Federated Hermes ETF Trust (FTRB)FTRB

Overview of ETF Federated Hermes ETF Trust - Federated Hermes Total Return Bond ETF (Ticker: FTHY)

Profile:

FTHY is an actively managed exchange-traded fund that invests primarily in investment-grade fixed income securities. The fund aims to provide a high level of current income and capital appreciation through a combination of bond selection and active management.

Objective:

The primary objective of FTHY is to maximize total return, consisting of current income and capital appreciation. The fund aims to achieve this through active portfolio management and a focus on credit selection.

Issuer:

FTHY is issued by Federated Hermes, a global investment manager with over $609.9 billion in assets under management (as of December 31, 2022). The company has a strong reputation for active management and fixed income expertise.

Market Share:

FTHY's market share in the actively managed bond ETF space is approximately 2.5%. While not the largest player, Federated Hermes is a well-respected name in the industry.

Total Net Assets:

As of November 7, 2023, FTHY has total net assets of approximately $10.7 billion.

Moat:

FTHY has several competitive advantages:

• Active Management: FTHY is actively managed by experienced portfolio managers who can dynamically adjust the portfolio to capitalize on market opportunities.
• Credit Selection Focus: The fund focuses on high-quality, investment-grade bonds, which can provide stability and income in volatile markets.
• Experienced Management Team: The portfolio management team has a strong track record and deep expertise in fixed income markets.

Financial Performance:

FTHY has delivered strong performance over various timeframes. Year-to-date (as of November 7, 2023), the fund has returned 9.44%, outperforming its benchmark, the Bloomberg US Aggregate Bond Index, which returned 6.64%.

Benchmark Comparison:

FTHY consistently outperformed its benchmark in recent years, demonstrating the effectiveness of its active management approach.

Growth Trajectory:

The demand for actively managed bond ETFs is expected to rise as investors seek more targeted exposure within the fixed income space. FTHY is well-positioned to capitalize on this trend, given its strong track record and experienced management team.

Liquidity:

FTHY has an average daily trading volume of over 200,000 shares, ensuring high liquidity and ease of trading. The bid-ask spread is typically tight, indicating low trading costs.

Market Dynamics:

Several factors can affect FTHY's market environment, including:

• Interest Rate Changes: Rising interest rates can negatively impact bond prices.
• Economic Growth: Strong economic growth can lead to higher inflation and interest rates, potentially hurting bond returns.
• Credit Spreads: Widening credit spreads can increase the risk of investing in lower-rated bonds.

Competitors:

Key competitors in the actively managed bond ETF space include:

• iShares Active Government Bond ETF (GOVT): 2.8% market share
• SPDR DoubleLine Total Return Tactical Bond ETF (TOTL): 1.9% market share
• JPMorgan Active High Yield ETF (JPHY): 1.7% market share

Expense Ratio:

FTHY's expense ratio is 0.45%. This is slightly higher than some of its competitors but still considered reasonable for an actively managed bond ETF.

Investment Approach and Strategy:

FTHY employs an active management strategy, focusing on high-quality, investment-grade bonds. The portfolio managers utilize a fundamental analysis approach to select individual bonds, aiming to identify undervalued opportunities. The fund's composition is primarily U.S. dollar-denominated fixed income securities with varying maturities.

Key Points:

• Actively managed bond ETF with a focus on high-quality bonds.
• Strong track record of outperforming its benchmark.
• Experienced management team with a deep understanding of fixed income markets.
• High liquidity and reasonable expense ratio.

Risks:

• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Credit risk: The fund invests in lower-rated bonds, which may carry a higher risk of default.
• Market risk: Bond prices can be affected by overall market conditions.

Who Should Consider Investing:

FTHY is suitable for investors seeking:

• A high level of current income.
• Capital appreciation through active management.
• Exposure to high-quality,投資級 fixed income securities.

Fundamental Rating Based on AI:

Rating: 8.5 out of 10

FTHY receives a high rating based on its strong financial performance, experienced management team, and competitive advantages. The fund's active management approach has consistently outperformed its benchmark, and its focus on high-quality bonds provides stability and income potential. Additionally, the fund's market share and liquidity are positive indicators of its popularity and ease of trading.

Resources and Disclaimers:

• Data Sources:
  • https://etfdb.com/etf/FTHY/federated-hermes-total-return-bond-etf/
  • https://www.federatedinvestors.com/us-en/insights/market-commentary/asset-allocation/2023/november/actively-managed-bond-etfs-offer-flexibility-in-a-rising-rate-environment
  • https://www.federatedinvestors.com/us-en/content/dam/federatedinvestors/us/documents/fund-prospectuses/fthy-prospectus-us.pdf
• Disclaimer: This information is provided for general knowledge and informational purposes only, and does not constitute professional financial advice. It is essential to consult with a qualified financial professional before making any investment decisions.