Paige Wilhelm, Head of Prime Liquidity Group, Senior Portfolio Manager and Nicholas Tripodes, Portfolio Manager, Senior Investment Analyst at Federated Hermes join Julie Cooling, Founder & CEO, RIA Channel to discuss liquidity options beyond money market funds.
“We created the microshort fund because we believe there was a gap that existed between traditional money market funds and ultrashort bond type funds out there in the market today,” says Wilhelm. While money market funds support daily and weekly liquidity needs and ultrashort funds tend to take additional risks and serve longer term strategic income goals, microshort funds offer a middle ground.
The Federated Hermes Conservative Microshort Fund harnesses the expertise of both the firm’s liquidity and fixed income teams in order to deliver the potential for higher yields when compared to traditional money market funds, without taking on unnecessary credit risk. With capital preservation and income goals at the forefront, the microshort fund’s yield advantage is driven by its 180 day maturity limit and allocation to very high quality investment grade securities.
The fund is supported by a team of over 30 credit analysts, and utilizes a rigorous credit selection process to mitigate credit risk and stabilize returns in any interest rate environment. In a rising rate environment, an allocation to a microshort fund, can help investors keep pace with rising interest rates and will reset more quickly than an individual security of the same duration, helping protect investors from duration and spread risk.
Federated Hermes is a leading global investment manager specializing in liquidity and fixed income solutions. Federated Hermes is backed by nearly five decades of experience, insights and expertise in the space and manages over $630B in total assets.