Fund Evaluator:
Federated Hermes Adj Rate IS (FEUNX)
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Best Performing in Short Government Over the Last Year
| 2.5% | Vanguard ST Govt Securities Active Adm (VSGDX) |
| 2.4% | Vanguard Short-Term Treasury Idx Admiral (VSBSX) |
| 2.4% | Vanguard ST Govt Securities Active Inv (VSGBX) |
| 2.2% | Vanguard Short-Term Treasury Adm (VFIRX) |
| 2.1% | Vanguard Short-Term Treasury Inv (VFISX) |
Fund Details
Federated Hermes Adj Rate IS Overview
Federated Hermes Adj Rate IS (FEUNX) is an actively managed Taxable Bond Short Government fund. Federated launched the fund in 2019.
The investment seeks to provide current income consistent with minimal volatility of principal. The fund invests at least 65% of the value of its total assets in a professionally managed portfolio of U.S. government securities consisting primarily of adjustable and floating rate mortgage securities which are issued or guaranteed by the U.S. government, its agencies or instrumentalities. It may also invest up to 20% of its assets in fixed-rate, mortgage-backed securities and other fixed-rate securities.
About Federated Hermes Adj Rate IS (FEUNX)
There are 2 members of the management team with an average tenure of 4.63 years: Liam O'Connell (2017), J. Andrew Kirschler (2026). Management tenure is more important for actively managed funds than passive index funds.
The fund has 2 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 100% and ICE BofA 1-Y US Trsy Note TR USD index with a weighting of 100%. Federated Hermes Adj Rate IS has 224 securities in its portfolio. The top 10 holdings constitute 26.5% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.
Federated Hermes Adj Rate IS is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Federated Hermes Adj Rate IS has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0%. There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 96.2% (96.2% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Federated Hermes Adj Rate IS has 3.8% of the portfolio in cash.
Assets Under Management
The fund has $356 million in total assets, which is below the $448 million average for the Short Government 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.
FEUNX 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 Adj Rate IS expense ratio is below average compared to funds in the Short Government category. Federated Hermes Adj Rate IS has an expense ratio of 0.31%, which is 52% lower than its category average, making the fund expense ratio grade a B. 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 Adj Rate IS has a portfolio turnover rate of 44%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 220% for the Short Government category.
Recently, in the month of August 2026, Federated Hermes Adj Rate IS returned 0.3%, which earned it a grade of A, as the Short Government category had an average return of 0.2%. 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 funds in that category.
Federated Hermes Adj Rate IS has a trailing yield of 4.41%, which is above the 3.86% category average. The fund normally distributes its income monthly.
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 Adj Rate IS Grades
Year to date, the fund has returned 2.7%, 1.9 percentage points better than the category, which translates into a grade of A. The fund has returned 4.6% over the past year (grade of A), 5.7% over the past three years (grade of A) and 3.5% per year over the past five years (grade of A) and 2.4% per year over the past 10 years (grade of A).
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FEUNX Trailing NAV Total Returns Data as of 8/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| FEUNX Return (NAV) | 0.3% | 0.8% | 4.6% | 5.7% | 3.5% | 2.4% |
| FEUNX Grade | A | A | A | A | A | A |
| +/- Category | 0.1% | 0.6% | 2.4% | 1.5% | 1.9% | 0.9% |
| Short Government Avg | 0.2% | 0.2% | 2.2% | 4.2% | 1.6% | 1.5% |
| FEUNX Tax Cost Ratio | na | na | 1.8% | 2.0% | 1.6% | na |
FEUNX Annual NAV Total ReturnsData as of 8/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| FEUNX Return (NAV) | 2.7% | 5.5% | 6.0% | 5.3% | -1.6% | -0.1% | 1.2% | 2.6% | 1.7% | 0.7% | 0.3% |
| FEUNX Grade | A | B | A | A | A | A | F | D | A | B | F |
| +/- Category | 1.9% | 0.0% | 2.1% | 1.3% | 3.2% | 1.0% | -2.0% | -0.6% | 0.5% | 0.2% | -0.4% |
| Short Government Avg | 0.8% | 5.4% | 3.8% | 4.0% | -4.8% | -1.1% | 3.2% | 3.2% | 1.2% | 0.5% | 0.7% |
| Risk Measures | |
| Standard Deviation: | 1.1% |
| Total Risk Index: | 0.09 - Low |
| Category Risk Index: | 0.57 - Low |
| Category Risk Grade: | A (5% Rank) |
| Beta: | 0.18 |
| R-Squared: | 84% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | na |
| Bond Investment Style: | High Quality Limited Sensitivity |
| Yield: | 4.4% |
| Dividend Distribution: | Monthly |
| Cap Gains Distribution: | |
| Total Assets: | $489 Mil |
| Fund Total Assets: | $ 356 Mil |
| Share Class Type: | Inst |
| Portfolio Turnover: | 44% |
Management Team
| Number of Managers: 2 | |||
| Longest Tenure: 8.8 years | |||
| Average Tenure: 4.6 years | |||
| Managers (Year): O'Connell Liam (2017), Kirschler J. Andrew (2026) | |||
Portfolio Composition (as of 6/30/26)
| # of Holdings: | 224 |
| % in Top 10 Holdings: | 26.5% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 0.0% |
Portfolio Allocation |
|
| Domestic Stock: | 0.0% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 96.2% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 3.8% |
Purchase Information
| Fund Family: | Federated |
| Phone Number: | 800-341-7400 |
| Website: | www.federatedinvestors.com |
| Status: | Open |
| Inception Date: | August 5, 2019 |
| Min. Initial Purchase: | $1,000,000 |
| Min. Initial IRA Purchase: | $ 0 |
| True No-Load: | Yes |
| Front Load Maximum: | 0.00% |
| Deferred Charge Maximum: | 0.00% |
| Redemption Charge Maximum: | 0.00% |
| 12b-1 Fee: | na |
Expenses and Fees | |
| Expense Ratio (%): | 0.31% ( Rating : Below Avg ) |
| Category Average Expense Ratio (%): | 0.64% |
| Share Class: | Federated Hermes Adj Rate A |
| Min. Subsequent Purchase: | $ 0 |
| Min. Subsequent IRA Purchase: | $ 0 |
