Fund Evaluator:

Federated Hermes MDT Small Cap Value R Overview

Federated Hermes MDT Small Cap Value R (VSFRX) is an actively managed U.S. Equity Small Value fund. Federated launched the fund in 2010.

The investment seeks capital appreciation. The fund seeks to achieve its objective by investing primarily in the common stock of small U.S. companies. Under normal circumstances, it will invest its assets so that at least 80% of its net assets (plus any borrowings for investment purposes) are invested in small cap value investments.

About Federated Hermes MDT Small Cap Value R (VSFRX)

There are 4 members of the management team with an average tenure of 0.68 years: Frederick Konopka (2025), Daniel Mahr (2025), John Lewicke (2025), Damien Zhang (2025). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: Russell 3000 TR USD index with a weighting of 100% and Russell 2000 Value TR USD index with a weighting of 100%. Federated Hermes MDT Small Cap Value R has 206 securities in its portfolio. The top 10 holdings constitute 16.4% 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 MDT Small Cap Value R is part of the Equity global asset class and is within the U.S. Equity fund group. Federated Hermes MDT Small Cap Value R has 3.6% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 94.0%. There is 3.6% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Federated Hermes MDT Small Cap Value R has 0.1% of the portfolio in cash.

Assets Under Management

The fund has $13 million in total assets, which is below the $417 million average for the Small Value 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.

VSFRX 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 MDT Small Cap Value R expense ratio is high compared to funds in the Small Value category. Federated Hermes MDT Small Cap Value R has an expense ratio of 1.23%, which is 5% higher 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 MDT Small Cap Value R has a portfolio turnover rate of 59%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 128% for the Small Value category.

Recently, in the month of July 2026, Federated Hermes MDT Small Cap Value R returned -1.8%, which earned it a grade of D, as the Small Value category had an average return of -0.4%. 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 MDT Small Cap Value R has a trailing yield of 0.86%, which is above the 0.77% category average. The fund normally distributes its income annually 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 MDT Small Cap Value R Grades

Year to date, the fund has returned 18.3%, 1.8 percentage points worse than the category, which translates into a grade of D. The fund has returned 27.6% over the past year (grade of D), 12.1% over the past three years (grade of D) and 8.4% per year over the past five years (grade of D) and 9.4% per year over the past 10 years (grade of D).

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 MDT Small Cap Value R, including its riskiness, submit your email to unlock the rest of the article.