Federated Hermes Total Return Bond Fund Class A (TLRAX)

Overview

The fund is primarily focused on investments in investment-grade, fixed-income securities denominated in U.S. dollars. Its investment strategy is designed to balance risk and return by diversifying its portfolio across various types of fixed-income securities. While the core of its investments are in safer, investment-grade options, the fund also explores opportunities in high-yield, non-U.S. dollar denominated, and emerging market fixed-income securities to potentially enhance returns. However, it maintains a disciplined approach by limiting exposure to unhedged non-U.S. dollar denominated fixed-income securities and foreign currencies to protect against undue risk.

Products and Services

• Investment-Grade Fixed-Income Securities

  The fund invests primarily in U.S. dollar denominated, investment-grade fixed-income securities. These securities are considered lower risk and are chosen for their potential to provide steady income, making them the foundation of the fund’s investment strategy.

• High-Yield Fixed-Income Securities

  In addition to safer, investment-grade securities, the fund diversifies by investing in high-yield fixed-income securities. These are riskier investments with the potential for higher returns, carefully selected to balance the overall risk of the portfolio.

• Non-U.S. Dollar Denominated Fixed-Income Securities

  The fund also allocates a portion of its portfolio to non-U.S. dollar denominated fixed-income securities. This diversification allows the fund to take advantage of global fixed-income markets, within the specified limits to manage exposure to currency risk.

• Emerging Market Fixed-Income Securities

  Emerging market fixed-income securities are another component of the fund’s investment strategy. Although these are considered riskier due to the economic and political uncertainties of emerging markets, they offer potential for higher returns, contributing to the fund's diversified investment approach.

• Risk Management

  The fund's investment strategy includes strict limits on exposure to non-U.S. dollar denominated fixed-income securities and foreign currencies to manage risk effectively. The portfolio normally does not exceed 10% in unhedged non-U.S. dollar positions, with an absolute maximum of 20% to safeguard against adverse currency movements.