Federated Hermes Short‑Term Income Fund Service Shares is an actively managed mutual fund focused on generating current income from high‑quality, short‑maturity fixed income securities. It invests across asset‑backed and mortgage‑backed securities, corporate bonds, and U.S. Treasury and Agency obligations, aiming to balance income with modest interest‑rate risk. The portfolio targets a dollar‑weighted average effective duration of roughly one to three years, positioning it within the short‑term bond category and benchmarking against the Bloomberg 1–3 Year U.S. Government/Credit Index and a 0–3 Year composite of corporate, ABS, Treasury/Agency, and MBS indices. The fund pays dividends monthly and typically maintains hundreds of holdings to diversify issuer and sector exposures. With a track record dating to 1986 for the overall strategy and oversight by an experienced management team, it seeks to offer a relatively conservative avenue for income compared with money market funds while accepting net asset value fluctuation. Its role in the market is to provide investors with a professionally managed, short‑duration bond allocation that emphasizes liquidity, credit quality, and disciplined duration management within investment‑grade markets.
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