,924 | $4,644 | $8,297 | $56,657 | $11,006 |
Portfolio turnover6 | 44% | 86% | 89% | 74% | 84% | 66% |
1 | Per share numbers have been calculated using the average shares method. |
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. |
March 31, 2022 (unaudited)
Assets: | |
Investment in securities, at value including $6,948,700 of investments in an affiliated holding* (identified cost $170,389,611) | $205,264,540 |
Cash | 11,954 |
Income receivable | 331,693 |
Income receivable from an affiliated holding | 1,945 |
Receivable for shares sold | 133,356 |
Total Assets | 205,743,488 |
Liabilities: | |
Payable for shares redeemed | 2,161,251 |
Payable for investment adviser fee (Note 5) | 3,233 |
Payable for administrative fee (Note 5) | 445 |
Payable for distribution services fee (Note 5) | 8,992 |
Payable for other service fees (Notes 2 and 5) | 16,419 |
Accrued expenses (Note 5) | 75,238 |
Total Liabilities | 2,265,578 |
Net assets for 7,638,615 shares outstanding | $203,477,910 |
Net Assets Consist of: | |
Paid-in capital | $159,439,103 |
Total distributable earnings (loss) | 44,038,807 |
Total Net Assets | $203,477,910 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | |
Class A Shares: | |
Net asset value per share ($68,900,393 ÷ 2,575,134 shares outstanding), no par value, unlimited shares authorized | $26.76 |
Offering price per share (100/94.50 of $26.76) | $28.32 |
Redemption proceeds per share | $26.76 |
Class C Shares: | |
Net asset value per share ($7,459,009 ÷ 306,092 shares outstanding), no par value, unlimited shares authorized | $24.37 |
Offering price per share | $24.37 |
Redemption proceeds per share (99.00/100 of $24.37) | $24.13 |
Class R Shares: | |
Net asset value per share ($14,643,676 ÷ 560,308 shares outstanding), no par value, unlimited shares authorized | $26.14 |
Offering price per share | $26.14 |
Redemption proceeds per share | $26.14 |
Institutional Shares: | |
Net asset value per share ($104,741,019 ÷ 3,908,710 shares outstanding), no par value, unlimited shares authorized | $26.80 |
Offering price per share | $26.80 |
Redemption proceeds per share | $26.80 |
Class R6 Shares: | |
Net asset value per share ($7,733,813 ÷ 288,371 shares outstanding), no par value, unlimited shares authorized | $26.82 |
Offering price per share | $26.82 |
Redemption proceeds per share | $26.82 |
* | See information listed after the Fund’s Portfolio of Investments. |
Six Months Ended March 31, 2022 (unaudited)
Investment Income: | |
Dividends (including $1,848 received from an affiliated holding* and net of foreign taxes withheld of $5,165) | $1,608,944 |
Expenses: | |
Investment adviser fee (Note 5) | 876,688 |
Administrative fee (Note 5) | 79,823 |
Custodian fees | 6,148 |
Transfer agent fees (Note 2) | 117,179 |
Directors’/Trustees’ fees (Note 5) | 956 |
Auditing fees | 16,576 |
Legal fees | 4,603 |
Portfolio accounting fees | 51,817 |
Distribution services fee (Note 5) | 66,531 |
Other service fees (Notes 2 and 5) | 98,299 |
Share registration costs | 41,257 |
Printing and postage | 12,206 |
Miscellaneous (Note 5) | 13,018 |
TOTAL EXPENSES | 1,385,101 |
Waivers and Reimbursements: | |
Waiver/reimbursement of investment adviser fee (Note 5) | (307,896) |
Waivers/reimbursement of other operating expenses (Notes 2 and 5) | (30,893) |
TOTAL WAIVERS AND REIMBURSEMENTS | (338,789) |
Net expenses | 1,046,312 |
Net investment income | 562,632 |
Realized and Unrealized Gain (Loss) on Investments: | |
Net realized gain on investments (including net realized loss of $(3,276) on sales of investments in an affiliated holding*) | 14,361,958 |
Realized gain distribution from affiliated investment company shares | 764 |
Net change in unrealized appreciation of investments (including net change in unrealized appreciation of $21 on investments in an affiliated holding*) | (7,503,769) |
Net realized and unrealized gain (loss) on investments | 6,858,953 |
Change in net assets resulting from operations | $7,421,585 |
* | See information listed after the Fund’s Portfolio of Investments. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended 9/30/2021 | |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $562,632 | $881,548 |
Net realized gain (loss) | 14,362,722 | 40,653,585 |
Net change in unrealized appreciation/depreciation | (7,503,769) | 36,905,389 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 7,421,585 | 78,440,522 |
Distributions to Shareholders: | ||
Class A Shares | (5,780,869) | (64,125) |
Class C Shares | (647,794) | — |
Class R Shares | (1,235,755) | (15,319) |
Institutional Shares | (8,200,915) | (251,271) |
Class R6 Shares | (639,094) | (22,473) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (16,504,427) | (353,188) |
Share Transactions: | ||
Proceeds from sale of shares | 29,460,925 | 48,773,298 |
Net asset value of shares issued to shareholders in payment of distributions declared | 15,999,603 | 336,020 |
Cost of shares redeemed | (30,111,278) | (58,536,923) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 15,349,250 | (9,427,605) |
Change in net assets | 6,266,408 | 68,659,729 |
Net Assets: | ||
Beginning of period | 197,211,502 | 128,551,773 |
End of period | $203,477,910 | $197,211,502 |
Transfer Agent Fees Incurred | Transfer Agent Fees Reimbursed | |
Class A Shares | $44,150 | $(9,264) |
Class C Shares | 5,330 | — |
Class R Shares | 7,042 | (483) |
Institutional Shares | 59,570 | (9,917) |
Class R6 Shares | 1,087 | — |
TOTAL | $117,179 | $(19,664) |
Other Service Fees Incurred | |
Class A Shares | $88,635 |
Class C Shares | 9,664 |
TOTAL | $98,299 |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class A Shares: | Shares | Amount | Shares | Amount |
Shares sold | 258,290 | $7,112,708 | 509,092 | $13,137,958 |
Shares issued to shareholders in payment of distributions declared | 211,600 | 5,723,775 | 2,820 | 63,395 |
Shares redeemed | (414,587) | (11,409,958) | (654,965) | (16,321,427) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | 55,303 | $1,426,525 | (143,053) | $(3,120,074) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class C Shares: | Shares | Amount | Shares | Amount |
Shares sold | 26,849 | $677,470 | 71,301 | $1,715,793 |
Shares issued to shareholders in payment of distributions declared | 26,089 | 644,136 | — | — |
Shares redeemed | (60,439) | (1,542,169) | (119,296) | (2,825,136) |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS | (7,501) | $(220,563) | (47,995) | $(1,109,343) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class R Shares: | Shares | Amount | Shares | Amount |
Shares sold | 69,653 | $1,953,633 | 187,958 | $4,777,905 |
Shares issued to shareholders in payment of distributions declared | 46,691 | 1,234,030 | 695 | 15,300 |
Shares redeemed | (75,744) | (2,070,805) | (245,198) | (6,153,646) |
NET CHANGE RESULTING FROM CLASS R SHARE TRANSACTIONS | 40,600 | $1,116,858 | (56,545) | $(1,360,441) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 672,006 | $18,276,997 | 1,017,776 | $27,031,411 |
Shares issued to shareholders in payment of distributions declared | 288,525 | 7,813,254 | 10,508 | 236,426 |
Shares redeemed | (514,041) | (14,246,592) | (1,243,895) | (30,470,859) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | 446,490 | $11,843,659 | (215,611) | $(3,203,022) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class R6 Shares: | Shares | Amount | Shares | Amount |
Shares sold | 51,643 | $1,440,117 | 80,290 | $2,110,231 |
Shares issued to shareholders in payment of distributions declared | 21,573 | 584,408 | 928 | 20,899 |
Shares redeemed | (30,950) | (841,754) | (105,894) | (2,765,855) |
NET CHANGE RESULTING FROM CLASS R6 SHARE TRANSACTIONS | 42,266 | $1,182,771 | (24,676) | $(634,725) |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | 577,158 | $15,349,250 | (487,880) | $(9,427,605) |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets over $50 billion |
Percentage of Average Daily Net Assets of Class | |
Class A Shares | 0.05% |
Class C Shares | 0.75% |
Class R Shares | 0.50% |
Distribution Services Fees Incurred | Distribution Services Fees Waived | |
Class C Shares | $29,100 | $— |
Class R Shares | 37,431 | (11,229) |
TOTAL | $66,531 | $(11,229) |
Purchases | $86,681,519 |
Sales | $86,258,690 |
Beginning Account Value 10/1/2021 | Ending Account Value 3/31/2022 | Expenses Paid During Period1 | |
Actual: | |||
Class A Shares | $1,000 | $1,037.10 | $5.74 |
Class C Shares | $1,000 | $1,032.80 | $9.73 |
Class R Shares | $1,000 | $1,036.60 | $6.19 |
Institutional Shares | $1,000 | $1,038.30 | $4.47 |
Class R6 Shares | $1,000 | $1,038.80 | $4.12 |
Hypothetical (assuming a 5% return before expenses): | |||
Class A Shares | $1,000 | $1,019.30 | $5.69 |
Class C Shares | $1,000 | $1,015.36 | $9.65 |
Class R Shares | $1,000 | $1,018.85 | $6.14 |
Institutional Shares | $1,000 | $1,020.54 | $4.43 |
Class R6 Shares | $1,000 | $1,020.89 | $4.08 |
1 | Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Class A Shares | 1.13% |
Class C Shares | 1.92% |
Class R Shares | 1.22% |
Institutional Shares | 0.88% |
Class R6 Shares | 0.81% |
Annual Evaluation of Adequacy and Effectiveness
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 314172271
CUSIP 314172172
CUSIP 314172263
CUSIP 31421N808
Share Class | Ticker | A | BEARX | C | PBRCX | Institutional | PBRIX |
Federated Hermes Prudent Bear Fund
A Portfolio of Federated Hermes Equity Funds
Percentage of Total Net Assets | |
Securities Sold Short | (54.7)% |
Derivative Contracts—Short (notional value)1 | (41.0)% |
U.S. Treasury Securities | 66.1% |
Common Stocks | 7.3% |
Other Security Type2 | 0.2% |
Cash Equivalents3 | 23.0% |
Adjustment for Derivative Contracts (notional value)1 | 39.3% |
Collateral on Deposit for Securities Sold Short | 56.4% |
Other Assets and Liabilities—Net4 | 3.4% |
TOTAL | 100% |
Sector Composition | Percentage of Total Securities Sold Short6 |
Broad Equity Index | 93.8% |
Information Technology | 1.2% |
Health Care | 1.0% |
Industrials | 0.9% |
Financials | 0.8% |
Consumer Discretionary | 0.5% |
Real Estate | 0.5% |
Utilities | 0.4% |
Consumer Staples | 0.3% |
Communication Services | 0.3% |
Materials | 0.2% |
Energy | 0.1% |
TOTAL | 100% |
1 | Derivative contracts may consist of futures, forwards, written options and swaps. More complete information regarding the Fund’s direct investments in derivative contracts, including unrealized appreciation (depreciation), value and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report. |
2 | Other Security Type consists of purchased put options. |
3 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
4 | Assets, other than investments in securities, securities sold short, derivative contracts and collateral on deposit for securities sold short, less liabilities. See Statement of Assets and Liabilities. |
5 | Sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS. |
6 | Includes any short positions on futures contracts. |
Shares, Principal Amount or Contracts | Value | ||
U.S. TREASURIES— 66.1% | |||
U.S. Treasury Bills— 18.6% | |||
$37,000,000 | 1,2 | United States Treasury Bill, 0.245%, 12/1/2022 | $ 36,674,030 |
U.S. Treasury Notes— 47.5% | |||
36,000,000 | 1 | United States Treasury Note, 0.500%, 11/30/2023 | 34,989,869 |
60,000,000 | United States Treasury Note, 0.750%, 12/31/2023 | 58,442,802 | |
TOTAL | 93,432,671 | ||
TOTAL U.S. TREASURIES (IDENTIFIED COST $132,507,249) | 130,106,701 | ||
COMMON STOCKS— 7.3% | |||
Communication Services— 0.5% | |||
180 | 3 | Alphabet, Inc., Class A | 500,643 |
2,200 | 3 | Meta Platforms, Inc. | 489,192 |
TOTAL | 989,835 | ||
Consumer Discretionary— 0.8% | |||
1,200 | Advance Auto Parts, Inc. | 248,351 | |
5,000 | eBay, Inc. | 286,300 | |
1,800 | 3 | Expedia Group, Inc. | 352,206 |
50,000 | 3 | Solo Brands, Inc. | 426,500 |
600 | 3 | Ulta Beauty, Inc. | 238,932 |
TOTAL | 1,552,289 | ||
Consumer Staples— 0.7% | |||
4,800 | Kroger Co. | 275,376 | |
18,000 | 3 | Olaplex Holdings, Inc. | 281,340 |
4,200 | Philip Morris International, Inc. | 394,548 | |
2,400 | WalMart, Inc. | 357,408 | |
24,700 | 3 | Winc, Inc. | 78,299 |
TOTAL | 1,386,971 | ||
Financials— 1.1% | |||
7,000 | Ally Financial, Inc. | 304,360 | |
6,000 | Bank of America Corp. | 247,320 | |
1,000 | 3 | Berkshire Hathaway, Inc., Class B | 352,910 |
1,000 | Goldman Sachs Group, Inc. | 330,100 | |
12,000 | KeyCorp | 268,560 | |
24,933 | 3 | Oportun Financial Corp. | 358,038 |
4,800 | VOYA Financial, Inc. | 318,480 | |
TOTAL | 2,179,768 | ||
Health Care— 0.9% | |||
5,500 | Bristol-Myers Squibb Co. | 401,665 | |
30,000 | 3 | Checkmate Pharmaceuticals, Inc. | 95,700 |
15,000 | 3 | Decibel Therapeutics, Inc. | 45,600 |
60,000 | 3 | Freeline Therapeutics Holdings PLC, ADR | 67,200 |
Shares, Principal Amount or Contracts | Value | ||
COMMON STOCKS— continued | |||
Health Care— continued | |||
26,000 | 3 | Galecto, Inc. | $ 57,200 |
1,100 | 3 | Laboratory Corp. of America Holdings | 290,026 |
1,200 | McKesson Corp. | 367,356 | |
17,000 | 3 | Reneo Pharmaceuticals, Inc. | 49,980 |
900 | UnitedHealth Group, Inc. | 458,973 | |
TOTAL | 1,833,700 | ||
Industrials— 0.8% | |||
1,400 | Cummins, Inc. | 287,154 | |
3,200 | Emerson Electric Co. | 313,760 | |
3,400 | Owens Corning, Inc. | 311,100 | |
1,000 | Parker-Hannifin Corp. | 283,760 | |
1,500 | United Parcel Service, Inc. | 321,690 | |
TOTAL | 1,517,464 | ||
Information Technology— 1.5% | |||
2,000 | Apple, Inc. | 349,220 | |
4,000 | Cognizant Technology Solutions Corp. | 358,680 | |
900 | 3 | Fair Isaac & Co., Inc. | 419,814 |
12,603 | 3 | IBEX LTD | 200,892 |
3,000 | IBM Corp. | 390,060 | |
5,000 | Micron Technology, Inc. | 389,450 | |
1,800 | Microsoft Corp. | 554,958 | |
2,000 | Qualcomm, Inc. | 305,640 | |
TOTAL | 2,968,714 | ||
Materials— 0.3% | |||
2,000 | Eagle Materials, Inc. | 256,720 | |
5,000 | Olin Corp. | 261,400 | |
TOTAL | 518,120 | ||
Real Estate— 0.3% | |||
2,000 | Crown Castle International Corp. | 369,200 | |
6,000 | National Retail Properties, Inc. | 269,640 | |
TOTAL | 638,840 | ||
Utilities— 0.4% | |||
3,500 | Duke Energy Corp. | 390,810 | |
12,000 | PPL Corp. | 342,720 | |
TOTAL | 733,530 | ||
TOTAL COMMON STOCKS (IDENTIFIED COST $15,590,096) | 14,319,231 | ||
3 | PURCHASED PUT OPTIONS— 0.2% | ||
500 | SPDR S&P 500 ETF Trust, Notional Amount $22,582,000, Exercise Price $420. Expiration Date 5/20/2022 | 212,750 | |
1,000 | SPDR S&P 500 ETF Trust, Notional Amount $45,164,000, Exercise Price $435. Expiration Date 4/14/2022 | 151,000 | |
1,000 | SPDR S&P 500 ETF Trust, Notional Amount $45,164,000, Exercise Price $440. Expiration Date 4/8/2022 | 100,500 |
Shares, Principal Amount or Contracts | Value | ||
3 | PURCHASED PUT OPTIONS— continued | ||
1,000 | SPDR S&P 500 ETF Trust, Notional Amount $45,164,000, Exercise Price $445. Expiration Date 4/1/2022 | $ 11,500 | |
TOTAL PURCHASED PUT OPTIONS (IDENTIFIED COST $572,206) | 475,750 | ||
INVESTMENT COMPANY— 23.0% | |||
45,410,306 | Federated Hermes Government Obligations Fund, Premier Shares, 0.19%4 (IDENTIFIED COST $45,410,306) | 45,410,306 | |
TOTAL INVESTMENT IN SECURITIES—96.6% (IDENTIFIED COST $194,079,857)5 | 190,311,988 | ||
OTHER ASSETS AND LIABILITIES - NET—3.4%6 | 6,619,221 | ||
TOTAL NET ASSETS—100% | $196,931,209 |
Shares | Value | ||
Broad Equity Index— (48.7)% | |||
12,000 | 3 | ARK Fintech Innovation ETF | $ 348,600 |
2,000 | ARK Industrial Innovation ETF | 135,320 | |
2,500 | ARK Web x.0 ETF | 218,050 | |
11,000 | iShares Russell 2000 ETF | 2,257,970 | |
206,000 | S&P Depositary Receipts Trust | 93,037,840 | |
TOTAL | 95,997,780 | ||
Communication Services— (0.3)% | |||
1,000 | 3 | Live Nation Entertainment, Inc. | 117,640 |
200 | 3 | Netflix, Inc. | 74,918 |
1,200 | 3 | Take-Two Interactive Software, Inc. | 184,488 |
1,000 | Walt Disney Co. | 137,160 | |
TOTAL | 514,206 | ||
Consumer Discretionary— (0.5)% | |||
1,700 | 3 | CarMax, Inc. | 164,016 |
1,200 | 3 | Carvana Co. | 143,148 |
4,000 | 3 | General Motors Co. | 174,960 |
5,000 | Leggett and Platt, Inc. | 174,000 | |
1,800 | Polaris, Inc., Class A | 189,576 | |
400 | Pool Corp. | 169,140 | |
TOTAL | 1,014,840 | ||
Consumer Staples— (0.3)% | |||
5,000 | Conagra Brands, Inc. | 167,850 | |
2,000 | McCormick & Co., Inc. | 199,600 | |
7,000 | Reynolds Consumer Products, Inc. | 205,380 | |
TOTAL | 572,830 | ||
Energy— (0.1)% | |||
4,200 | DT Midstream, Inc. | 227,892 |
Shares | Value | ||
Financials— (0.8)% | |||
800 | CME Group, Inc. | $ 190,288 | |
2,000 | Cullen Frost Bankers, Inc. | 276,820 | |
1,300 | Gallagher (Arthur J.) & Co. | 226,980 | |
15,000 | 3 | Rocket Companies, Inc. | 166,800 |
9,000 | Starwood Property Trust, Inc. | 217,530 | |
8,000 | Unum Group | 252,080 | |
2,000 | Wintrust Financial Corp. | 185,860 | |
TOTAL | 1,516,358 | ||
Health Care— (0.9)% | |||
800 | Becton Dickinson & Co. | 212,800 | |
1,800 | 3 | Catalent, Inc. | 199,620 |
500 | Cooper Cos., Inc. | 208,795 | |
9,000 | 3 | Elanco Animal Health, Inc. | 234,810 |
800 | 3 | Insulet Corp. | 213,112 |
1,000 | 3 | Repligen Corp. | 188,090 |
4,000 | SPDR S&P Biotech ETF | 359,520 | |
900 | STERIS PLC | 217,593 | |
TOTAL | 1,834,340 | ||
Industrials— (0.9)% | |||
1,500 | Ametek, Inc. | 199,770 | |
1,000 | 3 | Boeing Co. | 191,500 |
5,100 | 3 | Delta Air Lines, Inc. | 201,807 |
10,000 | 3 | Dun & Bradstreet Holdings, Inc. | 175,200 |
2,000 | ITT Corp. | 150,420 | |
1,100 | Stanley Black & Decker, Inc. | 153,769 | |
7,300 | 3 | SunRun, Inc. | 221,701 |
4,000 | 3 | United Airlines Holdings, Inc. | 185,440 |
800 | Valmont Industries, Inc. | 190,880 | |
TOTAL | 1,670,487 | ||
Information Technology— (1.2)% | |||
2,500 | Amphenol Corp., Class A | 188,375 | |
1,200 | Analog Devices, Inc. | 198,216 | |
450 | Automatic Data Processing, Inc. | 102,393 | |
5,000 | Avnet, Inc. | 202,950 | |
400 | 3 | Bill.Com Holdings, Inc. | 90,716 |
2,000 | 3 | Cirrus Logic, Inc. | 169,580 |
1,400 | Entegris, Inc. | 183,764 | |
1,000 | 3 | Fiserv, Inc. | 101,400 |
1,700 | 3 | Five9, Inc. | 187,680 |
1,000 | 3 | Guidewire Software, Inc. | 94,620 |
700 | Littelfuse, Inc. | 174,587 | |
1,800 | 3 | PTC, Inc. | 193,896 |
4,000 | Switch, Inc. | 123,280 | |
500 | 3 | Teledyne Technologies, Inc. | 236,315 |
550 | Texas Instruments, Inc. | 100,914 | |
TOTAL | 2,348,686 |
Shares | Value | ||
Materials— (0.2)% | |||
1,700 | Aptargroup, Inc. | $ 199,750 | |
1,200 | Scotts Miracle-Gro Co. | 147,552 | |
TOTAL | 347,302 | ||
Real Estate— (0.5)% | |||
1,000 | Alexandria Real Estate Equities, Inc. | 201,250 | |
3,000 | Duke Realty Corp. | 174,180 | |
8,000 | Kimco Realty Corp. | 197,600 | |
2,500 | Rexford Industrial Realty, Inc. | 186,475 | |
2,500 | WP Carey, Inc. | 202,100 | |
TOTAL | 961,605 | ||
Utilities— (0.3)% | |||
8,000 | CenterPoint Energy, Inc. | 245,120 | |
3,100 | Edison International | 217,310 | |
5,000 | OGE Energy Corp. | 203,900 | |
TOTAL | 666,330 | ||
Total Securities Sold Short (PROCEEDS $82,318,295) | $107,672,656 |
Description | Number of Contracts | Notional Value | Expiration Date | Value and Unrealized Depreciation |
Short Futures: | ||||
3E-Mini Russel 2000 Short Futures | 190 | $19,630,800 | June 2022 | $(565,791) |
3S&P 500 E-Mini Short Futures | 270 | $61,165,125 | June 2022 | $(3,328,082) |
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | $(3,893,873) |
Value as of 9/30/2021 | Purchases at Cost | Proceeds from Sales | |
Affiliated issuers no longer in the portfolio at period end | $315,350 | $— | $(223,430) |
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS | $315,350 | $— | $(223,430) |
Change in Unrealized Appreciation/ Depreciation | Net Realized Gain/ (Loss) | Value as of 3/31/2022 | Shares Held as of 3/31/2022 | Dividend Income |
$119,189 | $(211,109) | $— | — | $— |
$119,189 | $(211,109) | $— | — | $— |
Federated Hermes Government Obligations Fund, Premier Shares | |
Value as of 9/30/2021 | $55,798,854 |
Purchases at Cost | $194,993,446 |
Proceeds from Sales | $(205,381,994) |
Change in Unrealized Appreciation/Depreciation | N/A |
Net Realized Gain/(Loss) | N/A |
Value as of 3/31/2022 | $45,410,306 |
Shares Held as of 3/31/2022 | 45,410,306 |
Dividend Income | $7,734 |
1 | All or a portion of this security is pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding short futures and securities sold short contracts. |
2 | Discount rate at time of purchase. |
3 | Non-income-producing security. |
4 | 7-day net yield. |
5 | Also represents the cost of investments for federal tax purposes. |
6 | 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 March 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: | ||||
U.S. Treasuries | $— | $130,106,701 | $— | $130,106,701 |
Purchased Put Options | 475,750 | — | — | 475,750 |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | 14,051,139 | — | — | 14,051,139 |
International | 268,092 | — | — | 268,092 |
Investment Company | 45,410,306 | — | — | 45,410,306 |
TOTAL SECURITIES | $60,205,287 | $130,106,701 | $— | $190,311,988 |
Other Financial Instruments: | ||||
Liabilities | ||||
Securities Sold Short | $(107,672,656) | $— | $— | $(107,672,656) |
Futures Contracts | (3,893,873) | — | — | (3,893,873) |
TOTAL OTHER FINANCIAL INSTRUMENTS | $(111,566,529) | $— | $— | $(111,566,529) |
The following acronym(s) are used throughout this portfolio: | ||
ADR | —American Depositary Receipt | |
ETF | —Exchange-Traded Fund | |
SPDR | —Standard & Poor’s Depositary Receipt |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $7.79 | $10.11 | $12.58 | $13.27 | $16.27 | $19.50 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.09 | (0.23) | (0.19) | 0.10 | (0.11) | (0.25) |
Net realized and unrealized gain (loss) | (0.90) | (2.09) | (2.21) | (0.79) | (2.89) | (2.98) |
Total From Investment Operations | (0.81) | (2.32) | (2.40) | (0.69) | (3.00) | (3.23) |
Less Distributions: | ||||||
Distributions from net investment income | — | — | (0.07) | — | — | — |
Net Asset Value, End of Period | $6.98 | $7.79 | $10.11 | $12.58 | $13.27 | $16.27 |
Total Return2 | (10.40)% | (22.95)% | (19.15)% | (5.20)% | (18.44)% | (16.56)% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 2.69%4 | 3.02% | 2.85% | 2.84% | 3.54% | 3.34% |
Net expenses excluding dividends and other expenses related to short sales | 1.78%4 | 1.78% | 1.78% | 1.78% | 1.89% | 1.78% |
Net investment income (loss) | (2.24)%4 | (2.68)% | (1.65)% | 0.74% | (0.74)% | (1.40)% |
Expense waiver/reimbursement5 | 0.10%4 | 0.11% | 0.11% | 0.09% | 0.10% | 0.07% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $38,123 | $40,185 | $59,987 | $53,827 | $57,253 | $82,782 |
Portfolio turnover6 | 57% | 148% | 247% | 313% | 284% | 315% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. 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 (loss) 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. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $6.74 | $8.81 | $10.98 | $11.67 | $14.42 | $17.41 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | 0.01 | (0.25) | (0.25) | 0.002 | (0.20) | (0.34) |
Net realized and unrealized gain (loss) | (0.73) | (1.82) | (1.92) | (0.69) | (2.55) | (2.65) |
Total From Investment Operations | (0.72) | (2.07) | (2.17) | (0.69) | (2.75) | (2.99) |
Net Asset Value, End of Period | $6.02 | $6.74 | $8.81 | $10.98 | $11.67 | $14.42 |
Total Return3 | (10.68)% | (23.50)% | (19.76)% | (5.91)% | (19.07)% | (17.17)% |
Ratios to Average Net Assets: | ||||||
Net expenses4 | 3.45%5 | 3.77% | 3.63% | 3.59% | 4.28% | 4.09% |
Net expenses excluding dividends and other expenses related to short sales | 2.53%5 | 2.53% | 2.53% | 2.53% | 2.63% | 2.53% |
Net investment income (loss) | (3.00)%5 | (3.44)% | (2.46)% | 0.01% | (1.49)% | (2.16)% |
Expense waiver/reimbursement6 | 0.10%5 | 0.11% | 0.11% | 0.09% | 0.10% | 0.07% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $7,291 | $8,018 | $12,696 | $10,422 | $12,090 | $18,278 |
Portfolio turnover7 | 57% | 148% | 247% | 313% | 284% | 315% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Represents less than $0.01. |
3 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
4 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
5 | Computed on an annualized basis. |
6 | This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest. |
7 | Securities that mature are considered sales for purposes of this calculation. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended September 30, | |||||
2021 | 2020 | 2019 | 2018 | 2017 | ||
Net Asset Value, Beginning of Period | $8.02 | $10.38 | $12.92 | $13.59 | $16.63 | $19.88 |
Income From Investment Operations: | ||||||
Net investment income (loss)1 | (0.34) | (0.21) | (0.22) | 0.14 | (0.07) | (0.20) |
Net realized and unrealized gain (loss) | (0.49) | (2.15) | (2.21) | (0.81) | (2.97) | (3.05) |
Total From Investment Operations | (0.83) | (2.36) | (2.43) | (0.67) | (3.04) | (3.25) |
Less Distributions: | ||||||
Distributions from net investment income | — | — | (0.11) | — | — | — |
Net Asset Value, End of Period | $7.19 | $8.02 | $10.38 | $12.92 | $13.59 | $16.63 |
Total Return2 | (10.35)% | (22.74)% | (18.97)% | (4.93)% | (18.28)% | (16.35)% |
Ratios to Average Net Assets: | ||||||
Net expenses3 | 2.53%4 | 2.69% | 2.64% | 2.56% | 3.26% | 3.04% |
Net expenses excluding dividends and other expenses related to short sales | 1.53%4 | 1.53% | 1.53% | 1.53% | 1.63% | 1.53% |
Net investment income (loss) | (2.04)%4 | (2.38)% | (1.79)% | 1.03% | (0.48)% | (1.09)% |
Expense waiver/reimbursement5 | 0.09%4 | 0.11% | 0.09% | 0.09% | 0.10% | 0.06% |
Supplemental Data: | ||||||
Net assets, end of period (000 omitted) | $151,516 | $116,071 | $196,933 | $77,603 | $86,727 | $107,720 |
Portfolio turnover6 | 57% | 148% | 247% | 313% | 284% | 315% |
1 | Per share numbers have been calculated using the average shares method. |
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 (loss) 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. |
March 31, 2022 (unaudited)
Assets: | |
Investment in securities, at value including $45,410,306 of investments in an affiliated holding* (identified cost $194,079,857) | $190,311,988 |
Cash denominated in foreign currencies (identified cost $131,662) | 132,155 |
Deposit at broker for short sales | 106,638,496 |
Income receivable | 192,787 |
Income receivable from an affiliated holding | 3,644 |
Interest receivable on short positions | 34,513 |
Receivable for investments sold | 2,906,138 |
Receivable for shares sold | 4,054,913 |
Receivable for variation margin on futures contracts | 1,047,888 |
Total Assets | 305,322,522 |
Liabilities: | |
Securities sold short, at value (proceeds $82,318,295) | 107,672,656 |
Dividends payable on short positions | 284,166 |
Payable for investments purchased | 229,545 |
Payable for shares redeemed | 87,124 |
Payable for investment adviser fee (Note 5) | 6,479 |
Payable for administrative fee (Note 5) | 412 |
Payable for distribution services fee (Note 5) | 4,777 |
Payable for other service fees (Notes 2 and 5) | 13,890 |
Accrued expenses (Note 5) | 92,264 |
Total Liabilities | 108,391,313 |
Net assets for 27,733,747 shares outstanding | $196,931,209 |
Net Assets Consist of: | |
Paid-in capital | $1,183,637,906 |
Total distributable earnings (loss) | (986,706,697) |
Total Net Assets | $196,931,209 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | |
Class A Shares: | |
Net asset value per share ($38,123,403 ÷ 5,458,402 shares outstanding), no par value, unlimited shares authorized | $6.98 |
Offering price per share (100/94.50 of $6.98) | $7.39 |
Redemption proceeds per share | $6.98 |
Class C Shares: | |
Net asset value per share ($7,291,499 ÷ 1,211,333 shares outstanding), no par value, unlimited shares authorized | $6.02 |
Offering price per share | $6.02 |
Redemption proceeds per share (99.00/100 of $6.02) | $5.96 |
Institutional Shares: | |
Net asset value per share ($151,516,307 ÷ 21,064,012 shares outstanding), no par value, unlimited shares authorized | $7.19 |
Offering price per share | $7.19 |
Redemption proceeds per share | $7.19 |
* | See information listed after the Fund’s Portfolio of Investments. |
Six Months Ended March 31, 2022 (unaudited)
Investment Income: | |
Interest | $232,696 |
Dividends (including $7,734 received from an affiliated holding*) | 139,496 |
TOTAL INCOME | 372,192 |
Expenses: | |
Investment adviser fee (Note 5) | 974,807 |
Administrative fee (Note 5) | 62,146 |
Custodian fees | 16,018 |
Transfer agent fees | 91,912 |
Directors’/Trustees’ fees (Note 5) | 825 |
Auditing fees | 18,719 |
Legal fees | 4,603 |
Portfolio accounting fees | 37,869 |
Distribution services fee (Note 5) | 27,006 |
Other service fees (Notes 2 and 5) | 54,919 |
Share registration costs | 30,413 |
Printing and postage | 17,518 |
Miscellaneous (Note 5) | 15,125 |
Expenses related to short positions | 757,509 |
TOTAL EXPENSES | 2,109,389 |
Waiver and Reimbursement: | |
Waiver/reimbursement of investment adviser fee (Note 5) | (72,655) |
Net expenses | 2,036,734 |
Net investment loss | (1,664,542) |
Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions, Futures Contracts and Short Sales: | |
Net realized loss on investments (including net realized loss of $(211,109) on sales of investments in affiliated companies*) | $(4,322,666) |
Net realized loss on foreign currency transactions | (4,743) |
Net realized loss on futures contracts | (1,439,060) |
Net realized loss on short sales | (3,527,451) |
Net change in unrealized depreciation of investments (including net change in unrealized depreciation of $119,189 on investments in affiliated companies*) | (1,842,884) |
Net change in unrealized appreciation/depreciation of translation of assets and liabilities in foreign currency | 1,259 |
Net change in unrealized appreciation of futures contracts | (6,918,706) |
Net change in unrealized depreciation of securities sold short | 260,517 |
Net realized and unrealized gain (loss) on investments, foreign currency transactions, futures contracts and short sales | (17,793,734) |
Change in net assets resulting from operations | $(19,458,276) |
* | See information listed after the Fund’s Portfolio of Investments. |
Six Months Ended (unaudited) 3/31/2022 | Year Ended 9/30/2021 | |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment loss | $(1,664,542) | $(4,280,552) |
Net realized gain (loss) | (9,293,920) | (69,270,761) |
Net change in unrealized appreciation/depreciation | (8,499,814) | 23,781,034 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (19,458,276) | (49,770,279) |
Share Transactions: | ||
Proceeds from sale of shares | 215,333,045 | 225,464,917 |
Cost of shares redeemed | (163,217,188) | (281,036,978) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 52,115,857 | (55,572,061) |
Change in net assets | 32,657,581 | (105,342,340) |
Net Assets: | ||
Beginning of period | 164,273,628 | 269,615,968 |
End of period | $196,931,209 | $164,273,628 |
Other Service Fees Incurred | |
Class A Shares | $45,996 |
Class C Shares | 8,923 |
TOTAL | $54,919 |
Fair Value of Derivative Instruments | ||
Assets | ||
Statement of Assets and Liabilities Location | Fair Value | |
Derivatives not accounted for as hedging instruments under ASC Topic 815 | ||
Equity contracts | Receivable for variation margin on futures contracts | $(3,893,873)* |
Equity contracts | Purchased options, within Investment in securities at value | 475,750 |
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $(3,418,123) |
* | Includes cumulative net depreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day’s variation margin is reported within the Statement of Assets and Liabilities. |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |||
Futures Contracts | Purchased Options Contracts1 | Total | |
Equity contracts | $(1,439,060) | $(2,930,123) | $(4,369,183) |
1 | The net realized loss on Purchased Options Contracts is found within the Net realized loss on investments on the Statement of Operations. |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |||
Futures Contracts | Purchased Options Contracts2 | Total | |
Equity contracts | $(6,918,706) | $(585,241) | $(7,503,947) |
2 | The net change in unrealized appreciation of Purchased Options Contracts is found within the Net change in unrealized depreciation of investments on the Statement of Operations. |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class A Shares: | Shares | Amount | Shares | Amount |
Shares sold | 2,540,985 | $18,488,901 | 3,166,440 | $27,389,174 |
Shares issued to shareholders in payment of distributions declared | — | — | — | — |
Shares redeemed | (2,238,353) | (16,144,212) | (3,946,531) | (34,863,911) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | 302,632 | $2,344,689 | (780,091) | $(7,474,737) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Class C Shares: | Shares | Amount | Shares | Amount |
Shares sold | 208,354 | $1,311,432 | 341,660 | $2,607,941 |
Shares issued to shareholders in payment of distributions declared | — | — | — | — |
Shares redeemed | (186,139) | (1,149,439) | (593,823) | (4,516,907) |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS | 22,215 | $161,993 | (252,163) | $(1,908,966) |
Six Months Ended 3/31/2022 | Year Ended 9/30/2021 | |||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 26,042,948 | $195,532,712 | 21,814,821 | $195,467,802 |
Shares issued to shareholders in payment of distributions declared | — | — | — | — |
Shares redeemed | (19,446,842) | (145,923,537) | (26,325,644) | (241,656,160) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | 6,596,106 | $49,609,175 | (4,510,823) | $(46,188,358) |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | 6,920,953 | $52,115,857 | (5,543,077) | $(55,572,061) |
Short-Term | Long-Term | Total |
$706,950,627 | $226,834,166 | $933,784,793 |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets over $50 billion |
Percentage of Average Daily Net Assets of Class | |
Class A Shares | 0.05% |
Class C Shares | 0.75% |
Distribution Services Fees Incurred | |
Class C Shares | $27,006 |
Purchases | $24,925,949 |
Sales | $41,559,605 |
Beginning Account Value 10/1/2021 | Ending Account Value 3/31/2022 | Expenses Paid During Period1 | |
Actual: | |||
Class A Shares | $1,000 | $896.00 | $12.72 |
Class C Shares | $1,000 | $893.20 | $16.28 |
Institutional Shares | $1,000 | $896.50 | $11.96 |
Hypothetical (assuming a 5% return before expenses): | |||
Class A Shares | $1,000 | $1,011.52 | $13.49 |
Class C Shares | $1,000 | $1,007.73 | $17.27 |
Institutional Shares | $1,000 | $1,012.32 | $12.69 |
1 | Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Class A Shares | 2.69% |
Class C Shares | 3.45% |
Institutional Shares | 2.53% |
Annual Evaluation of Adequacy and Effectiveness
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 31421N600
CUSIP 31421N501
Item 2. | Code of Ethics |
Not Applicable
Item 3. | Audit Committee Financial Expert |
Not Applicable
Item 4. | Principal Accountant Fees and Services |
Not Applicable
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 Equity Funds
By /S/ Lori A. Hensler
Lori A. Hensler
Principal Financial Officer
Date May 23, 2022
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 May 23, 2022
By /S/ Lori A. Hensler
Lori A. Hensler
Principal Financial Officer
Date May 23, 2022