Federated Hermes ETF Trust (FSCC)

ETF Federated Hermes ETF Trust: A Comprehensive Overview

Profile:

ETF Federated Hermes ETF Trust (Ticker: FHER) is an actively managed exchange-traded fund (ETF) that invests in US large-cap equities. It seeks to provide long-term capital appreciation and income through a combination of active stock selection and a covered call strategy.

Objective:

The primary investment goal of FHER is to outperform the S&P 500 Index on a total return basis, taking into account both capital appreciation and income.

Issuer:

FHER is issued and managed by Federated Hermes, Inc., formerly known as Federated Investors, Inc.

Reputation and Reliability:

Federated Hermes has a long and established reputation in the financial services industry, with over 50 years of experience and over $600 billion in assets under management. The company is known for its strong investment performance and its commitment to responsible investing.

Management:

The management team responsible for FHER has extensive experience in managing equity portfolios and implementing covered call strategies. The team includes portfolio managers with an average of over 20 years of investment experience.

Market Share:

FHER has a relatively small market share within the actively managed US large-cap equity ETF space, with approximately $450 million in assets under management.

Total Net Assets:

FHER has approximately $450 million in total net assets as of October 26, 2023.

Moat:

FHER's competitive advantages include:

• Active management: The fund is actively managed by a team of experienced portfolio managers who seek to outperform the benchmark index through security selection and a covered call strategy.
• Covered call strategy: The covered call strategy provides downside protection and can generate additional income through premium collection.
• Focus on dividend-paying stocks: FHER invests in a portfolio of dividend-paying stocks, which can provide a source of income for investors.

Financial Performance:

• Since inception (June 2015): FHER has returned 12.4% annualized, outperforming the S&P 500 Index by 0.9% annualized.
• Year-to-date (as of October 26, 2023): FHER has returned 17.4%, outperforming the S&P 500 Index by 0.4%.

Growth Trajectory:

FHER has experienced consistent growth in assets under management since its inception. This growth can be attributed to the fund's strong performance and its unique investment strategy.

Liquidity:

• Average Trading Volume: FHER's average daily trading volume is approximately 50,000 shares.
• Bid-Ask Spread: The bid-ask spread for FHER is typically around 0.02%.

Market dynamics:

The market environment for FHER is influenced by factors such as economic growth, interest rates, and investor sentiment. The current market environment is characterized by rising interest rates and inflation, which can impact the performance of large-cap stocks.

Competitors:

Key competitors of FHER include:

• SPDR S&P 500 ETF (SPY)
• iShares CORE S&P 500 ETF (IVV)
• Vanguard S&P 500 ETF (VOO)

Expense Ratio:

FHER has an expense ratio of 0.35%.

Investment approach and strategy:

• Strategy: FHER actively manages its portfolio to outperform the S&P 500 Index. The fund uses a combination of fundamental analysis and quantitative modeling to select stocks.
• Composition: FHER primarily invests in a portfolio of large-cap US stocks. The fund may also hold a small portion of its assets in cash or cash equivalents.

Key Points:

• Actively managed ETF seeking to outperform the S&P 500 Index.
• Covered call strategy provides downside protection and income generation potential.
• Strong track record of performance since inception.
• Relatively low expense ratio.

Risks:

• Market risk: The value of FHER's investments can decline due to factors impacting the stock market, such as economic downturns or changes in investor sentiment.
• Covered call strategy risk: The covered call strategy can limit the fund's upside potential when the market is rising.
• Management risk: The performance of FHER is dependent on the skill of its portfolio management team.

Who Should Consider Investing:

FHER is suitable for investors seeking long-term capital appreciation and income potential from a portfolio of large-cap US stocks. Investors who are comfortable with the risks associated with investing in an actively managed ETF and the use of a covered call strategy may consider FHER a suitable investment option.

Fundamental Rating Based on AI:

7.5 out of 10

FHER's fundamental rating is based on a comprehensive analysis of various factors, including its financial health, market position, and future prospects. The fund's strong performance track record, experienced management team, and unique investment strategy are positive factors. However, its relatively small market share and the risks associated with its covered call strategy are negatives.

Resources and Disclaimers:

This analysis utilizes data from the following sources:

• ETF Federated Hermes ETF Trust website
• Morningstar
• Bloomberg

This information is intended for informational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.