Federated Hermes Total Return Bond Fund Class R Shares (FTRKX)

Overview

The fund specializes in investments across a diverse range of fixed-income securities that primarily focus on generating returns through U.S. dollar denominated, investment-grade assets. It aims to achieve its investment objective by meticulously selecting fixed-income securities that promise reliable returns, supported by strong credit ratings. Strategically, the fund diversifies its portfolio by incorporating high-yield, non-U.S. dollar denominated, and emerging market fixed-income securities. This approach is designed to balance risk and optimize the potential for profit across varying market conditions and geographic locations. The fund adheres to certain limitations to manage exposure and risk, ensuring that investments in non-U.S. dollar denominated securities and foreign currencies remain within predefined thresholds relative to its total assets.

Products and Services

• Investment-Grade Fixed-Income Securities

  The cornerstone of the fund's investment strategy focuses on securities that are denominated in U.S. dollars and have been classified as investment-grade. These securities are selected based on their creditworthiness, aiming to provide stable and reliable returns. The emphasis on investment-grade assets caters to conservative investors seeking lower-risk income streams.

• High-Yield Fixed-Income Securities

  To enhance portfolio returns, the fund also allocates a portion of its investments to high-yield, fixed-income securities. These are typically associated with higher risk compared to investment-grade securities but offer the potential for higher returns. This strategy aims to balance the overall risk-return profile of the fund, appealing to investors looking for growth in addition to income.

• Non-U.S. Dollar Denominated and Emerging Market Securities

  As part of its diversification strategy, the fund invests in non-U.S. dollar denominated and emerging market fixed-income securities. These investments allow the fund to capture growth in dynamic and developing markets outside the United States. Though limited to a maximum of 20% of the fund’s total assets, this component of the portfolio introduces opportunities for currency and geographical diversification.

• Currency and Geographical Diversification Limits

  The fund implements strict limits to manage the level of risk associated with non-U.S. dollar denominated investments and foreign currencies. Unhedged foreign exposure normally does not exceed 10% of the fund's total assets, with an absolute cap at 20% to mitigate potential currency risks and ensure the stability of the fund's portfolio.