Prospectus
July
31, 2023
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Federated Hermes Municipal Obligations Fund
A Portfolio of Federated Hermes Money Market Obligations Trust
A money
market mutual fund seeking to provide current income exempt from all federal
regular income tax consistent with stability of principal by investing primarily
in a portfolio of high-quality, tax-exempt securities maturing in 397 days or
less.
As with
all mutual funds, the Securities and Exchange Commission (SEC) has not approved
or disapproved these securities or passed upon the adequacy of this Prospectus.
Any representation to the contrary is a criminal offense.
The
Fund is a Retail Money Market Fund and is only available for investment to
accounts beneficially owned by natural
persons.
Not
FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
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WS |
Maximum
Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) |
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Maximum
Deferred Sales Charge (Load) (as a percentage of original purchase price
or redemption proceeds, as applicable) |
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Maximum
Sales Charge (Load) Imposed on Reinvested Dividends (and other
Distributions) (as a percentage of offering price) |
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Redemption
Fee (as a percentage of amount redeemed, if
applicable) |
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Exchange
Fee |
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WS |
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Management
Fee |
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Distribution
(12b-1) Fee |
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Other
Expenses |
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Total
Annual Fund Operating Expenses |
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Fee
Waivers and/or Expense Reimbursements2 |
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Total
Annual Fund Operating Expenses After Fee Waivers and/or Expense
Reimbursements |
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1
2
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Year |
$ |
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3
Years |
$ |
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5
Years |
$ |
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10
Years |
$ |
1
Pursuant
to Rule 2a-7 the Fund is designated as a “retail” money market fund and is
permitted to use amortized cost to value its
portfolio securities and to transact at a stable $1.00 net asset value. As a
retail money market fund, the Fund has adopted policies and procedures
reasonably designed to limit investments in the Fund to accounts beneficially
owned by natural persons. In addition, the Fund has adopted policies and
procedures to impose liquidity fees on redemptions and/or temporary redemption
gates in the event that the Fund’s weekly liquid assets were to fall below a
designated threshold, if the Fund’s Board determines that such liquidity fees or
redemption gates are in the best interest of the Fund.
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3
The
Fund’s WS class total return for the six-month period from January 1, 2023 to
June 30, 2023, was 1.58%.
Within
the periods shown in the bar chart, the Fund’s WS class highest quarterly return
was 0.64% (quarter ended December 31, 2022). Its lowest quarterly return was
0.00% (quarter ended September 30, 2021).
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FUND
MANAGEMENT
The Fund’s
Investment Adviser is Federated Investment Management Company.
Purchase
and Sale of Fund Shares
The
minimum initial investment amount for the Fund’s WS Shares is generally $500,000
and there is no minimum subsequent
investment amount. Certain types of accounts are eligible for lower minimum
investments. The minimum investment amount for Systematic Investment Programs is
$50.
You
may purchase, redeem or exchange Shares of the Fund on any day the New York
Stock Exchange (NYSE) is open. Shares may
be purchased through a financial intermediary or directly from the Fund, by wire
or by check. Please note that certain purchase restrictions may apply. Redeem or
exchange Shares through a financial intermediary or directly from the Fund by
telephone at 1-800-341-7400 or by mail.
The
Fund operates as a retail money market fund. Accordingly, only accounts
beneficially owned by natural persons (“Eligible
Accounts”) may be invested in the Fund. Accounts that are not Eligible Accounts
are not permitted to invest in the Fund and will be redeemed in accordance with
policies and procedures adopted by the Fund’s Board.
Neither
the Fund nor the Adviser will be responsible for any loss of income in an
investor’s account or tax liability resulting
from an involuntary redemption.
4
Tax
Information
It
is anticipated that Fund distributions will be primarily dividends that are
exempt from federal regular income tax, although a
portion of the Fund’s dividends may not be tax-exempt. Dividends may be subject
to state and local taxes. Although the Fund does not seek to realize capital
gains, the Fund may realize and distribute capital gains from time to time as a
result of the Fund’s normal investment activities. Any Fund distributions of
capital gains are taxable at applicable capital gains rates. The Fund is
generally not a suitable investment for retirement accounts.
Interest from the Fund’s
investments may be subject to the AMT.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank), the Fund and/or its related
companies may pay the intermediary for the sale of Fund Shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary and your salesperson to recommend the Fund
over another investment. Ask your salesperson or visit your financial
intermediary’s website for more information.
What are
the Fund’s Investment Strategies?
The
Fund’s investment objective is to provide current income exempt from all federal
regular income tax consistent with
stability of principal. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the strategies and
policies described in this Prospectus.
The
Fund invests primarily in a portfolio of high-quality, tax-exempt securities
maturing in 397 days or less. Issuers include
states and political subdivisions, industrial and economic development
authorities, school and college authorities, housing authorities, healthcare
facility authorities, municipal utilities, transportation authorities and other
public agencies. The Fund will invest its assets so that, normally,
distributions of annual interest income are exempt from federal regular income
tax. Interest from the Fund’s investments may be subject to the federal
alternative minimum tax for individuals (AMT). The Fund’s investment adviser
(the “Adviser”) may invest in securities subject to AMT in an attempt to seek
appropriate risk-adjusted returns and provide diversification.
The
Adviser targets a dollar-weighted average portfolio maturity range based upon
its interest rate outlook. The Adviser formulates
its interest rate outlook by analyzing a variety of factors, such as (among
others): current and expected U.S. economic growth; current and expected
interest rates and inflation; and the Federal Reserve’s monetary
policy.
The
Adviser generally shortens the portfolio’s dollar-weighted average maturity when
it expects interest rates to rise and
extends the maturity when it expects interest rates to fall. This strategy seeks
to enhance the returns from favorable interest rate changes and reduce the
effect of unfavorable changes. The Adviser selects securities used to shorten or
extend the portfolio’s dollar-weighted average maturity by comparing the returns
currently offered by different investments to their historical and expected
returns. In targeting a dollar-weighted average portfolio maturity range, the
Adviser also will consider the tax-exempt securities available.
The
Adviser actively manages the Fund’s portfolio, seeking to limit the credit risk
taken by the Fund and to select investments
with appropriate risk-adjusted returns. The Fund seeks to invest in securities
that present minimal credit risk, based on the Adviser’s assessment of the
issuer’s credit quality, including the issuer’s or guarantor’s capacity to meet
its financial obligations, among other factors.
The
Adviser structures the portfolio by investing in variable rate demand
instruments and municipal notes, as well as other
permissible investments as described in this Prospectus and in the Fund’s
Statement of Additional Information (SAI).
The
Fund will: (1) maintain a dollar-weighted average maturity (WAM) of 60 days or
less; and (2) maintain a weighted average
life (WAL) of 120 days or less. Certain of the securities in which the Fund
invests may pay interest at a rate that is periodically adjusted (“Adjustable
Rate Securities”). For purposes of calculating WAM, the maturity of an
Adjustable Rate Security generally will be the period remaining until its next
interest rate adjustment. For purposes of calculating WAL, the maturity of an
Adjustable Rate Security will be its stated final maturity, without regard to
interest rate adjustments; accordingly, the 120-day WAL limitation could serve
to limit the Fund’s ability to invest in Adjustable Rate Securities.
Under
normal circumstances, the Fund will invest its assets so that at least 80% of
the income that it distributes will be exempt
from federal regular income tax. This policy may not be changed without
shareholder approval.
In
addition, in response to unusual circumstances, such as adverse market, economic
or other conditions (for example, to help
avoid potential losses, or during periods when there is a shortage of
appropriate tax-exempt securities), to maintain liquidity to meet shareholder
redemptions, or to accommodate cash inflows, the Adviser may also leave a
portion of the Fund’s assets uninvested, or may invest in securities subject to
federal income tax.
5
TEMPORARY
INVESTMENTS
The
Fund may temporarily depart from its principal investment strategies by
investing its assets in taxable securities or holding
cash or, subject to certain eligibility requirements, repurchase agreements
collateralized by government securities with The Federal Reserve Bank of New
York (“NY Fed”). It may do this in response to unusual circumstances, such as:
adverse market, economic or other conditions (for example, to help avoid
potential losses, or during periods when there is a shortage of appropriate
tax-exempt securities); to maintain liquidity to meet shareholder redemptions;
or to accommodate cash inflows. It is possible that such temporary investments
could affect the Fund’s investment returns. If the Fund invests in taxable
securities, it may receive and distribute taxable income to investors and to
that extent fail to meet its investment objectives. In order to invest in
repurchase agreements with the NY Fed, the Fund must satisfy the NY Fed’s
eligibility requirements and may engage in periodic “test” trading in order to
assess operational abilities at times when the Fund would otherwise not enter
into such a position. These exercises may vary in size and frequency. Repurchase
agreements with the NY Fed are considered “government securities” for purposes
of Rule 2a-7 and the Fund considers the NY Fed to be an instrumentality of the
U.S. government. If the Fund invests in taxable securities, it may receive and
distribute taxable income to investors and to that extent fail to meet its
investment objectives.
What are
the Fund’s Principal Investments?
The
following provides general information on the Fund’s principal investments. The
Fund’s Statement of Additional Information
(SAI) provides information about the Fund’s non-principal investments and may
provide additional information about the Fund’s principal
investments.
TAX-EXEMPT
SECURITIES
Tax-exempt
securities are fixed-income securities that, in the opinion of bond counsel to
the issuer or on the basis of another
authority believed by the Adviser to be reliable, pay interest that is not
subject to federal regular income taxes. Fixed-income securities pay interest,
dividends or distributions at a specified rate. The rate may be a fixed
percentage of the principal or adjusted periodically. In addition, the issuer of
a fixed-income security must repay the principal amount of the security,
normally within a specified time. Typically, states, counties, cities and other
political subdivisions and authorities issue tax-exempt securities. The market
categorizes tax-exempt securities by their source of repayment. Certain of these
tax-exempt securities may be subject to credit enhancement. The following
describes the principal types of tax-exempt securities in which the Fund may
invest.
Variable
Rate Demand Instruments (A Type of Tax-Exempt Security)
Variable
rate demand instruments are tax-exempt securities that require the issuer or a
third party, such as a dealer or bank (the
“Demand Provider”), to repurchase the security for its face value upon demand.
The securities also pay interest at a variable rate intended to cause the
securities to trade at their face value. Some variable rate demand instruments
are “conditional,” so that the occurrence of certain conditions discharges the
Demand Provider’s obligation to repurchase the security. Other variable rate
demand instruments are “unconditional,” so that there are no conditions under
which the Demand Provider’s obligation to repurchase the security can terminate.
The Fund treats variable rate demand instruments as short-term securities even
though their maturity may extend beyond 397 days because, within 397 days, their
variable interest rate adjusts in response to changes in market rates and the
repayment of their principal amount can be demanded. Certain variable rate
demand instruments that may be invested in by the Fund, referred to as
“synthetic” variable rate demand instruments, have certain features, such as
call features, that make it possible that the Fund will realize capital
gains.
Municipal
Notes (A Type of Tax-Exempt Security)
Municipal
notes are short-term, tax-exempt securities. Many municipalities issue such
notes to fund their current operations
before collecting taxes or other municipal revenues. Municipalities may also
issue notes to fund capital projects prior to issuing long-term bonds. The
issuers typically repay the notes at the end of their fiscal year, either with
taxes, other revenues or proceeds from newly issued notes or bonds.
General
Obligation Bonds (A Type of Tax-Exempt Security)
General
obligation bonds are supported by the issuer’s power to exact property or other
taxes. The issuer must impose and
collect taxes sufficient to pay principal and interest on the bonds. However,
the issuer’s authority to impose additional taxes may be limited by its charter
or state law.
6
Special
Revenue Bonds (A Type of Tax-Exempt Security)
Special
revenue bonds are payable solely from specific revenues received by the issuer
such as specific taxes, assessments,
tolls or fees. Bondholders may not collect from the municipality’s general taxes
or revenues. For example, a municipality may issue bonds to build a toll road,
and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls
normally would result in a default on the bonds, or in certain cases, may result
in a reduction in payments received in respect of the bonds.
Private
Activity Bonds (A Type of Special Revenue Bond)
Private
activity bonds are special revenue bonds used to finance private projects. A
certain percentage of the proceeds from a
private activity bond is used for a private business use or a certain percentage
of the debt service regarding a private activity bond is paid directly or
indirectly from a private business use. A private business use is a trade or
business carried on by any person or entity other than a governmental unit.
Private activity bonds are secured primarily by revenues derived from loan
repayments or lease payments due from the private entity, which may or may not
be guaranteed by a parent company or otherwise secured. Private activity bonds
generally are not secured by a pledge of the taxing power of the issuer of such
bonds. For example, a municipality may issue bonds to finance a new factory to
improve its local economy. The municipality would lend the proceeds from its
bonds to the company using the factory, and the company would agree to make loan
payments sufficient to cover interest and principal payments on the bonds. The
bonds would be payable from the company’s loan payments, and generally not from
any other revenues of the municipality. Therefore, any default of the loan
normally would result in a default on the bonds.
Types
of private activity bonds include, for example: bonds issued to obtain funds to
provide water, sewage and solid waste
facilities, qualified residential rental projects, certain local electric, gas
and other heating and cooling facilities, qualified hazardous waste facilities,
high-speed intercity rail facilities, certain airports, docks, wharves and mass
transportation facilities and qualified mortgages; qualified student loan bonds;
qualified redevelopment bonds; and bonds used for certain organizations exempt
from federal income taxation (qualified 501(c)(3) bonds).
The
interest on many types of private activity bonds is subject to the AMT. The Fund
may invest in bonds subject to
AMT.
Tax-Exempt
Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt
commercial paper is an obligation issued by a tax-exempt issuer with a maturity
of generally less than nine months.
Tax-exempt issuers may issue commercial paper to pay for current expenditures or
other permissible activities. Tax-exempt issuers may constantly reissue their
commercial paper and use the proceeds (or other sources) to repay maturing
paper. If the tax-exempt issuer cannot continue to obtain liquidity in this
fashion, and if there is not another available source of liquidity, its
commercial paper may default or there may be a reduction in payments received in
repayment of the tax-exempt commercial paper.
Credit
Enhancement
The
Fund may invest in tax-exempt securities with credit enhancement. Credit
enhancement consists of an arrangement in which a
company agrees to pay amounts due on a fixed-income security if the issuer
defaults. In some cases, the company providing credit enhancement makes all
payments directly to the security holders and receives reimbursement from the
issuer. Normally, the credit enhancer has greater financial resources and
liquidity than the issuer. For this reason, the Adviser may evaluate the credit
risk of a fixed-income security based solely upon its credit
enhancement.
Common
types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement
also includes arrangements where securities or other liquid assets secure
payment of a fixed-income security. If a default occurs, these assets may be
sold and the proceeds paid to the security’s holders. Either form of credit
enhancement reduces credit risks by providing another source of payment for a
fixed-income security. The Adviser evaluates credit enhancements based on its
own credit assessment standards and analysis.
Investing
in Securities of Other Investment Companies
The
Fund may invest its assets in shares of other investment companies as an
efficient means of implementing its investment
strategies, managing its uninvested cash and/or other investment reasons
consistent with the Fund’s investment objective and investment strategies. These
investments may include shares of a fund, including a money market fund or
preferred shares of a closed-end fund that are eligible for purchase by money
market funds (generally, because such preferred shares are structured as
unconditional demand instruments with a third-party Demand Provider). Other
investment companies are managed independently of the Fund and incur additional
fees and/or expenses which would, therefore, be borne indirectly by the Fund in
connection with any such investment. In the case of an investment in an
affiliated fund, these investments also can create conflicts of interests for
the Adviser to the Fund and the investment adviser to the acquired fund. For
example, a conflict of interest can arise due to the possibility that the
Adviser to the Fund could make a decision to redeem the Fund’s investment in the
acquired fund. A conflict of interest can also arise if,
7
because of
the Fund’s investment in the acquired fund, the acquired fund is able to garner
more assets, thereby growing the acquired fund and increasing the management
fees received by the investment adviser to the acquired fund, which would either
be the Adviser or an affiliate of the Adviser. However, the Adviser believes
that the benefits and efficiencies of making investments in other investment
companies should outweigh the potential additional fees and/or expenses and
resulting conflicts of interest. The Fund may invest in money market securities
directly.
OTHER
INVESTMENTS, TRANSACTIONS, TECHNIQUES
Additional
Information Regarding the Security Selection Process
As
part of analysis in its security selection process, among other factors, the
Adviser also evaluates whether environmental,
social and governance factors could have a positive or negative impact on the
risk profiles of many issuers or guarantors in the universe of securities in
which the Fund may invest. The Adviser may also consider information derived
from active engagements conducted by its in-house stewardship team with certain
issuers or guarantors on environmental, social and governance topics. This
qualitative analysis does not automatically result in including or excluding
specific securities but may be used by Federated Hermes as an additional input
in its primary analysis.
Minimal
credit risk
Under
Rule 2a-7, money market funds, such as the Fund, may generally invest in
“Eligible Securities” which include securities
issued by another money market fund, government securities or securities that
have a remaining maturity of no more than 397 calendar days and are determined
by the fund’s board or its delegate to present minimal credit risk based on an
assessment of the issuer’s credit quality, including the capacity of the issuer
or guarantor to meet its financial obligations. The Fund’s Board has adopted
procedures by which the Adviser will conduct this initial and ongoing
assessment, as required.
What are
the Specific Risks of Investing in the Fund?
The
following provides general information on the risks associated with the Fund’s
principal investments. These are the primary
factors that may negatively impact the Fund’s ability to maintain a stable NAV,
delay the payment of redemptions by the Fund or reduce the Fund’s daily
dividends. Any additional risks associated with the Fund’s non-principal
investments are described in the Fund’s SAI. The Fund’s SAI also may provide
additional information about the risks associated with the Fund’s principal
investments.
TAX-EXEMPT
SECURITIES RISK
The
securities in which the Fund invests may include those issued by state or local
governments, other political subdivisions
or authorities, or directly or indirectly supported by taxes, assessments,
tolls, fees or other revenue collected by or otherwise derived from or through
such issuers. Special factors, such as legislative changes, and state and local
economic and business developments, may adversely affect the yield and/or value
of the Fund’s investments in tax-exempt securities. Legal, economic, political
or other developments may raise impairments (such as, for example, limitations
under applicable law on the issuer’s authority to raise taxes, prolonged
budgetary processes, declining real estate values or declining tax revenues) to
such issuer’s budgetary flexibility, liquidity and ability to satisfy its
obligations. Like other issuers and securities, the likelihood that the credit
risk associated with such issuers and such securities will increase is greater
during times of economic stress and financial instability.
ISSUER
Credit Risk
It
is possible that interest or principal on securities will not be paid when due.
Money market funds try to minimize this risk by
purchasing higher-quality securities.
Many
fixed-income securities (including tax-exempt securities) receive credit ratings
from NRSROs such as Fitch Rating
Service, Moody’s Investor Services, Inc. and Standard & Poor’s that assign
ratings to securities by assessing the likelihood of an issuer and/or guarantor
default. Higher credit ratings correspond to lower perceived credit risk and
lower credit ratings correspond to higher perceived credit risk. Credit ratings
may be upgraded or downgraded from time to time as an NRSRO’s assessment of the
financial condition of a party obligated to make payments with respect to such
securities and credit risk changes. The impact of any credit rating downgrade
can be uncertain. Credit rating downgrades may lead to increased interest rates
and volatility in financial markets, which in turn could negatively affect the
value of the Fund’s portfolio holdings, its share price and its investment
performance. Credit ratings are not a guarantee of quality. Credit ratings may
lag behind the current financial conditions of the issuer and/or guarantor and
do not provide assurance against default or other loss of money. Credit ratings
do not protect against a decline in the value of a security. If a security has
not received a rating, the Fund must rely entirely upon the Adviser’s credit
assessment. Ratings are just one factor that the Adviser considers in its credit
assessment and analysis.
8
Fixed-income
securities generally compensate for greater credit risk by paying interest at a
higher rate. The difference between
the yield of a security and the yield of a U.S. Treasury security or other
appropriate benchmark with a comparable maturity (the “spread”) measures the
additional interest paid for risk. Spreads may increase generally in response to
adverse economic or market conditions. A security’s spread may also increase if
the security’s rating is lowered, or the security is perceived to have an
increased credit risk. An increase in the spread will cause the price of the
security to decline if interest rates remain unchanged.
COUNTERPARTY
CREDIT RISK
Counterparty
credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations.
This could cause the Fund to lose money or to lose the benefit of the
transaction or prevent the Fund from selling or buying other securities to
implement its investment strategy.
RISK
RELATED TO THE ECONOMY
The
value of the Fund’s portfolio may decline in tandem with a drop in the overall
value of the markets in which the Fund
invests and/or other markets based on negative developments in the U.S. and
global economies. Economic, political and financial conditions, or industry or
economic trends and developments, may, from time to time, and for varying
periods of time, cause volatility, illiquidity and/or other potentially adverse
effects in the financial markets, including the fixed-income market. The
commencement, continuation or ending of government policies and economic
stimulus programs, changes in monetary policy, increases or decreases in
interest rates, or other factors or events that affect the financial markets,
including the fixed-income markets, may contribute to the development of or
increase in volatility, illiquidity, shareholder redemptions and other adverse
effects which could negatively impact the Fund’s performance. For example, the
value of certain portfolio securities may rise or fall in response to changes in
interest rates, which could result from a change in government policies, and has
the potential to cause investors to move out of certain portfolio securities,
including fixed-income securities, on a large scale across the market. This may
increase redemptions from funds that hold impacted securities. Such a market
event could result in decreased liquidity and increased volatility in the
financial markets. Market factors, such as the demand for particular portfolio
securities, may cause the price of certain portfolio securities to fall while
the prices of other securities rise or remain unchanged.
Epidemic
and Pandemic Risk
An outbreak of respiratory
disease caused by a novel coronavirus was first detected in China in late 2019
and subsequently spread globally. This coronavirus has resulted in,
and may
continue to result in, closed borders, enhanced health screenings, disruptions
to healthcare service preparation and delivery, quarantines, cancellations and
disruptions to supply chains, workflow operations and consumer activity, as well
as general concern and uncertainty. The impact of this coronavirus has resulted
in substantial economic volatility. Health crises caused by outbreaks, such as
the coronavirus outbreak, may exacerbate other pre-existing political, social
and economic risks. The impact of this outbreak, and other epidemics and
pandemics that may arise in the future, could continue to negatively affect the
worldwide economy, as well as the economies of individual countries, individual
companies, including certain Fund service providers and issuers of the Fund’s
investments, and the markets in general in significant and unforeseen ways. In
addition, governments, their regulatory agencies, or self-regulatory
organizations may take actions in response to the pandemic, including
significant fiscal and monetary policy changes, that may affect the instruments
in which the Fund invests or the issuers of such instruments. Any such impact
could adversely affect the Fund’s performance.
Interest
Rate Risk
Prices
of fixed-income securities (including tax-exempt securities) rise and fall in
response to changes in interest rates. Generally,
when interest rates rise, prices of fixed-income securities fall. However,
market factors, such as the demand for particular fixed-income securities, may
cause the price of certain fixed-income securities to fall while the prices of
other securities rise or remain unchanged.
Recent
and potential future changes in monetary policy made by central banks and/or
their governments are likely to affect the
level of interest rates. Money market funds try to minimize this risk by
purchasing short-term securities. Negative or very low interest rates magnify
the risks associated with changes in interest rates. In general, changing
interest rates, including rates that fall below zero, have unpredictable effects
on markets and expose debt and related markets to heightened volatility and may
detract from Fund performance to the extent a Fund is exposed to such interest
rates and/or volatility. During periods when interest rates are low or there are
negative interest rates, a Fund’s yield (and total return) also is likely to be
low or otherwise adversely affected or the Fund may be unable to maintain a
positive return, or yield, or minimize the volatility of the Fund’s NAV per
share or maintain a stable NAV.
9
Certain
of the Fund’s investments may also be valued, in part, by reference to the
relative relationship between interest rates on
tax-exempt securities and taxable securities. With respect to the Fund’s
investments described in the preceding sentence, the value of such Fund
investments may be negatively affected (or positively affected) when the market
for tax-exempt securities underperforms (or outperforms) the market for taxable
securities.
Call
Risk
Call
risk is the possibility that an issuer may redeem a fixed-income security
(including a tax-exempt security) before maturity
(a “call”) at a price below or above its current market price. An increase in
the likelihood of a call may reduce the security’s price.
If
a fixed-income security is called, the Fund may have to reinvest the proceeds in
other fixed-income securities with lower
interest rates, higher credit risks or other less favorable
characteristics.
Sector
Risk
A
substantial part of the Fund’s portfolio may be comprised of securities issued
or credit enhanced by businesses with similar
characteristics. As a result, the Fund will be more susceptible to any economic,
business, political or other developments which generally affect these issuers
or entities. Developments affecting companies with similar characteristics might
include changes in interest rates, changes in economic cycles affecting credit
losses and regulatory changes.
TAX
RISK
In
order to pay interest that is exempt from federal regular income tax, tax-exempt
securities must meet certain legal requirements.
Failure to meet such requirements may cause the interest received and
distributed by the Fund to shareholders to be taxable.
Changes
or proposed changes in federal, state or local tax laws may cause the prices of
tax-exempt securities to fall
and/or may affect the tax-exempt status of the securities in which the Fund
invests. The Fund may invest in securities whose interest is subject to state
tax, federal regular income tax or AMT. Consult your tax professional for more
information.
LIQUIDITY
RISK
Liquidity
risk is the risk that the Fund will experience significant net redemptions of
Fund Shares at a time when it cannot
find willing buyers for its portfolio securities or can only sell its portfolio
securities at a material loss. An inability to sell portfolio securities may
result from adverse market developments or investor perceptions regarding the
portfolio securities. While the Fund endeavors to maintain a high level of
liquidity in its portfolio so that it can satisfy redemption requests, the
Fund’s ability to sell portfolio securities can deteriorate rapidly due to
credit events affecting particular issuers or credit enhancement providers, or
due to general market conditions and a lack of willing buyers.
CREDIT
ENHANCEMENT RISK
The
securities in which the Fund invests may be subject to credit enhancement (for
example, guarantees, letters of credit or bond
insurance). Credit enhancement is designed to help assure timely payment of the
security; it does not protect the Fund against losses caused by declines in a
security’s value due to changes in market conditions. Securities subject to
credit enhancement generally would be assigned a lower credit rating if the
rating were based primarily on the credit quality of the issuer without regard
to the credit enhancement. If the credit quality of the credit enhancement
provider (for example, a bank or bond insurer) is downgraded, a security credit
enhanced by such credit enhancement provider also may be downgraded.
A
single enhancement provider may provide credit enhancement to more than one of
the Fund’s investments. Having multiple
securities credit enhanced by the same enhancement provider will increase the
adverse effects on the Fund that are likely to result from a downgrading of, or
a default by, such an enhancement provider. Adverse developments in the banking
or bond insurance industries also may negatively affect the Fund, as the Fund
may invest in securities credit enhanced by banks or by bond insurers without
limit. Bond insurers that provide credit enhancement for large segments of the
fixed-income markets, including the municipal bond market, may be more
susceptible to being downgraded or defaulting during recessions or similar
periods of economic stress.
RISK
ASSOCIATED WITH INVESTING SHARE PURCHASE PROCEEDS
On
days during which there are net purchases of Fund Shares, the Fund must invest
the proceeds at prevailing market yields or
hold cash. If the Fund holds cash, or if the yield of the securities purchased
is less than that of the securities already in the portfolio, the Fund’s yield
will likely decrease. Conversely, net purchases on days on which short-term
yields rise will likely cause the Fund’s yield to increase. The larger the
amount that must be invested or the greater the
10
difference
between the yield of the securities purchased and the yield of the existing
investments, the greater the impact will be on the yield of the Fund. In the
event of significant changes in short-term yields or significant net purchases,
the Fund retains the discretion to close to new investments. However, the Fund
is not required to close, and no assurance can be given that this will be done
in any given circumstance.
RISK
ASSOCIATED WITH USE OF AMORTIZED COST
In
the unlikely event that the Fund’s Board of Trustees (“Board”) were to
determine, pursuant to Rule 2a-7, that the extent of
the deviation between the Fund’s amortized cost per share and its market-based
NAV per share may result in material dilution or other unfair results to
shareholders, the Board will cause the Fund to take such action as it deems
appropriate to eliminate or reduce, to the extent practicable, such dilution or
unfair results, including, but not limited to, considering suspending redemption
of Shares and liquidating the Fund under Rule 22e-3 under the Investment Company
Act of 1940.
ADDITIONAL
FACTORS AFFECTING YIELD
There
is no guarantee that the Fund will provide a certain level of income or that any
such income will exceed the rate of
inflation. Further, the Fund’s yield will vary. A low or negative interest rate
environment may prevent the Fund from providing a positive return, or yield, or
paying Fund expenses out of current income and could impair the Fund’s ability
to maintain a stable NAV. The Fund’s yield could also be negatively affected
(both in absolute terms and as compared to other money market funds) by aspects
of its investment program (for example, its investment policies, strategies or
limitations) or its operational policies (for example, its cut-off time for
purchases and redemptions of Shares).
Fees
& Gates Risk
The
Fund has adopted policies and procedures such that the Fund will be able to
impose liquidity fees on redemptions and/or
temporarily suspend redemptions for up to 10 business days in any 90-day period
in the event that the Fund’s weekly liquid assets were to fall below a
designated threshold, subject to a determination by the Fund’s Board that such a
liquidity fee or redemption gate is in the Fund’s best interest. If the Fund’s
weekly liquid assets fall below 30% of its total assets, the Fund may impose
liquidity fees of up to 2% of the value of the shares redeemed and/or
temporarily suspend redemptions, if the Board, including a majority of the
independent Trustees, determines that imposing a liquidity fee or temporarily
suspending redemptions is in the Fund’s best interest. In addition, if the
Fund’s weekly liquid assets fall below 10% of its total assets at the end of any
business day, the Fund must impose a 1% liquidity fee on shareholder redemptions
unless the Board, including a majority of the independent Trustees, determines
that imposing such a fee is not in the best interests of the Fund.
technology
Risk
The
Adviser uses various technologies in managing the Fund, consistent with its
investment objective(s) and strategy described
in this Prospectus. For example, proprietary and third-party data and systems
are utilized to support decision making for the Fund. Data imprecision, software
or other technology malfunctions, programming inaccuracies and similar
circumstances may impair the performance of these systems, which may negatively
affect Fund performance.
What Do
Shares Cost?
CALCULATION
OF NET ASSET VALUE
The
Fund attempts to stabilize the NAV of its Shares at $1.00 by valuing the
portfolio securities using the amortized cost method. In addition,
for regulatory purposes, the Fund calculates a market-based (or shadow) NAV per
Share on a daily basis for purposes of confirming that its NAV continues to
approximate fair value. For purposes of calculating the shadow NAV and
monitoring its comparison to the amortized cost-based NAV, pursuant to Rule 2a-5
under the Investment Company Act, the Board has designated the Adviser as the
Fund’s valuation designee to perform any fair value determinations for
securities and other assets held by the Fund. The Adviser, acting through its
“Valuation Committee” is responsible for determining the fair value of
investments in the shadow NAV for which market quotations are not readily
available. The Valuation Committee is comprised of officers of the Adviser and
certain of the Adviser’s affiliated companies and determines fair value and
oversees the calculation of the NAV. The Valuation Committee is subject to Board
oversight and certain reporting and other requirements intended to provide the
Board the information it needs to oversee the Adviser’s fair value
determinations. The Fund cannot guarantee that its NAV will always remain at
$1.00 per Share. The Fund does not charge a front-end sales charge.
11
You can
purchase, redeem or exchange Shares any day the NYSE is open (a “Regular
Business Day”). You may also be able to purchase and
redeem (but not exchange) Shares on certain days that the NYSE is closed on an
unscheduled basis due to unforeseen or emergency circumstances, if the Fund’s
Board determines to allow Fund Share transactions on such days (a “Special
Trading Day”). If the Fund declares a Special Trading Day, information regarding
shareholder trading activities for the Special Trading Day (such as when NAV,
and entitlement to that day’s dividend, will be determined) will be available by
calling the Fund at 1-800-341-7400 and will be posted on FederatedHermes.com/us.
The
information set forth in this Prospectus regarding times relevant to NAV
determination and dividend entitlement applies only to Regular Business
Days. Please
note that the times that might be specified for NAV determination and dividend
entitlement on a Special Trading Day would not necessarily be the same as set
forth in this Prospectus with respect to Regular Business Days. Although
Federated Hermes will attempt to make such information available in advance of a
particular Special Trading Day, given the nature of Special Trading Days, it may
not be able to do so until the morning of the Special Trading Day.
When
the Fund receives your transaction request in proper form (as described in this
Prospectus under the sections entitled “How to Purchase
Shares” and “How to Redeem and Exchange Shares”), it is processed at the next
determined NAV. NAV is generally determined at 12:00 p.m., 3:00 p.m. and as of
the end of regular trading on the NYSE (normally,
4:00 p.m.)
Eastern time each day the NYSE is open; except that on the day after
Thanksgiving and Christmas Eve (when Christmas Eve falls on a weekday), the last
NAV will be determined at 3:00 p.m. Eastern time. The times as of when NAV is
determined, and when orders must be placed, may be changed as permitted by the
SEC.
How is the
Fund Sold?
The
Fund’s Distributor, Federated Securities Corp., markets the Shares described in
this Prospectus only to accounts beneficially
owned by natural persons (“Eligible Accounts”). The Fund offers the following
Share classes: Automated Shares, Investment Shares, Wealth Shares, Service
Shares, Cash II Shares, Cash Series Shares and Capital Shares, each representing
interests in a single portfolio of securities. This Prospectus relates to Wealth
Shares. All Share classes have different expenses which affect their
performance. Contact your financial intermediary or call 1-800-341-7400 for more
information concerning the other classes. Please note that certain purchase
restrictions may apply.
Under
the Distributor’s Contract with the Fund, the Distributor offers Shares on a
continuous, best-efforts basis. The Distributor
is a subsidiary of Federated Hermes, Inc. (“Federated Hermes, formerly Federated
Investors, Inc.”). The Fund may not be a suitable investment for retirement
plans.
Intra-Fund
Share Conversion Program
A
shareholder in the Fund’s Shares may convert their Shares at net asset value to
any other share class of the Fund if the shareholder
meets the investment minimum and eligibility requirements for the share class
into which the conversion is sought, as applicable. Such conversion of classes
should not result in a realization event for tax purposes. Contact your
financial intermediary or call 1-800-341-7400 to convert your
Shares.
Payments
to Financial Intermediaries
The
Fund and its affiliated service providers may pay fees as described below to
financial intermediaries (such as broker-dealers,
banks, investment advisers or third-party administrators) whose customers are
shareholders of the Fund.
SERVICE
FEES
The
Fund may pay Service Fees of up to 0.25% of average net assets to financial
intermediaries or to Federated Shareholder
Services Company (FSSC), a subsidiary of Federated Hermes, for providing
services to shareholders and maintaining shareholder accounts. Intermediaries
that receive Service Fees may include a company affiliated with management of
Federated Hermes. If a financial intermediary receives Service Fees on an
account, it is not eligible to also receive Account Administration Fees on that
same account.
The
Fund has no present intention of paying, accruing or incurring any such Service
Fees on the WS class until such time as
approved by the Fund’s Board of Trustees.
ACCOUNT
ADMINISTRATION FEES
The
Fund may pay Account Administration Fees of up to 0.25% of average net assets to
banks that are not registered as broker-dealers
or investment advisers for providing administrative services to the Fund and its
shareholders. If a financial intermediary receives Account Administration Fees
on an account, it is not eligible to also receive Service Fees or Recordkeeping
Fees on that same account.
The
Fund has no present intention of paying, accruing or incurring any such Account
Administration Fees on the WS class
until such time as approved by the Fund’s Board of Trustees.
12
RECORDKEEPING
FEES
The
Fund may pay Recordkeeping Fees on an average-net-assets basis or on a
per-account-per-year basis to financial intermediaries
for providing recordkeeping services to the Fund and its shareholders. If a
financial intermediary receives Recordkeeping Fees on an account, it is not
eligible to also receive Account Administration Fees or Networking Fees on that
same account.
NETWORKING
FEES
The
Fund may reimburse Networking Fees on a per-account-per-year basis to financial
intermediaries for providing administrative
services to the Fund and its shareholders on certain non-omnibus accounts. If a
financial intermediary receives Networking Fees on an account, it is not
eligible to also receive Recordkeeping Fees on that same account.
ADDITIONAL
PAYMENTS TO FINANCIAL INTERMEDIARIES
The
Distributor may pay, out of its own resources, amounts to certain financial
intermediaries, including broker-dealers, banks,
registered investment advisers, independent financial planners and retirement
plan administrators, that support the sale of Shares or provide services to Fund
shareholders. The amounts of these payments could be significant, and may create
an incentive for the financial intermediary or its employees or associated
persons to recommend or sell Shares of the Fund to you. Not all financial
intermediaries receive such payments and the amount of compensation may vary by
intermediary. In some cases, such payments may be made by or funded from the
resources of companies affiliated with the Distributor (including the Adviser).
These payments are not reflected in the fees and expenses listed in the fee
table section of the Fund’s Prospectus and described above because they are not
paid by the Fund.
These
payments are negotiated and may be based on such factors as: the number or value
of Shares that the financial intermediary
sells or may sell; the value of client assets invested; the level and types of
services or support furnished by the financial intermediary; or the Fund’s
and/or other Federated Hermes funds’ relationship with the financial
intermediary. These payments may be in addition to payments, as described above,
made by the Fund to the financial intermediary. In connection with these
payments, the financial intermediary may elevate the prominence or profile of
the Fund and/or other Federated Hermes funds, within the financial
intermediary’s organization by, for example, placement on a list of preferred or
recommended funds and/or granting the Distributor preferential or enhanced
opportunities to promote the funds in various ways within the financial
intermediary’s organization. You can ask your financial intermediary for
information about any payments it receives from the Distributor or the Fund and
any services provided, as well as about fees and/or commissions it
charges.
How to
Purchase Shares
You
may purchase Shares through a financial intermediary, directly from the Fund or
through an exchange from another Federated
Hermes fund. The Fund reserves the right to reject any request to purchase or
exchange Shares. New investors must submit a completed New Account
Form.
For
important account information, see the section “Security and Privacy
Protection.”
The
minimum initial investment for Fund Shares is generally $500,000. There is no
minimum subsequent investment
amount.
Financial
intermediaries may impose higher or lower minimum investment requirements on
their customers than those imposed by
the Fund. Keep in mind that financial intermediaries may charge you fees for
their services in connection with your Share transactions.
The
Fund operates as a retail money market fund. Accordingly, only accounts
beneficially owned by natural persons (“Eligible
Accounts”) may be invested in the Fund. Examples of Eligible Accounts include
accounts owned by individuals who have been issued a social security number,
individuals holding accounts through omnibus accounts and natural persons
investing through certain tax-advantaged accounts and trusts. These
tax-advantaged accounts and trusts may include, among others:
participant-directed defined contribution plans; individual retirement accounts;
simplified employee pension arrangements; simple retirement accounts; custodial
accounts; deferred compensation plans for government or tax-exempt organization
employees; Archer medical savings accounts; college savings plans; health
savings account plans; ordinary trusts and estate of natural persons; or certain
other retirement and investment accounts, notwithstanding having an
institutional decision maker (e.g., a plan sponsor in certain retirement
arrangements or an investment adviser managing discretionary investment
accounts). Accounts that are not Eligible Accounts are not permitted to invest
in the Fund and will be redeemed in accordance with policies and procedures
adopted by the Fund’s Board. Pursuant to relief granted by the SEC, the Fund
hereby notifies investors that it may redeem accounts that are not Eligible
Accounts. Financial intermediaries will be required to take steps to remove any
shareholders on behalf of whom they hold shares in the Fund that are not
eligible to be invested in the Fund. Further, financial intermediaries may only
13
submit
purchase orders, if they have implemented policies and procedures reasonably
designed to limit all investors on behalf of whom they submit orders to Eligible
Accounts. Financial intermediaries may be required by the Fund or its
shareholder servicing agent to provide a written statement or other
representation that they have in place, and operate in compliance with, such
policies and procedures prior to submitting purchase orders.
The
Fund will not accept new accounts that are not Eligible Accounts. Neither the
Fund nor the Adviser will be responsible
for any loss of income in an investor’s account or tax liability resulting from
an involuntary redemption. The Fund has adopted policies and procedures such
that the Fund will be able: (a) to limit the beneficial owners of shares to
natural persons; and (b) to allow the Fund to impose liquidity fees and
temporarily suspend redemptions.
THROUGH
A FINANCIAL INTERMEDIARY
Submit
your purchase order to your financial intermediary. Financial intermediaries are
responsible for promptly submitting
purchase orders and payment to the Fund by electronic means permitted by the
Fund, or according to the instructions in the sections “By Telephone” or “By
Mail” below.
If
your financial intermediary submits your order electronically, your order will
be processed and you will be entitled to
dividends pursuant to operating procedures established by the Fund. If your
financial intermediary submits your order by telephone or by mail, your order
will be processed and you will be entitled to dividends as outlined in the
section “By Telephone” or the section “By Mail” below.
If
you deal with a financial intermediary, you will have to follow the financial
intermediary’s procedures for transacting with the
Fund. For more information about how to purchase Shares through your financial
intermediary, you should contact your financial intermediary
directly.
DIRECTLY
FROM THE FUND
By
Telephone
You may
purchase Shares by calling the Fund at 1-800-341-7400.
Your
purchase will be priced at the NAV next calculated after the Fund receives your
order. Receipt of a purchase order by a
financial intermediary will be deemed received by the Fund to the extent that
such financial intermediary has been duly authorized by the Fund to accept such
orders. If you call the Fund by 3:00 p.m. Eastern time and send your payment by
wire by the close of the Federal Reserve wire transfer system, you will be
entitled to that day’s dividend.
Send your
wire to:
State
Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
BNF: 23026552
Attention: Federated Hermes EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
BNF: 23026552
Attention: Federated Hermes EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
If the
Fund does not receive your purchase wire by the close of the Federal Reserve
wire transfer system on your designated settlement
date, your purchase will be canceled and you could be liable for any losses or
fees incurred by the Fund or SS&C GIDS, Inc., the Fund’s transfer
agent.
You
cannot purchase Shares by wire on days when wire transfers are restricted, even
if the NYSE is open on such days (for
example, Columbus Day and Veterans Day). The Fund does not consider wire
purchase requests received on such days to be in proper form, and will not
process such requests.
By
Mail
You may
purchase Shares by sending your check payable to The
Federated Hermes Funds at the
following address:
The
Federated Hermes Funds
P.O. Box 219318
Kansas City, MO 64121-9318
P.O. Box 219318
Kansas City, MO 64121-9318
If you
send your check by a private
courier or overnight delivery service that
requires a street address, send it to:
The
Federated Hermes Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
14
Please
note your account number on your check. Payment should be made in
U.S. dollars and drawn on a U.S. bank. If your check does not clear, your
purchase will be canceled and you could be liable for any losses or fees
incurred by the Fund or SS&C GIDS, Inc., the Fund’s transfer agent. The Fund
reserves the right to reject any purchase request. For
example, to protect against check fraud, the Fund may reject any purchase
request involving a check that is not made payable to The
Federated Hermes Funds (including, but not
limited to, requests to purchase Shares using third-party checks) or involving
temporary checks or credit card checks.
Your
order will be priced at the NAV next calculated after the Fund receives your
check and you will be entitled to dividends
beginning on the day the check is converted into federal funds (normally the
business day after the check is received).
By
Direct Deposit
You may
establish Payroll Deduction/Direct Deposit arrangements for investments into the
Fund by either calling a Client Service
Representative at 1-800-341-7400; or by completing the Payroll Deduction/Direct
Deposit Form, which is available on FederatedHermes.com/us under “Resources” and
then “Literature and Forms,” then “Forms.” You will receive a confirmation when
this service is available.
THROUGH
AN EXCHANGE
You
may purchase Shares through an exchange from any Federated Hermes fund or share
class that does not have a stated
sales charge or contingent deferred sales charge, except shares of Federated
Hermes Institutional Money Market Management, Federated Hermes Institutional
Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust,
Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares
without a sales charge (“no-load Class A Shares”) and Class R Shares of any Fund
provided that you meet any shareholder eligibility and minimum initial
investment requirements for the Shares to be purchased (if applicable), both
accounts have identical registrations, and you must receive a prospectus for the
fund in which you wish to exchange.
By
Online Account Services
You may
access your accounts online to purchase Shares through FederatedHermes.com/us’s
Shareholder Account Access system once you have registered for access. Online
transactions may be subject to certain limitations including limitations as to
the amount of the transaction. For more information about the services available
through Shareholder Account Access, please visit FederatedHermes.com/us and
select “Sign In” and “Access and Manage Investments,” or call 1-800-341-7400,
Option #4 to speak with a Client Service Representative.
BY
SYSTEMATIC INVESTMENT PROGRAM (SIP)
Once
you have opened an account, you may automatically purchase additional Shares on
a regular basis by completing the SIP
section of the New Account Form or by contacting the Fund or your financial
intermediary. The minimum investment amount for SIPs is $50.
BY
AUTOMATED CLEARING HOUSE (ACH)
Once
you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH
member. This purchase option can be established by completing the appropriate
sections of the New Account Form.
How to
Redeem and Exchange Shares
You should
redeem or exchange Shares:
◾ through a
financial intermediary if you purchased Shares through a financial intermediary;
or
◾ directly
from the Fund if you purchased Shares directly from the Fund.
Redemption
proceeds normally are wired or mailed within one business day for each method of
payment after receiving a timely
request in proper form. Depending upon the method of payment, when shareholders
receive redemption proceeds can differ. Payment may be delayed for up to seven
days under certain circumstances (see “Limitations on Redemption
Proceeds”).
For
important account information, see the section “Security and Privacy
Protection.”
THROUGH
A FINANCIAL INTERMEDIARY
Submit
your redemption or exchange request to your financial intermediary. Financial
intermediaries are responsible for promptly
submitting redemption or exchange requests to the Fund by electronic means
permitted by the Fund, or according to the instructions in the sections “By
Telephone” or “By Mail” below.
15
If
your financial intermediary submits your redemption or exchange request
electronically, your request will be processed
and your proceeds will be paid pursuant to operating procedures established by
the Fund. If your financial intermediary submits your redemption or exchange
request by telephone or by mail, your request will be processed and your
proceeds will be paid as outlined in the section “By Telephone” or the section
“By Mail” below.
If
you deal with a financial intermediary, you will have to follow the financial
intermediary’s procedures for transacting with the
Fund. For more information about how to redeem or exchange Shares through your
financial intermediary, you should contact your financial intermediary
directly.
DIRECTLY
FROM THE FUND
By
Telephone
You
may redeem or exchange Shares by calling the Fund at 1-800-341-7400. Your
redemption or exchange request will be priced
at the NAV next calculated after the request is received by the Fund. Receipt of
a redemption or exchange order by a financial intermediary will be deemed
received by the Fund to the extent that such financial intermediary has been
duly authorized by the Fund to accept such orders.
If
you call the Fund by noon Eastern time, and your redemption proceeds are wired
to you the same day, you will not be entitled
to that day’s dividend.
If
you call the Fund after noon Eastern time and before the end of regular trading
(normally 4:00 p.m. Eastern time) on the NYSE,
you will be entitled to that day’s dividend and your redemption proceeds will be
sent to you the following business day.
By
Mail
You may
redeem or exchange Shares by mailing a written request to the Fund.
Your
redemption or exchange request will be priced at the NAV next calculated after
the Fund receives your written request in
proper form. If your redemption proceeds are wired to you the same day your
order is priced, you will not be entitled to that day’s dividend. If a check for
your redemption proceeds is mailed to you on the next business day after your
request is priced, you will be entitled to dividends through the day on which
the Fund priced your request.
Send
requests by mail to:
The
Federated Hermes Funds
P.O. Box 219318
Kansas City, MO 64121-9318
P.O. Box 219318
Kansas City, MO 64121-9318
Send
requests by private
courier or overnight delivery service
to:
The
Federated Hermes Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
All
requests must include:
◾ Fund Name
and Share Class, account number and account registration;
◾ amount to
be redeemed or exchanged;
◾ signatures
of all shareholders exactly as registered; and
◾ if
exchanging, the Fund
Name and Share Class, account number and account registration into which you are
exchanging.
Call your
financial intermediary or the Fund if you need special instructions.
Signature
Guarantees
Signatures
must be guaranteed by a financial institution which is a participant in a
Medallion signature guarantee program
if:
◾ your
redemption will be sent to an address other than the address of
record;
◾ your
redemption will be sent to an address of record that was changed within the last
30 days;
◾ a
redemption is payable to someone other than the shareholder(s) of record;
or
◾ transferring
into another fund with a different shareholder registration.
A
Medallion signature guarantee is designed to protect your account from fraud.
Obtain a Medallion signature guarantee from a
bank or trust company, savings association, credit union or broker, dealer or
securities exchange member. A
notary public cannot provide a signature guarantee.
16
By
Online Account Services
You may
access your accounts online to redeem or exchange Shares through FederatedHermes.com/us’s
Shareholder Account Access system once you have registered for access. Online
transactions may be subject to certain limitations including limitations as to
the amount of the transaction. For more information about the services available
through Shareholder Account Access, please visit FederatedHermes.com/us and
select “Sign In” and “Access and Manage Investments,” or call 1-800-341-7400,
Option #4 to speak with a Client Service Representative.
PAYMENT
METHODS FOR REDEMPTIONS
Your
redemption proceeds will be mailed by check to your address of record. The
following payment options are available
if you complete the appropriate section of the New Account Form or an Account
Service Options Form. These payment options require a signature guarantee if
they were not established when the account was opened:
◾ An
electronic transfer to your account at a financial institution that is an ACH
member; or
◾ Wire
payment to your account at a domestic commercial bank that is a Federal Reserve
System member.
Methods
the Fund May Use to Meet Redemption Requests
The
Fund intends to pay Share redemptions in cash. To ensure that the Fund has cash
to meet Share redemptions on any day, the
Fund typically expects to hold a cash or cash equivalent reserve or sell
portfolio securities.
In unusual
or stressed circumstances, the Fund may generate cash in the following
ways:
◾ Inter-fund
Borrowing and Lending. The SEC
has granted an exemption that permits the Fund and all other funds advised by
subsidiaries of Federated Hermes (“Federated Hermes funds”) to lend and borrow
money for certain temporary purposes directly to and from other Federated Hermes
funds. Inter-fund borrowing and lending is permitted only: (a) to meet
shareholder redemption requests; (b) to meet commitments arising from “failed”
trades; and (c) for other temporary purposes. All inter-fund loans must be
repaid in seven days or less.
◾ Redemption
in Kind. Although
the Fund intends to pay Share redemptions in cash, it reserves the right to pay
the redemption price in whole or in part by an “in-kind” distribution of the
Fund’s portfolio securities. Because the Fund has elected to be governed by Rule
18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any
one shareholder in cash only up to the lesser of $250,000 or 1% of the net
assets represented by such Share class during any 90-day period. Redemptions in
kind are made consistent with the procedures adopted by the Fund’s Board, which
generally include distributions of a pro rata share of the Fund’s portfolio
assets. Redemption in kind is not as liquid as a cash redemption. If redemption
is made in kind, securities received may be subject to market risk and the
shareholder could incur taxable gains and brokerage or other charges in
converting the securities to cash.
LIMITATIONS
ON REDEMPTION PROCEEDS
Redemption
proceeds normally are wired or mailed within one business day after receiving a
request in proper form. Payment
may be delayed for up to seven days:
◾ to allow
your purchase to clear (as discussed below);
◾ during
periods of market volatility;
◾ when a
shareholder’s trade activity or amount adversely impacts the Fund’s ability to
manage its assets; or
◾ during any
period when the Federal Reserve wire or applicable Federal Reserve banks are
closed, other than customary weekend and holiday closings.
If
you request a redemption of Shares recently purchased by check (including a
cashier’s check or certified check), money
order, bank draft or ACH, your redemption proceeds may not be made available for
up to seven calendar days to allow the Fund to collect payment on the instrument
used to purchase such Shares. If the purchase instrument does not clear, your
purchase order will be canceled and you will be responsible for any losses
incurred by the Fund as a result of your canceled order.
In
addition, the right of redemption may be suspended, or the payment of proceeds
may be delayed, during any period:
◾ when the
NYSE is closed, other than customary weekend and holiday closings;
◾ when
trading on the NYSE is restricted, as determined by the SEC;
◾ in which
an emergency exists, as determined by the SEC, so that disposal of the Fund’s
investments or determination of its NAV is not reasonably practicable;
or
◾ in which
there are emergency conditions, including liquidation of the Fund, as provided
in Section 22(e), and rules thereunder, of the Investment Company Act of
1940.
You
will not accrue interest or dividends on uncashed redemption checks from the
Fund when checks are undeliverable and
returned to the Fund.
17
Certain
special LIMITATIONS affecting REDEMPTIONs
The
SEC has implemented a number of requirements, including liquidity fees and
temporary redemption gates, for money
market funds based on the amount of Fund assets that are “weekly liquid assets,”
which generally includes cash, direct obligations of the U.S. government,
certain other U.S. government or agency securities and securities that will
mature or are subject to a demand feature that is exercisable and payable within
five business days.
The
Fund has adopted policies and procedures such that the Fund will be able to
impose liquidity fees on redemptions and/or
temporarily suspend redemptions for up to 10 business days in any 90-day period
in the event that the Fund’s weekly liquid assets were to fall below a
designated threshold, subject to a determination by the Fund’s Board that such a
liquidity fee or redemption gate is in the Fund’s best interest. If the Fund’s
weekly liquid assets fall below 30% of its total assets, the Fund may impose
liquidity fees of up to 2% of the value of the shares redeemed and/or
temporarily suspend redemptions, if the Board, including a majority of the
independent Trustees, determines that imposing a liquidity fee or temporarily
suspending redemptions is in the Fund’s best interest. If the Fund’s weekly
liquid assets fall below 10% of its total assets at the end of any business day,
the Fund will impose a liquidity fee of 1% on all redemptions beginning on the
next business day, unless the Board, including a majority of the independent
Trustees, determines that imposing such a fee would not be in the best interests
of the Fund or determines that a lower or higher fee (not to exceed 2%) would be
in the best interests of the Fund, which would remain in effect until weekly
liquid assets return to 30% or the Board determines that the fee is no longer in
the best interests of the Fund. In the event that a liquidity fee is imposed
and/or redemptions are temporarily suspended, the Board may take certain other
actions based on the particular facts and circumstances, including but not
limited to modifying the timing and frequency of its NAV determinations. All
liquidity fees payable by shareholders of the Fund would be payable to the Fund
and could offset any losses realized by the Fund when seeking to honor
redemption requests during times of market stress.
If
liquidity fees are imposed or redemptions are temporarily suspended, the Fund
will notify shareholders on the Fund’s website or
by press release. In addition to identifying the Fund, such notifications will
include the Fund’s percentage of total assets invested in weekly liquid assets,
the time of implementation of the liquidity fee and/or redemption gate and
details regarding the amount of the liquidity fee. The imposition and
termination of a liquidity fee or redemption gate will also be reported by the
Fund to the SEC on Form N-CR. If redemptions are temporarily suspended, the Fund
and your financial intermediary will not accept redemption or exchange orders
until the Fund has notified shareholders that the redemption gate has been
lifted. Shareholders wishing to redeem or exchange shares once the redemption
gate has been lifted will need to submit a new redemption or exchange request to
the Fund or their financial intermediary.
All
liquidity fees payable by shareholders to the Fund can be used to offset any
losses realized by the Fund when seeking to
honor redemption requests during times of market stress. The Fund expects to
treat such liquidity fees as not constituting income to the Fund.
A
liquidity fee imposed by the Fund will reduce the amount you will receive upon
the redemption of your shares and will
decrease the amount of any capital gain or increase the amount of any capital
loss you will recognize from such redemption. Although there is some degree of
uncertainty with respect to the tax treatment of liquidity fees received by
money market funds, it is anticipated at this time that a liquidity fee will
have no tax effect for the Fund. As the tax treatment will likely be the subject
of future guidance issued by the Internal Revenue Service (IRS), the Fund will
re-visit the applicable tax treatment of liquidity fees when they are
received.
In
addition, the right of any investor to receive payment with respect to any
redemption may be suspended or the payment of
the redemption proceeds postponed during any period in which the NYSE is closed
(other than weekends or holidays) or trading on the NYSE is restricted or, to
the extent otherwise permitted by the 1940 Act, if an emergency exists as a
result of which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets. In addition, the SEC may by order permit suspension
of redemptions for the protection of shareholders of the Fund.
If
the Fund’s weekly liquid assets fall below 10% and the Board determines that it
would not be in the best interests of the Fund
to continue operating, the Board may suspend redemptions in the Fund and may
approve the liquidation of the Fund. The Board may also suspend redemptions and
liquidate the Fund if the Board determines that the deviation between its
amortized cost price per share and its market-based NAV may result in material
dilution or other unfair results to investors or existing shareholders. Prior to
suspending redemptions, the Fund would be required to notify the SEC of its
decision to liquidate and suspend redemptions. If the Fund ceases honoring
redemptions and determines to liquidate, the Fund expects that it would notify
shareholders on the Fund’s website or by press release. Distributions to
shareholders of liquidation proceeds may occur in one or more
disbursements.
18
Purchase
orders received by the Fund after the last NAV determination of a given day, but
prior to notification of the imposition
of liquidity fees or a redemption gate will be cancelled unless re-confirmed.
Under certain circumstances, the Fund may honor redemption or exchange orders
(or pay redemptions without adding a liquidity fee to the redemption amount) if
the Fund can verify that the redemption or exchange order was received in good
order by the Fund or the Fund’s agent before the Fund imposed liquidity fees or
temporarily suspended redemptions.
Involuntary
Redemptions
The
Fund operates as a retail money market fund. Accordingly, only Eligible Accounts
may be invested in the Fund. Accounts
that are not Eligible Accounts are not permitted to invest in the Fund and will
be redeemed in accordance with policies and procedures adopted by the Fund’s
Board. Financial intermediaries will be required to take steps to remove any
shareholders on behalf of whom they hold shares in the Fund that are not
eligible to be invested in the Fund. Further, financial intermediaries may only
submit purchase orders if they have implemented policies and procedures
reasonably designed to limit all investors on behalf of whom they submit orders
to Eligible Accounts. Financial intermediaries may be required by the Fund or
its shareholder servicing agent to provide a written statement or other
representation that they have in place, and operate in compliance with, such
policies and procedures prior to submitting purchase orders. Neither the Fund
nor the Adviser will be responsible for any loss of income in an investor’s
account or tax liability resulting from an involuntary redemption.
EXCHANGE
PRIVILEGE
You
may exchange Shares of the Fund for shares of any Federated Hermes fund or share
class that does not have a stated
sales charge or contingent deferred sales charge, except shares of Federated
Hermes Institutional Money Market Management, Federated Hermes Institutional
Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust,
Federated Hermes Institutional Prime Value Obligations Fund, no-load Class A
Shares and Class R Shares of any Fund.
To do
this, you must:
◾ meet any
applicable shareholder eligibility requirements;
◾ ensure
that the account registrations are identical;
◾ meet any
applicable minimum initial investment requirements; and
◾ receive a
prospectus for the fund into which you wish to exchange.
An
exchange is treated as a redemption and a subsequent purchase, and is a taxable
transaction. The Fund reserves the right to
reject any request to purchase or exchange Shares. The Fund may modify or
terminate the exchange privilege at any time.
Systematic
Withdrawal/Exchange Program
You
may automatically redeem or exchange Shares. The minimum amount for all new or
revised systematic redemptions
or exchanges of Shares is $50 per transaction per fund. Complete the appropriate
section of the New Account Form or an Account Service Options Form or contact
your financial intermediary or the Fund. Your account value must meet the
minimum initial investment amount at the time the program is established. This
program may reduce, and eventually deplete, your account. Payments should not be
considered yield or income.
ADDITIONAL
CONDITIONS
Telephone
Transactions
The
Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.
Share
Certificates
The
Fund no longer issues share certificates. If you are redeeming or exchanging
Shares represented by certificates previously
issued by the Fund, you must return the certificates with your written
redemption or exchange request. For your protection, send your certificates by
registered or certified mail, but do not endorse them.
19
Security
and Privacy Protection
ONLINE
ACCOUNT and TELEPHONE ACCESS SECURITY
Federated
Hermes will not be responsible for losses that result from unauthorized
transactions, unless Federated Hermes does not
follow procedures designed to verify your identity. When initiating a
transaction by telephone or online, shareholders should be aware that any person
with access to your account and other personal information including PINs
(Personal Identification Numbers) may be able to submit instructions by
telephone or online. Shareholders are responsible for protecting their identity
by using strong usernames and complex passwords which utilize combinations of
mixed case letters, numbers and symbols, and change passwords and PINs
frequently.
Using
FederatedHermes.com/us’s
Account Access website means you are consenting to sending and receiving
personal financial information over the Internet, so you should be sure you are
comfortable with the risks. You will be required to accept the terms of an
online agreement and to establish and utilize a password in order to access
online account services. The Transfer Agent has adopted security procedures to
confirm that Internet instructions are genuine. The Transfer Agent will also
send you written confirmation of share transactions. The Transfer Agent, the
Fund and any of its affiliates will not be liable for losses or expenses that
occur from fraudulent Internet instructions reasonably believed to be
genuine.
The
Transfer Agent or the Fund will employ reasonable procedures to confirm that
telephone transaction requests are genuine,
which may include recording calls, asking the caller to provide certain personal
identification information, sending you written confirmation, or requiring other
confirmation security procedures. The Transfer Agent, the Fund and any of its
affiliates will not be liable for relying on instructions submitted by telephone
that the Fund reasonably believes to be genuine.
ANTI-MONEY
LAUNDERING COMPLIANCE
To
help the government fight the funding of terrorism and money laundering
activities, federal law requires financial institutions
to obtain, verify and record information that identifies each new customer who
opens a Fund account and to determine whether such person’s name appears on
governmental lists of known or suspected terrorists or terrorist organizations.
Pursuant to the requirements under the USA PATRIOT Act, the information obtained
will be used for compliance with the USA PATRIOT Act or other applicable laws,
regulations and rules in connection with money laundering, terrorism or other
illicit activities.
Information
required includes your name, residential or business address, date of birth (for
an individual), and other information
that identifies you, including your social security number, tax identification
number or other identifying number. The Fund cannot waive these requirements.
The Fund is required by law to reject your Account Application if the required
information is not provided. If, after reasonable effort, the Fund is unable to
verify your identity or that of any other person(s) authorized to act on your
behalf, or believes it has identified potentially suspicious, fraudulent or
criminal activity, the Fund reserves the right to close your account and redeem
your shares at the next calculated NAV without your permission. Any applicable
contingent deferred sales charge (CDSC) will be assessed upon redemption of your
shares.
The
Fund has a strict policy designed to protect the privacy of your personal
information. A copy of Federated Hermes’ privacy policy notice was
given to you at the time you opened your account. The Fund sends a copy of the
privacy notice to you annually. You may also obtain the privacy notice by
calling the Fund, or through FederatedHermes.com/us.
Account
and Share Information
ACCOUNT
ACTIVITY
You
will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital
gains paid.
DIVIDENDS
AND CAPITAL GAINS
The Fund
declares any dividends daily and pays them monthly to shareholders.
The
Fund does not expect to realize any capital gains or losses. However, the Fund
may realize capital gains on certain securities,
such as synthetic variable rate demand instruments, that may be redeemed in
certain circumstances at a premium to their face value. If capital gains or
losses were to occur, they could result in an increase or decrease in dividends.
The Fund pays any capital gains at least annually, and may make such special
distributions of dividends and capital gains as may be necessary to meet
applicable regulatory requirements. Your dividends and capital gains
distributions will be automatically reinvested in additional Shares without a
sales charge, unless you elect cash payments. Dividends may also be reinvested
without sales charges in shares of any class of any other Federated Hermes fund
of which you are already a shareholder.
See “Tax
Information” below for information on the tax consequences of the Fund realizing
a capital gain.
20
Under
the federal securities laws, the Fund is required to provide a notice to
shareholders regarding the source of distributions made by the
Fund if such distributions are from sources other than ordinary investment
income. In addition, important information regarding the Fund’s distributions,
if applicable, is available via the link to the Fund and share class name at
FederatedHermes.com/us/FundInformation.
Small
Distributions and Uncashed Checks
Generally,
dividend and/or capital gain distributions payable by check in an amount of less
than $25 will be automatically
reinvested in additional shares. This policy does not apply if you have elected
to receive cash distributions that are directly deposited into your bank account
via wire or ACH.
Additionally,
if one or more dividend or capital gain distribution checks are returned as
“undeliverable,” or remain uncashed
for 180 days, all subsequent dividend and capital gain distributions will be
reinvested in additional shares. No interest will accrue on amounts represented
by uncashed distribution checks. For questions on whether reinvestment applies
to your distributions, please contact a Client Service Representative at
1-800-341-7400.
Certain
states, including the State of Texas, have laws that allow shareholders to
designate a representative to receive abandoned
or unclaimed property (“escheatment”) notifications by completing and submitting
a designation form that generally can be found on the official state website. If
a shareholder resides in an applicable state, and elects to designate a
representative to receive escheatment notifications, escheatment notices
generally will be delivered as required by such state laws, including, as
applicable, to both the shareholder and the designated representative. A
completed designation form may be mailed to the Fund (if Shares are held
directly with the Fund) or to the shareholder’s financial intermediary (if
Shares are not held directly with the Fund). Shareholders should refer to
relevant state law for the shareholder’s specific rights and responsibilities
under his or her state’s escheatment law(s), which can generally be found on a
state’s official website.
ACCOUNTS
WITH LOW BALANCES
Federated
Hermes reserves the right to close accounts if redemptions or exchanges cause
the account balance to fall below
$500,000. Before an account is closed, you will be notified and allowed at least
30 days to purchase additional Shares to meet the minimum.
TAX
INFORMATION
The
Fund and/or
your
financial intermediary provides year-end tax information and an annual statement
of your account activity to assist you in completing your federal, state and
local tax returns. It is anticipated that Fund distributions will be primarily
dividends that are exempt from federal regular income tax, although a portion of
the Fund’s dividends may not be exempt. Dividends may be subject to state and
local taxes. Although the Fund does not seek to realize capital gains, the Fund
may realize and distribute capital gains from time to time as a result of the
Fund’s normal investment activities. Distributions of net short-term capital
gains are taxable to you as ordinary income. Distributions of net long-term
capital gains are taxable to you as long-term capital gains regardless of how
long you have owned your Shares. Capital gains and non-exempt dividends are
taxable whether paid in cash or reinvested in the Fund. Redemptions and
exchanges are taxable sales. Please consult your tax adviser regarding your
federal, state and local tax liability.
FREQUENT
TRADING POLICIES
Given
the short-term nature of the Fund’s investments and its use of the amortized
cost method for calculating the NAV of Fund
Shares, the Fund does not anticipate that in the normal case frequent or
short-term trading into and out of the Fund will have significant adverse
consequences for the Fund and its shareholders. For this reason and because the
Fund is intended to be used as a liquid short-term investment, the Fund’s Board
has not adopted policies or procedures to monitor or discourage frequent or
short-term trading of the Fund’s Shares. Regardless of their frequency or
short-term nature, purchases and redemptions of Fund Shares can have adverse
effects on the management of the Fund’s portfolio and its
performance.
Other
funds in the Federated Hermes family of funds may impose monitoring policies.
Under normal market conditions, such
monitoring policies are designed to protect the funds being monitored and their
shareholders, and the operation of such policies and shareholder investments
under such monitoring are not expected to have a materially adverse impact on
the Federated Hermes funds or their shareholders. If you plan to exchange your
Fund Shares for shares of another Federated Hermes fund, please read the
prospectus of that other Federated Hermes fund for more
information.
PORTFOLIO
HOLDINGS INFORMATION
Information
concerning the Fund’s portfolio holdings is available via the link to the Fund
and share class name at FederatedHermes.com/us.
Such information is posted on the website five business days after both
mid-month and month-end then remains posted on the website for six months
thereafter. Summary portfolio composition information as of the close of each
month is posted on the website 15 days (or the next business day) after
month-end and remains until replaced
21
by the
information for the succeeding month. The summary portfolio composition
information may include identification of the Fund’s top 10 credit/obligor
exposures, weighted average maturity and weighted average life of the Fund’s
portfolio and percentage breakdowns of the portfolio by credit quality tier,
effective maturity range and type of security. The Fund’s WAM and WAL, Shadow
NAV (market-based value of the Fund’s portfolio), Weekly Liquid Assets and Daily
Flows are posted every business day and remain posted on the website for six
months thereafter.
You may
also access portfolio information via the link to the Fund and share class name
at FederatedHermes.com/us.
The Fund’s Annual and Semi-Annual Shareholder Reports contain complete listings
of the Fund’s portfolio holdings as of the end of the Fund’s second and fourth
fiscal quarters. These reports are also available on the SEC’s website at
sec.gov.
The
Fund files with the SEC a complete schedule of its portfolio holdings as of the
close of each month on “Form N-MFP.” Form N-MFP
is available on the SEC’s website at sec.gov. You may access Form N-MFP via the
link to the Fund and share class name at FederatedHermes.com/us.
In
addition, from time to time (for example, during periods of unusual market
conditions), additional information regarding the Fund’s
portfolio holdings and/or composition may be posted to FederatedHermes.com/us.
If and when such information is posted, its availability will be noted on, and
the information will be accessible from, the home page of the
website.
Who
Manages the Fund?
The
Board governs the Fund. The Board selects and oversees the Adviser, Federated
Investment Management Company.
The Adviser manages the Fund’s assets, including buying and selling portfolio
securities. Federated Advisory Services Company (FASC), an affiliate of the
Adviser, provides certain support services to the Adviser. The fee for these
services is paid by the Adviser and not by the Fund.
The
address of the Adviser and FASC is 1001 Liberty Avenue, Pittsburgh, PA
15222-3779.
The
Adviser and
other advisory subsidiaries of Federated Hermes combined, advise approximately
102 registered investment companies spanning equity, fixed-income and money
market mutual funds and also manage a variety of other pooled investment
vehicles, private investment companies and customized separately managed
accounts (including non-U.S./offshore funds). Federated Hermes’ assets under
management totaled approximately $668.9 billion as of December 31, 2022.
Federated Hermes was established in 1955 as Federated Investors, Inc. and is one
of the largest investment managers in the United States with nearly 2,000
employees. Federated Hermes provides investment products to more than 11,000
investment professionals and institutions.
The
Adviser advises approximately 73 registered investment
companies and also manages sub-advised funds. The Adviser’s assets under
management totaled approximately $399.6 billion as of December 31,
2022.
ADVISORY
FEES
The
Fund’s investment advisory contract provides for payment to the Adviser of an
annual investment advisory fee of 0.20% of
the Fund’s average daily net assets. The Adviser may voluntarily waive a portion
of its fee or reimburse the Fund for certain operating expenses. The Adviser and
its affiliates have also agreed to certain “Fee Limits” as described in the
footnote to the “Risk/Return Summary: Fees and Expenses” table found in the
“Fund Summary” section of the Prospectus.
A
discussion of the Board’s review of the Fund’s investment advisory contract is
available in the Fund’s Annual and
Semi-Annual
Shareholder
Reports for the periods ended May 31 and November 30, respectively.
Financial
Information
FINANCIAL
HIGHLIGHTS
The
Financial Highlights will help you understand the Fund’s financial performance
for its past five fiscal years. Some of the
information is presented on a per Share basis. Total returns represent the rate
an investor would have earned (or lost) on an investment in the Fund, assuming
reinvestment of any dividends and capital gains.
This
information has been audited by KPMG LLP, an independent registered public
accounting firm, whose report, along with
the Fund’s audited financial statements, is included in the Annual
Report.
22
Financial
Highlights–Wealth
Shares
(For a Share
Outstanding Throughout Each Period)
|
|
Year
Ended May 31, |
Period
Ended
5/31/20191 |
Year
Ended
7/31/2018 | |||
|
|
2023 |
2022 |
2021 |
2020 | ||
|
Net
Asset Value, Beginning of Period |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
|
Income
From Investment Operations: |
|
|
|
|
|
|
|
Net
investment income |
0.023 |
0.001 |
0.001 |
0.012 |
0.0132 |
0.011 |
|
Net
realized gain (loss) |
0.0003 |
0.0003 |
0.0003 |
0.001 |
0.0003 |
0.0003 |
|
Total
From Investment
Operations |
0.023 |
0.001 |
0.001 |
0.013 |
0.013 |
0.011 |
|
Less
Distributions: |
|
|
|
|
|
|
|
Distributions
from net investment income |
(0.023) |
(0.001) |
(0.001) |
(0.013) |
(0.013) |
(0.011) |
|
Distributions
from net realized gain |
(0.000)3 |
(0.000)3 |
(0.000)3 |
(0.000)3 |
(0.000)3 |
(0.000)3 |
|
Total
Distributions |
(0.023) |
(0.001) |
(0.001) |
(0.013) |
(0.013) |
(0.011) |
|
Net
Asset Value, End of Period |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
$1.00 |
|
Total
Return4 |
2.34% |
0.12% |
0.13% |
1.27% |
1.27% |
1.12% |
|
Ratios
to Average Net Assets: |
|
|
|
|
|
|
|
Net
expenses5 |
0.21% |
0.19% |
0.21% |
0.21% |
0.21%6 |
0.21% |
|
Net
investment income |
2.38% |
0.13% |
0.12% |
1.24% |
1.52%6 |
1.10% |
|
Expense
waiver/reimbursement7 |
0.09% |
0.11% |
0.09% |
0.09% |
0.09%6 |
0.10% |
|
Supplemental
Data: |
|
|
|
|
|
|
|
Net
assets, end of period (000 omitted) |
$2,371,755 |
$1,772,201 |
$1,372,803 |
$1,510,434 |
$1,713,390 |
$1,163,568 |
|
1 |
The
Fund has changed its fiscal year end from July 31 to May 31. This period
represents the ten-month period from August 1, 2018 to May 31,
2019. |
|
2 |
Per
share number has been calculated using the average shares
method. |
|
3 |
Represents
less than $0.001. |
|
4 |
Based
on net asset value. Total returns for periods of less than one year are
not annualized. |
|
5 |
Amount
does not reflect net expenses incurred by investment companies in which
the Fund may invest. |
|
6 |
Computed
on an annualized basis. |
|
7 |
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. |
Further information
about the Fund’s performance is contained in the Fund’s Annual Report, dated May
31, 2023, which can be obtained free of charge.
23
Appendix
A: Hypothetical Investment and Expense Information
The
following chart provides additional hypothetical information about the effect of
the Fund’s expenses, including investment advisory fees
and other Fund costs, on the Fund’s assumed returns over a 10-year period. The
chart shows the estimated expenses that would be incurred in respect of a
hypothetical investment of $10,000, assuming a 5% return each year, and no
redemption of Shares. The chart also assumes that the Fund’s annual expense
ratio stays the same throughout the 10-year period and that all dividends and
distributions are reinvested. The annual expense ratio used in the chart is the
same as stated in the “Fees and Expenses” table of this Prospectus (and thus
does not reflect any fee waiver or expense reimbursement currently in effect).
The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted
from the hypothetical initial investment of $10,000; the “Front-End Sales
Charge”) is reflected in the “Hypothetical Expenses” column. The hypothetical
investment information does not reflect the effect of charges (if any) normally
applicable to redemptions of Shares (e.g., deferred
sales charges, redemption fees). Mutual fund returns, as well as fees and
expenses, may fluctuate over time, and your actual investment returns and total
expenses may be higher or lower than those shown below.
|
FEDERATED
HERMES MUNICIPAL OBLIGATIONS FUND - WS CLASS |
| ||||
|
ANNUAL
EXPENSE RATIO: 0.30% |
| ||||
|
MAXIMUM
FRONT-END SALES CHARGE: NONE |
| ||||
|
Year |
Hypothetical
Beginning
Investment |
Hypothetical
Performance
Earnings |
Investment
After
Returns |
Hypothetical
Expenses |
Hypothetical
Ending
Investment |
|
1 |
$10,000.00 |
$500.00 |
$10,500.00 |
$30.71 |
$10,470.00 |
|
2 |
$10,470.00 |
$523.50 |
$10,993.50 |
$32.15 |
$10,962.09 |
|
3 |
$10,962.09 |
$548.10 |
$11,510.19 |
$33.66 |
$11,477.31 |
|
4 |
$11,477.31 |
$573.87 |
$12,051.18 |
$35.24 |
$12,016.74 |
|
5 |
$12,016.74 |
$600.84 |
$12,617.58 |
$36.90 |
$12,581.53 |
|
6 |
$12,581.53 |
$629.08 |
$13,210.61 |
$38.63 |
$13,172.86 |
|
7 |
$13,172.86 |
$658.64 |
$13,831.50 |
$40.45 |
$13,791.98 |
|
8 |
$13,791.98 |
$689.60 |
$14,481.58 |
$42.35 |
$14,440.20 |
|
9 |
$14,440.20 |
$722.01 |
$15,162.21 |
$44.34 |
$15,118.89 |
|
10 |
$15,118.89 |
$755.94 |
$15,874.83 |
$46.42 |
$15,829.48 |
|
Cumulative |
|
$6,201.58 |
|
$380.85 |
|
24
An SAI dated July 31,
2023, is incorporated by reference into this Prospectus. Additional information
about the Fund and its investments is contained in the Fund’s SAI and Annual and
Semi-Annual Reports to shareholders as they become available. The SAI contains a
description of the Fund’s policies and procedures with respect to the disclosure
of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual
Report and other information without charge, and to make inquiries, call your
financial intermediary or the Fund at 1-800-341-7400.
The Fund’s shareholder
reports will be made available on FederatedHermes.com/us/FundInformation, and
you will be notified and provided with a link each time a report is posted to
the website. You may request to receive paper reports from the Fund or from your
financial intermediary, free of charge, at any time. You may also request to
receive documents through e-delivery.
These documents, as well
as additional information about the Fund (including portfolio holdings,
performance and distributions), are also available on
FederatedHermes.com/us.
You can
obtain information about the Fund (including the SAI) by accessing Fund
information from the EDGAR Database on the SEC’s website at sec.gov. You can
purchase copies of this information by contacting the SEC by email at
[email protected].
Federated Hermes
Municipal Obligations Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at
FederatedHermes.com/us
or call 1-800-341-7400.
or call 1-800-341-7400.
Federated Securities
Corp., Distributor
Investment
Company Act File No. 811-5950
CUSIP
60934N658
32786
(7/23)
© 2023 Federated Hermes,
Inc.