ETF Evaluator:
Federated Hermes Enhanced Income ETF ()
Follow This ETF
(as of Aug 26)
Best Performing in Derivative Income Over the Last Year
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ETF Details
Federated Hermes Enhanced Income ETF Overview
Federated Hermes Enhanced Income ETF (PAYR) is an actively managed Nontraditional Equity Derivative Income exchange-traded fund (ETF). Federated launched the ETF in 2025.
The investment seeks high current income with a secondary objective of capital appreciation.
The fund manager pursues its investment objective by investing primarily in high dividend-paying common stocks with dividend growth potential along with an options overlay strategy. The fund generally invests in high dividend-paying large-cap or mid-cap stocks of U.S. issuers, and may also hold foreign stocks, including depositary receipts.
About Federated Hermes Enhanced Income ETF (PAYR)
There are 6 members of the management team with an average tenure of 0.81 years: Daniel Peris (2025), Deborah Bickerstaff (2025), Jared Hoff (2025), Damian McIntyre (2025), Dana Meissner (2025) and Michael Tucker (2025). Management tenure is more important for actively managed ETFs than passive index ETFs.
Federated Hermes Enhanced Income ETF has 55 securities in its portfolio. The top 10 holdings constitute 32.8% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.
Federated Hermes Enhanced Income ETF is part of the Equity global asset class and is within the Nontraditional Equity ETF group. Federated Hermes Enhanced Income ETF has 22.3% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 73.2% There is 22.3% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Federated Hermes Enhanced Income ETF has 4.5% of the portfolio in cash.
Assets Under Management
The fund has $57 million in total assets, which is below the $727 million average for the Derivative Income category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.
PAYR Performance and Fees
The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Federated Hermes Enhanced Income ETF expense ratio is average compared to funds in the Derivative Income category. Federated Hermes Enhanced Income ETF has an expense ratio of 0.40%, which is 52% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.
High portfolio turnover can translate to higher expenses and lower aftertax returns. Federated Hermes Enhanced Income ETF has a portfolio turnover rate of 0%, which indicates that it holds its assets around /years. By way of comparison, the average portfolio turnover is 69% for the Derivative Income category.
Recently, in the month of July 2026, Federated Hermes Enhanced Income ETF returned 4.7%, which earned it a grade of A, as the Derivative Income category had an average return of -1.5%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.
Federated Hermes Enhanced Income ETF has a trailing yield of 0.00%, which is below the 19.96% category average.
The fund normally distributes its income monthly and its capital gains annually.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
Federated Hermes Enhanced Income ETF Grades
Year to date, the ETF has returned 15.5%, 12.9 percentage points better than the category, which translates into a grade of A.
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PAYR Trailing NAV Total Returns Data as of 7/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| PAYR Return (NAV) | 4.7% | 4.9% | na | na | na | na |
| PAYR Return (Price) | 4.2% | 5.5% | na | na | na | na |
| NAV +/- Price Return | 0.480% | -0.531% | na | na | na | na |
| Derivative Income Avg | -1.5% | 0.6% | 11.2% | 13.7% | 8.8% | 7.5% |
| PAYR Grade (NAV) | A | B | na | na | na | na |
| +/- Category (NAV) | 6.3% | 4.3% | na | na | na | na |
| PAYR Tax-Cost Ratio | na | na | na | na | na | na |
PAYR Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| PAYR Return (NAV) | 15.5% | na | na | na | na | na | na | na | na | na | na |
| PAYR Return (Price) | 15.4% | na | na | na | na | na | na | na | na | na | na |
| NAV +/- Price Ret | -0.006% | na | na | na | na | na | na | na | na | na | na |
| Derivative Income Avg | 2.6% | 10.6% | 18.5% | 17.5% | -11.3% | 19.4% | 1.4% | 19.2% | -7.1% | 12.1% | 8.7% |
| PAYR Grade (NAV) | A | na | na | na | na | na | na | na | na | na | na |
| +/- Category | 12.9% | na | na | na | na | na | na | na | na | na | na |
| Risk Measures | |
| Beta: | na |
| R-Squared: | na |
| Standard Deviation: | na |
| Category Risk Index: | na |
| Category Risk Rating: | |
| Total Risk Index: | na |
| Total Risk Rating: | |
| Portfolio Characteristics | |
| Yield: | -- |
| Total Assets: | $ 57 Mil |
| Share Class Assets: | $ 57 Mil |
| Turnover: | 0.0% |
| Expense Ratio: | 0.40% |
| Index Fund: | No |
| Index Tracked: | N/A |
| Index Weighting: | 100% |
| Leveraged: | No |
| Socially Responsible Fund: | No |
| Capital Gains Distribution Frequency: | Annually |
| Income Distribution Frequency: | Monthly |
Management Team
| Number of Managers: 6 | |||
| Longest Tenure: 0.8 years | |||
| Average Tenure: 0.8 years | |||
| Managers (Year): Peris Daniel (2025), Bickerstaff Deborah (2025), Hoff Jared (2025), McIntyre Damian (2025), Meissner Dana (2025), Tucker Michael (2025) | |||
Portfolio Composition (as of 7/31/26)
| # of Holdings: | 55 |
| % in Top 10 Holdings: | 32.8% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 22.3% |
Portfolio Allocation |
|
| Domestic Stock: | 73.2% |
| Foreign Stock: | 22.3% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 0.0% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 4.5% |
Purchase Information
| Legal Structure: | Open Ended Investment Company |
| Fund Family: | Federated |
| Phone Number: | 800-341-7400 |
| Website: | |
| Inception Date: | October 7, 2025 |
Expenses and Fees
| Expense Ratio (%): | 0.40% (Rating: Avg) |
| Category Average Expense Ratio (%): | 0.83% |
