Fund Evaluator:

Federated Hermes Muni and Stock Adv IS Overview

Federated Hermes Muni and Stock Adv IS (FMUIX) is an actively managed Allocation Moderately Conservative Allocation fund. Federated launched the fund in 2010.

The investment seeks to provide tax-advantaged income with a secondary objective of capital appreciation. The fund invests in a diversified portfolio that is allocated between tax-exempt securities and equity securities. In seeking to provide investors with a relatively high level of tax-advantaged income, it will invest at least 50% of its total assets in tax-exempt securities; under current federal tax law, this strategy will enable interest earned on tax-exempt securities to retain its tax-exempt nature when paid to the fund's shareholders as dividends.

About Federated Hermes Muni and Stock Adv IS (FMUIX)

There are 5 members of the management team with an average tenure of 4.69 years: Stephen Gutch (2023), Michael Jura (2020), Ann Ferentino (2013), Damian McIntyre (2025), Derek Plaski (2025). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: S&P 500 (TR) (1970) index with a weighting of 100% and Bloomberg US Universal TR USD index with a weighting of 100%. Federated Hermes Muni and Stock Adv IS has 411 securities in its portfolio. The top 10 holdings constitute 16.2% 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 Muni and Stock Adv IS is part of the Allocation global asset class and is within the Allocation fund group. Federated Hermes Muni and Stock Adv IS has 2.8% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 48.4%. There is 1.3% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 50.3% (48.8% domestic bond, 1.5% foreign bond and 0.0% convertible bond). Federated Hermes Muni and Stock Adv IS has 0.0% of the portfolio in cash.

Assets Under Management

The fund has $528 million in total assets, which is below the $561 million average for the Moderately Conservative Allocation 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.

FMUIX 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 Muni and Stock Adv IS expense ratio is above average compared to funds in the Moderately Conservative Allocation category. Federated Hermes Muni and Stock Adv IS has an expense ratio of 0.74%, which is 26% 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 Muni and Stock Adv IS has a portfolio turnover rate of 31%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 43% for the Moderately Conservative Allocation category.

Recently, in the month of August 2026, Federated Hermes Muni and Stock Adv IS returned 1.0%, which earned it a grade of D, as the Moderately Conservative Allocation category had an average return of 1.3%. 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 Muni and Stock Adv IS has a trailing yield of 2.09%, which is below the 3.29% 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 Muni and Stock Adv IS Grades

Year to date, the fund has returned 7.6%, 1.4 percentage points better than the category, which translates into a grade of A. The fund has returned 13.3% over the past year (grade of A), 10.7% over the past three years (grade of B) and 5.2% per year over the past five years (grade of B) and 6.2% per year over the past 10 years (grade of B).

For more mutual fund grades, analysis and screening tools to help your investment discovery, join AAII for a $2, full-access trial. Learn more here: https://invest.aaii.com/membership.

Otherwise, for more information about Federated Hermes Muni and Stock Adv IS, including its riskiness, submit your email to unlock the rest of the article.