Fund Evaluator:
Federated Hermes Strategic Income IS (STISX)
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Best Performing in Multisector Bond Over the Last Year
| 7.1% | Morningstar Multisector Bond (MSTMX) |
| 6.0% | Fidelity Advisor Strategic Income Z (FIWDX) |
| 5.4% | Russell Inv Opportunistic Credit Y (RGCYX) |
| 5.4% | Russell Inv Opportunistic Credit M (RGOTX) |
| 5.2% | Payden Managed Income SI (PKBIX) |
Fund Details
Federated Hermes Strategic Income IS Overview
Federated Hermes Strategic Income IS (STISX) is an actively managed Taxable Bond Multisector Bond fund. Federated launched the fund in 2008.
The investment seeks a high level of current income. The fund's advisor allocates the portfolio of investments among the following three categories of the fixed-income market: domestic investment-grade (including, but not limited to, U.S. government, asset-backed, mortgage-backed, corporate and municipal), domestic noninvestment-grade (including, but not limited to, corporate debt issues, MBS and municipal securities) and foreign investments. In addition, when the Adviser considers the risk/return prospects of equity securities to be attractive, it may also opportunistically invest up to 20% of its assets in equity securities.
About Federated Hermes Strategic Income IS (STISX)
There are 2 members of the management team with an average tenure of 9.39 years: Nathan Kehm (2018), Donald Ellenberger (2016). Management tenure is more important for actively managed funds than passive index funds.
The fund has 4 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 100%, Bloomberg EM Seasoned ex Agg/Eur$ TR USD index with a weighting of 25%, Bloomberg US MBS TR USD index with a weighting of 35% and Bloomberg US HY 2% Issuer Cap TR USD index with a weighting of 40%. Federated Hermes Strategic Income IS has 270 securities in its portfolio. The top 10 holdings constitute 86.1% 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 Strategic Income IS is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Federated Hermes Strategic Income IS has 20.2% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.3%. 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 89.6% (69.4% domestic bond, 20.2% foreign bond and 0.0% convertible bond). Federated Hermes Strategic Income IS has 1.2% of the portfolio in cash.
Assets Under Management
The fund has $350 million in total assets, which is below the $1 billion average for the Multisector 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.
STISX 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 Strategic Income IS expense ratio is above average compared to funds in the Multisector Bond category. Federated Hermes Strategic Income IS has an expense ratio of 0.64%, which is 32% 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 Strategic Income IS has a portfolio turnover rate of 49%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 162% for the Multisector Bond category.
Recently, in the month of July 2026, Federated Hermes Strategic Income IS returned -0.8%, which earned it a grade of C, as the Multisector Bond category had an average return of -0.7%. 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 Strategic Income IS has a trailing yield of 5.34%, which is above the 5.31% 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 Strategic Income IS Grades
Year to date, the fund has returned 1.3%, 0.5 percentage points better than the category, which translates into a grade of B. The fund has returned 5.8% over the past year (grade of A), 7.2% over the past three years (grade of A) and 2.3% per year over the past five years (grade of C) and 3.9% per year over the past 10 years (grade of B).
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STISX 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 |
|
| STISX Return (NAV) | -0.8% | 0.2% | 5.8% | 7.2% | 2.3% | 3.9% |
| STISX Grade | C | B | A | A | C | B |
| +/- Category | -0.1% | 0.1% | 1.5% | 0.9% | -0.1% | 0.4% |
| Multisector Bond Avg | -0.7% | 0.0% | 4.3% | 6.3% | 2.4% | 3.5% |
| STISX Tax Cost Ratio | na | na | 2.1% | 2.1% | 2.0% | 1.8% |
STISX Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| STISX Return (NAV) | 1.3% | 9.3% | 5.9% | 9.7% | -13.5% | 4.0% | 6.6% | 13.2% | -3.0% | 6.4% | 10.8% |
| STISX Grade | B | A | C | B | F | A | C | A | D | C | A |
| +/- Category | 0.5% | 1.2% | 0.2% | 1.3% | -3.4% | 1.7% | 0.3% | 2.9% | -1.1% | -0.2% | 3.3% |
| Multisector Bond Avg | 0.9% | 8.1% | 5.7% | 8.4% | -10.1% | 2.2% | 6.3% | 10.3% | -1.9% | 6.6% | 7.5% |
| Risk Measures | |
| Standard Deviation: | 5.6% |
| Total Risk Index: | 0.46 - Low |
| Category Risk Index: | 1.25 - High |
| Category Risk Grade: | F (89% Rank) |
| Beta: | 0.92 |
| R-Squared: | 87% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | Small-Cap Value |
| Bond Investment Style: | na Limited Sensitivity |
| Yield: | 5.3% |
| Dividend Distribution: | Monthly |
| Cap Gains Distribution: | |
| Total Assets: | $565 Mil |
| Fund Total Assets: | $ 350 Mil |
| Share Class Type: | Inst |
| Portfolio Turnover: | 49% |
Management Team
| Number of Managers: 2 | |||
| Longest Tenure: 10.3 years | |||
| Average Tenure: 9.4 years | |||
| Managers (Year): Ellenberger Donald (2016), Kehm Nathan (2018) | |||
Portfolio Composition (as of 6/30/26)
| # of Holdings: | 270 |
| % in Top 10 Holdings: | 86.1% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 20.2% |
Portfolio Allocation |
|
| Domestic Stock: | 0.3% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 69.4% |
| Foreign Bond: | 20.2% |
| Convertible Bond: | 0.0% |
| Other: | 8.9% |
| Cash: | 1.2% |
Purchase Information
| Fund Family: | Federated |
| Phone Number: | 800-341-7400 |
| Website: | www.federatedinvestors.com |
| Status: | Open |
| Inception Date: | January 28, 2008 |
| 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 (%): | 0.64% ( Rating : Above Avg ) |
| Category Average Expense Ratio (%): | 0.94% |
| Share Class: | Federated Hermes Strategic Income C |
| Min. Subsequent Purchase: | $ 0 |
| Min. Subsequent IRA Purchase: | $ 0 |
