Fund Evaluator:
Federated Hermes Government Income Svc (FITSX)
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Best Performing in Government Mortgage-Backed Bond Over the Last Year
| 4.4% | Fidelity Mortgage Securities (FMSFX) |
| 4.4% | Fidelity Advisor Mortgage Securities Z (FIKUX) |
| 4.3% | Fidelity GNMA (FGMNX) |
| 4.3% | Vanguard Mortgage-Backed Secs Idx Adm (VMBSX) |
| 4.2% | Vanguard GNMA Adm (VFIJX) |
Fund Details
Federated Hermes Government Income Svc Overview
Federated Hermes Government Income Svc (FITSX) is an actively managed Taxable Bond Government Mortgage-Backed Bond fund. Federated launched the fund in 1992.
The investment seeks current income. Under normal market conditions, the fund invests primarily in mortgage-backed securities (MBS) of investment-grade quality and seeks to provide returns consistent with investments in the market for U.S. home mortgages. It will invest in MBS that are issued or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises (GSEs). The fund also may invest in U.S. government securities and certain derivative instruments.
About Federated Hermes Government Income Svc (FITSX)
There are 2 members of the management team with an average tenure of 6.84 years: Liam O'Connell (2013), 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 Bloomberg US MBS TR USD index with a weighting of 100%. Federated Hermes Government Income Svc has 98 securities in its portfolio. The top 10 holdings constitute 30.8% 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 Government Income Svc is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Federated Hermes Government Income Svc 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 95.1% (95.1% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Federated Hermes Government Income Svc has 5.0% of the portfolio in cash.
Assets Under Management
The fund has $62 million in total assets, which is below the $337 million average for the Government Mortgage-Backed Bond 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.
FITSX 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 Government Income Svc expense ratio is high compared to funds in the Government Mortgage-Backed Bond category. Federated Hermes Government Income Svc has an expense ratio of 0.84%, which is 6% lower than its category average, making the fund expense ratio grade a D. 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 Government Income Svc has a portfolio turnover rate of 292%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 367% for the Government Mortgage-Backed Bond category.
Recently, in the month of July 2026, Federated Hermes Government Income Svc returned -1.3%, which earned it a grade of C, as the Government Mortgage-Backed Bond category had an average return of -1.2%. 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 Government Income Svc has a trailing yield of 3.62%, which is below the 3.87% 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 Government Income Svc Grades
Year to date, the fund has returned -0.6%, 0.2 percentage points worse than the category, which translates into a grade of C. The fund has returned 3.8% over the past year (grade of B), 3.5% over the past three years (grade of D) and -0.5% per year over the past five years (grade of F) and 0.6% per year over the past 10 years (grade of D).
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FITSX 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 |
|
| FITSX Return (NAV) | -1.3% | -1.1% | 3.8% | 3.5% | -0.5% | 0.6% |
| FITSX Grade | C | D | B | D | F | D |
| +/- Category | -0.1% | -0.2% | 0.5% | -0.3% | -0.6% | -0.3% |
| Government Mortgage-Backed Bond Avg | -1.2% | -0.9% | 3.4% | 3.8% | 0.1% | 1.0% |
| FITSX Tax Cost Ratio | na | na | 1.4% | 1.3% | 1.1% | 0.9% |
FITSX Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| FITSX Return (NAV) | -0.6% | 8.3% | 0.2% | 3.5% | -11.7% | -1.6% | 4.0% | 5.6% | 0.4% | 1.7% | 1.0% |
| FITSX Grade | C | B | F | F | D | D | C | C | D | B | D |
| +/- Category | -0.2% | 0.7% | -1.0% | -1.0% | -1.2% | -0.2% | -0.3% | 0.4% | -0.1% | 0.4% | -0.4% |
| Government Mortgage-Backed Bond Avg | -0.4% | 7.6% | 1.2% | 4.4% | -10.5% | -1.4% | 4.4% | 5.2% | 0.5% | 1.3% | 1.3% |
| Risk Measures | |
| Standard Deviation: | 7.0% |
| Total Risk Index: | 0.57 - Below Average |
| Category Risk Index: | 1.23 - High |
| Category Risk Grade: | F (101% Rank) |
| Beta: | 1.23 |
| R-Squared: | 99% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | na |
| Bond Investment Style: | na |
| Yield: | 3.6% |
| Dividend Distribution: | Monthly |
| Cap Gains Distribution: | Annually |
| Total Assets: | $134 Mil |
| Fund Total Assets: | $ 62 Mil |
| Share Class Type: | Inst |
| Portfolio Turnover: | 292% |
Management Team
| Number of Managers: 2 | |||
| Longest Tenure: 13.3 years | |||
| Average Tenure: 6.8 years | |||
| Managers (Year): O'Connell Liam (2013), Kirschler J. Andrew (2026) | |||
Portfolio Composition (as of 6/30/26)
| # of Holdings: | 98 |
| % in Top 10 Holdings: | 30.8% |
| 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: | 95.1% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 5.0% |
Purchase Information
| Fund Family: | Federated |
| Phone Number: | 800-341-7400 |
| Website: | www.federatedinvestors.com |
| Status: | Open |
| Inception Date: | June 2, 1992 |
| 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 (%): | 0.84% ( Rating : High ) |
| Category Average Expense Ratio (%): | 0.89% |
| Share Class: | Federated Hermes Government Income IS |
| Min. Subsequent Purchase: | $ 0 |
| Min. Subsequent IRA Purchase: | $ 0 |
