Federated Hermes launches active ETF targeting high monthly distributions
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Federated Hermes Enhanced Income ETF leverages experience of tenured investment teams -
Federated Hermes strategically expands ETF lineup to meet client interests and objectives in a wide range of market conditions
Designed to help meet the needs of investors seeking a relatively consistent monthly cash flow and a disciplined approach to managing risk, Federated Hermes Enhanced Income ETF may be a compelling option for income-oriented investors, particularly those in or near retirement, with appropriate risk tolerance. It seeks to deliver high current income with a secondary objective of capital appreciation, pursuing its investment objective by investing primarily in high-dividend-paying common stocks with dividend growth potential along with an options overlay strategy.
"Combining a high-quality-dividend portfolio with an actively managed options overlay, Federated Hermes Enhanced Income ETF can serve multiple roles in a portfolio," said
The portfolio managers represent two of
"As interest in ETFs continues to grow, we are dedicated to meeting investor demand by offering ETF versions of our flagship strategies," said
As of
- MDT Market Neutral ETF (NYSE: MKTN)
- MDT Large Cap Core ETF (NYSE: FLCC)
- MDT Large Cap Growth ETF (NYSE: FLCG)
- MDT Large Cap Value ETF (NYSE: FLCV)
- MDT Small Cap Core ETF (NYSE: FSCC)
- Short Duration Corporate ETF (NYSE: FCSH)
- Short Duration High Yield ETD (NYSE: FHYS)
- Total Return Bond ETF (NYSE: FTRB)
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U.S. Strategic Dividend ETF (NYSE: FDV)
Investors should carefully consider the ETF's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us at 1-800-341-7400 or visit FederatedHermes.com/us. Please carefully read the summary prospectus or the prospectus before investing.
ETFs are subject to risks and fluctuate in value.
Diversification does not assure a profit nor protect against loss
There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience the same capital appreciation potential as non-dividend-paying stocks.
The value of equity securities in the fund's portfolio will fluctuate and, as a result, the fund's share price may decline. Equity securities may decline in value because of an increase in interest rates or changes in the stock market.
The fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments.
The fund is a new fund that recently commenced operations. New funds have limited operating histories for investors to evaluate and new funds may not attract sufficient assets to achieve investment and trading efficiencies.
While stocks have higher return potential, they may be more volatile than bonds.
Writing option contracts can result in losses that exceed the seller's initial premium collected and may lead to additional turnover and higher tax liability.
ETFs are generally more tax efficient than traditional mutual funds due to their structure. When investors redeem shares, ETFs can do so in-kind, meaning they exchange shares for underlying assets without triggering capital gains taxes for remaining investors. ETFs often distribute fewer capital gains to investors compared to mutual funds, leading to lower tax liabilities.
As part of the fund's investment objective, the fund seeks to distribute current monthly income. As a result of market, interest rate and other circumstances, the amounts of such distributions may vary widely from month to month and in some months no distribution may be paid at all. There is no assurance that the fund will make a distribution in any given month. Distributions in excess of the fund's current and accumulated earnings and profits will be treated as a return of capital and a significant portion of the fund's distributions at any point in time may consist of return of capital. A return of capital distribution generally will not be taxable currently but will reduce the shareholder's cost basis and will result in a higher capital gain or lower capital loss when those fund shares on which the distribution was received are sold.
ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. NAVs are calculated using prices as of the end of regular trading on the
Federated Securities Corp.is Distributor of the Federated Hermes Funds.
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