Federated Hermes: Stay tuned, stay nimble

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or industry.

Bloomberg Aggregate Bond Index: An unmanaged index comprised of securities from the Bloomberg Government/Corporate Bond Index, Mortgage-Backed Securities Index and Asset-Backed Securities Index. Total return includes price appreciation/depreciation and income as a percentage of the initial investment. Indices are rebalanced monthly by market capitalization. Indices are unmanaged and investments cannot be made in an index.

Bond credit ratings measure the risk that a security will default. Credit ratings of A or better are considered high credit quality; credit ratings of BBB are investment grade and the lowest investment grade category; credit ratings of BB and lower correspond to lower rated securities; and credit ratings of CCC or lower present a high risk of default.

Bond prices are sensitive to changes in interest rates, and a rise in interest rates may cause their prices to fall.

Bloomberg’s Evaluated Pricing Product (BVAL) provides returns across more than 600 corporate and government sectors, including AAA-rated municipal bonds.

Consumer Price Index (CPI): A measure of inflation at the retail level.

Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.

Gross Domestic Product (GDP) is a broad measure of the economy that measures the retail value of goods and services produced in a country.

High yielding, lower rated securities generally carry greater market, credit/default and liquidity risk and may be more volatile than higher quality securities. For example, their prices are more volatile, economic downturns and financial setbacks may affect their prices more negatively, and their trading market may be more limited.

Income may be subject to federal alternative minimum tax and state and local taxes.

International investing involves special risks, including currency risk, increased volatility, political risks and differences in auditing and other financial standards. The prices of securities in emerging markets and frontier markets can be significantly more volatile than the prices of securities in developed countries, and currency and political risks are heightened in emerging markets.

Municipal Bond Index (formerly /Investortools Municipal Bond Index): is a broad, comprehensive, market value-weighted index comprised of approximately 55,000 bond issues exempt from federal income tax or subject to alternative minimum tax (AMT).

The value of certain asset-backed securities may be particularly sensitive to changes in prevailing interest rates, and although the securities are generally backed by some form of government or private guarantee and/or insurance, there is no guarantee that the guarantors or private insurers will respect their obligations.

The value of certain mortgage-backed securities may be particularly sensitive to changes in prevailing interest rates, and although the securities are generally backed by some form of public or private insurance, there can be no assurance that the guarantors or insurers private sector will respect their obligations.

Yield curve: graph showing the comparative yields of securities of a particular class according to their maturity. Securities at the long end of the yield curve have longer maturities.

Yield to Maturity (YTM) is used to determine the rate of return an investor would receive if a long-term interest-bearing investment, such as a bond, were held to its maturity date. It takes into account the purchase price, the redemption value, the time to maturity, the coupon yield and the time between interest payments.

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