Federated Hermes ETF Trust (FLCG)

ETF Federated Hermes ETF Trust: A Summary

Profile: Federated Hermes ETF Trust is a family of actively managed ETFs spanning various asset classes and investment strategies. The Trust's key focus areas include equity, fixed income, alternatives, and multi-asset solutions. Its diverse range of ETFs caters to investors with different risk appetites and investment goals.

Objective: The primary objective of the ETF Federated Hermes ETF Trust is to provide investors with long-term capital appreciation and/or income generation through actively managed strategies. Each individual ETF within the Trust has its own specific objectives, aligned with its target asset class and investment approach.

Issuer: The issuer of ETF Federated Hermes ETF Trust is Federated Hermes, Inc.

• Reputation and Reliability: Federated Hermes is a reputable asset manager with over 60 years of experience in the financial services industry. The firm is known for its strong ethical and sustainable investing principles.
• Management: The ETF Trust is managed by experienced investment professionals with deep expertise in their respective asset classes and investment strategies.

Market Share: Federated Hermes ETF Trust holds a relatively small market share in the overall ETF industry. However, it has a strong presence in specific niches, such as sustainable investing and actively managed fixed income strategies.

Total Net Assets: As of October 26, 2023, the total net assets under management for the ETF Federated Hermes ETF Trust are approximately $25 billion.

Moat: The ETF Trust's competitive advantages include:

• Actively managed strategies: The Trust utilizes experienced portfolio managers who actively manage the underlying investments, aiming to outperform their respective benchmarks.
• Strong ESG focus: Many of the Trust's ETFs incorporate environmental, social, and governance (ESG) factors into their investment selection process.
• Diverse product offerings: The Trust offers a wide range of ETFs across different asset classes and strategies, catering to various investor needs.

Financial Performance: The financial performance of individual ETFs within the Trust varies based on their investment objectives and strategies. Some ETFs have outperformed their benchmarks, while others have lagged. It's crucial to analyze the performance of each specific ETF before making an investment decision.

Benchmark Comparison: Comparing the performance of individual ETFs within the Trust to their respective benchmarks is essential to assess their effectiveness. Investors should analyze the tracking error, Sharpe ratio, and other relevant metrics to determine whether the ETF is adding value compared to its benchmark.

Growth Trajectory: The growth trajectory of the ETF Federated Hermes ETF Trust depends on several factors, including market conditions, investor demand for actively managed strategies, and the performance of individual ETFs. The Trust has experienced steady growth in recent years, but its future growth trajectory is uncertain.

Liquidity:

• Average Trading Volume: The average daily trading volume for individual ETFs within the Trust varies. Some ETFs have high trading volumes, while others have lower liquidity. Investors should consider the trading volume before investing in an ETF to ensure they can buy and sell their shares easily.
• Bid-Ask Spread: The bid-ask spread for individual ETFs within the Trust also varies. Investors should consider the bid-ask spread when buying or selling shares, as it impacts the overall transaction cost.

Market Dynamics: Several factors affect the market environment for the ETF Federated Hermes ETF Trust, including:

• Economic indicators: Strong economic growth typically benefits actively managed strategies, while weak economic conditions may lead to underperformance.
• Sector growth prospects: The performance of individual ETFs within the Trust is also influenced by the growth prospects of their underlying sectors.
• Current market conditions: Market volatility and investor sentiment can impact the demand for actively managed strategies.

Competitors: Key competitors of the ETF Federated Hermes ETF Trust include:

• BlackRock (BLK)
• Vanguard (VOO)
• State Street Global Advisors (STT)
• iShares (IVV)

Expense Ratio: The expense ratios for individual ETFs within the Trust vary depending on the underlying asset class and strategy. Investors should consider the expense ratio when evaluating the overall cost of investing in an ETF.

Investment Approach and Strategy: The investment approach and strategy of individual ETFs within the Trust vary. Some ETFs aim to track a specific index, while others employ active management strategies to outperform their benchmarks. The specific assets held by each ETF also differ based on its investment objective and strategy.

Key Points:

• The ETF Federated Hermes ETF Trust offers a diverse range of actively managed ETFs across various asset classes and investment strategies.
• The Trust is managed by experienced investment professionals with a strong focus on ESG investing.
• Investors should carefully evaluate the financial performance and benchmark comparison of each individual ETF before investing.
• The Trust's future growth trajectory depends on several factors, including market conditions and investor demand.

Risks: The main risks associated with the ETF Federated Hermes ETF Trust include:

• Volatility: Actively managed ETFs can experience higher volatility compared to passively managed index-tracking ETFs.
• Market risk: The performance of individual ETFs is influenced by the performance of their underlying assets.
• Management risk: The success of the ETFs depends on the skill and experience of the portfolio managers.

Who Should Consider Investing: Investors who are looking for actively managed strategies with a strong ESG focus may consider investing in the ETF Federated Hermes ETF Trust. Investors should have a moderate to high risk tolerance and a long-term investment horizon.

Evaluation of ETF Federated Hermes ETF Trust's fundamentals using an AI-based rating system on a scale of 1 to 10, titled 'Fundamental Rating Based on AI':

Fundamental Rating Based on AI: 7

The ETF Federated Hermes ETF Trust receives a rating of 7 based on an AI-based analysis of its fundamentals. The Trust benefits from a strong reputation, experienced management, and a diverse range of actively managed strategies. However, its relatively small market share and the uncertainty surrounding its future growth trajectory limit its overall score.

Resources and Disclaimers:

• Federated Hermes ETF Trust website: https://www.federatedhermes.com/etfs
• Morningstar ETF reports for individual ETFs within the Trust
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their research and consult with a financial professional before making any investment decisions.