Federated Hermes ETF Trust

04/24/2025 | Press release | Distributed by Public on 04/24/2025 14:28

Annual Report by Investment Company (Form N-CSR)

United States Securities and Exchange Commission
Washington, D.C. 20549

Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies

811-23730
 (Investment Company Act File Number)

Federated Hermes ETF Trust
 (Exact Name of Registrant as Specified in Charter)

Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

Peter J. Germain, Esquire
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

Date of Fiscal Year End: 2025-02-28

Date of Reporting Period: 2025-02-28

Item 1. Reports to Stockholders

Federated Hermes Short Duration High Yield ETF

NYSE Arca | FHYS

Annual Shareholder Report - February 28, 2025

A Portfolio of Federated Hermes ETF Trust

This annual shareholder report contains important information about the Federated Hermes Short Duration High Yield ETF (the "Fund") for the period of March 1, 2024 to February 28, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

This report describes changes made to or planned for the Fund since the beginning of the reporting period.

What were the Fund costs for the last year?

(based on a hypothetical $10,000 investment)

Fund Name
Costs of a $10,000 investment
Costs paid as a percentage of a $10,000 investment
Federated Hermes Short Duration High Yield ETF
$52
0.50%

Management's Discussion of Fund Performance

The following discussion compares the performance of the Fund to the ICE BofA 0-5 Year BB/B US High Yield Constrained Index (the "Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide high current income by investing in a diversified portfolio of below investment-grade, fixed-income instruments.

Top Contributors to Performance

  • The Fund's relative performance was positively impacted by security selection in the Basic Industry, Insurance, Telecom and Technology sectors. The Fund's loan holdings also outperformed the Index.

  • The Fund was positively impacted by its overweight allocations in the Insurance, Leisure and Services sectors.

  • Specific Fund holdings that positively impacted performance relative to the Index included: Grifols, Lummus, CSC Holdings and Ardonagh Midco 2 Limited. The Fund did not own SFR/Altice, a European cable company which substantially underperformed.

Top Detractors from Performance

  • The Fund's relative performance was negatively impacted by security selection in the Consumer Goods, Financial Services, Real Estate, Transportation and Media sectors.

  • The Fund was negatively impacted by its industry allocation, especially its underweight allocations in the strong performing Banking and Healthcare sectors. It was also negatively impacted by its overweight allocation in the underperforming Capital Goods sector. Given the strong absolute performance during the period, the Fund's cash position was also a drag on relative performance.

  • Specific Fund holdings that negatively impacted performance relative to the Index included: iHeartCommunications, Ardagh Packaging and E.W. Scripps. Additionally, the Fund's underweight positions in Bausch Health and Rakuten also negatively impacted relative performance.

Annual Shareholder Report

Federated Hermes Short Duration High Yield ETF

Fund Performance

Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future.The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.

Cumulative Performance: 12/16/2021 to 2/28/2025

Total Return Based on $10,000 Investment

Federated Hermes Short Duration High Yield ETF at NAV
Bloomberg US Aggregate Bond Index
Lipper Short High Yield Funds Average Index
ICE BofA 0-5 Year BB/B US High Yield Constrained Index
12/16/2021
$10,000
$10,000
$10,000
$10,000
2/28/2022
$9,826
$9,669
$9,899
$9,876
2/28/2023
$9,564
$8,729
$9,731
$9,754
2/29/2024
$10,486
$9,020
$10,594
$10,693
2/28/2025
$11,274
$9,543
$11,466
$11,609

Average Annual Total Returns

Fund/Index
1 Year
Since Inception 12/16/2021
Federated Hermes Short Duration High Yield ETF at NAV
7.52%
3.82%
Bloomberg US Aggregate Bond IndexFootnote Reference*
5.81%
(1.45%)
Lipper Short High Yield Funds Average Index
8.24%
4.31%
ICE BofA 0-5 Year BB/B US High Yield Constrained Index
8.57%
4.77%
Footnote Description
Footnote*
The Fund has designated the Bloomberg US Aggregate Bond Index as the new broad-based securities market index in accordance with the SEC's revised requirements for such an index.

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

Key Fund Statistics

  • Net Assets$29,245,337
  • Number of Investments205
  • Portfolio Turnover45%
  • Total Advisory Fees Paid$140,160

Annual Shareholder Report

Federated Hermes Short Duration High Yield ETF

Fund Holdings

Top Index Classifications (% of Net Assets)

Value
Value
Oil Field Services
3.5%
Packaging
3.7%
Building Materials
3.8%
Chemicals
3.9%
Health Care
4.0%
Midstream
5.8%
Independent Energy
6.6%
Gaming
6.7%
Insurance - P&C
6.9%
Technology
11.4%

Material Fund Changes

Following is a summary of material changes made to or planned for the Fund since the beginning of the reporting period. For more complete and current information, you may review the Fund's disclosure documents on its webpage at FederatedHermes.com/us/FundInformationor upon request at 1-800-341-7400, Option 4, or by contacting your financial advisor.

Effective April 30, 2024, Braden Rotberg was added to the Fund's portfolio management team.

Effective April 28, 2025, Kathryn P. Glass has been added to the Fund's portfolio management team.

Additional Information about the Fund

Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 31423L206

Q455585-A (04/25)

Federated Securities Corp., Distributor

FederatedHermes.com/us

© 2025 Federated Hermes, Inc.

Item 2. Code of Ethics

(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.

(c) There was no amendment to the registrant's code of ethics described in Item 2(a) above during the period covered by the report.

(d) There was no waiver granted, either actual or implicit, from a provision to the registrant's code of ethics described in Item 2(a) above during the period covered by the report.

(e) Not Applicable

(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3. Audit Committee Financial Expert

The registrant's Board has determined that each of the following members of the Board's Audit Committee is an "audit committee financial expert," and is "independent," for purposes of this Item 3: John G. Carson, Thomas M. O'Neill and John S. Walsh.

Item 4. Principal Accountant Fees and Services

(a) Audit Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2025 - $259,903

Fiscal year ended 2024 - $102,987

(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $0

Amount requiring approval of the registrant's Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $1,698 and $0 respectively. Fiscal year ended 2025- Travel expenses for attendance at Board meeting.

(c) Tax Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $0

Amount requiring approval of the registrant's Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(d) All Other Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $0

Amount requiring approval of the registrant's Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $31,761 respectively. Fiscal year ended 2024- Service fees for analysis of potential Passive Foreign Investment Company holdings.

(e)(1) Audit Committee Policies regarding Pre-approval of Services.

The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor's independence. The Audit Committee is required to pre-concur with independence conclusions made by the independent auditor regarding non-audit services to be provided by the independent auditor to the Funds, the Funds Board of Directors, or any entity that is controlled directly or indirectly by the Funds. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval (and pre-concurrence for non-audit services) by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.

Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate to management its responsibilities to pre-approve services performed by the independent auditor.

The Audit Committee has delegated pre-approval/pre-concurrence authority to its chairman (the "Chairman") for services that do not exceed a specified dollar threshold. The Chairman or Chief Audit Executive will report any such pre-approval/pre-concurrence decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval/pre-concurrence authority when the Chairman is unavailable.

AUDIT SERVICES

The annual audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.

In addition to the annual audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other audit services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain audit services; with limited exception, all other audit services must be specifically pre-approved by the Audit Committee.

AUDIT-RELATED SERVICES

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the RIC's financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of audit-related services does not impair the independence of the auditor, and has pre-approved certain audit-related services; all other audit-related services must be specifically pre-approved by the Audit Committee.

TAX SERVICES

The Audit Committee believes that the independent auditor can provide tax services to the RIC such as tax compliance, tax planning and tax advice without impairing the auditor's independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved/pre-concurred certain tax services; with limited exception, all tax services involving large and complex transactions must be specifically pre-approved/pre-concurred by the Audit Committee.

ALL OTHER SERVICES

With respect to the provision of permissible services other than audit, review or attest services the pre-approval/pre-concurrence requirement is waived if:

(1) With respect to such services rendered to the Funds, the aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the audit client to its accountant during the fiscal year in which the services are provided; and,

(2) With respect to such services rendered to the Fund's investment adviser ( the "Adviser")and any entity controlling, controlled by to under common control with the Adviser such as affiliated non-U.S. and U.S. funds not under the Audit Committee's purview and which do not fall within a category of service which has been determined by the Audit Committee not to have a direct impact on the operations or financial reporting of the RIC, the aggregate amount of all services provided constitutes no more than five percent of the total amount of revenues paid to the RIC's auditor by the RIC, its Adviser and any entity controlling, controlled by, or under common control with the Adviser during the fiscal year in which the services are provided; and

(3) Such services were not recognized by the issuer or RIC at the time of the engagement to be non-audit services; and

(4) Such services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Audit Committee.

The Audit Committee may grant general pre-approval/pre-concurrence to those permissible non-audit services which qualify for pre-approval and which it believes are routine and recurring services, and would not impair the independence of the auditor.

The Securities and Exchange Commission's (the "SEC") rules and relevant guidance should be consulted to determine the precise definitions of these services and applicability of exceptions to certain of the prohibitions.

PRE-APPROVAL FEE LEVELS

Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.

PROCEDURES

Requests or applications to provide services that require specific approval/concurrence by the Audit Committee will be submitted to the Audit Committee by the Fund's Principal Accounting Officer and/or the Chief Audit Executive of Federated Hermes, Inc., only after those individuals have determined that the request or application is consistent with the SEC's rules on auditor independence.

(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrant's Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

4(b)

Fiscal year ended 2025 - 0%

Fiscal year ended 2024 - 0%

Percentage of services provided to the registrant's Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant's Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(c)

Fiscal year ended 2025 - 0%

Fiscal year ended 2024 - 0%

Percentage of services provided to the registrant's Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant's Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(d)

Fiscal year ended 2025 - 0%

Fiscal year ended 2024 - 0%

Percentage of services provided to the registrant's Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant's Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

(f) NA

(g) Non-Audit Fees billed to the registrant, the registrant's Adviser, and certain entities controlling, controlled by or under common control with the Adviser:

Fiscal year ended 2025 - $132,673

Fiscal year ended 2024 - $314,833

(h) The registrant's Audit Committee has considered that the provision of non-audit services that were rendered to the registrant's Adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence.

(i) Not Applicable

(j) Not Applicable

Item 5. Audit Committee of Listed Registrants

Not Applicable

Item 6. Schedule of Investments

(a) The registrant's Schedule of Investments is included as part of the Financial Statements filed under Item 7 of this form.

(b) Not Applicable

Item 7. Financial Statements and Financial Highlights for Open-End Management Companies
Annual Financial Statements
and Additional Information
February 28, 2025
 
 
NYSE Arca | FHYS
Federated Hermes Short Duration High Yield ETF
A Portfolio of Federated Hermes ETF Trust
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
CONTENTS 
Portfolio of Investments
1
Financial Highlights
8
Statement of Assets and Liabilities
9
Statement of Operations
10
Statement of Changes in Net Assets
11
Notes to Financial Statements
12
Report of Independent Registered Public Accounting Firm
17
Shareholder Meeting Results
18
Evaluation and Approval of Advisory Contract
19
Portfolio of Investments
February 28, 2025  
Principal
Amount
or Shares
Value
       
CORPORATE BONDS-80.2%
Aerospace/Defense-1.0%
$225,000
TransDigm, Inc., 144A, 6.375%, 3/1/2029
$   227,965
 75,000
TransDigm, Inc., Sr. Sub., Series WI, 5.500%, 11/15/2027
    74,268
TOTAL
302,233
Airlines-0.6%
125,000
American Airlines, Inc./AAdvantage Loyalty IP Ltd., 144A, 5.500%, 4/20/2026
   124,870
 58,750
Mileage Plus Holdings LLC, 144A, 6.500%, 6/20/2027
    59,152
TOTAL
184,022
Automotive-3.0%
125,000
Adient Global Holdings Ltd., Term Loan - 1st Lien, 144A, 7.000%, 4/15/2028
   127,530
250,000
Clarios Global LP / Clarios US Finance Co, Sr. Unsecd. Note, 144A, 8.500%, 5/15/2027
   250,956
 90,000
Clarios Global LP, Sec. Fac. Bond, 144A, 6.750%, 5/15/2028
    91,881
200,000
Ford Motor Credit Co. LLC, Sr. Unsecd. Note, Series GMTN, 4.389%, 1/8/2026
   198,658
200,000
IHO Verwaltungs GmbH, Sec. Fac. Bond, 144A, 6.375%, 5/15/2029
   197,633
TOTAL
866,658
Banking-0.2%
 75,000
Ally Financial, Inc., Sr. Sub. Note, 5.750%, 11/20/2025
    75,271
Building Materials-3.0%
150,000
American Builders & Contractors Supply Co., Inc., 144A, 4.000%, 1/15/2028
   143,183
 50,000
Beacon Roofing Supply, Inc., Sr. Note, 144A, 6.500%, 8/1/2030
    51,428
150,000
Foundation Building Materials, Inc., Sr. Unsecd. Note, 144A, 6.000%, 3/1/2029
   132,742
 75,000
Interface, Inc., Sr. Unsecd. Note, 144A, 5.500%, 12/1/2028
    73,608
175,000
MIWD Holdco II LLC/ MIWD Finance Corp., Sr. Unsecd. Note, 144A, 5.500%, 2/1/2030
   167,730
100,000
Standard Industries, Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2027
    99,058
200,000
White Cap Buyer LLC, Sr. Unsecd. Note, 144A, 6.875%, 10/15/2028
   199,816
TOTAL
867,565
Cable Satellite-2.0%
 50,000
CCO Holdings LLC/Cap Corp., Sr. Sub. Secd. Note, 144A, 5.500%, 5/1/2026
    49,934
 50,000
Charter Communications Operating, LLC/Charter Communications Operating Capital Corp., Sec. Fac. Bond, 6.150%, 11/10/2026
    51,037
125,000
Sirius XM Radio, Inc., Sr. Unsecd. Note, 144A, 5.000%, 8/1/2027
   123,284
200,000
Virgin Media Secured Finance PLC, Sec. Fac. Bond, 144A, 5.500%, 5/15/2029
   191,418
200,000
Ziggo B.V., Sec. Fac. Bond, 144A, 4.875%, 1/15/2030
   184,122
TOTAL
599,795
Chemicals-3.6%
 25,000
Ashland, Inc., Sr. Unsecd. Note, 144A, 3.375%, 9/1/2031
    21,762
200,000
Cheever Escrow Issuer, Sec. Fac. Bond, 144A, 7.125%, 10/1/2027
   202,453
175,000
H.B. Fuller Co., Sr. Unsecd. Note, 4.250%, 10/15/2028
   166,814
225,000
Illuminate Buyer LLC/Illuminate Holdings IV, Inc., Sr. Unsecd. Note, 144A, 9.000%, 7/1/2028
   227,675
225,000
Olympus Water US Holding Corp., Sec. Fac. Bond, 144A, 9.750%, 11/15/2028
   236,809
200,000
SNF Group SACA, Sr. Unsecd. Note, 144A, 3.125%, 3/15/2027
   190,810
TOTAL
1,046,323
Construction Machinery-0.6%
175,000
United Rentals North America, Inc., Sr. Unsecd. Note, 5.500%, 5/15/2027
   175,174
Consumer Cyclical Services-1.7%
175,000
Garda World Security Corp., Sec. Fac. Bond, 144A, 7.750%, 2/15/2028
   180,431
 50,000
Go Daddy Operating Co. LLC / GD Finance Co., Inc., Sr. Unsecd. Note, 144A, 5.250%, 12/1/2027
    49,594
125,000
Match Group Holdings II LLC, Sr. Unsecd. Note, 144A, 5.000%, 12/15/2027
   122,977
Annual Financial Statements and Additional Information
1
Principal
Amount
or Shares
Value
       
CORPORATE BONDS-continued
Consumer Cyclical Services-continued
$130,000
The Brink's Co., Sr. Unsecd. Note, 144A, 6.500%, 6/15/2029
$   133,149
TOTAL
486,151
Consumer Products-2.5%
275,000
BCPE Empire Holdings, Inc., Sr. Unsecd. Note, 144A, 7.625%, 5/1/2027
   274,174
200,000
Edgewell Personal Care Co., Sr. Unsecd. Note, 144A, 5.500%, 6/1/2028
   197,510
225,000
Energizer Holdings, Inc., Sr. Unsecd. Note, 144A, 6.500%, 12/31/2027
   227,839
 25,000
Prestige Brands, Inc., Sr. Unsecd. Note, 144A, 5.125%, 1/15/2028
    24,662
TOTAL
724,185
Diversified Manufacturing-1.3%
200,000
Gates Corp., Sr. Unsecd. Note, 144A, 6.875%, 7/1/2029
   205,225
175,000
WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 6.375%, 3/15/2029
   178,029
TOTAL
383,254
Finance Companies-1.9%
150,000
Macquarie Airfinance Holdings Ltd., Sr. Unsecd. Note, 144A, 8.125%, 3/30/2029
   157,773
 75,000
Navient Corp., Sr. Unsecd. Note, 6.750%, 6/15/2026
    75,921
 50,000
Rocket Mortgage Co-Issuer, Inc., Sr. Unsecd. Note, 144A, 3.625%, 3/1/2029
    46,463
150,000
United Wholesale Mortgage, LLC, Sr. Unsecd. Note, 144A, 5.500%, 11/15/2025
   149,688
125,000
United Wholesale Mortgage, LLC, Sr. Unsecd. Note, 144A, 5.750%, 6/15/2027
   123,811
TOTAL
553,656
Food & Beverage-2.8%
165,000
Aramark Services, Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/1/2028
   162,178
125,000
Bellring Brands, Inc., Sr. Unsecd. Note, 144A, 7.000%, 3/15/2030
   129,607
125,000
Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 5.500%, 10/15/2027
   124,440
165,000
Post Holdings, Inc., Sr. Unsecd. Note, 144A, 5.500%, 12/15/2029
   161,642
225,000
US Foods, Inc., Sr. Unsecd. Note, 144A, 6.875%, 9/15/2028
   233,202
TOTAL
811,069
Gaming-5.4%
125,000
Boyd Gaming Corp., Sr. Unsecd. Note, 4.750%, 12/1/2027
   123,110
175,000
CCM Merger, Inc., Sr. Unsecd. Note, 144A, 6.375%, 5/1/2026
   174,954
150,000
Churchill Downs, Inc., Sr. Unsecd. Note, 144A, 5.500%, 4/1/2027
   149,319
140,000
Light & Wonder International, Inc., Sr. Unsecd. Note, 144A, 7.250%, 11/15/2029
   144,159
200,000
MGM Resorts International, Sr. Unsecd. Note, 6.125%, 9/15/2029
   201,168
150,000
Midwest Gaming Borrower LLC, Sr. Note, 144A, 4.875%, 5/1/2029
   143,283
250,000
Mohegan Tribal Gaming Authority, 144A, 8.000%, 2/1/2026
   247,595
200,000
PENN Entertainment, Inc., Sr. Unsecd. Note, 144A, 5.625%, 1/15/2027
   198,154
100,000
Station Casinos, LLC, Sr. Unsecd. Note, 144A, 4.500%, 2/15/2028
    96,608
100,000
Wynn Resorts Finance LLC / Wynn Resorts Capital Corp, Sr. Unsecd. Note, 144A, 5.125%, 10/1/2029
    97,358
TOTAL
1,575,708
Health Care-2.3%
225,000
AHP Health Partners, Inc., Sr. Unsecd. Note, 144A, 5.750%, 7/15/2029
   213,676
 75,000
Avantor Funding, Inc., Sr. Unsecd. Note, 144A, 3.875%, 11/1/2029
    69,505
125,000
CHS/Community Health Systems, Inc., Sec. Fac. Bond, 144A, 5.625%, 3/15/2027
   120,539
175,000
Neogen Food Safety Corp., Sr. Unsecd. Note, 144A, 8.625%, 7/20/2030
   185,884
100,000
Tenet Healthcare Corp., 144A, 6.250%, 2/1/2027
    99,878
TOTAL
689,482
Independent Energy-6.6%
250,000
Aethon United BR LP/Aethon United Finance Corp., 144A, 7.500%, 10/1/2029
   257,729
165,000
Ascent Resources Utica Holdings LLC/ ARU Finance Corp., Sr. Unsecd. Note, 144A, 8.250%, 12/31/2028
   168,908
150,000
Chord Energy Corp., Sr. Unsecd. Note, 144A, 6.375%, 6/1/2026
   150,155
 75,000
Civitas Resources, Inc., Unsecd. Note, 144A, 8.375%, 7/1/2028
    78,052
Annual Financial Statements and Additional Information
2
Principal
Amount
or Shares
Value
       
CORPORATE BONDS-continued
Independent Energy-continued
$275,000
Comstock Resources, Inc., Sr. Unsecd. Note, 144A, 6.750%, 3/1/2029
$   270,176
175,000
Matador Resources Co., Sr. Unsecd. Note, 144A, 6.875%, 4/15/2028
   178,746
125,000
Permian Resources Operating LLC, Sr. Unsecd. Note, 144A, 5.375%, 1/15/2026
   124,690
175,000
Range Resources Corp., Sr. Unsecd. Note, 4.875%, 5/15/2025
   174,588
215,000
Rockcliff Energy II LLC, Sr. Unsecd. Note, 144A, 5.500%, 10/15/2029
   204,806
150,000
Sitio Royalties Operating Partnership LP / Sitio Finance Corp., Sr. Unsecd. Note, 144A, 7.875%, 11/1/2028
   157,141
175,000
SM Energy Co., Sr. Unsecd. Note, 6.750%, 9/15/2026
   175,074
TOTAL
1,940,065
Industrial - Other-1.3%
 75,000
Hillenbrand, Inc., Sr. Unsecd. Note, 6.250%, 2/15/2029
    75,988
125,000
Madison Iaq LLC, Sr. Unsecd. Note, 144A, 5.875%, 6/30/2029
   120,535
175,000
SPX Flow, Inc., Sr. Unsecd. Note, 144A, 8.750%, 4/1/2030
   182,288
TOTAL
378,811
Insurance - P&C-4.5%
200,000
Acrisure LLC, Sec. Fac. Bond, 144A, 7.500%, 11/6/2030
   206,466
275,000
Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer, Sr. Unsecd. Note, 144A, 6.750%, 10/15/2027
   274,239
275,000
AmWINS Group, Inc., Sec. Fac. Bond, 144A, 6.375%, 2/15/2029
   278,117
225,000
Broadstreet Partners, Inc., Sr. Unsecd. Note, 144A, 5.875%, 4/15/2029
   220,008
 75,000
Hub International Ltd., Sec. Fac. Bond, 144A, 7.250%, 6/15/2030
    77,452
125,000
Jones Deslauriers Insurance Management, Inc., Sec. Fac. Bond, 144A, 8.500%, 3/15/2030
   133,094
125,000
Ryan Specialty LLC, Sec. Fac. Bond, 144A, 4.375%, 2/1/2030
   118,420
TOTAL
1,307,796
Leisure-2.2%
125,000
Carnival Corp., Sr. Unsecd. Note, 144A, 5.750%, 3/1/2027
   125,320
125,000
Carnival Corp., Sr. Unsecd. Note, 144A, 5.750%, 3/15/2030
   125,366
 75,000
Cedar Fair LP / Canada's Wonderland Co. / Magnum Management Corp. / Millennium Op, 6.500%, 10/1/2028
    75,664
 24,000
NCL Corp. Ltd., Sr. Unsecd. Note, 144A, 5.875%, 3/15/2026
    24,007
150,000
NCL Corp. Ltd., Sr. Unsecd. Note, 144A, 6.250%, 3/1/2030
   150,696
150,000
Royal Caribbean Cruises, Ltd., Sr. Unsecd. Note, 144A, 5.500%, 8/31/2026
   151,136
TOTAL
652,189
Lodging-2.1%
125,000
Hilton Domestic Operating Company, Inc., Sr. Unsecd. Note, 144A, 5.375%, 5/1/2025
   124,576
205,000
RHP Hotel Property/RHP Finance Corp., Sr. Unsecd. Note, 144A, 7.250%, 7/15/2028
   212,440
125,000
Wyndham Hotels & Resorts, Inc., Sr. Unsecd. Note, 144A, 4.375%, 8/15/2028
   120,394
150,000
XHR LP, Sr. Unsecd. Note, 144A, 6.625%, 5/15/2030
   152,079
TOTAL
609,489
Media Entertainment-1.3%
125,000
Outfront Media Capital LLC / Outfront Media Capital Corp., Sr. Unsecd. Note, 144A, 5.000%, 8/15/2027
   122,485
175,000
Stagwell Global LLC, Sr. Unsecd. Note, 144A, 5.625%, 8/15/2029
   169,536
100,000
Univision Communications, Inc., Sec. Fac. Bond, 144A, 8.000%, 8/15/2028
   101,580
TOTAL
393,601
Metals & Mining-1.5%
200,000
Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 6.750%, 4/15/2030
   200,203
 75,000
Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 6.875%, 11/1/2029
    75,389
165,000
Coeur Mining, Inc., Sr. Unsecd. Note, 144A, 5.125%, 2/15/2029
   159,295
TOTAL
434,887
Midstream-5.8%
150,000
Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 3/1/2027
   149,888
250,000
Blue Racer Midstream LLC/Blue Racer Finance Corp., Sr. Unsecd. Note, 144A, 7.000%, 7/15/2029
   257,894
275,000
CNX Midstream Partners LP, Sr. Unsecd. Note, 144A, 4.750%, 4/15/2030
   256,208
Annual Financial Statements and Additional Information
3
Principal
Amount
or Shares
Value
       
CORPORATE BONDS-continued
Midstream-continued
$100,000
DT Midstream, Inc., Sr. Sub. Secd. Note, 144A, 4.125%, 6/15/2029
$    94,804
 75,000
EQM Midstream Partners LP, Sr. Unsecd. Note, 144A, 6.375%, 4/1/2029
    76,923
150,000
Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.625%, 2/15/2026
   149,979
100,000
Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.875%, 3/1/2028
   100,725
 65,000
Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 6.500%, 6/1/2029
    66,386
 75,000
Northriver Midstream Fin, 144A, 5.625%, 2/15/2026
    74,648
250,000
Solaris Midstream Holdings LLC, Sr. Unsecd. Note, 144A, 7.625%, 4/1/2026
   249,901
150,000
Suburban Propane Partners LP, Sr. Unsecd. Note, 5.875%, 3/1/2027
   149,886
 75,000
Targa Resources Partners LP / Targa Resources Partners Finance Corp., Sr. Unsecd. Note, 144A, 5.500%, 3/1/2030
    75,878
TOTAL
1,703,120
Oil Field Services-3.5%
250,000
Archrock Partners LP / Archrock Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.875%, 4/1/2027
   249,890
175,000
Kodiak Gas Services LLC, Sr. Unsecd. Note, 144A, 7.250%, 2/15/2029
   180,653
150,000
Nabors Industries, Inc., Sr. Unsecd. Note, 144A, 7.375%, 5/15/2027
   150,272
153,000
Precision Drilling Corp., Sr. Unsecd. Note, 144A, 7.125%, 1/15/2026
   153,035
275,000
USA Compression Partners LP, Sr. Unsecd. Note, 144A, 7.125%, 3/15/2029
   282,627
TOTAL
1,016,477
Packaging-2.4%
 50,000
Clydesdale Acquisition Holdings, Inc., Sec. Fac. Bond, 144A, 6.875%, 1/15/2030
    50,936
 50,000
Crown Americas LLC, Sr. Unsecd. Note, Series WI, 5.250%, 4/1/2030
    49,197
225,000
Owens-Brockway Glass Container, Inc., Sr. Unsecd. Note, 144A, 6.625%, 5/13/2027
   224,780
125,000
Sealed Air Corp., Sr. Unsecd. Note, 144A, 5.000%, 4/15/2029
   121,879
250,000
Trivium Packaging Finance B.V., Sr. Unsecd. Note, 144A, 8.500%, 8/15/2027
   249,630
TOTAL
696,422
Paper-1.3%
175,000
Clearwater Paper Corp., Sr. Unsecd. Note, 144A, 4.750%, 8/15/2028
   164,276
225,000
Graphic Packaging International, LLC, Sr. Unsecd. Note, 144A, 4.750%, 7/15/2027
   221,015
TOTAL
385,291
Pharmaceuticals-1.3%
200,000
Grifols Escrow Issuer S.A., Sr. Unsecd. Note, 144A, 4.750%, 10/15/2028
   189,055
200,000
Organon Finance 1 LLC, Sr. Unsecd. Note, 144A, 5.125%, 4/30/2031
   182,245
TOTAL
371,300
Restaurant-0.7%
200,000
1011778 BC Unltd. Liability Co./New Red Finance, Inc., 144A, 6.125%, 6/15/2029
   203,370
Retailers-3.3%
125,000
Academy Ltd., Sec. Fac. Bond, 144A, 6.000%, 11/15/2027
   124,871
115,000
Asbury Automotive Group, Inc., Sr. Unsecd. Note, 144A, 4.625%, 11/15/2029
   109,587
225,000
BELRON Uk Finance PLC, 144A, 5.750%, 10/15/2029
   224,689
100,000
Group 1 Automotive, Inc., Sr. Unsecd. Note, 144A, 6.375%, 1/15/2030
   101,791
205,000
LCM Investments Holdings II, LLC, Sr. Unsecd. Note, 144A, 4.875%, 5/1/2029
   195,346
 75,000
Velocity Vehicle Group, Sr. Unsecd. Note, 144A, 8.000%, 6/1/2029
    78,308
125,000
William Carter Co., Sr. Unsecd. Note, 144A, 5.625%, 3/15/2027
   124,607
TOTAL
959,199
Technology-7.5%
210,000
Capstone Borrower, Inc., Sec. Fac. Bond, 144A, 8.000%, 6/15/2030
   220,000
 75,000
Ciena Corp., Sr. Unsecd. Note, 144A, 4.000%, 1/31/2030
    69,670
 65,000
Clarivate Science Holdings Corp., 144A, 3.875%, 7/1/2028
    61,000
 75,000
Coherent Corp., Sr. Unsecd. Note, 144A, 5.000%, 12/15/2029
    72,366
200,000
Consensus Cloud Solutions, Inc., Sr. Unsecd. Note, 144A, 6.000%, 10/15/2026
   198,590
125,000
Elastic N.V., Sr. Unsecd. Note, 144A, 4.125%, 7/15/2029
   117,963
Annual Financial Statements and Additional Information
4
Principal
Amount
or Shares
Value
       
CORPORATE BONDS-continued
Technology-continued
$ 50,000
Ellucian Holdings, Inc., Sec. Fac. Bond, 144A, 6.500%, 12/1/2029
$    50,316
125,000
Entegris, Inc., Sr. Unsecd. Note, 144A, 4.375%, 4/15/2028
   120,459
 32,340
Goto Group, Inc., 144A, 5.500%, 5/1/2028
    27,974
 44,660
Goto Group, Inc., 144A, Second Out, 5.500%, 5/1/2028
    20,097
100,000
HealthEquity, Inc., Sr. Unsecd. Note, 144A, 4.500%, 10/1/2029
    94,919
100,000
Iron Mountain, Inc., Sr. Unsecd. Note, 144A, 4.875%, 9/15/2027
    98,402
 70,000
Iron Mountain, Inc., Sr. Unsecd. Note, 144A, 7.000%, 2/15/2029
    72,094
 25,000
NCR Voyix Corp., Sr. Unsecd. Note, 144A, 5.000%, 10/1/2028
    24,244
 75,000
Open Text, Inc., 144A, 6.900%, 12/1/2027
    77,524
250,000
Rocket Software, Inc., Sec. Fac. Bond, 144A, 9.000%, 11/28/2028
   258,973
125,000
Science Applications International Corp., Sr. Unsecd. Note, 144A, 4.875%, 4/1/2028
   120,627
100,000
Seagate HDD Cayman, Sr. Unsecd. Note, 8.250%, 12/15/2029
   107,132
310,000
SS&C Technologies, Inc., Sr. Unsecd. Note, 144A, 5.500%, 9/30/2027
   308,674
 75,000
Viavi Solutions, Inc., Sr. Unsecd. Note, 144A, 3.750%, 10/1/2029
    68,743
TOTAL
2,189,767
Utility - Electric-3.0%
175,000
Calpine Corp., Sr. Unsecd. Note, 144A, 5.125%, 3/15/2028
   172,396
150,000
NRG Energy, Inc., Sr. Unsecd. Note, 144A, 5.250%, 6/15/2029
   147,000
100,000
TerraForm Power Operating LLC, Sr. Unsecd. Note, 144A, 5.000%, 1/31/2028
    96,722
200,000
TransAlta Corp., Sr. Unsecd. Note, 7.750%, 11/15/2029
   208,412
125,000
Vistra Operations Co., LLC, Sr. Unsecd. Note, 144A, 5.625%, 2/15/2027
   125,020
 65,000
XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 4.500%, 9/15/2027
    62,100
 75,000
XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 7.250%, 1/15/2029
    74,499
TOTAL
886,149
TOTAL CORPORATE BONDS
(IDENTIFIED COST $23,258,949)
23,468,479
1
FLOATING RATE LOANS-16.8%
Airlines-0.3%
 84,322
SkyMiles IP Ltd., 2020 Skymiles Term Loan B-1st Lien, 8.043% (SOFR CME +3.750%), 10/20/2027
    85,408
Automotive-0.3%
 99,000
DexKo Global, Inc., 2023 Incremental Term Loan-1st Lien, 8.579% (SOFR CME +4.250%), 10/4/2028
    93,591
Building Materials-0.8%
 99,250
Foundation Building Materials Holding Co., LLC, 2024 Term Loan B2-1st Lien, 8.324%-8.552% (SOFR CME
+4.000%), 1/29/2031
    94,287
123,750
GYP Holdings III Corp., 2024 Term Loan-1st Lien, 6.574% (SOFR CME +2.250%), 5/12/2030
   123,828
TOTAL
218,115
Cable Satellite-0.4%
100,000
Charter Communications Operating, LLC, 2024 Term Loan B5-1st Lien, 6.560% (SOFR CME +2.250%), 12/15/2031
    99,824
Chemicals-0.3%
 85,105
Axalta Coating Systems U.S. Holdings, Inc., 2024 Term Loan B-1st Lien, 6.079% (SOFR CME +1.750%), 12/20/2029
    85,255
Consumer Cyclical Services-1.3%
173,654
Allied Universal Holdco, LLC, 2021 USD Incremental Term Loan B-1st Lien, 8.174% (SOFR CME +3.750%), 5/12/2028
   173,791
124,062
Dun & Bradstreet Corp. (The), 2024 Term Loan-1st Lien, 6.574% (SOFR CME +2.250%), 1/18/2029
   123,849
 91,188
Fleet Midco I Ltd., 2024 Term Loan B-1st Lien, 7.055% (SOFR CME +2.750%), 2/21/2031
    91,074
TOTAL
388,714
Consumer Products-0.3%
 99,233
VC GB Holdings I Corp., Term Loan-1st Lien, 8.090% (SOFR CME +3.500%), 7/21/2028
    98,966
Diversified Manufacturing-0.5%
 55,197
EMRLD Borrower, LP, Term Loan B-1st Lien, 6.933% (SOFR CME +2.500%), 5/31/2030
    55,007
 99,750
EMRLD Borrower, LP, 2024 Term Loan B-1st Lien, 6.829% (SOFR CME +2.500%), 8/4/2031
    99,483
TOTAL
154,490
Annual Financial Statements and Additional Information
5
Principal
Amount
or Shares
Value
1
FLOATING RATE LOANS-continued
Gaming-1.3%
$ 41,125
Caesars Entertainment, Inc., Term Loan B-1st Lien, 6.563% (SOFR CME +2.250%), 2/6/2030
$    41,104
248,125
Caesars Entertainment, Inc., 2024 Term Loan B1-1st Lien, 6.563% (SOFR CME +2.250%), 2/6/2031
   248,125
 99,000
Ontario Gaming GTA LP, Term Loan B-1st Lien, 8.579% (SOFR CME +4.250%), 8/1/2030
    99,232
TOTAL
388,461
Health Care-1.7%
254,333
Medline Borrower, LP, 2024 USD Add-on Term Loan B-1st Lien, 6.574% (SOFR CME +2.250%), 10/23/2028
   254,605
141,645
Parexel International Corp., 2025 Term Loan B-1st Lien, 6.824% (SOFR CME +2.500%), 11/15/2028
   141,808
 97,477
Vizient, Inc., 2024 Term Loan B-1st Lien, 6.324% (SOFR CME +2.000%), 8/1/2031
    97,741
TOTAL
494,154
Industrial - Other-0.9%
 99,250
CD&R Hydra Buyer, Inc., 2024 Term Loan B-1st Lien, 8.424% (SOFR CME +4.000%), 3/25/2031
    97,566
 96,128
Filtration Group Corp., 2025 USD Term Loan B-1st Lien, 7.324% (SOFR CME +3.000%), 10/21/2028
    96,569
 69,750
SPX Flow, Inc., 2024 Term Loan B-1st Lien, 7.324% (SOFR CME +3.000%), 4/5/2029
    69,946
TOTAL
264,081
Insurance - P&C-2.4%
150,000
Ardonagh Midco 3 PLC, 2025 USD Repriced Term Loan B-1st Lien, 7.553% (SOFR CME +3.250%), 2/15/2031
   149,063
198,501
HUB International Ltd., 2025 Term Loan B-1st Lien, 7.043% (USD Prime + 1.500%), 6/20/2030
   198,626
 99,251
Jones DesLauriers Insurance Management, Inc., 2025 Term Loan B-1st Lien, 7.065% (SOFR CME +2.750%), 3/15/2030
    99,066
149,625
Sedgwick Claims Management Services, Inc., 2023 Term Loan B-1st Lien, 7.313% (SOFR CME +3.000%), 7/31/2031
   149,665
 91,936
Truist Insurance Holdings, LLC, 2024 Term Loan B-1st Lien, 7.079% (SOFR CME +2.750%), 5/6/2031
    91,752
TOTAL
688,172
Leisure-0.4%
124,063
SeaWorld Parks & Entertainment, Inc., 2024 Term Loan B3-1st Lien, 6.324% (SOFR CME +2.000%), 12/4/2031
   123,597
Media Entertainment-0.7%
119,079
Emerald X, Inc., 2025 Term Loan B-1st Lien, 8.074% (SOFR CME +3.750%), 1/30/2032
   119,476
 97,500
Univision Communications, Inc., 2022 Term Loan B-1st Lien, 8.579% (SOFR CME +4.250%), 6/24/2029
    96,038
TOTAL
215,514
Packaging-1.3%
204,357
Charter NEX U.S., Inc., 2024 Term Loan B1-1st Lien, 7.307% (SOFR CME +3.000%), 11/29/2030
   204,520
163,390
Clydesdale Acquisition Holdings, Inc., Term Loan B-1st Lien, 7.499% (SOFR CME +3.175%), 4/13/2029
   163,289
TOTAL
367,809
Technology-3.9%
172,785
Athenahealth Group, Inc., 2022 Term Loan B-1st Lien, 7.324% (SOFR CME +3.000%), 2/15/2029
   172,291
139,483
Camelot U.S. Acquisition, LLC, 2024 Term Loan B-1st Lien, 7.074% (SOFR CME +2.750%), 1/31/2031
   137,460
148,503
Central Parent, Inc., 2024 Term Loan B-1st Lien, 7.579% (SOFR CME +3.250%), 7/6/2029
   135,546
147,456
Cloud Software Group, Inc., 2024 Term Loan B-1st Lien, 7.829% (SOFR CME +3.500%), 3/30/2029
   147,774
 98,997
Proofpoint, Inc., 2024 Term Loan-1st Lien, 7.324% (SOFR CME +3.000%), 8/31/2028
    99,203
 98,750
Quartz Acquireco, LLC, 2025 Term Loan B-1st Lien, 6.568% (SOFR CME +2.250%), 6/28/2030
    98,626
 98,752
Renaissance Holding Corp., 2024 Term Loan B-1st Lien, 8.324% (SOFR CME +4.000%), 4/5/2030
    96,037
 99,500
UKG, Inc., 2024 Term Loan B-1st Lien, 7.300% (SOFR CME +3.000%), 2/10/2031
    99,467
146,070
VS Buyer, LLC, 2024 Term Loan B-1st Lien, 7.070% (SOFR CME +2.750%), 4/12/2031
   145,949
TOTAL
1,132,353
TOTAL FLOATING RATE LOANS
(IDENTIFIED COST $4,890,916)
4,898,504
ASSET-BACKED SECURITIES-0.2%
Automotive-0.2%
 40,834
Enterprise Fleet Financing LLC 2022-4, Class A2, 5.760%, 10/22/2029
    41,079
Equipment Lease-0.0%
  3,842
DLLAD LLC 2023-1A, Class A2, 5.190%, 4/20/2026
     3,844
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $44,670)
44,923
Annual Financial Statements and Additional Information
6
Principal
Amount
or Shares
Value
INVESTMENT COMPANY-2.0%
585,360
Federated Hermes Government Obligations Fund, Premier Shares, 4.26%2
(IDENTIFIED COST $585,360)
$   585,360
TOTAL INVESTMENT IN SECURITIES-99.2%
(IDENTIFIED COST $28,779,895)3
28,997,266
OTHER ASSETS AND LIABILITIES - NET-0.8%4
248,071
NET ASSETS-100%
$29,245,337
Transactions with affiliated investment companies, which are funds managed by the Adviser or an affiliate of the Adviser, during the period ended February 28, 2025, were as follows:  
Bank Loan
Core Fund
Federated Hermes
Institutional
Prime Value
Obligations Fund,
Institutional Shares
Federated Hermes
Government
Obligations Fund,
Premier Shares
Total of
Affiliated
Transactions
Value as of 2/29/2024
$453,982
$1,265,326
$-
$1,719,308
Purchases at Cost
$-
$1,583,438
$7,264,266
$8,847,704
Proceeds from Sales
$(453,982)
$(2,848,680)
$(6,678,906)
$(9,981,568)
Change in Unrealized Appreciation/Depreciation
$(1,614)
$(317)
$-
$(1,931)
Net Realized Gain/(Loss)
$1,614
$233
$-
$1,847
Value as of 2/28/2025
$-
$-
$585,360
$585,360
Shares Held as of 2/28/2025
-
-
585,360
585,360
Dividend Income
$11,524
$6,613
$28,429
$46,566
 
1
Floating/variable note with current rate and current maturity or next reset date shown.
2
7-day net yield.
3
The cost of investments for federal tax purposes amounts to $28,880,565.
4
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of net assets at February 28, 2025.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1-quoted prices in active markets for identical securities.
Level 2-other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3-significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used, as of February 28, 2025, in valuing the Fund's assets carried at fair value:  
Valuation Inputs
Level 1-
Quoted
Prices
Level 2-
Other
Significant
Observable
Inputs
Level 3-
Significant
Unobservable
Inputs
Total
Debt Securities:
Corporate Bonds
$-
$23,468,479
$-
$23,468,479
Floating Rate Loans
-
4,898,504
-
4,898,504
Asset-Backed Securities
-
44,923
-
44,923
Investment Company
585,360
-
-
585,360
TOTAL SECURITIES
$585,360
$28,411,906
$-
$28,997,266
 
The following acronym(s) are used throughout this portfolio:
GMTN
-Global Medium Term Note
SOFR
-Secured Overnight Financing Rate
USD
-Unified School District
See Notes which are an integral part of the Financial Statements
Annual Financial Statements and Additional Information
7
Financial Highlights
(For a Share Outstanding Throughout Each Period) 
Year Ended February 28 or 29,
Period
Ended
2/28/20221
2025
2024
2023
Net Asset Value, Beginning of Period
$22.79
$22.25
$24.32
$25.02
Income From Investment Operations:
Net investment income (loss)2
1.34
1.43
1.28
0.43
Net realized and unrealized gain (loss)
0.33
0.64
(1.96)
(0.86)
TOTAL FROM INVESTMENT OPERATIONS
1.67
2.07
(0.68)
(0.43)
Less Distributions:
Distributions from net investment income
(1.50)
(1.53)
(1.39)
(0.27)
Net Asset Value, End of Period
$22.96
$22.79
$22.25
$24.32
Total Return3
7.52%
9.64%
(2.67)%
(1.74)%
Ratios to Average Net Assets:
Net expenses4
0.50%
0.50%
0.50%
0.50%5
Net investment income
5.84%
6.38%
5.70%
4.67%5
Expense waiver/reimbursement6
0.10%
0.10%
0.10%
0.14%5
Supplemental Data:
Net assets, end of period (000 omitted)
$29,245
$27,212
$28,342
$28,069
Portfolio turnover7
45%
94%
109%
7%
 
1
Reflects operations for the period from December 16, 2021 (commencement of operations) to February 28, 2022.
2
Per share numbers have been calculated using the average shares method.
3
Based on net asset value. Total returns for periods of less than one year are not annualized.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
5
Computed on an annualized basis.
6
This expense decrease is reflected in both the net expense and the net investment income ratios shown above. Amount does not reflect expense waiver/
reimbursement recorded by investment companies in which the Fund may invest.
7
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Financial Statements and Additional Information
8
Statement of Assets and Liabilities
February 28, 2025
 
Assets:
Investment in securities, at value including $585,360 of investments in affiliated holdings* (identified cost $28,779,895, including $585,360 of
identified cost in affiliated holdings)
$28,997,266
Cash
377
Income receivable
436,910
Income receivable from affiliated holdings
1,284
Total Assets
29,435,837
Liabilities:
Income distribution payable
179,379
Payable to adviser (Note 5)
11,121
Total Liabilities
190,500
Net assets for 1,274,000 shares outstanding
$29,245,337
Net Assets Consist of:
Paid-in capital
$31,997,760
Total distributable earnings (loss)
(2,752,423)
Net Assets
$29,245,337
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
$29,245,337 ÷ 1,274,000 shares outstanding, no par value, unlimited shares authorized
$22.96
 
*
See information listed after the Fund's Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Financial Statements and Additional Information
9
Statement of Operations
Year Ended February 28, 2025
 
Investment Income:
Interest
$1,716,325
Dividends received from affiliated holdings*
46,566
TOTAL INCOME
1,762,891
Expenses:
Investment adviser fee (Note 5)
166,578
Waiver/reimbursement of investment adviser fee (Note 5)
(26,418)
Net expenses
140,160
Net investment income
1,622,731
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments (including net realized gain of $1,847 on sales of investments in affiliated holdings*)
152,247
Net realized loss on in-kind redemptions
(86,618)
Net change in unrealized depreciation of investments (including net change in unrealized appreciation of $(1,931) on investments in affiliated
holdings*)
260,819
Net realized and unrealized gain (loss) on investments
326,448
Change in net assets resulting from operations
$1,949,179
 
*
See information listed after the Fund's Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Financial Statements and Additional Information
10
Statement of Changes in Net Assets
 
 
Year Ended February 28 or 29
2025
2024
Increase (Decrease) in Net Assets
Operations:
Net investment income
$1,622,731
$1,766,980
Net realized gain (loss)
65,629
(303,726)
Net change in unrealized appreciation/depreciation
260,819
1,056,753
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
1,949,179
2,520,007
Distributions to Shareholders
(1,793,303)
(1,880,286)
Share Transactions:
Proceeds from sale of shares
12,912,960
446,097
Cost of shares redeemed
(11,035,281)
(2,216,484)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS
1,877,679
(1,770,387)
Change in net assets
2,033,555
(1,130,666)
Net Assets:
Beginning of period
27,211,782
28,342,448
End of period
$29,245,337
$27,211,782
See Notes which are an integral part of the Financial Statements
Annual Financial Statements and Additional Information
11
Notes to Financial Statements
February 28, 2025
1. ORGANIZATION
Federated Hermes ETF Trust (the "Trust") was organized as a Delaware statutory trust on August 23, 2011 and is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Trust consists of eight portfolios. The financial statements included herein are only those of Federated Hermes Short Duration High Yield ETF (the "Fund"). The Fund's investment objective is to seek high current income.
Shares of the Fund are listed for trading on a national securities exchange during the trading day. The Fund's primary listing exchange is NYSE Arca. Any amount of shares can be bought and sold throughout the trading day like shares of other publicly traded companies, and when you buy or sell the Fund's shares in the secondary market, you will pay or receive the market price. However, there can be no guarantee that an active trading market will develop or be maintained, or that the Fund shares listing will continue or remain unchanged.
Shares of the Fund may only be acquired through the Fund's distributor and redeemed directly with the Fund by or through an Authorized Participant in large blocks called Creation Units or multiples thereof. Authorized Participants are registered clearing agents that enter into an agreement with the Fund's distributor to transact in Creation Units. Purchases and redemptions of Creation Units will take place in-kind and/or for cash at the discretion of the Fund. The determination of whether purchases and redemptions of Creation Units will be for cash or in-kind depends primarily on the regulatory requirements and settlement mechanisms relevant to the Fund's portfolio holdings and the Fund is not limited to engaging in in-kind transactions to any particular market circumstances.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by Federated Investment Management Company (the "Adviser").
■
Shares of mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
■
Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and ask quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Adviser, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Adviser's valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser's valuation committee ("Valuation Committee"), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different. The trading prices of the Fund's shares listed on its exchange may differ from the Fund's NAV and will normally be affected by market forces, such as supply and demand, economic conditions, the market value of the Fund's disclosed portfolio holdings and other factors. As a result, trading prices may be lower, higher or the same as the Fund's NAV; and investors may pay more than NAV when buying shares and receive less than NAV when selling shares through the exchange.
Fair Valuation and Significant Events Procedures
Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.
The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-partypricing services' policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based
Annual Financial Statements and Additional Information
12
on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a "bid" evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and ask for the investment (a "mid" evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-incomesecurities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Adviser.
The Adviser has also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
■
With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■
Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;
■
Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
The Adviser has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Adviser. The Trustees periodically review fair valuations made in response to significant events.
Repurchase Agreements
The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.
The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.
The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date.
Distributions of net investment income, if any, are declared and paid monthly. In addition, distributions of capital gains, if any, are declared and paid at least annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretionof premium and discount is included in investment income. The detail of the total fund expense waiver and reimbursement of $26,418 is disclosed in Note 5.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended February 28, 2025, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of February 28, 2025, tax years 2022 through 2025 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and the State of Delaware.
Annual Financial Statements and Additional Information
13
When-Issued and Delayed-Delivery Transactions
The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities, like other securities, are priced in accordance with procedures established by and under the general supervision of the Adviser.
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ materially from those estimated. The Fund applies investment company accounting and reporting guidance.
3. SHARES OF BENEFICIAL INTEREST
The following tables summarize share activity with respect to purchases and redemptions of Creation Units:  
Year Ended
2/28/2025
Year Ended
2/29/2024
Shares sold
560,000
20,000
Shares issued to shareholders in payment of distributions declared
-
-
Shares redeemed
(480,000)
(100,000)
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS
80,000
(80,000)
4. FEDERAL TAX INFORMATION
The accounting treatment of certain items in accordance with income tax regulations may differ from the accounting treatment in accordance with GAAP which may result in permanent differences. In the case of the Fund, such differences primarily result from securities redeemed in-kind.
For the year ended February 28, 2025, permanent differences identified and reclassified among the components of net assets were as follows:  
Increase (Decrease)
Paid-In Capital
Total Distributable
Earnings (Loss)
$(158,079)
$158,079
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended February 28, 2025 and February 29, 2024, were as follows:  
2025
2024
Ordinary income
$1,793,303
$1,880,286
As of February 28, 2025, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income
$60,854
Net unrealized appreciation
$116,701
Capital loss carryforwards
$(2,929,978)
TOTAL
$(2,752,423)
At February 28, 2025, the cost of investments for federal tax purposes was $28,880,565. The net unrealized appreciation of investments for federal tax purposes was $116,701. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $282,034 and unrealized depreciation from investments for those securities having an excess of cost over value of $165,333. The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities.
Annual Financial Statements and Additional Information
14
As of February 28, 2025, the Fund had a capital loss carryforward of $2,929,978 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, thereby reducing the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, these net capital losses retain their character as either short-term or long-term and do not expire.
The following schedule summarizes the Fund's capital loss carryforwards:  
Short-Term
Long-Term
Total
$2,240,317
$689,661
$2,929,978
The Fund used capital loss carryforwards of $50,264 to offset capital gains realized during the year ended February 28, 2025.
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.60% of the Fund's average daily net assets. Under the advisory agreement, the Adviser has contractually agreed to pay all operating expenses of the Fund under a unitary fee structure, except (i) interest and taxes (including, but not limited to, income, excise, transaction, transfer and withholding taxes) and registration fees and expenses; (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities and the execution of portfolio transactions, including brokerage commissions and short sale dividend or interest expense; (iii) expenses incurred in connection with any distribution plan adopted by the Trust in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) Acquired Fund Fees and Expenses; (v) litigation expenses; (vi) proxy-related expenses; (vii) tax reclaim recovery expenses; and (viii) any expenses determined to be extraordinary expenses. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund for competitive reasons such as to maintain the Fund's expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the year ended February 28, 2025, the Adviser voluntarily waived $25,897 of its fee. The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated investment companies. For the year ended February 28, 2025, the Adviser reimbursed $521.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The Adviser, not the Fund, pays FAS.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses of up to 0.25% of average daily net assets, annually, to compensate FSC. Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee.
For the year ended February 28, 2025, the Fund did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Expense Limitation

The Adviser and certain of its affiliates (which may include FAS or FSC) have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, taxes, litigation expenses, extraordinary expenses and proxy-related expenses, if any) paid by the Fund (after the voluntary waivers and/or reimbursements) will not exceed 0.50% (the "Fee Limit") up to but not including the later of (the "Termination Date"): (a) July 1, 2026; or (b) the date of the Fund's next effective Prospectus. These arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Fund's Trustees.
Directors'/Trustees' and Miscellaneous Fees
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies.
Affiliated Shares of Beneficial Interest
As of February 28, 2025, a majority of the shares of beneficial interest outstanding are owned by an affiliate of the Adviser.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities, short-term obligations and in-kind transactions, for the year ended February 28, 2025, were as follows:  
Purchases
$10,797,196
Sales
$12,292,896
Additionally, there were purchases and sales of $12,739,639 and $10,854,388, respectively, in connection with in-kind purchases and sales of the Fund's Shares of Creation Units.
Annual Financial Statements and Additional Information
15
7. INTERFUND LENDING
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Hermes, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of February 28, 2025, there were no outstanding loans. During the year ended February 28, 2025, the program was not utilized.
8. OPERATING SEGMENTS
In this reporting period, the Fund adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. Adoption of the new standard impacted financial statement disclosures only and did not affect the Fund's financial position or the results of its operations. An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.
9. INDEMNIFICATIONS
Under the Fund's organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party's actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
10. FEDERAL TAX INFORMATION (UNAUDITED)
For the fiscal year ended February 28, 2025, 98.8% of total ordinary income distributions qualified as business interest income for purposes of 163(j) and the regulations thereunder.
Annual Financial Statements and Additional Information
16
Report of Independent Registered Public Accounting Firm
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FEDERATED HERMES SHORT DURATION HIGH YIELD ETF:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes Short Duration High Yield ETF (the "Fund") (one of the portfolios constituting Federated Hermes ETF Trust (the "Trust")), including the portfolio of investments, as of February 28, 2025, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the three years in the period then ended and for the period from December 16, 2021 (commencement of operations) through February 28, 2022 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund (one of the portfolios constituting Federated Hermes ETF Trust) at February 28, 2025, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the three years in the period then ended and for the period from December 16, 2021 (commencement of operations) through February 28, 2022, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of February 28, 2025, by correspondence with the custodian, brokers, and others; when replies were not received from brokers or others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   
We have served as the auditor of one or more Federated Hermes investment companies since 1979.
Boston, Massachusetts
April 24, 2025
Annual Financial Statements and Additional Information
17
Shareholder Meeting Results (unaudited)
At a Special Meeting held on November 1, 2024, shareholders of the Federated Hermes ETF Trust (the "Trust") elected Trustees of the Trust. Shareholders of the Trust elected new individuals to serve as Trustees effective January 1, 2025, who will serve on the Board with current Trustees Messrs. J. Christopher Donahue, Thomas R. Donahue, John G. Carson, G. Thomas Hough, Thomas M. O'Neill, John S. Walsh and Ms. Madelyn A. Reilly. Under the Trust's Director Service Policy, Trustees Judge Maureen Lally-Green and Mr. P. Jerome Richey retired from the Board on December 31, 2024. The number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes with respect to the election of each nominee for office, is included below. 
Trustee:
Voting For
Withheld Authority
Abstained
Broker Non-Voting
J. Christopher Donahue
11,485,288.558
40,816.564
0
N/A
Thomas R. Donahue
11,485,288.558
40,816.564
0
N/A
John G. Carson
11,485,288.558
40,816.564
0
N/A
G. Thomas Hough
11,484,904.444
41,200.678
0
N/A
Karen L. Larrimer
11,517,570.948
8,534.174
0
N/A
Max F. Miller
11,485,173.558
40,931.564
0
N/A
Frank J. Nasta
11,485,288.558
40,816.564
0
N/A
Thomas M. O'Neill
11,485,288.558
40,816.564
0
N/A
Madelyn A. Reilly
11,516,385.948
9,719.174
0
N/A
John S. Walsh
11,485,288.558
40,816.564
0
N/A
Annual Financial Statements and Additional Information
18
Evaluation and Approval of Advisory Contract-May 2024
Federated Hermes Short Duration High Yield ETF (the "Fund")
At its meetings in May 2024 (the "May Meetings"), the Fund's Board of Trustees (the "Board"), including those Trustees who are not "interested persons" of the Fund, as defined in the Investment Company Act of 1940 (the "Independent Trustees"), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the "Adviser") (the "Contract") for an additional one-year term. The Board's determination to approve the continuation of the Contract reflects the exercise of its business judgment after considering all of the information and factors believed to be relevant and appropriate on whether to approve the continuation of the existing arrangement. The information, factors and conclusions that formed the basis for the Board's approval are summarized below.
Information Received and Review Process
At the request of the Independent Trustees, the Fund's Chief Compliance Officer (the "CCO") furnished to the Board in advance of its May Meetings an independent written evaluation of the Fund's management fee (the "CCO Fee Evaluation Report"). The Board considered the CCO Fee Evaluation Report, along with other information, in evaluating the reasonableness of the Fund's management fee and in determining to approve the continuation of the Contract.
In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board considered information specifically prepared in connection with the approval of the continuation of the Contract that was presented at the May Meetings. In this regard, in the months preceding the May Meetings, the Board requested and reviewed written responses and supporting materials prepared by the Adviser and its affiliates (collectively, "Federated Hermes") in response to requests posed to Federated Hermes by independent legal counsel on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Trustees deemed reasonably necessary to evaluate the Contract, which included detailed information about the Fund and Federated Hermes furnished to the Board at its meetings throughout the year and in between regularly scheduled meetings on particular matters as the need arose.
The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contracts; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objectives and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark index; (7) the Fund's fees and expenses, including the management fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors they deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (1) the nature and quality of the services provided by the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser's cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize "economies of scale" as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any "fall-out" benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same adviser for what might be viewed as like services; and (6) the extent of care, conscientiousness and independence with which the fund's board members perform their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of the adviser's services and fees. The Board considered that the Securities and Exchange Commission ("SEC") disclosure requirements regarding the basis for a fund board's approval of the fund's investment advisory contract generally align with the factors listed above. The Board was guided by these factors in its evaluation of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Hermes on matters relating to the oversight of the other funds advised by Federated Hermes (each, a "Federated Hermes Fund" and, collectively, the "Federated Hermes Funds").
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19
In addition, the Board considered the preferences and expectations of Fund shareholders and the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew the Contract. In particular, the Board recognized that many shareholders likely have invested in the Fund based on the strength of Federated Hermes' industry standing and reputation and with the expectation that Federated Hermes will have a continuing role in providing advisory services to the Fund. Thus, the Board observed that there are a range of investment options available to the Fund's shareholders in the marketplace and such shareholders, having had the opportunity to consider other investment options, have effectively selected Federated Hermes by virtue of investing in the Fund.
In determining to approve the continuation of the Contract, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate through the exercise of their reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board's determination to approve the continuation of the Contract was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Contract. The Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Trustees met separately in executive session with their independent legal counsel and without management present to review the relevant materials and consider their responsibilities under applicable laws. In addition, senior management representatives of Federated Hermes also met with the Independent Trustees and their independent legal counsel to discuss the materials and presentations furnished to the Board at the May Meetings. The Board considered the approval of the Contract for the Fund as part of its consideration of agreements for funds across the family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
Nature, Extent and Quality of Services
The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of Federated Hermes dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the full range of services provided to the Fund by Federated Hermes. The Board considered the Adviser's personnel, investment philosophy and process, investment research capabilities and resources, trade operations capabilities, experience and performance track record. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Advisers, including the execution of portfolio transactions and the selection of brokers for those transactions. The Board also considered the Adviser's ability to deliver competitive investment performance for the Fund when compared to the Fund's Performance Peer Group (as defined below), which was deemed by the Board to be a useful indicator of how the Adviser is executing the Fund's investment program.
In addition, the Board considered the financial resources and overall reputation of Federated Hermes and its willingness to consider and make investments in personnel, infrastructure, technology, cybersecurity, business continuity planning and operational enhancements that are designed to benefit the Federated Hermes Funds. The Board noted the benefits of the previous significant acquisition of Hermes Fund Managers Limited by Federated Hermes, which has deepened Federated Hermes' investment management expertise and capabilities and expanded its access to analytical resources related to environmental, social and governance ("ESG") factors and issuer engagement on ESG matters where appropriate. The Board considered Federated Hermes' oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes' communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Federated Hermes Funds. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds' officers. The Board considered the special attributes of the Fund as an exchange-traded fund ("ETF") relative to a traditional mutual fund and the benefits that are expected to be realized from an investment in the Fund, rather than a traditional mutual fund. The Board also considered the resources devoted by Federated Hermes in developing and maintaining an infrastructure necessary to support the ongoing operations of the Fund.
The Board received and evaluated information regarding Federated Hermes' regulatory and compliance environment. The Board considered Federated Hermes' compliance program and compliance history and reports from the CCO about Federated Hermes' compliance with applicable laws and regulations, including responses to regulatory developments and any compliance or other issues raised by regulatory agencies. The Board also noted Federated Hermes' support of the Federated Hermes Funds' compliance control structure and the compliance-related resources devoted by Federated Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including Federated Hermes' commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board
Annual Financial Statements and Additional Information
20
considered Federated Hermes' approach to internal audits and risk management with respect to the Federated Hermes Funds and its day-to-day oversight of the Federated Hermes Funds' compliance with their investment objectives and policies as well as with applicable laws and regulations, noting that regulatory and other developments had over time led, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard.
In addition, the Board noted Federated Hermes' commitment to maintaining high quality systems and expending substantial resources to prepare for and respond to ongoing changes due to the market, regulatory and control environments in which the Fund and its service providers operate.
The Board considered Federated Hermes' efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted the benefits to shareholders of being part of the family of Federated Hermes Funds.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund's investment performance, the Board considered performance results in light of the Fund's investment objective, strategies and risks. The Board considered detailed investment reports on, and the Adviser's analysis of, the Fund's performance over different time periods that were provided to the Board throughout the year and in connection with the May Meetings. These reports included, among other items, information on the Fund's gross and net returns, the Fund's investment performance compared to one or more relevant categories or groups of peer funds and the Fund's benchmark index, performance attribution information and commentary on the effect of market conditions. The Board considered that, in its evaluation of investment performance at meetings throughout the year, it focused particular attention on information indicating less favorable performance of certain Federated Hermes Funds for specific time periods and discussed with Federated Hermes the reasons for such performance as well as any specific actions Federated Hermes had taken, or had agreed to take, to seek to enhance Fund investment performance and the results of those actions. In addition, the Board considered information about the Adviser's overall assessment of the functioning of the Fund's arbitrage mechanism.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the "Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered the CCO's view that, in evaluating such comparisons, in some cases there may be differences in the funds' objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
The Board also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.
The Board considered that the Fund's performance fell below the median of the Performance Peer Group for the one-yearperiod ended December 31, 2023. The Board discussed the Fund's performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser's overall capabilities to manage the Fund.
Fund Expenses
The Board considered the management fee and overall expense structure of the Fund and the comparative fee and expense information that had been provided in connection with the May Meetings. In this regard, the Board was presented with, and considered, information regarding the contractual management fee rates, net management fee rates, and total expense ratios relative to an appropriate group of peer funds consisting solely of other actively managed ETFs in the overall category of peer funds selected by Morningstar (the "Expense Peer Group"). The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category. In evaluating such comparisons, the Board noted information about structural, operational and other differences between ETFs and traditional mutual funds, including differences in the marketplace in which each type of product must compete.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered funds are the products most like the Fund, in that they are readily available to
Annual Financial Statements and Additional Information
21
Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle, in fact, chosen and maintained by the Fund's shareholders. The Board noted that the range of such other registered funds' fees and expenses, therefore, appears to be a relevant indicator of what investors have found to be reasonable in the marketplace in which the Fund competes. The Board also considered competition in the general ETF marketplace and the impact of market pressures on the price levels for actively managed ETFs such as the Fund.
Consistent with general ETF practice, the Board noted the Fund's "unitary" fee structure, under which the Adviser, in addition to providing investment management services, arranges for transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate. The Board considered that, other than the management fee, the Adviser pays all operating expenses of the Fund, except for: (i) interest and taxes (including, but not limited to, income, excise, transaction, transfer and withholding taxes); (ii) expenses of the Fund incurred with respect to the acquisition and disposition of portfolio securities and the execution of portfolio transactions, including brokerage commissions and short sale dividend or interest expense; (iii) expenses incurred in connection with any distribution plan adopted by the Trust in compliance with Rule 12b-1 under the 1940 Act, including distribution fees; (iv) acquired fund fees and expenses; (v) litigation expenses; (vi) proxy-related expenses; (vii) tax reclaim recovery expenses; and (viii) any expenses determined to be extraordinary expenses.
The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund's fee rates relative to its Expense Peer Group. In this regard, the Board noted that the contractual advisory fee rate was above the median of the Expense Peer Group, but the Board noted the applicable waivers and reimbursements, and that the overall expense structure of the Fund remained competitive in the context of other factors considered by the Board.
The Board also received and considered information about the nature and extent of services offered and fees charged by Federated Hermes to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO's conclusion that non-registered fund clients are inherently different products due to the following differences, among others: (i) different types of targeted investors; (ii) different applicable laws and regulations; (iii) different legal structures; (iv) different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; (v) the time spent by portfolio managers and their teams (among other personnel across various departments, including legal, compliance and risk management) in reviewing securities pricing; (vi) different SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (vii) different administrative responsibilities; (viii) different degrees of risk associated with management; and (ix) a variety of different costs. The Board also considered information regarding the differences in the nature of the services required for Federated Hermes to manage its proprietary registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution's registered fund, noting the CCO's view that Federated Hermes generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Hermes Funds than in its role as sub-adviser to an unaffiliated third-party registered fund. The Board noted that the CCO did not consider the fees for providing advisory services to other types of clients to be determinative in judging the appropriateness of the Federated Hermes Funds' management fees.
In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
Profitability
The Board received and considered profitability information furnished by Federated Hermes. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made on a fund-by-fund basis, using allocation methodologies specified by the CCO and described to the Board. The Board considered the CCO's view that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs on a fund-by-fund basis continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable because a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Hermes Fund and may produce unintended consequences. In addition, the Board considered the CCO's view that the allocation methodologies used by Federated Hermes in estimating profitability for purposes of reporting to the Board in connection with the continuation of the Contract are consistent with the methodologies previously reviewed by an independent consultant. The Board noted that the independent consultant had previously conducted a review of the allocation methodologies and reported to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's view that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.
Annual Financial Statements and Additional Information
22
The Board also reviewed information compiled by Federated Hermes comparing its profitability information to other publicly-held fund management companies, including information regarding profitability trends over time. The Board recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's conclusion that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive. The Board also considered the CCO's view that Federated Hermes appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Federated Hermes Funds.
Economies of Scale
The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. The Board considered that any reduction in fixed costs associated with the management of the Fund would benefit the Adviser due to the unitary fee structure of the Fund, but that the unitary fee would protect shareholders from a rise in operating costs and/or a decline in Fund assets and is a transparent means of informing the Fund's shareholders of the fees associated with the Fund. The Board also considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense reimbursements are another means for potential economies of scale to be shared with shareholders and can provide protection from an increase in expenses if a Federated Hermes Fund's assets decline. The Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.
The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information is relevant to considering whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of management fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund management fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or "fall-out") benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. In connection with the Board's governance of other Federated Hermes Funds, the Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds' investment advisory contracts, Federated Hermes' affiliates also receive fees for providing other services to the Federated Hermes Funds under separate service contracts including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that Federated Hermes' affiliates provide distribution and shareholder services to the Federated Hermes Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The Board also received and considered information detailing the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
Conclusions
The Board considered: (i) the CCO's conclusion that his observations and the information accompanying the CCO Fee Evaluation Report show that the management fee for the Fund is reasonable; and (ii) the CCO's recommendation that the Board approve the management fee. The Board noted that, under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Contract by the CCO. The CCO also recognized that the Board's
Annual Financial Statements and Additional Information
23
evaluation of the Federated Hermes Funds' advisory and sub-advisory arrangements is a continuing and ongoing process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items, and management has committed to reviewing certain items, for future reporting to the Board as the Board continues its ongoing oversight of the Federated Hermes Funds.
On the basis of the information and factors summarized above, among other information and factors deemed relevant by the Board, and the evaluation thereof, the Board, including the Independent Trustees, unanimously voted to approve the continuation of the Contract. The Board based its determination to approve the Contract on the totality of the circumstances and relevant factors and with a view of past and future long-term considerations. Not all of the factors and considerations identified above were necessarily deemed to be relevant to the Fund, nor did the Board consider any one of them to be determinative.
Annual Financial Statements and Additional Information
24
Funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in funds involves investment risk, including the possible loss of principal.
This information is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.   
 
Federated Hermes Short Duration High Yield ETF

Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedHermes.com/us
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31423L206
Q455585 (4/25)
©2025 Federated Hermes, Inc.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies

Federated Hermes Short Duration High Yield ETF: Not Applicable.

Item 9. Proxy Disclosures for Open-End Management Investment Companies.

Federated Hermes Short Duration High Yield ETF: The Fund's report on its most recent meeting of shareholders is filed under Item 7 of this form.

Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.

Federated Hermes Short Duration High Yield ETF: The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.

Federated Hermes Short Duration High Yield ETF: The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not Applicable

Item 13. Portfolio Managers of Closed-End Management Investment Companies.

Not Applicable

Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not Applicable

Item 15. Submission of Matters to a Vote of Security Holders.

No Changes to Report

Item 16. Controls and Procedures.

(a) The registrant's Principal Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures as of a date within 90 days of the filing date of this report on Form N-CSR.

(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not Applicable

Item 18. Recovery of Erroneously Awarded Compensation

(a) Not Applicable

(b) Not Applicable

Item 19. Exhibits

(a)(1) Not Applicable.

(a)(2) Not Applicable.

(a)(3) Certifications of Principal Executive Officer and Principal Financial Officer.

(a)(4) Not Applicable.

(a)(5) Not Applicable.

(b) Certifications pursuant to 18 U.S.C. Section 1350.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: Federated Hermes ETF Trust

By: /s/ Jeremy D. Boughton
Jeremy D. Boughton, Principal Financial Officer

Date: April 23, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer

Date: April 23, 2025

By: /s/ Jeremy D. Boughton
Jeremy D. Boughton, Principal Financial Officer

Date: April 23, 2025

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