Fund Evaluator:

Federated Hermes Short-Term Income Svc Overview

Federated Hermes Short-Term Income Svc (FSTIX) is an actively managed Taxable Bond Short-Term Bond fund. Federated launched the fund in 1986.

The investment seeks to provide current income. In pursuing its principal investment strategies, the fund invests in a diversified portfolio of fixed-income securities consisting of U.S. government and privately issued mortgage-backed and asset-backed securities, corporate debt securities and U.S. Treasury and agency securities. At least 65% of the fund's securities must be rated A or higher by a nationally recognized statistical rating organization. The adviser seeks to enhance the fund's performance by allocating relatively more of its portfolio to the security type that the Adviser expects to offer the best balance between current income and risk.

About Federated Hermes Short-Term Income Svc (FSTIX)

There are 2 members of the management team with an average tenure of 6.59 years: Nicholas Tripodes (2017), Daniel Mastalski (2022). 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 Govt/Credit 1-3 Yr TR USD index with a weighting of 100%. Federated Hermes Short-Term Income Svc has 529 securities in its portfolio. The top 10 holdings constitute 16.3% 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 Short-Term Income Svc is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Federated Hermes Short-Term Income Svc has 12.9% 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 93.5% (80.6% domestic bond, 12.9% foreign bond and 0.0% convertible bond). Federated Hermes Short-Term Income Svc has 1.3% of the portfolio in cash.

Assets Under Management

The fund has $77 million in total assets, which is below the $904 million average for the Short-Term 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.

FSTIX 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 Short-Term Income Svc expense ratio is above average compared to funds in the Short-Term Bond category. Federated Hermes Short-Term Income Svc has an expense ratio of 0.66%, which is the same as 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 Short-Term Income Svc has a portfolio turnover rate of 27%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 135% for the Short-Term Bond category.

Recently, in the month of July 2026, Federated Hermes Short-Term Income Svc returned 0.0%, which earned it a grade of C, as the Short-Term Bond category had an average return of -0.0%. 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 Short-Term Income Svc has a trailing yield of 4.50%, which is above the 4.16% 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 Short-Term Income Svc Grades

Year to date, the fund has returned 1.2%, 0.3 percentage points better than the category, which translates into a grade of B. The fund has returned 3.7% over the past year (grade of B), 5.2% over the past three years (grade of B) and 2.6% per year over the past five years (grade of B) and 2.4% per year over the past 10 years (grade of B).

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