Federated Hermes Short Duration Corporate ETF

Federated Hermes Short Duration Corporate ETF (FCSH) is an actively managed bond fund that seeks current income. It holds mostly investment-grade corporate bonds, with an average maturity of 2.8 years as of July 31, 2026. Its managers choose the bonds instead of copying an index, and they may hold up to 10% in junk bonds. That flexibility costs more: 0.30% a year, against an average of about 0.06% for similar funds.

• Over the year to Oct 27, 2026, FCSH returned +1.2%, 7th of 8 among similar funds.
• Its worst full calendar year was 2022 (-5.9%); its best was 2025 (+6.5%).
• The deepest fall in its price history was 8.5% (Dec 31, 2021 to Oct 20, 2022), recovered by May 15, 2024.

As of Jul 31, 2026, the fund held 171 securities; the ten largest made up 17.49% of assets.

The bonds mature in 2.8 years on average (weighted by size), with an average coupon of 4.79%.

• Over the three months to Jul 31, 2026, investors added a net $724K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.23%, +0.11%, -0.18%.

Federated Hermes's managers choose the bonds. The fund does not track an index. The Bloomberg US Corporate 1-5 Year Index is its yardstick for performance, and the fund may lean toward the same broad sectors as that index. At least 80% of net assets must be in corporate bonds and similar debt. Most of it is investment grade, meaning credit agencies rate it as relatively likely to be repaid. Up to 10% may be lower-rated "junk" bonds. The fund can also own Treasuries, mortgage-backed and asset-backed securities, and dollar bonds from foreign companies.

Duration measures how much a bond's price reacts when interest rates change. The managers keep it between 1.5 and 3.5 years and adjust it based on their view of rates. They may use futures, options and swaps to do this. As of July 31, 2026, the fund held two small Treasury futures positions, plus 171 holdings. US issuers made up 89.5% of the fund. Big banks led the list: Bank of America (2.7%), Citigroup (2.4%) and JPMorgan Chase (2.0%), followed by Mars, Wells Fargo and Boeing. The top 10 made up 17.5% of the fund. Portfolio turnover was 21%.

Unlike most ETFs, the fund creates and redeems shares partly or fully in cash, which can add trading costs. Like any ETF, its market price can sit slightly above or below the value of its holdings.

• FCSH charges 0.3% a year, versus an average of 0.06% for the similar funds below (8th of 8, cheapest first).
• Of that, 0.39% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.1% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $41 in the first year and $505 over 10 years (assuming a 5% annual return).

It holds short-maturity, mostly investment-grade corporate bonds whose prices have moved far less than stocks, while paying monthly income.

FCSH could serve as a steadier bond sleeve that pays income every month. Its trailing 12-month yield was 4.24% as of October 27, 2026, and its one-year volatility was 2.2%. It launched in December 2021, so it has no record from 2008 or 2020. In the 2022 rate shock it fell 7.9% between January and September. It did not get back to its old high until May 15, 2024, about 20 months later. Its deepest drop was 8.5%, and its worst calendar year was 2022, at -5.93%. Someone selling shares for cash in a year like that would have taken a loss, though a modest one. Cost is the main drawback. The SEC's standard example puts costs on $10,000 at $41 over one year and $505 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).