Fund Evaluator:

Federated Hermes Municipal Ultrashort A Overview

Federated Hermes Municipal Ultrashort A (FMUUX) is an actively managed Municipal Bond Muni National Short fund. Federated launched the fund in 2000.

The investment seeks to provide current income exempt from federal regular income tax. The fund will invest at least 65% of its assets in securities rated investment-grade without regard to the maturity of the securities and may purchase securities rated below investment-grade without regard to the maturity of the securities up to 35% of its assets. It will normally invest so that at least 80% of its net assets are in tax-exempt securities or at least 80% of its annual interest income is exempt from federal regular income tax.

About Federated Hermes Municipal Ultrashort A (FMUUX)

There are 2 members of the management team with an average tenure of 1.65 years: Ann Ferentino (2025), Kyle Stewart (2024). Management tenure is more important for actively managed funds than passive index funds.

The fund has 3 primary benchmarks: Bloomberg Municipal 1 Yr 1-2 TR USD index with a weighting of 100%, Lipper Tax-Exempt MM Fd Avg index with a weighting of 50% and Bloomberg Municipal 1 Yr 1-2 TR USD index with a weighting of 50%. Federated Hermes Municipal Ultrashort A has 283 securities in its portfolio. The top 10 holdings constitute 21.3% 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 Municipal Ultrashort A is part of the Fixed Income global asset class and is within the Municipal Bond fund group. Federated Hermes Municipal Ultrashort A 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 98.5% (98.5% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Federated Hermes Municipal Ultrashort A has 1.5% of the portfolio in cash.

Assets Under Management

The fund has $412 million in total assets, which is below the $642 million average for the Muni National Short 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.

FMUUX 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 Municipal Ultrashort A expense ratio is average compared to funds in the Muni National Short category. Federated Hermes Municipal Ultrashort A has an expense ratio of 0.51%, which is 12% lower than its category average, making the fund expense ratio grade a C. 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 Municipal Ultrashort A has a portfolio turnover rate of 47%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 51% for the Muni National Short category.

Recently, in the month of August 2026, Federated Hermes Municipal Ultrashort A returned 0.3%, which earned it a grade of C, as the Muni National Short category had an average return of 0.3%. 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 Municipal Ultrashort A has a trailing yield of 2.69%, which is below the 2.78% 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 Municipal Ultrashort A Grades

Year to date, the fund has returned 1.5%, 0.5 percentage points better than the category, which translates into a grade of A. The fund has returned 2.4% over the past year (grade of C), 3.3% over the past three years (grade of D) and 2.3% per year over the past five years (grade of A) and 1.6% per year over the past 10 years (grade of C).

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