N-CSR 1 form18216.htm EDGAR HTML

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

 

 

 

 

811-21904

 

(Investment Company Act File Number)

 

Federated Hermes MDT Series

_______________________________________________________________

 

(Exact Name of Registrant as Specified in Charter)

 

 

 

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 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: 07/31/21

 

 

Date of Reporting Period: 07/31/21

 

 

 

 

 

 

 

 

 

Item 1.Reports to Stockholders
Annual Shareholder Report
July 31, 2021
 
 
Share Class | Ticker
A | QAACX
C | QCACX
Institutional | QIACX
R6 | QKACX
Federated Hermes MDT All Cap Core Fund
Fund Established 2002
A Portfolio of Federated Hermes MDT Series
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from August 1, 2020 through July 31, 2021. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,  
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes MDT All Cap Core Fund (the “Fund”), based on net asset value, for the 12-month reporting period ended July 31, 2021, was 38.40% for Class A Shares, 37.37% for Class C Shares, 38.83% for Institutional Shares and 38.84% for Class R6 Shares. The total return for the Russell 3000® Index (R3000),1 the Fund’s broad-based securities market index, was 38.73% for the same period. The total return of the Morningstar Large Blend Funds Average (MLBFA),2 a peer group average for the Fund, was 36.72% during the same period. The Fund’s and MLBFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the R3000.
During the reporting period, the Fund’s investment strategy focused on stock selection. Stock selection was the most significant factor affecting the Fund’s performance relative to the R3000 during the period.
The following discussion will focus on the performance of the Fund’s R6 Shares relative to the R3000.
Market Overview
The reporting period was marked by the gradual but continuing recovery of the economy from the pandemic. The market has been less volatile than during the prior reporting period, and the market preferences for style in these 12 months have reversed some of the large differentials of the prior period. During the previous 12-month reporting period, the growth style led the value style by almost 35% (the Russell 3000® Growth Index (R3000G)3 returned 28.24% while the Russell 3000® Value Index (R3000V)4 returned -6.67%). During this reporting period, the value style led the growth style by a much more moderate amount of just under 4% (R3000V returned 40.72% and R3000G returned 36.83%). Similarly, in the capitalization ranges, the small cap stocks5 in the Russell 2000® Index6 led the mega-cap stocks in the Russell Top 200® Index7 by 15.53% this period rather than trailing by 20.43% for the prior period. The market still reacted quickly to new economic data, but now there was far less uncertainty about the future than there was at the end of the prior reporting period.
The best performing sectors in the R3000 during the reporting period were Financials (55.49%), Energy (48.42%) and Industrials (47.58%). Underperforming sectors during the same period included Consumer Staples (18.99%), Health Care (27.88%) and Real Estate (35.53%).
Annual Shareholder Report
1
STOCK SELECTION
When looking at the Fund’s outperformance in terms of fundamental and technical characteristics, most of the Fund’s outperformance relative to the R3000 was driven by strong stock selection among young companies with very high analyst conviction but prices not near 52-week highs. Unfavorable stock selection among stocks with prices near 52-week highs and neutral to high analyst conviction provided a partial offset. The Fund’s sector exposures continued to remain close to R3000 weights; there were no significant overweight or underweight positions at the end of the reporting period. Favorable stock selection in the Information Technology, Materials and Energy sectors contributed the most to the Fund’s outperformance versus the benchmark. The largest unfavorable offsets included Consumer Discretionary, Financials and Industrials sectors.
Individual stocks enhancing the Fund’s performance during the reporting period included Spirit AeroSystems Holdings, Inc. (Class A), DXC Technology Co. and Fortinet, Inc.
Individual stocks detracting from the Fund’s performance during the reporting period included Tesla Inc., Cogent Communications Holdings Inc. and Kimberly-Clark Corporation. Tesla outperformed the R3000 but was underweighted by the Fund.
1
Please see the footnotes to the line graphs below for definitions of, and further information about, the Russell 3000® Index.
2
Please see the footnotes to the line graphs below for definitions of, and further information about, the Morningstar peer group average.
3
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000® Growth Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad growth market. The Russell 3000® Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.*
4
The Russell 3000® Value Index measures the performance of the broad value segment of U.S. equity universe. It includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market. The Russell 3000® Value Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.*
Annual Shareholder Report
2
5
Small-cap stocks may be less liquid and subject to greater price volatility than large-cap stocks.
6
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.*
7
The Russell Top 200® Index measures the performance of the largest cap segment of the U.S. equity universe. The Russell Top 200® Index is a subset of the Russell 3000® Index. It includes approximately 200 of the largest securities based on a combination of their market cap and current index membership and represents approximately 68% of the total market capitalization of the U.S. market. The Russell Top 200® Index is constructed to provide a comprehensive and unbiased barometer for this very large cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.*
*
The index is unmanaged, and it is not possible to invest directly in an index.
Annual Shareholder Report
3
FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes MDT All Cap Core Fund (the “Fund”) from July 31, 2011 to July 31, 2021, compared to the Russell 3000®Index (R3000)2 and the Morningstar Large Blend Funds Average (MLBFA).3 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of July 31, 2021  
■ Total returns shown for the Class C Shares include the maximum contingent deferred sales charge of 1.00% as applicable. 
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the line graph above.
Average Annual Total Returns for the Period Ended 7/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
30.78%
16.63%
14.39%
Class C Shares
36.37%
17.08%
14.33%
Institutional Shares
38.83%
18.31%
15.37%
Class R6 Shares4
38.84%
18.29%
14.93%
R3000
38.73%
17.36%
15.16%
MLBFA
36.72%
15.80%
13.73%
Annual Shareholder Report
4
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450); for Class C Shares a 1.00% contingent deferred sales charge would be applied on any redemption less than one year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The R3000 and MLBFA have been adjusted to reflect reinvestment of dividends of securities.
2
The R3000 measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. The R3000 is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected. The index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. The R3000 is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance.
3
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
4
Prior to September 1, 2016, Class R6 Shares were known as Class R Shares and included 12b-1 fees and certain other expenses. As of September 1, 2016, Class R6 does not include such 12b-1 fees and certain other expenses, and the performance shown above for Class R6 prior to September 1, 2016, reflects the higher Class R expenses.
Annual Shareholder Report
5
Portfolio of Investments Summary Table (unaudited)
At July 31, 2021, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Information Technology
27.2%
Health Care
14.0%
Financials
12.3%
Consumer Discretionary
11.5%
Communication Services
10.0%
Industrials
8.5%
Consumer Staples
5.5%
Materials
3.4%
Real Estate
3.0%
Energy
1.4%
Utilities
1.3%
Cash Equivalents2
1.7%
Other Assets and Liabilities—Net3
0.2%
TOTAL
100%
 
1
Except for Cash Equivalents and Other Assets and Liabilities, sector classifications are based
upon, and individual portfolio securities are assigned to, the classifications of the Global Industry
Classification Standard (GICS) except that the Adviser assigns a classification to securities not
classified by the GICS and to securities for which the Adviser does not have access to the
classification made by the GICS.
2
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements other than those representing cash collateral for securities lending.
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and
Liabilities.
Annual Shareholder Report
6
Portfolio of Investments
July 31, 2021  
Shares
 
 
Value
         
 
COMMON STOCKS—   98.1%
 
 
 
Communication Services—   10.0%
 
13,395
 
Activision Blizzard, Inc.
$1,120,090  
9,446
1
Alphabet, Inc., Class A
25,452,530 
81,453
1
Altice USA, Inc.
2,503,051  
65,486
1
Cars.com, Inc.
791,071    
189
1
Charter Communications, Inc.
140,625    
13,344
 
Electronic Arts, Inc.
1,921,002  
11,705
1
Facebook, Inc.
4,170,492  
2,955
1
Netflix, Inc.
1,529,419  
69,931
 
News Corp., Inc., Class A
1,722,401  
14,846
1
Pinterest, Inc.
874,429    
10,893
1
Take-Two Interactive Software, Inc.
1,889,064  
36,970
 
Verizon Communications, Inc.
2,062,187  
 
 
TOTAL
44,176,361
 
 
Consumer Discretionary—   11.5%
 
5,124
 
Advance Auto Parts, Inc.
1,086,595  
3,295
1
Amazon.com, Inc.
10,964,409 
1,585
1
AutoZone, Inc.
2,573,358  
8,667
1
Burlington Stores, Inc.
2,901,712  
2,553
1
Cooper-Standard Holding, Inc.
66,506     
4,789
1
CROCs, Inc.
650,394    
3,997
 
Dick’s Sporting Goods, Inc.
416,248    
10,690
 
Domino’s Pizza, Inc.
5,617,488  
3,282
1
Five Below, Inc.
638,086    
35,900
1
Ford Motor Co.
500,805    
53,197
1
Goodyear Tire & Rubber Co.
835,725    
7,769
 
Home Depot, Inc.
2,549,708  
1,839
 
Kontoor Brands, Inc.
101,844    
2,035
 
L Brands, Inc.
162,942    
2,114
1
LGI Homes, Inc.
361,283    
14,470
 
Lowe’s Cos., Inc.
2,788,224  
169,981
1
Macy’s, Inc.
2,889,677  
7,196
 
McDonald’s Corp.
1,746,541  
2,682
 
Nike, Inc., Class B
449,262    
7,463
1
O’Reilly Automotive, Inc.
4,506,458  
14,148
1
SeaWorld Entertainment, Inc.
670,757    
2,668
 
Starbucks Corp.
323,975    
2,306
1
Tesla, Inc.
1,584,683  
834
 
Wingstop, Inc.
142,873    
17,573
1
YETI Holdings, Inc.
1,692,807  
Annual Shareholder Report
7
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Consumer Discretionary—   continued
 
37,039
 
Yum! Brands, Inc.
$4,866,554  
 
 
TOTAL
51,088,914
 
 
Consumer Staples—   5.5%
 
36,107
1
BJ’s Wholesale Club Holdings, Inc.
1,828,459  
72,342
 
Colgate-Palmolive Co.
5,751,189  
5,439
 
Costco Wholesale Corp.
2,337,247  
9,374
 
Hershey Foods Corp.
1,676,821  
7,602
 
Molson Coors Beverage Company, Class B
371,662    
18,951
 
PepsiCo, Inc.
2,974,359  
95,231
 
Philip Morris International, Inc.
9,531,671  
 
 
TOTAL
24,471,408
 
 
Energy—   1.4%
 
4,297
1
Cheniere Energy, Inc.
364,944    
14,278
 
Continental Resources, Inc.
487,594    
46,821
 
EOG Resources, Inc.
3,411,378  
17,376
 
Helmerich & Payne, Inc.
498,170    
63,055
 
Marathon Oil Corp.
730,808    
7,087
 
Marathon Petroleum Corp.
391,344    
6,339
 
Targa Resources, Inc.
266,935    
 
 
TOTAL
6,151,173
 
 
Financials—   12.3%
 
765
1
Alleghany Corp.
507,271    
40,855
 
Allstate Corp.
5,313,193  
57,314
 
Ally Financial, Inc.
2,943,647  
130,312
 
Bank of New York Mellon Corp.
6,688,915  
11,854
 
Equitable Holdings, Inc.
365,933    
5,368
 
Fidelity National Financial, Inc.
239,466    
35,342
 
Interactive Brokers Group, Inc., Class A
2,186,256  
310
1
Markel Corp.
373,913    
12,712
 
MSCI, Inc., Class A
7,575,844  
13,379
 
NASDAQ, Inc.
2,498,261  
43,356
 
Northern Trust Corp.
4,892,725  
37,749
 
Prudential Financial, Inc.
3,785,470  
1,662
 
Signature Bank
377,224    
87,929
 
State Street Corp.
7,662,133  
24,637
 
The Travelers Cos., Inc.
3,668,942  
40,471
 
Tradeweb Markets, Inc.
3,510,050  
38,383
 
Zions Bancorporation, N.A.
2,001,673  
 
 
TOTAL
54,590,916
 
 
Health Care—   14.0%
 
32,266
 
AbbVie, Inc.
3,752,536  
23,240
 
Amgen, Inc.
5,613,390  
40,396
1
AnaptysBio, Inc.
928,300    
6,580
 
Anthem, Inc.
2,526,786  
Annual Shareholder Report
8
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
47,299
1
Avantor, Inc.
$1,777,496  
1,025
1
Biohaven Pharmaceutical Holding Co. Ltd.
129,160    
5,128
 
Cerner Corp.
412,240    
15,619
 
CVS Health Corp.
1,286,381  
14,814
1
Davita, Inc.
1,781,384  
6,122
1
Envista Holdings Corp.
263,736    
3,975
 
Humana, Inc.
1,692,794  
26,976
1
IQVIA Holdings, Inc.
6,681,955  
10,787
1
Jazz Pharmaceuticals PLC.
1,828,612  
25,357
 
Johnson & Johnson
4,366,475  
38,540
 
McKesson Corp.
7,855,608  
50,137
 
Merck & Co., Inc.
3,854,031  
4,943
1
Moderna, Inc.
1,747,845  
37,635
1
Myriad Genetics, Inc.
1,190,395  
6,423
1
Progyny, Inc.
357,697    
5,032
1
Shockwave Medical, Inc.
915,824    
3,995
1
United Therapeutics Corp.
726,810    
10,911
1
Veeva Systems, Inc.
3,630,199  
13,106
1
Vertex Pharmaceuticals, Inc.
2,641,907  
816
1
Waters Corp.
318,085    
28,585
 
Zoetis, Inc.
5,794,180  
 
 
TOTAL
62,073,826
 
 
Industrials—   8.5%
 
10,871
 
AGCO Corp.
1,436,168  
16,108
 
Allegion PLC
2,200,353  
18,699
1
Astronics Corp.
319,379    
5,977
1
Avis Budget Group, Inc.
494,716    
57,393
 
Carrier Global Corp.
3,170,963  
28,412
1
CIRCOR International, Inc.
876,226    
2,880
 
Flowserve Corp.
121,219    
12,880
 
Fortune Brands Home & Security, Inc.
1,255,414  
5,908
1
Generac Holdings, Inc.
2,477,579  
21,775
1
IAA Spinco, Inc.
1,316,952  
117,749
1
KAR Auction Services, Inc.
1,940,504  
5,425
 
Lennox International, Inc.
1,787,158  
1,213
 
Manpower, Inc.
143,838    
37,452
 
Masco Corp.
2,236,259  
134,208
 
Otis Worldwide Corp.
12,018,326 
37,735
 
Ryder System, Inc.
2,873,520  
24,178
 
Spirit AeroSystems Holdings, Inc., Class A
1,044,731  
11,956
1
SPX Corp.
796,987    
3,051
 
United Parcel Service, Inc.
583,839    
2,779
1
XPO Logistics, Inc.
385,419    
 
 
TOTAL
37,479,550
Annual Shareholder Report
9
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   27.2%
 
2,339
1
Adobe, Inc.
$1,453,993  
16,358
 
Alliance Data Systems Corp.
1,525,383  
6,095
1
Ambarella, Inc.
600,297    
107,832
 
Apple, Inc.
15,728,376 
16,812
 
Applied Materials, Inc.
2,352,503  
6,182
1
Arista Networks, Inc.
2,351,571  
35,739
1
Arrow Electronics, Inc.
4,237,573  
10,232
1
Asana, Inc.
727,086    
1,652
1
Atlassian Corp. PLC
537,098    
12,438
 
Bentley Systems, Inc.
756,355    
8,490
 
Broadcom, Inc.
4,121,046  
21,864
1
Cirrus Logic, Inc.
1,805,748  
2,221
1
CloudFlare, Inc.
263,477    
9,243
1
Commvault Systems, Inc.
698,678    
13,421
1
Crowdstrike Holdings, Inc.
3,403,700  
4,803
1
Datadog, Inc.
531,692    
8,511
1
Dropbox, Inc.
268,011    
108,883
1
DXC Technology Co.
4,353,142  
19,101
1
EPAM Systems, Inc.
10,692,740 
9,896
1
FleetCor Technologies, Inc.
2,555,345  
28,488
1
Fortinet, Inc.
7,755,573  
1,816
1
Gartner, Inc., Class A
480,750    
17,451
 
Hewlett Packard Enterprise Co.
253,040    
50,473
 
HP, Inc.
1,457,156  
9,288
1
HubSpot, Inc.
5,535,834  
46,303
 
Intel Corp.
2,487,397  
8,352
1
MA-COM Technology Solutions Holdings, Inc.
515,485    
5,562
 
Mastercard, Inc.
2,146,598  
45,610
 
Microsoft Corp.
12,994,745 
6,681
1
Nutanix, Inc.
240,650    
28,612
 
NVIDIA Corp.
5,579,054  
28,048
 
Oracle Corp.
2,444,103  
5,230
1
Palo Alto Networks, Inc.
2,087,031  
21,076
 
Paychex, Inc.
2,398,870  
9,396
1
Paylocity Corp.
1,949,294  
15,923
1
PayPal Holdings, Inc.
4,387,264  
40,911
1
Plantronics, Inc.
1,276,014  
37,764
 
Qualcomm, Inc.
5,657,047  
66,109
 
Western Union Co.
1,534,390  
19,682
 
Xerox Holdings Corp.
474,927    
 
 
TOTAL
120,619,036
 
 
Materials—   3.4%
 
83,199
1
Alcoa Corp.
3,340,440  
46,545
1
Allegheny Technologies, Inc.
955,569    
Annual Shareholder Report
10
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Materials—   continued
 
51,721
1
Berry Global Group, Inc.
$3,325,143  
138,595
 
Chemours Co./The
4,608,284  
34,432
 
Dow, Inc.
2,140,293  
2,676
1
Ingevity Corp.
227,299    
2,163
 
RPM International, Inc.
187,294    
 
 
TOTAL
14,784,322
 
 
Real Estate—   3.0%
 
11,565
 
Coresite Realty Corp.
1,598,399  
967
 
Crown Castle International Corp.
186,718    
10,460
 
Extra Space Storage, Inc.
1,821,504  
12,177
 
Iron Mountain, Inc.
532,865    
76,810
 
Macerich Co. (The)
1,252,003  
32,263
 
National Storage Affiliates Trust
1,747,687  
10,197
 
Public Storage
3,186,359  
7,255
 
SBA Communications, Corp.
2,473,882  
8,122
 
SL Green Realty Corp.
604,764    
 
 
TOTAL
13,404,181
 
 
Utilities—   1.3%
 
2,865
 
American Electric Power Co., Inc.
252,464    
2,309
 
Entergy Corp.
237,642    
48,448
 
Exelon Corp.
2,267,366  
37,132
 
OGE Energy Corp.
1,253,205  
29,350
 
Public Service Enterprises Group, Inc.
1,826,451  
 
 
TOTAL
5,837,128
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $315,455,980)
434,676,815
 
 
INVESTMENT COMPANY—   1.7%
 
7,659,010
 
Federated Hermes Institutional Prime Value Obligations Fund, Institutional
Shares, 0.02%2
(IDENTIFIED COST $7,662,074)
7,662,074  
 
 
TOTAL INVESTMENT IN SECURITIES—99.8%
(IDENTIFIED COST $323,118,054)3
442,338,889
 
 
OTHER ASSETS AND LIABILITIES - NET—0.2%4
771,266
 
 
TOTAL NET ASSETS—100%
$443,110,155
Annual Shareholder Report
11
An affiliated company is a company in which the Fund, alone or in combination with other funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the period ended July 31, 2021, were as follows:  
 
Value as of
7/31/2020
Purchases
at Cost*
Proceeds
from Sales*
Consumer Discretionary:
 
 
 
Wingstop, Inc.**
$3,630,781
$—
$(3,030,488)
Health Care:
 
 
 
AnaptysBio, Inc.**
$759,600
$—
$(41,091)
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS
$4,390,381
$—
$(3,071,579)
Annual Shareholder Report
12
 
Change in
Unrealized
Appreciation/
Depreciation*
Net
Realized Gain/
(Loss)*
Value as of
7/31/2021
Shares
Held as of
7/31/2021
Dividend
Income*
 
 
 
 
 
$(757,014)
$299,594
$142,873
834
$101,373
 
 
 
 
 
$197,277
$12,514
$928,300
40,396
$—
$(559,737)
$312,108
$1,071,173
41,230
$101,373
 
*
A portion of the amount shown may have been recorded when the Fund did not have ownership
of at least 5% of the voting shares.
**
At July 31, 2021, the Fund no longer has ownership of at least 5% voting shares.
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended July 31, 2021, were as follows:  
 
Federated Hermes
Government
Obligations Fund
Premier Shares*
Federated Hermes
Institutional
Prime Value
Obligations Fund
Institutional Shares
Total of
Affiliated
Transactions
Value as of 7/31/2020
$7,296,777
$5,679,483
$12,976,260
Purchases at Cost
$16,818,480
$142,155,254
$158,973,734
Proceeds from Sales
$(24,115,257)
$(140,173,771)
$(164,289,028)
Change in Unrealized Appreciation/
Depreciation
N/A
$521
$521
Net Realized Gain/(Loss)
N/A
$587
$587
Value as of 7/31/2021
$—
$7,662,074
$7,662,074
Shares Held as of 7/31/2021
—
7,659,010
7,659,010
Dividend Income
$1,494
$5,982
$7,476
 
*
All or a portion of the balance/activity for the fund relates to cash collateral received on
securities lending transactions.
 
1
Non-income-producing security.
2
7-day net yield.
3
The cost of investments for federal tax purposes amounts to $323,255,042.
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 total net assets at July 31, 2021.
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.
Annual Shareholder Report
13
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.
As of July 31, 2021, all investments of the Fund utilized Level 1 inputs in valuing the Fund’s assets carried at fair value.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
14
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$31.77
$29.90
$30.01
$24.95
$21.77
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)
0.081
0.131
0.161
0.091
0.26
Net realized and unrealized gain (loss)
11.90
2.69
1.81
5.08
3.11
Total From Investment Operations
11.98
2.82
1.97
5.17
3.37
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.12)
(0.11)
(0.07)
(0.11)
(0.19)
Distributions from net realized gain
(0.88)
(0.84)
(2.01)
—
—
Total Distributions
(1.00)
(0.95)
(2.08)
(0.11)
(0.19)
Net Asset Value, End of Period
$42.75
$31.77
$29.90
$30.01
$24.95
Total Return2
38.40%
9.66%
7.80%
20.78%
15.56%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.04%
1.04%
1.08%
1.36%
1.38%
Net investment income
0.23%
0.44%
0.57%
0.31%
0.69%
Expense waiver/reimbursement4
0.17%
0.20%
0.24%
0.00%5
0.00%5
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$109,747
$79,301
$69,221
$40,539
$33,799
Portfolio turnover
63%
160%
87%
82%
77%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
15
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$29.57
$27.99
$28.37
$23.66
$20.66
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)
(0.18)1
(0.08)1
(0.05)1
(0.11)1
(0.19)
Net realized and unrealized gain (loss)
11.04
2.50
1.68
4.82
3.23
Total From Investment Operations
10.86
2.42
1.63
4.71
3.04
Less Distributions:
 
 
 
 
 
Distributions from net investment income
—
—
—
—
(0.04)
Distributions from net realized gain
(0.88)
(0.84)
(2.01)
—
—
Total Distributions
(0.88)
(0.84)
(2.01)
—
(0.04)
Net Asset Value, End of Period
$39.55
$29.57
$27.99
$28.37
$23.66
Total Return2
37.37%
8.86%
6.96%
19.91%
14.72%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.79%
1.79%
1.85%
2.09%
2.13%
Net investment income (loss)
(0.52)%
(0.31)%
(0.20)%
(0.41)%
(0.06)%
Expense waiver/reimbursement4
0.16%
0.21%
0.24%
0.00%5
0.00%5
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$38,028
$31,030
$32,178
$39,625
$36,440
Portfolio turnover
63%
160%
87%
82%
77%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
16
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$32.22
$30.29
$30.37
$25.24
$22.02
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)
0.191
0.221
0.251
0.161
0.39
Net realized and unrealized gain (loss)
12.08
2.74
1.81
5.16
3.09
Total From Investment Operations
12.27
2.96
2.06
5.32
3.48
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.21)
(0.19)
(0.13)
(0.19)
(0.26)
Distributions from net realized gain
(0.88)
(0.84)
(2.01)
—
—
Total Distributions
(1.09)
(1.03)
(2.14)
(0.19)
(0.26)
Net Asset Value, End of Period
$43.40
$32.22
$30.29
$30.37
$25.24
Total Return2
38.83%
10.01%
8.08%
21.15%
15.90%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.74%
0.74%
0.78%
1.07%
1.08%
Net investment income
0.52%
0.73%
0.87%
0.57%
1.01%
Expense waiver/reimbursement4
0.21%
0.25%
0.29%
0.00%5
0.00%5
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$283,822
$243,490
$215,799
$95,290
$52,169
Portfolio turnover
63%
160%
87%
82%
77%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Financial Highlights – Class R6 Shares1
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$31.62
$29.75
$29.89
$24.85
$21.46
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)
0.202
0.212
0.232
0.182
0.21
Net realized and unrealized gain (loss)
11.84
2.69
1.79
5.06
3.18
Total From Investment Operations
12.04
2.90
2.02
5.24
3.39
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.22)
(0.19)
(0.15)
(0.20)
—
Distributions from net realized gain
(0.88)
(0.84)
(2.01)
—
—
Total Distributions
(1.10)
(1.03)
(2.16)
(0.20)
—
Net Asset Value, End of Period
$42.56
$31.62
$29.75
$29.89
$24.85
Total Return3
38.84%
10.00%
8.08%
21.17%
15.80%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses4
0.73%
0.73%
0.81%
1.02%
1.07%
Net investment income
0.54%
0.75%
0.78%
0.65%
0.95%
Expense waiver/reimbursement5
0.15%
0.17%
0.18%
0.00%6
0.00%6
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$11,513
$8,571
$9,183
$20,425
$17,363
Portfolio turnover
63%
160%
87%
82%
77%
 
1
Prior to September 1, 2016, the Fund’s Class R6 Shares were designated as Class R Shares.
2
Per share numbers have been calculated using the average shares method.
3
Based on net asset value.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
5
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
6
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
18
Statement of Assets and Liabilities
July 31, 2021
 
Assets:
 
Investment in securities, at value including $7,662,074 of investment in an affiliated
holding and $1,071,173 of investment in affiliated companies* (identified cost
$323,118,054)
$442,338,889
Income receivable
219,354
Income receivable from an affiliated holding
292
Receivable for investments sold
1,828,085
Receivable for shares sold
953,045
Total Assets
445,339,665
Liabilities:
 
Payable for investments purchased
1,072,089
Payable for shares redeemed
933,393
Payable for investment adviser fee (Note 5)
13,665
Payable for administrative fee (Note 5)
1,903
Payable for auditing fees
26,300
Payable for transfer agent fees
11,936
Payable for distribution services fee (Note 5)
23,885
Payable for other service fees (Notes 2 and 5)
40,390
Accrued expenses (Note 5)
105,949
Total Liabilities
2,229,510
Net assets for 10,339,095 shares outstanding
$443,110,155
Net Assets Consist of:
 
Paid-in capital
$268,404,039
Total distributable earnings (loss)
174,706,116
Total Net Assets
$443,110,155
Annual Shareholder Report
19
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
Class A Shares:
 
Net asset value per share ($109,747,361 ÷ 2,567,424 shares outstanding), no par value,
unlimited shares authorized
$42.75
Offering price per share (100/94.50 of $42.75)
$45.24
Redemption proceeds per share
$42.75
Class C Shares:
 
Net asset value per share ($38,027,995 ÷ 961,430 shares outstanding), no par value,
unlimited shares authorized
$39.55
Offering price per share
$39.55
Redemption proceeds per share (99.00/100 of $39.55)
$39.15
Institutional Shares:
 
Net asset value per share ($283,822,071 ÷ 6,539,741 shares outstanding), no par value,
unlimited shares authorized
$43.40
Offering price per share
$43.40
Redemption proceeds per share
$43.40
Class R6 Shares:
 
Net asset value per share ($11,512,728 ÷ 270,500 shares outstanding), no par value,
unlimited shares authorized
$42.56
Offering price per share
$42.56
Redemption proceeds per share
$42.56
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
20
Statement of Operations
Year Ended July 31, 2021
 
Investment Income:
 
Dividends (including $107,355 received from affiliated companies and an affiliated
holding*)
$5,077,009
Net income on securities loaned (includes $1,494 earned from an affiliated holding
related to cash collateral balances*) (Note 2)
88,863
TOTAL INCOME
5,165,872
Expenses:
 
Investment adviser fee (Note 5)
2,851,801
Administrative fee (Note 5)
320,424
Custodian fees
39,991
Transfer agent fees (Note 2)
350,321
Directors’/Trustees’ fees (Note 5)
3,329
Auditing fees
27,800
Legal fees
11,957
Portfolio accounting fees
130,677
Distribution services fee (Note 5)
256,572
Other service fees (Notes 2 and 5)
312,940
Share registration costs
73,590
Printing and postage
38,338
Miscellaneous (Note 5)
36,313
TOTAL EXPENSES
4,454,053
Waiver and Reimbursements:
 
Waiver/reimbursement of investment adviser fee (Note 5)
(603,073)
Reimbursement of other operating expenses (Notes 2 and 5)
(185,157)
TOTAL WAIVER AND REIMBURSEMENTS
(788,230)
Net expenses
3,665,823
Net investment income
1,500,049
Realized and Unrealized Gain (Loss) on Investments:
 
Net realized gain on investments (including net realized gain of $312,695 on sales of
investments in affiliated companies and an affiliated holding*)
65,974,347
Net change in unrealized appreciation of investments (including net change in
unrealized appreciation of $(559,216) on investments in affiliated companies and an
affiliated holding*)
66,920,393
Net realized and unrealized gain (loss) on investments
132,894,740
Change in net assets resulting from operations
$134,394,789
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
21
Statement of Changes in Net Assets
 
 
Year Ended July 31
2021
2020
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$1,500,049
$1,858,375
Net realized gain (loss)
65,974,347
3,253,617
Net change in unrealized appreciation/depreciation
66,920,393
24,231,474
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
134,394,789
29,343,466
Distributions to Shareholders:
 
 
Class A Shares
(2,423,144)
(2,420,345)
Class C Shares
(882,794)
(981,926)
Institutional Shares
(8,071,148)
(7,530,512)
Class R6 Shares
(290,075)
(293,094)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(11,667,161)
(11,225,877)
Share Transactions:
 
 
Proceeds from sale of shares
138,525,280
138,101,946
Proceeds from shares issued in connection with the tax-free transfer
of assets from PNC Multi-Factor All Cap Fund
—
4,799,602
Net asset value of shares issued to shareholders in payment of
distributions declared
10,673,152
10,177,441
Cost of shares redeemed
(191,208,255)
(135,185,593)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(42,009,823)
17,893,396
Change in net assets
80,717,805
36,010,985
Net Assets:
 
 
Beginning of period
362,392,350
326,381,365
End of period
$443,110,155
$362,392,350
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
22
Notes to Financial Statements
July 31, 2021
1. ORGANIZATION
Federated Hermes MDT Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of five portfolios. The financial statements included herein are only those of Federated Hermes MDT All Cap Core Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers four classes of shares: Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is long-term capital appreciation.
On November 15, 2019, the Fund acquired all of the net assets of PNC Multi-Factor All Cap Fund (the “Acquired Fund”), an open-end investment company, in a tax-free reorganization in exchange for shares of the Fund pursuant to a plan of reorganization approved by the Acquired Fund’s shareholders on November 5, 2019. The purpose of the transaction was to combine two portfolios with comparable investment objectives and strategies. For financial reporting purposes, the assets received and the shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Fund’s realized gains and losses with amounts distributable to shareholders for tax purposes.
For every one share of the Acquired Fund’s Class A Shares exchanged, a shareholder received 0.707 shares of the Fund’s Class A Shares.
For every one share of the Acquired Fund’s Class C Shares exchanged, a shareholder received 0.692 shares of the Fund’s Class C Shares.
For every one share of the Acquired Fund’s Class I Shares exchanged, a shareholder received 0.714 shares of the Fund’s Institutional Shares.
The Fund received net assets from the Acquired Fund as the result of the tax-free reorganization as follows:  
Shares of the
Fund Issued
Acquired Fund’s
Net Assets
Received
Unrealized
Depreciation1
Net Assets
of the Fund
Immediately
Prior to
Combination
Net Assets
of the Fund
Immediately
After
Combination
158,091
$4,799,602
$481,958
$334,525,804
$339,325,406
 
1
Unrealized Depreciation is included in the Net Assets Received amount shown above.
Annual Shareholder Report
23
Assuming the acquisition had been completed on August 1, 2019, the beginning of the annual reporting period of the Fund, the Fund’s pro forma results of operations for the year ended July 31, 2020, were as follows:  
Net investment income
$1,879,088
Net realized and unrealized gain on investments
27,688,497
Net increase in net assets resulting from operations
$29,567,585
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amount of earnings of the Acquired Fund that has been included in the Fund’s Statement of Changes in Net Assets as of July 31, 2020.
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:
■
Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■
Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
■
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 asked quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, 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 Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the 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
Annual Shareholder Report
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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.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee 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-party pricing 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 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 Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and 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 asked 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-income securities 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 Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser 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;
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25
■
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 Trustees have 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 Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
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 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 annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/
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accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursements of $788,230 is disclosed in this Note 2 and Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Transfer Agent Fees
For the year ended July 31, 2021, transfer agent fees for the Fund were as follows:  
 
Transfer Agent
Fees Incurred
Transfer Agent
Fees Reimbursed
Class A Shares
$89,021
$(20,328)
Class C Shares
30,281
(4,494)
Institutional Shares
229,533
(160,335)
Class R6 Shares
1,486
—
TOTAL
$350,321
$(185,157)
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended July 31, 2021, other service fees for the Fund were as follows:  
 
Other Service
Fees Incurred
Class A Shares
$227,416
Class C Shares
85,524
TOTAL
$312,940
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue 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 July 31, 2021, 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 July 31, 2021, tax years 2018 through 2021 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.
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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.
Securities Lending
The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund normally receives cash collateral for securities loaned that is invested in affiliated money market funds, other money market instruments and/or repurchase agreements. Investments in money market funds may include funds with a “floating” NAV that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if the investee fund’s NAV decreases, result in the Fund recognizing losses and being required to cover the decrease in the value of the cash collateral. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
Securities lending transactions are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.
As of July 31, 2021, the Fund had no outstanding securities on loan.
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
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28
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 Trustees.
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:  
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
516,489
$19,262,460
690,025
$19,860,088
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
69,799
2,108,622
Shares issued to shareholders in payment of
distributions declared
65,002
2,282,814
75,909
2,245,758
Shares redeemed
(510,501)
(18,302,996)
(654,712)
(18,099,902)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
70,990
$3,242,278
181,021
$6,114,566
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
150,210
$5,136,189
229,788
$6,229,160
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
5,925
167,267
Shares issued to shareholders in payment of
distributions declared
25,498
828,435
32,298
888,524
Shares redeemed
(263,607)
(8,987,701)
(368,127)
(9,700,529)
NET CHANGE RESULTING FROM CLASS C
SHARE TRANSACTIONS
(87,899)
$(3,023,077)
(100,116)
$(2,415,578)
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29
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
3,029,771
$110,406,642
3,765,883
$109,245,509
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
82,367
2,523,713
Shares issued to shareholders in payment of
distributions declared
206,534
7,372,239
227,539
6,839,149
Shares redeemed
(4,253,413)
(160,052,945)
(3,642,257)
(103,350,480)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
(1,017,108)
$(42,274,064)
433,532
$15,257,891
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class R6 Shares:
Shares
Amount
Shares
Amount
Shares sold
101,756
$3,719,989
96,159
$2,767,189
Shares issued to shareholders in payment of
distributions declared
5,416
189,664
6,915
204,010
Shares redeemed
(107,736)
(3,864,613)
(140,698)
(4,034,682)
NET CHANGE RESULTING FROM CLASS R6
SHARE TRANSACTIONS
(564)
$45,040
(37,624)
$(1,063,483)
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(1,034,581)
$(42,009,823)
476,813
$17,893,396
4. FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended July 31, 2021 and 2020, was as follows:  
 
2021
2020
Ordinary income1
$7,381,835
$5,661,147
Long-term capital gains
$4,285,326
$5,564,730
 
1
For tax purposes, short-term capital gain distributions are considered ordinary
income distributions.
As of July 31, 2021, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income1
$39,831,151
Net unrealized appreciation
$119,083,847
Undistributed long-term capital gains
$15,791,118
 
1
For tax purposes, short-term capital gains are considered ordinary income in determining
distributable earnings.
The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for the deferral of losses on wash sales.
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30
At July 31, 2021, the cost of investments for federal tax purposes was $323,255,042. The net unrealized appreciation of investments for federal tax purposes was $119,083,847. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $121,767,254 and net unrealized depreciation from investments for those securities having an excess of cost over value of $2,683,407.
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 0.70% of the Fund’s average daily net assets. 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 the year ended July 31, 2021, the Adviser voluntarily waived $596,738 of its fee and voluntarily reimbursed $185,157 of transfer agent fees. 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 July 31, 2021, the Adviser reimbursed $6,335.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:  
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the annualized fee paid to FAS was 0.079% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
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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’s Class A Shares, and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:  
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class C Shares
0.75%
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 July 31, 2021, distribution services fees for the Fund were as follows:  
 
Distribution Services
Fees Incurred
Class C Shares
$256,572
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares.
For the year ended July 31, 2021, FSC retained $23,374 of fees paid by the Fund. For the year ended July 31, 2021, Fund’s Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended July 31, 2021, FSC retained $22,026 in sales charges from the sale of Class A Shares. FSC also retained $282 of CDSC relating to redemptions of Class A Shares and $1,738 relating to redemptions of Class C Shares, respectively.
Other Service Fees
For the year ended July 31, 2021, FSSC received $5,820 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSSC, FAS and FSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Effective October 1, 2021, total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class C Shares Institutional Shares and R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.04%, 1.81%, 0.74% and 0.73% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) October 1, 2022; or (b) the date of the Fund’s next effective Prospectus. Prior to
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October 1, 2021, the Fee Limit for the Class C Shares was 1.79%. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the 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. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended July 31, 2021, were as follows:  
Purchases
$248,446,110
Sales
$302,981,491
7. CONCENTRATION OF RISK
The Fund may invest a portion of its assets in securities of companies that are deemed by the Fund’s management to be classified in similar business sectors. Economic developments may have an effect on the liquidity and volatility of the portfolio securities. A substantial portion of the Fund’s portfolio may be comprised of entities in the Information Technology sector. As a result, the Fund may be more susceptible to any economic, business, political or other developments which generally affect these entities.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 23, 2021. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), or a replacement rate as appropriate, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of July 31, 2021, the Fund had no outstanding loans. During the year ended July 31, 2021, the Fund did not utilize the LOC.
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9. 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 July 31, 2021, there were no outstanding loans. During the year ended July 31, 2021, the program was not utilized.
10. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
11. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended July 31, 2021, the amount of long-term capital gains designated by the Fund was $4,285,326.
For the fiscal year ended July 31, 2021, 32.27% of total ordinary income distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.
Of the ordinary income (including short-term capital gain) distributions made by the Fund during the year ended July 31, 2021, 32.26% qualify for the dividend received deduction available to corporate shareholders.
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Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES OF FEDERATED HERMES MDT SERIES AND SHAREHOLDERS OF FEDERATED HERMES MDT ALL CAP CORE FUND:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes MDT All Cap Core Fund (the “Fund”) (one of the portfolios constituting Federated Hermes MDT Series (the “Trust”)), including the portfolio of investments, as of July 31, 2021, 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 five years in the period then ended 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 MDT Series) at July 31, 2021, 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 five years in the period then ended, 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 standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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.
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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 July 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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
September 23, 2021
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2021 to July 31, 2021.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.  
 
Beginning
Account Value
2/1/2021
Ending
Account Value
7/31/2021
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$1,203.20
$5.68
Class C Shares
$1,000
$1,198.50
$9.76
Institutional Shares
$1,000
$1,204.90
$4.05
Class R6 Shares
$1,000
$1,205.00
$3.99
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,019.64
$5.21
Class C Shares
$1,000
$1,015.92
$8.95
Institutional Shares
$1,000
$1,021.12
$3.71
Class R6 Shares
$1,000
$1,021.17
$3.66
 
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
 
Class A Shares
1.04%
Class C Shares
1.79%
Institutional Shares
0.74%
Class R6 Shares
0.73%
Annual Shareholder Report
38
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2020, the Trust comprised five portfolio(s), and the Federated Hermes Fund Family consisted of 41 investment companies (comprising 163 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: May 2006
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
Annual Shareholder Report
39
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Vice President, Federated Hermes, Inc.; President, Director/Trustee
and CEO, Federated Advisory Services Company, Federated Equity
Management Company of Pennsylvania, Federated Global Investment
Management Corp., Federated Investment Counseling, Federated
Investment Management Company; President of some of the Funds in
the Federated Hermes Fund Family and Director, Federated Investors
Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Director, Federated Hermes, Inc.;
Chairman and Director, Southpointe Distribution Services, Inc. and
President, Technology, Federated Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors,
Director, KLX Energy Services Holdings, Inc. (oilfield services); former
Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
40
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty
Furniture Companies, Inc.; formerly, Director, Member of Governance
and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; and Director and Vice Chair, Our Campaign for the
Church Alive!, Inc.
Annual Shareholder Report
41
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity and
Director, The Golisano Children’s Museum of Naples, Florida.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Senior Vice President for Legal Affairs, General Counsel
and Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Director of Risk Management and Associate General Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms. Reilly served as Assistant General Counsel of Compliance and
Enterprise Risk as well as Senior Counsel of Environment, Health and
Safety, PPG Industries.
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
Annual Shareholder Report
42
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
OFFICERS 
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Annual Shareholder Report
43
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: June 2006
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen F. Auth
Birth Date:
September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: June 2012
Principal Occupations: Stephen F. Auth is Chief Investment Officer of
various Funds in the Federated Hermes Fund Family; Executive Vice
President, Federated Investment Counseling, Federated Global
Investment Management Corp. and Federated Equity Management
Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment
Management Company and Passport Research, Ltd. (investment
advisory subsidiary of Federated); Senior Vice President, Global
Portfolio Management Services Division; Senior Vice President,
Federated Investment Management Company and Passport
Research, Ltd.; Senior Managing Director and Portfolio Manager,
Prudential Investments.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR
VICE PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
 
Annual Shareholder Report
44
Evaluation and Approval of Advisory Contract–May 2021
Federated Hermes MDT All Cap Core Fund (the “Fund”)
At its meetings in May 2021 (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 MDTA LLC (the “Adviser”) 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 presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (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. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.
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 on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional
Annual Shareholder Report
45
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: the Adviser’s investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate) and comments on the reasons for the Fund’s performance; the Fund’s investment objectives; the Fund’s expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring and managing the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund’s relationship to the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the “Federated Hermes Funds”), which include a comprehensive array of funds with different investment objectives, policies and strategies, and the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Hermes Funds and Federated Hermes’ affiliates that service them (including communications from regulatory agencies), as well as Federated Hermes’ responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Hermes Funds and/or Federated Hermes may be responding to them. The Board noted that its evaluation process is evolutionary and that the criteria considered and the emphasis placed on relevant criteria may change in recognition of changing circumstances in the mutual fund marketplace.
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the
Annual Shareholder Report
46
fund, its benchmark, and comparable funds); (2) an adviser’s cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with a fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the 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 an adviser’s services and fees). The Board noted 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 review 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 Federated Hermes Funds.
In addition to considering the above-referenced factors, the Board was mindful of 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 have invested in the Fund 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 in the marketplace there are a range of investment options available to the Fund’s shareholders 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 Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection
Annual Shareholder Report
47
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 Federated Hermes Funds family, 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 the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by the Adviser and its affiliates. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade execution 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 the Adviser’s ability and experience in attracting and retaining qualified personnel to service the Fund. The Fund’s ability to deliver competitive performance when compared to its Performance Peer Group (as defined below) was also deemed to be relevant by the Board as 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 significant acquisition of Hermes Fund Managers Limited by Federated Hermes in 2018, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters.
The Board considered the quality of the Adviser’s communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account the Adviser’s communications with the Board in light of the market volatility amidst the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
Annual Shareholder Report
48
The Board received and evaluated information regarding the Adviser’s regulatory and compliance environment. The Board considered the Adviser’s compliance program, compliance history, and reports from the CCO about the Adviser’s 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, in particular, the compliance-related resources devoted by the Adviser and its affiliates in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including the Adviser’s commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ 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 to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered discussions with Federated Hermes regarding the implementation of its business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. 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, including changes associated with the pandemic.
Based on these considerations, the Board concluded that the nature, extent and quality of the Adviser’s investment management and related services warrant the continuation of the Contract.
Fund Investment Performance
In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks, as disclosed in the Fund’s prospectus. 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 include, among other items, information on the Fund’s gross and net returns, the Fund’s investment performance compared to one or more relevant investment categories and the Fund’s benchmark index, portfolio attribution information and commentary on the effect of current and recent market conditions.
Annual Shareholder Report
49
The Board also reviewed comparative information regarding the performance of other mutual funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”), noting 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, in evaluating such comparisons, that in some cases there may be differences in the funds’ investment objectives or investment management techniques, or the costs to implement funds, even within the same Performance Peer Group. In this connection, the Board considered that the Fund’s quantitative focus makes fee and expense comparisons particularly difficult as the funds in the Performance Peer Group varied widely in their complexity, and the management of the Fund is among the more complex relative to its Performance Peer Group. The Board also considered a report comparing the performance of the Fund solely to other funds with a quantitative focus in the Performance Peer Group.
For the one-year, three-year and five-year periods ended December 31, 2020, the Fund’s performance was above the median of the Performance Peer Group. In addition, the Board was informed by the Adviser that, for the same periods, the Fund outperformed its benchmark index for the one-year, three-year and five-year periods.
Following such evaluation and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Contract.
Fund Expenses
The Board considered the advisory 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 advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its deliberations. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because such comparisons are
Annual Shareholder Report
50
believed to be more relevant. The Board considered that other mutual funds are the products most like the Fund, in that they are readily available to 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 mutual funds’ fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.
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. In this regard, the Board had been previously advised that, while comparisons to its Expense Peer Group are relevant in judging the reasonableness of advisory fees, the Fund’s quantitative focus makes fee and expense comparisons particularly difficult. Although the Fund’s advisory fee was above the median of its Expense Peer Group range, the funds in the Expense Peer Group varied widely in their complexity, and the Board has been informed that the management of the Fund is among the more complex funds relative to its Expense Peer Group.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-mutual fund clients (such as institutional separate accounts) and third-party unaffiliated mutual funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that mon-mutual 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, addressing different administrative responsibilities, and addressing different degrees of risk associated with management; and (vi) 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 mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s mutual 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
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unaffiliated third-party mutual 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’ advisory fees.
Following such evaluation and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Contract.
Profitability and Other Benefits
The Board also received financial information about Federated Hermes, including information regarding the compensation and ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. This information covered not only the fees under the Federated Hermes Funds’ investment advisory contracts, but also fees received by Federated Hermes’ affiliates for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of 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 any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds. In addition, the Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Hermes Fund shareholders and/or reported to the Board their intention to do so (or continue to do so) in the future. Moreover, the Board received and considered regular reports from Federated Hermes throughout the year as to the institution, adjustment or elimination of these voluntary waivers and/or reimbursements.
The Board received and considered information furnished by Federated Hermes, as requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses 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 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. The allocation information, including the CCO’s view that cost allocations on a fund-by-fund basis may be unreliable, was considered in the evaluation by the Board. In addition, the Board considered
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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 that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
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 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.
In 2019, the Board approved a reduction of 5 basis points in the contractual advisory fee.
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 calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as personnel and processes for the portfolio management (including market data on which portfolio managers make investment decisions), trading operations, issuer engagement (including with respect to ESG matters), shareholder services, compliance, business continuity, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and use of data. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments (as well as the benefits of any economies of scale, should they exist) are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and that such waivers and 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 also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in
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connection with the May Meetings. The Board considered the beliefs of Federated Hermes and the CCO that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply breakpoints, at higher levels and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fees as a fund attains a certain size.
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 was 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 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 for future reporting to the Board or further consideration by management 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. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes MDT Series (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes MDT All Cap Core Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s investment adviser as the administrator for the Program with respect to the Fund (the “Administrator”). Each affiliated Federated Hermes advisory subsidiary (including the Fund’s investment adviser) that serves as investment adviser to a Federated Hermes Fund (including the Fund) has been approved as the administrator of the Program with respect to each Federated Hermes Fund that is managed by such advisory subsidiary (collectively, the “Administrator”). The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2021, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2020 through March 31, 2021 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where
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applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
■ confirmation that the Fund did not utilize alternative funding sources during the Period;
■ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
■ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
■ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
■ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit; and
■ liquidity events during the Period, including the impact on liquidity caused by extended non-U.S. market closures and the March-April 2020 market conditions, and the fact that there were no specific liquidity events during the Period that materially affected the Fund’s liquidity risk.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual 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 mutual funds involves investment risk, including the possible loss of principal.
This Report 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 MDT All Cap Core Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31421R106
CUSIP 31421R205
CUSIP 31421R304
CUSIP 31421R718
37309 (9/21)
© 2021 Federated Hermes, Inc.
 
Annual Shareholder Report
July 31, 2021
 
 
Share Class  | Ticker
A | QABGX
C | QCBGX
Institutional | QIBGX
R6 | QKBGX
Federated Hermes MDT Balanced Fund
Fund Established 2002
A Portfolio of Federated Hermes MDT Series
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from August 1, 2020 through July 31, 2021. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,  
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes MDT Balanced Fund (the “Fund”), based on net asset value for the 12-month reporting period ended July 31, 2021, was 23.31% for Class A Shares, 22.37% for Class C Shares, 23.59% for Institutional Shares and 23.70% for Class R6 Shares. Over the same period, the Fund’s custom blended benchmark (“Blended Index”),1 which consists of a 60%/40% blend of the Standard & Poor’s 500 Index(S&P 500)2 and the Bloomberg U.S. Aggregate Bond Index (BAB),3 returned 20.52%. The total return of the Morningstar US Allocation 50% - 70% Equity Category Average (MA50-70),4 a peer group average for the Fund, was 23.53% during the period. The Fund’s and the MA50-70’s total return for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the Blended Index.
During the reporting period, the Fund’s investment strategy focused on overall asset allocation, security selection within the domestic equity segment of the portfolio, sector allocation within the fixed income segment of the portfolio and security selection among the REIT investments of the portfolio. These were the most significant factors affecting the Fund’s performance relative to the Blended Index during the period.
The following discussion will focus on the performance of the Fund’s R6 Shares relative to the Blended Index.
MArket Overview
The reporting period featured a continuing recovery of the economy from the pandemic and strong performance in the equity market as evidenced by the 38.73% return of the whole market Russell 3000® Index.5 Market volatility declined and the market preferences for style in the reporting period reversed some of the large differentials of the prior period. During the prior reporting period, the growth style led the value style by almost 35% (the Russell 3000® Growth Index (R3000G)6 returned 28.24% while the Russell 3000® Value Index (R3000V)7 returned -6.67%). During this reporting period, the value style led the growth style by a much more moderate amount of just under 4% (R3000V returned 40.72% and R3000G returned 36.83%). Similarly, in the capitalization ranges, the small cap stocks8 in the Russell 2000® Index9 led the mega-cap stocks in the Russell Top 200® Index10 by 15.53% rather than trailing by 20.43%, as they did the prior reporting period. The market still reacted quickly to new economic data, but now there was far less uncertainty about the future than there was at the end of the prior reporting period.
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International equities11 in developed markets had a solid result although they underperformed the domestic equity market during the reporting period with the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE) Index12 returning 30.31%. Emerging market13 equity results were more modest, with the MSCI Emerging Markets Index14 returning 23.42% during the reporting period.
While short-term rates were largely unchanged, rates on intermediate- and long-term maturities increased from the extreme lows of last summer resulting in a loss of -0.70% for the BAB Index during the reporting period.15
ASSET ALLOCATION
The performance differential between equities and fixed income was material over the entire period. A significant overweight position to equities throughout the reporting period contributed positively to the Fund’s relative results.
EQUITIES
Domestic equity investments finished ahead of their benchmark, the Russell 3000® Index, during the reporting period. Investments in the Information Technology, Materials and Consumer Discretionary sectors were the most significant positive factors, while investments in the Financials, Consumer Staples and Industrials sectors were the most significant negative contributors to relative results.
FIXED INCOME
During the reporting period, the fixed income portion of the portfolio outperformed the BAB. Sector allocation made the most significant positive contribution to relative performance with security selection, much of it from an allocation to Treasury Inflation Protected notes, also a positive contributor.
REITS
REIT investments finished behind their benchmark, the MSCI US REIT Index,16 during the reporting period. An underweight position in shares of companies in the Self-Storage sector, which performed steadily, and security selection within the Health Care and Residential sectors, where the most distressed companies rallied materially off the lows at the beginning of the period, were the most negative contributors to relative results.
1
The Fund’s Blended Index, which reflects 60% of the S&P 500 and 40% of the BAB, is being used for comparison purposes because, although it is not the Fund’s broad-based securities market index, the Fund’s Adviser believes it is more reflective of the Fund’s balanced investment style.
2
Please see the footnotes to the line graphs below for definitions of, and further information about, the S&P 500 Index, one of the Fund’s broad-based securities market indices. The S&P 500’s return for the 12-month reporting period was 36.45%.
3
Please see the footnotes to the line graphs below for definitions of, and further information about, the BAB, one of the Fund’s broad-based securities market indices. The BAB’s return for the 12-month reporting period was -0.70%.
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4
Please see the footnotes to the line graphs below for definitions of, and further information about, the Morningstar peer group average.
5
The Russell 3000® Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.*
6
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000® Growth Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad growth market. The Russell 3000® Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.*
7
The Russell 3000® Value Index measures the performance of the broad value segment of U.S. equity universe. It includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market. The Russell 3000® Value Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.*
8
Small-cap stocks may be less liquid and subject to greater price volatility than large-cap stocks.
9
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.*
10
The Russell Top 200® Index measures the performance of the largest cap segment of the U.S. equity universe. The Russell Top 200® Index is a subset of the Russell 3000® Index. It includes approximately 200 of the largest securities based on a combination of their market cap and current index membership and represents approximately 68% of the total market capitalization of the U.S. market. The Russell Top 200® Index is constructed to provide a comprehensive and unbiased barometer for this very large cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.*
11
International investing involves special risks including currency risk, increased volatility of foreign securities, political risks and differences in auditing and other financial standards.
12
The MSCI EAFE Index is an equity index which captures large and mid cap representation across 21 developed markets countries around the world, excluding the U.S. and Canada.*
13
Prices of emerging markets securities can be significantly more volatile than the prices of securities in developed countries, and currency risks and political risks are accentuated in emerging markets.
14
The MSCI Emerging Markets Index is an unmanaged index consisting of 27 emerging market countries.*
15
Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.
16
The MSCI REIT Index is a free float-adjusted market capitalization weighted index that is comprised of equity Real Estate Investment Trusts (REITs). The index is based on the MSCI USA Investable Market Index (IMI), its parent index, which captures the large, mid and small cap segments of the USA market.*
*
The index is unmanaged, and it is not possible to invest directly in an index.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes MDT Balanced Fund (the “Fund”) from July 31, 2011 to July 31, 2021, compared to the Standard and Poor’s 500 Index (S&P 500),2 the Bloomberg U.S. Aggregate Bond Index (BAB),3 60% S&P 500/40% BAB (Blended Index) and the Morningstar Allocation-50% to 70% Equity Funds Average (MA50-70).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of July 31, 2021  
■ Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00% as applicable. 
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the line graph above.
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Average Annual Total Returns for the Periods Ended 7/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
16.53%
10.32%
8.98%
Class C Shares
21.37%
10.74%
8.95%
Institutional Shares
23.59%
11.85%
9.87%
Class R6 Shares5
23.70%
11.85%
9.56%
S&P 500
36.45%
17.35%
15.35%
BAB
-0.70%
3.13%
3.35%
Blended Index
20.52%
11.76%
10.66%
MA50-70
23.53%
9.94%
8.59%
 
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450); for Class C Shares, a 1.00% contingent deferred sales charge would be applied on any redemption less than one year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500, BAB and MA50-70 have been adjusted to reflect reinvestment of dividends on securities in the indexes.
2
The S&P 500 Index, a broad-based securities market index of the Fund, is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500 is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. The S&P 500 is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance.
3
The BAB, a broad-based securities market index of the Fund, is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market. The BAB is unmanaged and, unlike the Fund, is not affected by cash flows. Effective August 24, 2021, the name of the index changed from Bloomberg Barclays U.S. Aggregate Bond Index to Bloomberg U.S. Aggregate Bond Index. It is not possible to invest directly in an index. The BAB is not adjusted to reflect sales charges, expenses or other fees that the SEC requires to be reflected in the Fund’s performance.
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4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
Prior to September 1, 2016, Class R6 Shares were known as Class R Shares and included 12b-1 fees and certain other expenses. As of September 1, 2016, Class R6 does not include such 12b-1 fees and certain other expenses, and the performance shown above for Class R6 prior to September 1, 2016, reflects the higher Class R expenses.
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Portfolio of Investments Summary Tables (unaudited)
At July 31, 2021, the Fund’s portfolio composition1 was as follows: 
Portfolio Composition
Percentage of
Total Net Assets
Domestic Equity Securities
57.0%
Corporate Debt Securities
10.3%
International Equity Securities (including International Exchange-Traded Funds)
8.9%
Mortgage Core Fund
3.0%
High Yield Bond Core Fund
2.7%
U.S. Treasury Securities2
2.5%
Bank Loan Core Fund
2.0%
Project and Trade Finance Core Fund
1.5%
Emerging Markets Core Fund
1.3%
Asset-Backed Securities
0.9%
Commercial Mortgage-Backed Securities
0.8%
Mortgage-Backed Securities
0.3%
Government Agency
0.1%
Municipal Bond3
0.0%
Collateralized Mortgage Obligations3
0.0%
Securities Lending Collateral4
0.1%
Cash Equivalents5
7.8%
Derivative Contracts3,6
0.0%
Other Assets and Liabilities—Net7
0.8%
TOTAL
100%
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At July 31, 2021, the Fund’s sector composition8 for its equity securities (excluding exchange-traded funds) was as follows: 
Sector Composition
Percentage of
Equity Securities
Information Technology
26.2%
Health Care
13.8%
Consumer Discretionary
12.5%
Financials
12.1%
Industrials
9.5%
Communication Services
8.8%
Consumer Staples
5.8%
Real Estate
5.7%
Materials
3.1%
Utilities
1.3%
Energy
1.2%
Total
100%
 
1
See the Fund’s Prospectus and Statement of Additional Information for a description of the
types of securities in which the Fund invests. As of the date specified above, the Fund owned
shares of one or more affiliated investment companies. For purposes of this table, affiliated
investment companies (other than an affiliated money market mutual fund) in which the Fund
invested less than 10% of its net assets, are listed individually in the table.
2
Includes U.S. Treasuries pledged as collateral to ensure the Fund is able to satisfy the obligations
of its outstanding futures contracts.
3
Represents less than 0.1%.
4
Represents cash collateral received for portfolio securities on loan that may be invested in
affiliated money market funds, other money market instruments and/or repurchase agreements.
5
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements other than those representing cash collateral for securities lending.
6
Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as
applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact
of a derivative contract on the Fund’s performance may be larger than its unrealized
appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of
a derivative contract may provide a better indication of the contract’s significance to the
portfolio. More complete information regarding the Fund’s direct investments in derivative
contracts, including unrealized appreciation (depreciation), value and notional values or amounts
of such contracts, can be found in the table at the end of the Portfolio of Investments included
in this Report.
7
Assets, other than investments in securities and derivative contracts, less liabilities. See
Statement of Assets and Liabilities.
8
Sector classifications are based upon, and individual portfolio securities are assigned to, the
classifications of the Global Industry Classification Standard (GICS) except that the Adviser
assigns a classification to securities not classified by the GICS and to securities for which the
Adviser does not have access to the classification made by the GICS.
Annual Shareholder Report
8
Portfolio of Investments
July 31, 2021  
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   57.9%
 
 
 
Communication Services—   5.1%
 
5,703
 
Activision Blizzard, Inc.
$476,885    
2,376
1
Alphabet, Inc., Class A
6,402,203  
9,730
1
Altice USA, Inc.
299,003    
21,112
1
Cars.com, Inc.
255,033    
348
1
Charter Communications, Inc.
258,929    
3,811
 
Electronic Arts, Inc.
548,632    
2,382
1
Facebook, Inc.
848,707    
6,754
 
Lumen Technologies, Inc.
84,222     
19,249
 
News Corp., Inc., Class A
474,103    
2,935
1
Pinterest, Inc.
172,872    
2,310
1
Take-Two Interactive Software, Inc.
400,600    
14,027
 
Verizon Communications, Inc.
782,426    
 
 
TOTAL
11,003,615
 
 
Consumer Discretionary—   7.2%
 
1,044
 
Advance Auto Parts, Inc.
221,391    
1,029
1
Amazon.com, Inc.
3,424,090  
346
1
AutoZone, Inc.
561,755    
2,632
1
Burlington Stores, Inc.
881,194    
1,955
1
Capri Holdings Ltd.
110,086    
440
1
Cooper-Standard Holding, Inc.
11,462     
630
1
CROCs, Inc.
85,560     
1,060
 
Dick’s Sporting Goods, Inc.
110,388    
3,306
 
Domino’s Pizza, Inc.
1,737,270  
1,149
1
Five Below, Inc.
223,388    
24,635
1
Ford Motor Co.
343,658    
2,558
1
G-III Apparel Group Ltd.
76,382     
15,297
1
Goodyear Tire & Rubber Co.
240,316    
3,667
 
Home Depot, Inc.
1,203,473  
755
 
L Brands, Inc.
60,453     
371
1
LGI Homes, Inc.
63,404     
6,086
 
Lowe’s Cos., Inc.
1,172,711  
43,386
1
Macy’s, Inc.
737,562    
2,000
 
McDonald’s Corp.
485,420    
2,144
1
O’Reilly Automotive, Inc.
1,294,633  
3,062
1
SeaWorld Entertainment, Inc.
145,169    
1,009
 
Starbucks Corp.
122,523    
623
1
Tesla, Inc.
428,126    
1,003
 
Wingstop, Inc.
171,824    
4,331
1
YETI Holdings, Inc.
417,205    
Annual Shareholder Report
9
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Consumer Discretionary—   continued
 
10,540
 
Yum! Brands, Inc.
$1,384,851  
 
 
TOTAL
15,714,294
 
 
Consumer Staples—   3.4%
 
1,691
2
Albertsons Cos., Inc.
36,526     
6,671
1
BJ’s Wholesale Club Holdings, Inc.
337,819    
271
 
Coca-Cola Bottling Co.
108,170    
26,085
 
Colgate-Palmolive Co.
2,073,757  
104
 
Costco Wholesale Corp.
44,691     
337
 
Estee Lauder Cos., Inc., Class A
112,501    
6,075
 
Hershey Foods Corp.
1,086,696  
5,083
 
PepsiCo, Inc.
797,777    
23,001
 
Philip Morris International, Inc.
2,302,170  
1,048
1
Post Holdings, Inc.
107,252    
2,149
 
Procter & Gamble Co.
305,652    
 
 
TOTAL
7,313,011
 
 
Energy—   0.7%
 
13,000
 
Continental Resources, Inc.
443,950    
9,513
 
EOG Resources, Inc.
693,117    
5,348
 
Helmerich & Payne, Inc.
153,327    
21,158
 
Marathon Oil Corp.
245,222    
 
 
TOTAL
1,535,616
 
 
Financials—   7.0%
 
285
1
Alleghany Corp.
188,984    
10,516
 
Allstate Corp.
1,367,606  
17,829
 
Ally Financial, Inc.
915,698    
36,583
 
Bank of New York Mellon Corp.
1,877,805  
242
 
Evercore, Inc., Class A
31,992     
15,952
 
Huntington Bancshares, Inc.
224,604    
9,463
 
Interactive Brokers Group, Inc., Class A
585,381    
3,357
 
MSCI, Inc., Class A
2,000,638  
4,743
 
NASDAQ, Inc.
885,660    
44,000
 
New Residential Investment Corp.
429,440    
11,430
 
Northern Trust Corp.
1,289,876  
6,902
 
Prudential Financial, Inc.
692,133    
932
 
Santander Consumer USA Holdings, Inc.
38,240     
23,831
 
State Street Corp.
2,076,633  
9,961
 
The Travelers Cos., Inc.
1,483,392  
9,566
 
Tradeweb Markets, Inc.
829,659    
5,580
 
Zions Bancorporation, N.A.
290,997    
 
 
TOTAL
15,208,738
 
 
Health Care—   8.0%
 
9,183
 
AbbVie, Inc.
1,067,983  
Annual Shareholder Report
10
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
4,945
 
Amgen, Inc.
$1,194,415  
11,086
1
AnaptysBio, Inc.
254,756    
1,318
 
Anthem, Inc.
506,125    
12,393
1
Avantor, Inc.
465,729    
849
1
Biohaven Pharmaceutical Holding Co. Ltd.
106,983    
580
 
CIGNA Corp.
133,104    
15,524
1
Community Health Systems, Inc.
206,780    
3,813
 
CVS Health Corp.
314,039    
3,872
1
Davita, Inc.
465,608    
953
 
Eli Lilly & Co.
232,056    
1,634
1
Envista Holdings Corp.
70,393     
900
 
Humana, Inc.
383,274    
338
1
IDEXX Laboratories, Inc.
229,343    
7,106
1
IQVIA Holdings, Inc.
1,760,156  
2,525
1
Jazz Pharmaceuticals PLC.
428,038    
7,106
 
Johnson & Johnson
1,223,653  
8,952
 
McKesson Corp.
1,824,686  
13,595
 
Merck & Co., Inc.
1,045,048  
2,015
1
Moderna, Inc.
712,504    
7,854
1
Myriad Genetics, Inc.
248,422    
3,787
 
Pfizer, Inc.
162,121    
1,738
1
Progyny, Inc.
96,789     
1,239
1
SAGE Therapeutics, Inc.
54,181     
1,169
1
Shockwave Medical, Inc.
212,758    
432
1
United Therapeutics Corp.
78,594     
3,644
1
Veeva Systems, Inc.
1,212,395  
4,079
1
Vertex Pharmaceuticals, Inc.
822,245    
191
1
Waters Corp.
74,454     
8,612
 
Zoetis, Inc.
1,745,652  
 
 
TOTAL
17,332,284
 
 
Industrials—   5.5%
 
212
 
Acuity Brands, Inc.
37,180     
2,875
 
AGCO Corp.
379,816    
7,271
 
Allegion PLC
993,219    
1,980
1
Avis Budget Group, Inc.
163,885    
16,827
 
Carrier Global Corp.
929,692    
7,124
1
CIRCOR International, Inc.
219,704    
1,665
 
Flowserve Corp.
70,080     
3,032
 
Fortune Brands Home & Security, Inc.
295,529    
1,171
1
Generac Holdings, Inc.
491,070    
5,025
1
IAA Spinco, Inc.
303,912    
414
 
Illinois Tool Works, Inc.
93,841     
Annual Shareholder Report
11
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Industrials—   continued
 
32,966
1
KAR Auction Services, Inc.
$543,280    
2,523
 
Lennox International, Inc.
831,152    
9,134
 
Masco Corp.
545,391    
36,390
 
Otis Worldwide Corp.
3,258,724  
10,000
 
Pitney Bowes, Inc.
80,000     
9,727
 
Ryder System, Inc.
740,711    
6,409
 
Spirit AeroSystems Holdings, Inc., Class A
276,933    
7,730
1
SPX Corp.
515,282    
2,704
 
TransUnion
324,642    
1,458
1
TriNet Group, Inc.
120,985    
3,535
 
United Parcel Service, Inc.
676,458    
233
1
XPO Logistics, Inc.
32,315     
614
 
Xylem, Inc.
77,272     
 
 
TOTAL
12,001,073
 
 
Information Technology—   15.2%
 
1,432
1
Adobe, Inc.
890,174    
2,935
 
Alliance Data Systems Corp.
273,689    
1,705
1
Ambarella, Inc.
167,925    
25,312
 
Apple, Inc.
3,692,008  
3,030
 
Applied Materials, Inc.
423,988    
1,785
1
Arista Networks, Inc.
678,996    
7,214
1
Arrow Electronics, Inc.
855,364    
3,790
1
Asana, Inc.
269,317    
144
1
Atlassian Corp. PLC
46,817     
3,305
 
Bentley Systems, Inc.
200,977    
1,613
 
Broadcom, Inc.
782,950    
4,701
1
Cirrus Logic, Inc.
388,256    
298
1
CloudFlare, Inc.
35,352     
2,931
1
Commvault Systems, Inc.
221,554    
4,123
1
Crowdstrike Holdings, Inc.
1,045,634  
322
1
Datadog, Inc.
35,645     
2,333
1
Dell Technologies, Inc.
225,415    
4,697
1
Dropbox, Inc.
147,909    
28,217
1
DXC Technology Co.
1,128,116  
5,463
1
EPAM Systems, Inc.
3,058,187  
2,903
1
FleetCor Technologies, Inc.
749,613    
7,164
1
Fortinet, Inc.
1,950,327  
705
1
Gartner, Inc., Class A
186,635    
14,151
 
Hewlett Packard Enterprise Co.
205,190    
10,855
 
HP, Inc.
313,384    
2,245
1
HubSpot, Inc.
1,338,065  
9,807
 
Intel Corp.
526,832    
Annual Shareholder Report
12
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   continued
 
224
 
Intuit, Inc.
$118,713    
3,825
1
MA-COM Technology Solutions Holdings, Inc.
236,079    
3,271
 
Mastercard, Inc.
1,262,410  
11,281
 
Microsoft Corp.
3,214,070  
6,088
 
NVIDIA Corp.
1,187,099  
4,369
 
Oracle Corp.
380,715    
1,924
1
Palo Alto Networks, Inc.
767,772    
10,932
 
Paychex, Inc.
1,244,280  
2,166
1
Paylocity Corp.
449,358    
4,972
1
PayPal Holdings, Inc.
1,369,935  
9,836
1
Plantronics, Inc.
306,785    
9,835
 
Qualcomm, Inc.
1,473,283  
8,203
 
Vishay Intertechnology, Inc.
181,532    
31,056
 
Western Union Co.
720,810    
9,197
 
Xerox Holdings Corp.
221,924    
 
 
TOTAL
32,973,084
 
 
Materials—   1.8%
 
19,650
1
Alcoa Corp.
788,948    
18,593
1
Allegheny Technologies, Inc.
381,714    
13,951
1
Berry Global Group, Inc.
896,910    
44,373
 
Chemours Co./The
1,475,402  
6,018
 
Dow, Inc.
374,079    
 
 
TOTAL
3,917,053
 
 
Real Estate—   3.3%
 
3,600
 
American Campus Communities, Inc.
181,116    
14,400
 
American Homes 4 Rent
604,800    
46,900
2
Braemar Hotels & Resorts, Inc.
239,190    
24,600
1
Chatham Lodging Trust
302,088    
3,500
 
Duke Realty Corp.
178,080    
320
 
Equinix, Inc.
262,531    
4,400
 
Equity Residential Properties Trust
370,172    
12,500
 
Hudson Pacific Properties, Inc.
340,750    
8,000
 
Invitation Homes, Inc.
325,440    
24,000
 
Kimco Realty Corp.
511,920    
17,000
 
Kite Realty Group Trust
342,720    
18,000
 
Pebblebrook Hotel Trust
404,820    
5,700
 
Regency Centers Corp.
372,837    
4,900
 
Rexford Industrial Realty, Inc.
301,448    
3,500
 
Safety Income and Growth, Inc.
316,120    
3,100
 
Simon Property Group, Inc.
392,212    
900
 
Sun Communities, Inc.
176,499    
21,800
1
Sunstone Hotel Investors, Inc.
251,572    
Annual Shareholder Report
13
Shares or
Principal
Amount
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Real Estate—   continued
 
4,750
 
Terreno Realty Corp.
$324,710    
6,800
 
UDR, Inc.
373,932    
19,500
 
VICI Properties, Inc.
608,205    
 
 
TOTAL
7,181,162
 
 
Utilities—   0.7%
 
2,108
 
Evergy, Inc.
137,484    
12,828
 
Exelon Corp.
600,350    
1,476
 
NextEra Energy, Inc.
114,980    
19,281
 
OGE Energy Corp.
650,734    
1,401
 
Public Service Enterprises Group, Inc.
87,184     
 
 
TOTAL
1,590,732
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $92,184,452)
125,770,662
 
 
CORPORATE BONDS—   10.3%
 
 
 
Basic Industry - Chemicals—   0.0%
 
$    10,000
 
DuPont de Nemours, Inc., Sr. Unsecd. Note, 5.319%, 11/15/2038
13,386     
 
 
Basic Industry - Metals & Mining—   0.1%
 
    15,000
 
Anglogold Ashanti Holdings PLC, Sr. Note, 6.500%, 4/15/2040
18,750     
    62,000
 
Carpenter Technology Corp., Sr. Unsecd. Note, 4.450%, 3/1/2023
64,784     
   100,000
 
Reliance Steel & Aluminum Co., Sr. Unsecd. Note, 4.500%, 4/15/2023
105,728    
    20,000
 
Southern Copper Corp., Sr. Unsecd. Note, 6.750%, 4/16/2040
27,870     
 
 
TOTAL
217,132
 
 
Capital Goods - Aerospace & Defense—   0.6%
 
   200,000
 
BAE Systems PLC, Sr. Unsecd. Note, 144A, 3.000%, 9/15/2050
202,013    
   275,000
 
Boeing Co., Sr. Unsecd. Note, 4.875%, 5/1/2025
308,591    
     5,000
 
Embraer Overseas Ltd., Sr. Unsecd. Note, 144A, 5.696%, 9/16/2023
5,360      
   110,000
 
Huntington Ingalls Industries, Inc., Sr. Unsecd. Note, Series WI,
3.844%, 5/1/2025
120,477    
   300,000
 
Leidos, Inc., Sr. Unsecd. Note, Series WI, 2.300%, 2/15/2031
298,374    
   170,000
 
Leidos, Inc., Sr. Unsecd. Note, Series WI, 3.625%, 5/15/2025
185,340    
    10,000
 
Raytheon Technologies Corp., Sr. Unsecd. Note, 3.100%, 11/15/2021
10,010     
    15,000
 
Spirit AeroSystems, Inc., Sr. Unsecd. Note, 4.600%, 6/15/2028
14,546     
    40,000
3
Textron Financial Corp., Jr. Sub. Note, 144A, 1.891% (3-month USLIBOR
+1.735%), 2/15/2042
34,067     
    50,000
 
Textron, Inc., Sr. Unsecd. Note, 4.000%, 3/15/2026
56,156     
    50,000
 
Textron, Inc., Sr. Unsecd. Note, 4.300%, 3/1/2024
54,091     
 
 
TOTAL
1,289,025
 
 
Capital Goods - Building Materials—   0.1%
 
   200,000
 
Allegion US Holdings Co., Inc., Sr. Unsecd. Note, 3.200%, 10/1/2024
213,274    
 
 
Capital Goods - Construction Machinery—   0.0%
 
    10,000
 
CNH Industrial Capital America LLC, Sr. Unsecd. Note, 4.375%, 4/5/2022
10,257     
Annual Shareholder Report
14
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Capital Goods - Diversified Manufacturing—   0.1%
 
$    30,000
 
General Electric Capital Corp., Sr. Unsecd. Note, Series GMTN,
3.100%, 1/9/2023
$31,164     
    60,000
 
Lennox International, Inc., Sr. Unsecd. Note, 1.700%, 8/1/2027
60,573     
   175,000
 
Roper Technologies, Inc., Sr. Unsecd. Note, 2.000%, 6/30/2030
175,894    
 
 
TOTAL
267,631
 
 
Communications - Cable & Satellite—   0.1%
 
   145,000
 
Comcast Corp., Sr. Unsecd. Note, 2.800%, 1/15/2051
144,097    
    15,000
 
Comcast Corp., Sr. Unsecd. Note, 3.900%, 3/1/2038
17,521     
    10,000
 
Comcast Corp., Sr. Unsecd. Note, 4.400%, 8/15/2035
12,244     
 
 
TOTAL
173,862
 
 
Communications - Media & Entertainment—   0.2%
 
    30,000
 
Grupo Televisa S.A., Sr. Unsecd. Note, 6.125%, 1/31/2046
42,789     
   400,000
 
ViacomCBS, Inc., Sr. Unsecd. Note, 4.750%, 5/15/2025
453,616    
 
 
TOTAL
496,405
 
 
Communications - Telecom Wireless—   0.2%
 
   150,000
 
Crown Castle International Corp., Sr. Unsecd. Note, 3.700%, 6/15/2026
166,526    
   200,000
 
Vodafone Group PLC, Sr. Unsecd. Note, 4.875%, 6/19/2049
255,579    
 
 
TOTAL
422,105
 
 
Communications - Telecom Wirelines—   0.4%
 
   300,000
 
AT&T, Inc., Sr. Unsecd. Note, 3.650%, 6/1/2051
318,939    
     5,000
 
AT&T, Inc., Sr. Unsecd. Note, 4.500%, 5/15/2035
5,995      
    12,000
 
AT&T, Inc., Sr. Unsecd. Note, 144A, 3.500%, 9/15/2053
12,429     
    11,000
 
AT&T, Inc., Sr. Unsecd. Note, 144A, 3.650%, 9/15/2059
11,394     
   150,000
 
Telefonica Emisiones SAU, Sr. Unsecd. Note, 5.520%, 3/1/2049
198,361    
    90,000
 
Verizon Communications, Inc., Sr. Unsecd. Note, 3.150%, 3/22/2030
98,154     
    90,000
 
Verizon Communications, Inc., Sr. Unsecd. Note, 4.150%, 3/15/2024
97,865     
    29,000
 
Verizon Communications, Inc., Sr. Unsecd. Note, Series WI,
2.987%, 10/30/2056
28,259     
 
 
TOTAL
771,396
 
 
Consumer Cyclical - Automotive—   0.0%
 
    10,000
 
DaimlerChrysler North America Holding Corp., Company Guarantee,
8.500%, 1/18/2031
15,397     
    10,000
 
General Motors Financial Co., Inc., Sr. Unsecd. Note, 3.950%, 4/13/2024
10,764     
 
 
TOTAL
26,161
 
 
Consumer Cyclical - Lodging—   0.0%
 
    20,000
 
American Campus Communities Operating Partnership LP, Sr. Unsecd.
Note, 4.125%, 7/1/2024
21,786     
    30,000
 
Hyatt Hotels Corp., Sr. Unsecd. Note, 3.375%, 7/15/2023
31,237     
 
 
TOTAL
53,023
 
 
Consumer Cyclical - Retailers—   0.2%
 
   170,000
 
AutoNation, Inc., Sr. Unsecd. Note, 4.750%, 6/1/2030
203,472    
   250,000
 
AutoZone, Inc., Sr. Unsecd. Note, 3.250%, 4/15/2025
270,031    
    15,000
 
CVS Health Corp., Sr. Unsecd. Note, 3.700%, 3/9/2023
15,764     
Annual Shareholder Report
15
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Consumer Cyclical - Retailers—   continued
 
$    15,000
 
CVS Health Corp., Sr. Unsecd. Note, 4.100%, 3/25/2025
$16,640     
    10,000
 
WalMart, Inc., Sr. Unsecd. Note, 5.625%, 4/1/2040
14,589     
 
 
TOTAL
520,496
 
 
Consumer Cyclical - Services—   0.2%
 
   200,000
 
Alibaba Group Holding Ltd., Sr. Unsecd. Note, 2.800%, 6/6/2023
207,544    
   125,000
 
Amazon.com, Inc., Sr. Unsecd. Note, 3.800%, 12/5/2024
137,174    
    15,000
 
Expedia Group, Inc., Sr. Unsecd. Note, Series WI, 3.250%, 2/15/2030
15,764     
    10,000
 
University of Southern California, Sr. Unsecd. Note, 5.250%, 10/1/2111
16,194     
    70,000
 
Visa, Inc., Sr. Unsecd. Note, 3.150%, 12/14/2025
76,843     
    15,000
 
Visa, Inc., Sr. Unsecd. Note, 4.150%, 12/14/2035
18,779     
 
 
TOTAL
472,298
 
 
Consumer Non-Cyclical - Food/Beverage—   0.7%
 
    30,000
 
Anheuser-Busch Cos LLC / Anheuser-Busch InBev Worldwide, Inc., Sr.
Unsecd. Note, 4.700%, 2/1/2036
37,362     
   300,000
 
Danone SA, Sr. Unsecd. Note, 144A, 2.947%, 11/2/2026
323,834    
   140,000
 
Flowers Foods, Inc., Sr. Unsecd. Note, 3.500%, 10/1/2026
153,730    
    80,000
 
General Mills, Inc., Sr. Unsecd. Note, 144A, 3.000%, 2/1/2051
82,780     
   270,000
 
Heineken NV, Sr. Unsecd. Note, 144A, 3.500%, 1/29/2028
300,484    
   200,000
 
Kerry Group Financial Services, Sr. Unsecd. Note, 144A, 3.200%, 4/9/2023
207,220    
    15,000
 
Kraft Heinz Foods Co., Sr. Unsecd. Note, 5.200%, 7/15/2045
19,053     
    50,000
 
Mead Johnson Nutrition Co., Sr. Unsecd. Note, 4.125%, 11/15/2025
56,488     
   235,000
 
PepsiCo, Inc., Sr. Unsecd. Note, 3.625%, 3/19/2050
282,349    
 
 
TOTAL
1,463,300
 
 
Consumer Non-Cyclical - Health Care—   0.2%
 
   135,000
 
Agilent Technologies, Inc., Sr. Unsecd. Note, 2.750%, 9/15/2029
143,345    
   180,000
 
Dentsply Sirona, Inc., Sr. Unsecd. Note, 3.250%, 6/1/2030
195,977    
 
 
TOTAL
339,322
 
 
Consumer Non-Cyclical - Pharmaceuticals—   0.4%
 
   500,000
 
AbbVie, Inc., Sr. Unsecd. Note, 4.250%, 11/21/2049
613,576    
    15,000
 
Amgen, Inc., Sr. Unsecd. Note, 4.400%, 5/1/2045
18,765     
    10,000
 
Bristol-Myers Squibb Co., Sr. Unsecd. Note, Series WI, 4.125%, 6/15/2039
12,357     
    15,000
 
Johnson & Johnson, Sr. Unsecd. Note, 3.550%, 3/1/2036
17,890     
   165,000
 
Zoetis, Inc., Sr. Unsecd. Note, 3.000%, 5/15/2050
175,316    
 
 
TOTAL
837,904
 
 
Consumer Non-Cyclical - Supermarkets—   0.0%
 
    10,000
 
Kroger Co., Sr. Unsecd. Note, 4.450%, 2/1/2047
12,209     
 
 
Energy - Independent—   0.4%
 
   250,000
 
Canadian Natural Resources Ltd., 3.900%, 2/1/2025
273,207    
   125,000
 
Cimarex Energy Co., Sr. Unsecd. Note, 3.900%, 5/15/2027
139,179    
    20,000
 
EQT Corp., Sr. Unsecd. Note, 3.900%, 10/1/2027
21,726     
   475,000
 
Pioneer Natural Resources, Inc., Sr. Unsecd. Note, 2.150%, 1/15/2031
469,601    
 
 
TOTAL
903,713
Annual Shareholder Report
16
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Energy - Integrated—   0.7%
 
$   135,000
 
BP Capital Markets America, Inc., Sr. Unsecd. Note, 3.119%, 5/4/2026
$147,296    
    20,000
 
BP Capital Markets America, Inc., Sr. Unsecd. Note, 3.224%, 4/14/2024
21,398     
   300,000
 
BP Capital Markets America, Inc., Sr. Unsecd. Note, 3.937%, 9/21/2028
345,394    
     5,000
 
ConocoPhillips, Company Guarantee, 6.500%, 2/1/2039
7,473      
   270,000
 
Exxon Mobil Corp., Sr. Unsecd. Note, 2.992%, 3/19/2025
290,097    
    75,000
 
Husky Energy, Inc., 4.000%, 4/15/2024
80,520     
   240,000
 
Husky Energy, Inc., Sr. Unsecd. Note, 4.400%, 4/15/2029
272,921    
   275,000
 
Suncor Energy, Inc., Sr. Unsecd. Note, 3.750%, 3/4/2051
305,679    
 
 
TOTAL
1,470,778
 
 
Energy - Midstream—   0.4%
 
    20,000
 
Energy Transfer Operating, Sr. Unsecd. Note, 5.500%, 6/1/2027
23,774     
   115,000
 
Energy Transfer Partners LP, Sr. Unsecd. Note, 4.050%, 3/15/2025
125,002    
    75,000
 
Energy Transfer Partners LP, Sr. Unsecd. Note, 4.900%, 2/1/2024
81,603     
    10,000
 
Energy Transfer Partners LP, Sr. Unsecd. Note, 6.125%, 12/15/2045
12,877     
   170,000
 
Enterprise Products Operating LLC, Sr. Unsecd. Note, 3.950%, 2/15/2027
191,430    
    20,000
 
Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, Series MTN,
6.950%, 1/15/2038
29,001     
    40,000
 
MPLX LP, Sr. Unsecd. Note, 4.125%, 3/1/2027
45,140     
     5,000
 
MPLX LP, Sr. Unsecd. Note, 4.500%, 4/15/2038
5,763      
   225,000
 
MPLX LP, Sr. Unsecd. Note, 5.500%, 2/15/2049
293,505    
    20,000
 
Texas Eastern Transmission LP, Sr. Unsecd. Note, 144A,
2.800%, 10/15/2022
20,416     
    10,000
 
Western Gas Partners LP, Sr. Unsecd. Note, 4.750%, 8/15/2028
10,875     
 
 
TOTAL
839,386
 
 
Energy - Refining—   0.0%
 
    15,000
 
HollyFrontier Corp., Sr. Unsecd. Note, 5.875%, 4/1/2026
17,388     
    15,000
 
Marathon Petroleum Corp., Sr. Unsecd. Note, 4.500%, 4/1/2048
17,292     
    10,000
 
Marathon Petroleum Corp., Sr. Unsecd. Note, 6.500%, 3/1/2041
14,068     
    15,000
 
Valero Energy Corp., Sr. Unsecd. Note, 4.350%, 6/1/2028
17,153     
 
 
TOTAL
65,901
 
 
Financial Institution - Banking—   1.4%
 
    74,000
 
American Express Co., 2.650%, 12/2/2022
76,407     
   300,000
 
Bank of America Corp., Sr. Unsecd. Note, Series GMTN,
3.500%, 4/19/2026
331,616    
   200,000
 
Bank of America Corp., Sub. Note, Series L, 3.950%, 4/21/2025
219,689    
    15,000
 
Bank of America Corp., Sub. Note, Series MTN, 4.200%, 8/26/2024
16,452     
    15,000
 
Bank of America Corp., Sub., Series MTN, 4.450%, 3/3/2026
17,000     
    20,000
 
Bank of New York Mellon, N.A., 3.400%, 5/15/2024
21,573     
    40,000
 
Citigroup, Inc., Sr. Unsecd. Note, 2.876%, 7/24/2023
40,956     
    15,000
 
Citigroup, Inc., Sr. Unsecd. Note, 3.142%, 1/24/2023
15,202     
   250,000
 
Citigroup, Inc., Sr. Unsecd. Note, 3.300%, 4/27/2025
272,597    
   170,000
 
Citigroup, Inc., Sr. Unsecd. Note, 3.400%, 5/1/2026
187,299    
    15,000
 
Citigroup, Inc., Sub. Note, 4.450%, 9/29/2027
17,330     
Annual Shareholder Report
17
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Financial Institution - Banking—   continued
 
$    30,000
 
Comerica, Inc., 3.800%, 7/22/2026
$33,525     
    75,000
 
Fifth Third Bancorp, Sr. Unsecd. Note, 3.650%, 1/25/2024
80,449     
    40,000
 
Goldman Sachs Group, Inc., Sr. Unsecd. Note, 3.200%, 2/23/2023
41,649     
   275,000
 
Goldman Sachs Group, Inc., Sr. Unsecd. Note, 3.625%, 1/22/2023
288,397    
   150,000
 
Goldman Sachs Group, Inc., Sr. Unsecd. Note, 6.250%, 2/1/2041
224,866    
    10,000
4
JPMorgan Chase & Co., Jr. Sub. Deb., Series X, 6.100%, 10/1/2024
10,894     
    25,000
4
JPMorgan Chase & Co., Jr. Sub. Note, Series FF, 5.000%, 8/1/2024
26,405     
    20,000
 
JPMorgan Chase & Co., Sr. Unsecd. Note, 3.559%, 4/23/2024
21,040     
    15,000
 
JPMorgan Chase & Co., Sr. Unsecd. Note, 3.882%, 7/24/2038
17,564     
   400,000
 
JPMorgan Chase & Co., Sub. Note, 3.375%, 5/1/2023
420,026    
   300,000
 
Morgan Stanley, 4.300%, 1/27/2045
375,469    
    15,000
 
Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 3.125%, 1/23/2023
15,606     
    15,000
 
Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 4.000%, 7/23/2025
16,708     
    15,000
 
Morgan Stanley, Sub. Note, Series MTN, 4.100%, 5/22/2023
15,969     
    10,000
 
State Street Corp., Sub. Deb., 3.031%, 11/1/2034
10,833     
    45,000
 
Sumitomo Mitsui Financial Group, Inc., Sr. Unsecd. Note,
3.102%, 1/17/2023
46,859     
   250,000
 
US Bancorp, Sr. Unsecd. Note, Series MTN, 1.375%, 7/22/2030
243,885    
    10,000
 
Wells Fargo & Co., Series MTN, 4.100%, 6/3/2026
11,273     
    10,000
 
Westpac Banking Corp., Sub., Series GMTN, 4.322%, 11/23/2031
11,184     
 
 
TOTAL
3,128,722
 
 
Financial Institution - Broker/Asset Mgr/Exchange—   0.1%
 
    80,000
 
Invesco Finance PLC, Sr. Unsecd. Note, 3.750%, 1/15/2026
89,041     
    70,000
 
Nuveen LLC, Sr. Unsecd. Note, 144A, 4.000%, 11/1/2028
81,664     
    15,000
 
XLIT Ltd., Sub., 4.450%, 3/31/2025
16,897     
 
 
TOTAL
187,602
 
 
Financial Institution - Finance Companies—   0.2%
 
   150,000
 
AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust, Sr. Unsecd.
Note, 4.875%, 1/16/2024
163,278    
   250,000
 
GE Capital International Funding, Inc., Sr. Unsecd. Note,
4.418%, 11/15/2035
307,118    
 
 
TOTAL
470,396
 
 
Financial Institution - Insurance - Life—   0.6%
 
   400,000
 
AIA Group Ltd., Sub., 144A, 3.200%, 9/16/2040
418,486    
    25,000
 
American International Group, Inc., 4.500%, 7/16/2044
31,334     
    35,000
 
American International Group, Inc., Sr. Unsecd. Note, 4.125%, 2/15/2024
38,086     
   125,000
 
American International Group, Inc., Sr. Unsecd. Note, 4.200%, 4/1/2028
144,883    
   220,000
 
Belrose Funding Trust, Sr. Unsecd. Note, 2.330%, 8/15/2030
221,252    
    10,000
 
Lincoln National Corp., Sr. Unsecd. Note, 4.200%, 3/15/2022
10,236     
    15,000
 
MetLife, Inc., Jr. Sub. Note, 6.400%, 12/15/2036
19,298     
    10,000
 
MetLife, Inc., Jr. Sub. Note, 10.750%, 8/1/2039
17,255     
   250,000
 
MetLife, Inc., Sr. Unsecd. Note, 3.600%, 4/10/2024
270,524    
    15,000
 
Penn Mutual Life Insurance Co., Sr. Note, 144A, 7.625%, 6/15/2040
22,959     
Annual Shareholder Report
18
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Financial Institution - Insurance - Life—   continued
 
$    10,000
 
Principal Financial Group, Inc., Sr. Unsecd. Note, 3.125%, 5/15/2023
$10,474     
    10,000
 
Principal Financial Group, Inc., Sr. Unsecd. Note, 3.300%, 9/15/2022
10,325     
    50,000
 
Prudential Financial, Inc., Sr. Unsecd. Note, Series MTN,
6.200%, 11/15/2040
71,061     
 
 
TOTAL
1,286,173
 
 
Financial Institution - Insurance - P&C—   0.2%
 
    10,000
 
Berkshire Hathaway Finance Corp., Sr. Unsecd. Note, 4.200%, 8/15/2048
12,639     
    55,000
 
Nationwide Mutual Insurance Co., Sub., 144A, 4.350%, 4/30/2050
63,019     
   205,000
 
Nationwide Mutual Insurance Co., Sub., 144A, 4.950%, 4/22/2044
253,852    
    65,000
 
Nationwide Mutual Insurance Co., Sub. Note, 144A, 9.375%, 8/15/2039
115,221    
 
 
TOTAL
444,731
 
 
Financial Institution - REIT - Apartment—   0.1%
 
    20,000
 
Post Apartment Homes LP, Sr. Unsecd. Note, 3.375%, 12/1/2022
20,631     
   200,000
 
UDR, Inc., Sr. Unsecd. Note, Series MTN, 2.100%, 8/1/2032
197,011    
    70,000
 
UDR, Inc., Sr. Unsecd. Note, Series MTN, 2.950%, 9/1/2026
75,576     
 
 
TOTAL
293,218
 
 
Financial Institution - REIT - Healthcare—   0.1%
 
   185,000
 
Welltower, Inc., Sr. Unsecd. Note, 2.700%, 2/15/2027
198,074    
 
 
Financial Institution - REIT - Office—   0.0%
 
    70,000
 
Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 3.950%, 1/15/2028
80,068     
 
 
Financial Institution - REIT - Other—   0.1%
 
   105,000
 
WP Carey, Inc., Sr. Unsecd. Note, 3.850%, 7/15/2029
118,501    
    75,000
 
WP Carey, Inc., Sr. Unsecd. Note, 4.600%, 4/1/2024
81,866     
 
 
TOTAL
200,367
 
 
Financial Institution - REIT - Retail—   0.2%
 
   300,000
 
Kimco Realty Corp., Sr. Unsecd. Note, 2.700%, 10/1/2030
313,881    
    50,000
 
Kimco Realty Corp., Sr. Unsecd. Note, 3.400%, 11/1/2022
51,652     
 
 
TOTAL
365,533
 
 
Financial Institution - REITs—   0.0%
 
    60,000
 
Camden Property Trust, Sr. Unsecd. Note, 2.800%, 5/15/2030
64,765     
 
 
Supranational—   0.0%
 
    30,000
 
Corp Andina De Fomento, Sr. Unsecd. Note, 4.375%, 6/15/2022
30,996     
 
 
Technology—   0.5%
 
    10,000
 
Apple, Inc., 3.850%, 5/4/2043
12,054     
    30,000
 
Apple, Inc., Sr. Unsecd. Note, 2.400%, 5/3/2023
31,121     
   200,000
 
Apple, Inc., Sr. Unsecd. Note, 2.950%, 9/11/2049
211,347    
    70,000
 
Broadcom, Inc., Sr. Unsecd. Note, 144A, 3.750%, 2/15/2051
74,087     
    20,000
 
Corning, Inc., Unsecd. Note, 4.750%, 3/15/2042
25,588     
   240,000
 
Dell International LLC / EMC Corp., 6.020%, 6/15/2026
289,050    
   110,000
 
Fiserv, Inc., Sr. Unsecd. Note, 3.500%, 7/1/2029
122,976    
    20,000
 
Ingram Micro, Inc., Sr. Unsecd. Note, 5.000%, 8/10/2022
20,479     
   265,000
 
Intel Corp., Sr. Unsecd. Note, 3.400%, 3/25/2025
289,289    
Annual Shareholder Report
19
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Technology—   continued
 
$     7,000
 
Microsoft Corp., Sr. Unsecd. Note, 2.921%, 3/17/2052
$7,570      
     8,000
 
Microsoft Corp., Sr. Unsecd. Note, 3.450%, 8/8/2036
9,485      
    10,000
 
Verisk Analytics, Inc., Sr. Unsecd. Note, 4.125%, 9/12/2022
10,396     
    50,000
 
Verisk Analytics, Inc., Sr. Unsecd. Note, 5.500%, 6/15/2045
69,123     
 
 
TOTAL
1,172,565
 
 
Technology Services—   0.0%
 
     5,000
 
Global Payments, Inc., Sr. Unsecd. Note, 3.200%, 8/15/2029
5,422      
 
 
Transportation - Airlines—   0.1%
 
    30,000
 
Delta Air Lines, Inc., Sr. Unsecd. Note, 2.900%, 10/28/2024
30,431     
   110,000
 
Southwest Airlines Co., Sr. Unsecd. Note, 5.250%, 5/4/2025
125,673    
 
 
TOTAL
156,104
 
 
Transportation - Railroads—   0.2%
 
    50,000
 
Burlington Northern Santa Fe Corp., Deb., 5.750%, 5/1/2040
72,351     
    30,000
 
Kansas City Southern Industries, Inc., Sr. Unsecd. Note, 3.000%, 5/15/2023
31,069     
   225,000
 
Kansas City Southern Industries, Inc., Sr. Unsecd. Note, 3.125%, 6/1/2026
244,487    
 
 
TOTAL
347,907
 
 
Transportation - Services—   0.2%
 
    15,000
 
Enterprise Rent-A-Car USA Finance Co., Sr. Unsecd. Note, 144A,
5.625%, 3/15/2042
21,010     
    20,000
 
FedEx Corp., Sr. Unsecd. Note, 3.900%, 2/1/2035
23,480     
    70,000
 
Ryder System, Inc., Sr. Unsecd. Note, Series MTN, 2.800%, 3/1/2022
70,879     
   200,000
 
Ryder System, Inc., Sr. Unsecd. Note, Series MTN, 3.750%, 6/9/2023
211,848    
   125,000
 
United Parcel Service, Inc., Sr. Unsecd. Note, 3.900%, 4/1/2025
138,473    
 
 
TOTAL
465,690
 
 
Utility - Electric—   1.0%
 
    70,000
 
Consolidated Edison Co., Sr. Unsecd. Note, Series 20B, 3.950%, 4/1/2050
82,138     
    70,000
 
Electricite de France SA, Note, 144A, 5.600%, 1/27/2040
95,651     
   300,000
 
Electricite de France SA, Sr. Unsecd. Note, 144A, 4.500%, 9/21/2028
351,189    
   140,000
 
Emera US Finance LP, Sr. Unsecd. Note, 4.750%, 6/15/2046
170,310    
   170,000
 
EverSource Energy, Sr. Unsecd. Note, 3.350%, 3/15/2026
184,918    
   200,000
 
Exelon Corp., Sr. Unsecd. Note, 3.400%, 4/15/2026
219,774    
   100,000
 
Exelon Generation Co. LLC, Sr. Unsecd. Note, 4.250%, 6/15/2022
102,444    
   110,000
 
National Rural Utilities Cooperative Finance Corp., Sr. Sub. Note,
5.250%, 4/20/2046
120,122    
    25,000
 
National Rural Utilities Cooperative Finance Corp., Sr. Unsecd. Note, Series
MTNC, 8.000%, 3/1/2032
38,389     
   250,000
 
PPL Capital Funding, Inc., Sr. Unsecd. Note, 3.100%, 5/15/2026
270,836    
   175,000
 
Southern Co., Sr. Unsecd. Note, 3.250%, 7/1/2026
191,417    
   300,000
 
WEC Energy Group, Inc., Sr. Unsecd. Note, 1.800%, 10/15/2030
293,975    
 
 
TOTAL
2,121,163
 
 
Utility - Natural Gas—   0.3%
 
    65,000
 
National Fuel Gas Co., Sr. Unsecd. Note, 3.750%, 3/1/2023
67,680     
   445,000
 
National Fuel Gas Co., Sr. Unsecd. Note, 5.500%, 1/15/2026
519,194    
Annual Shareholder Report
20
Shares or
Principal
Amount
 
 
Value
 
 
CORPORATE BONDS—   continued
 
 
 
Utility - Natural Gas—   continued
 
$    15,000
 
Sempra Energy, Sr. Unsecd. Note, 2.900%, 2/1/2023
$15,517     
     5,000
 
TransCanada PipeLines Ltd., Sr. Unsecd. Note, 6.200%, 10/15/2037
6,954      
 
 
TOTAL
609,345
 
 
TOTAL CORPORATE BONDS
(IDENTIFIED COST $20,246,449)
22,507,805
 
 
U.S. TREASURIES—   2.5%
 
 
 
Treasury Inflation-Indexed Note—   1.3%
 
 1,742,020
 
U.S. Treasury Inflation-Protected Notes, 0.125%, 1/15/2031
1,972,815  
   723,590
5
U.S. Treasury Inflation-Protected Notes, 0.125%, 2/15/2051
829,229    
 
 
TOTAL
2,802,044
 
 
U.S. Treasury Bond—   0.4%
 
   850,000
 
United States Treasury Bonds, 2.375%, 5/15/2051
941,472    
 
 
U.S. Treasury Note—   0.8%
 
   300,000
 
United States Treasury Notes, 0.125%, 6/30/2023
299,725    
   150,000
 
United States Treasury Notes, 1.125%, 2/15/2031
148,717    
   250,000
 
United States Treasury Notes, 1.250%, 6/30/2028
254,314    
 1,050,000
 
United States Treasury Notes, 1.625%, 5/15/2031
1,088,071  
 
 
TOTAL
1,790,827
 
 
TOTAL U.S. TREASURIES
(IDENTIFIED COST $5,369,783)
5,534,343
 
 
ASSET-BACKED SECURITIES—   0.9%
 
 
 
Auto Receivables—   0.2%
 
   400,000
 
Toyota Auto Receivables Owner Trust 2020-B, Class A4, 1.660%, 9/15/2025
411,662    
    90,000
 
World Omni Auto Receivables Trust 2021-A, Class C, 0.890%, 8/16/2027
89,822     
 
 
TOTAL
501,484
 
 
Equipment Lease—   0.3%
 
   500,000
 
HPEFS Equipment Trust 2020-2A, Class C, 2.000%, 7/22/2030
511,517    
 
 
Other—   0.2%
 
   450,000
 
PFS Financing Corp. 2020-G, Class A, 0.970%, 2/15/2026
455,476    
 
 
Student Loans—   0.2%
 
   399,148
 
Navient Student Loan Trust 2021-A, Class A, 0.840%, 5/15/2069
400,526    
 
 
TOTAL ASSET-BACKED SECURITIES
(IDENTIFIED COST $1,838,874)
1,869,003
 
 
COMMERCIAL MORTGAGE-BACKED SECURITIES—   0.8%
 
 
 
Commercial Mortgage—   0.8%
 
   190,000
 
Bank, Class A4, 3.488%, 11/15/2050
212,579    
   200,000
 
Commercial Mortgage Trust 2013-CR8, Class B, 3.931%, 6/10/2046
208,176    
    54,729
 
Federal Home Loan Mortgage Corp. REMIC, Series K055, Class A1,
2.263%, 4/25/2025
56,453     
   394,477
 
Federal Home Loan Mortgage Corp. REMIC, Series K106, Class A1,
1.783%, 10/25/2029
410,056    
   350,000
 
Federal Home Loan Mortgage Corp. REMIC, Series K737, Class A2,
2.525%, 10/25/2026
376,021    
   200,000
 
FREMF Mortgage Trust 2013-K25 REMIC, Class B, 3.620%, 11/25/2045
205,770    
Annual Shareholder Report
21
Shares or
Principal
Amount
 
 
Value
 
 
COMMERCIAL MORTGAGE-BACKED SECURITIES—   continued
 
 
 
Commercial Mortgage—   continued
 
$   200,000
 
JPMDB Commercial Mortgage Securities Trust 2016-C4, Class A3,
3.141%, 12/15/2049
$218,711    
 
 
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $1,620,100)
1,687,766
 
 
MORTGAGE-BACKED SECURITIES—   0.3%
 
 
 
Federal Home Loan Mortgage Corporation—   0.0%
 
    31,785
 
Federal Home Loan Mortgage Corp., Pool G07801, 4.000%, 10/1/2044
34,743     
 
 
Federal National Mortgage Association—   0.3%
 
     7,740
 
Federal National Mortgage Association, Pool 357761, 5.500%, 5/1/2035
8,961      
       931
 
Federal National Mortgage Association, Pool 728709, 5.500%, 7/1/2033
1,066      
    27,570
 
Federal National Mortgage Association, Pool 932864, 4.000%, 12/1/2040
30,277     
    48,835
 
Federal National Mortgage Association, Pool AB7859, 3.500%, 2/1/2043
53,396     
    36,376
 
Federal National Mortgage Association, Pool AD6938, 4.500%, 6/1/2040
40,510     
    19,208
 
Federal National Mortgage Association, Pool AQ0945, 3.000%, 11/1/2042
20,552     
    23,010
 
Federal National Mortgage Association, Pool AT2127, 3.000%, 4/1/2043
24,621     
    19,010
 
Federal National Mortgage Association, Pool AT7861, 3.000%, 6/1/2028
20,125     
    27,421
 
Federal National Mortgage Association, Pool BM4388, 4.000%, 8/1/2048
29,696     
    12,979
 
Federal National Mortgage Association, Pool BM5024, 3.000%, 11/1/2048
13,677     
    17,977
 
Federal National Mortgage Association, Pool BM5246, 3.500%, 11/1/2048
19,072     
    19,553
 
Federal National Mortgage Association, Pool CA0833, 3.500%, 12/1/2047
20,766     
    18,579
 
Federal National Mortgage Association, Pool CA4427, 3.000%, 10/1/2049
19,455     
    14,368
 
Federal National Mortgage Association, Pool FM0008, 3.500%, 8/1/2049
15,410     
    32,010
 
Federal National Mortgage Association, Pool FM1000, 3.000%, 4/1/2047
33,850     
    14,797
 
Federal National Mortgage Association, Pool FM1221, 3.500%, 7/1/2049
15,854     
    27,265
 
Federal National Mortgage Association, Pool MA0500, 5.000%, 8/1/2040
30,922     
    26,737
 
Federal National Mortgage Association, Pool MA0666, 4.500%, 3/1/2041
29,734     
    31,034
 
Federal National Mortgage Association, Pool MA1430, 3.000%, 5/1/2043
33,205     
    35,793
 
Federal National Mortgage Association, Pool MA2803, 2.500%, 11/1/2031
37,628     
 
 
TOTAL
498,777
 
 
Government National Mortgage Association—   0.0%
 
    18,634
 
Government National Mortgage Association, Pool MA0625,
3.500%, 12/20/2042
20,153     
    12,645
 
Government National Mortgage Association, Pool MA1376,
4.000%, 10/20/2043
13,780     
 
 
TOTAL
33,933
 
 
TOTAL MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $535,473)
567,453
 
 
GOVERNMENT AGENCY—   0.1%
 
 
 
Federal National Mortgage Association—   0.1%
 
   250,000
 
Federal National Mortgage Association Notes, 0.625%, 4/22/2025
(IDENTIFIED COST $249,614)
251,054    
Annual Shareholder Report
22
Shares or
Principal
Amount
 
 
Value
 
 
MUNICIPAL BOND—   0.0%
 
$    30,000
 
Texas State Transportation Commission - State Highway Fund, 5.178%,
4/1/2030
(IDENTIFIED COST $33,522)
$37,498     
 
 
COLLATERALIZED MORTGAGE OBLIGATIONS—   0.0%
 
 
 
Federal Home Loan Mortgage Corporation—   0.0%
 
       217
 
Federal Home Loan Mortgage Corp. REMIC, Series 1311, Class K,
7.000%, 7/15/2022
223        
       244
 
Federal Home Loan Mortgage Corp. REMIC, Series 1384, Class D,
7.000%, 9/15/2022
250        
     2,576
 
Federal Home Loan Mortgage Corp. REMIC, Series 2497, Class JH,
6.000%, 9/15/2032
2,931      
 
 
TOTAL
3,404
 
 
Federal National Mortgage Association—   0.0%
 
     1,007
3
Federal National Mortgage Association REMIC, Series 1993-113, Class SB,
9.749% (10-year Constant Maturity Treasury +48.285%), 7/25/2023
1,056      
       525
 
Federal National Mortgage Association REMIC, Series 2003-35, Class UC,
3.750%, 5/25/2033
553        
 
 
TOTAL
1,609
 
 
Non-Agency Mortgage—   0.0%
 
       141
6
Bear Stearns Mortgage Securities, Inc. 1997-6, Class 1A,
6.280%, 3/25/2031
143        
 
 
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $4,874)
5,156
 
 
EXCHANGE-TRADED FUNDS—   8.0%
 
33,100
 
iShares Core MSCI Emerging Markets ETF
2,092,251  
191,800
 
iShares MSCI EAFE ETF
15,246,182 
 
 
Total Exchange-Traded Funds
(IDENTIFIED COST $15,559,125)
17,338,433
 
 
INVESTMENT COMPANIES—   18.4%
 
440,962
 
Bank Loan Core Fund
4,255,287  
280,120
 
Emerging Markets Core Fund
2,857,224  
168,995
 
Federated Hermes Government Obligations Fund, Premier Shares, 0.01%7
168,995    
16,941,121
 
Federated Hermes Institutional Prime Value Obligations Fund, Institutional
Shares, 0.02%7
16,947,898 
931,592
 
High Yield Bond Core Fund
5,962,186  
665,680
 
Mortgage Core Fund
6,610,200  
361,421
 
Project and Trade Finance Core Fund
3,205,801  
 
 
TOTAL INVESTMENT COMPANIES
(IDENTIFIED COST $40,186,084)
40,007,591
 
 
TOTAL INVESTMENT IN SECURITIES—99.2%
(IDENTIFIED COST $177,828,350)8
215,576,764
 
 
OTHER ASSETS AND LIABILITIES - NET—0.8%9
1,756,365
 
 
TOTAL NET ASSETS—100%
$217,333,129
Annual Shareholder Report
23
At July 31, 2021, the Fund had the following outstanding futures contracts:  
Description
Number of
Contracts
Notional
Value
Expiration
Date
Value and
Unrealized
Appreciation
(Depreciation)
Long Future:
 
 
 
 
1United States Treasury Notes 10-Year
Ultra Long Futures
1
$150,250
September 2021
$1,060
Short Futures:
 
 
 
 
1United States Treasury Notes 2-Year
Short Futures
2
$441,313
September 2021
$(457)
1United States Treasury Notes 5-Year
Short Futures
11
$1,368,898
September 2021
$(5,293)
1United States Treasury Notes 10-Year
Short Futures
6
$806,719
September 2021
$(4,576)
1United States Treasury Ultra Bond
Short Futures
6
$1,197,187
September 2021
$(76,733)
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS
$(85,999)
Net Unrealized Depreciation on Futures Contracts is included in “Other Assets and Liabilities—Net.”
Annual Shareholder Report
24
 
[PAGE INTENTIONALLY LEFT BLANK]
Annual Shareholder Report
25
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended July 31, 2021, were as follows:  
Affiliates
Value as of
7/31/2020
Purchases
at Cost
Proceeds
from Sales
Bank Loan Core Fund
$2,617,248
$3,469,024
$(1,970,000)
Emerging Markets Core Fund
$3,240,602
$1,615,975
$(2,059,430)
Federated Hermes Government Obligations Fund,
Premier Shares*
$1,431,638
$61,027,375
$(62,290,018)
Federated Hermes Institutional Prime Value Obligations
Fund, Institutional Shares
$5,427,864
$49,008,885
$(37,489,851)
High Yield Bond Core Fund
$3,878,566
$2,981,380
$(1,086,000)
Mortgage Core Fund
$11,545,574
$1,708,813
$(6,455,370)
Project and Trade Finance Core Fund
$2,538,696
$636,179
$—
TOTAL OF AFFILIATED TRANSACTIONS
$30,680,188
$120,447,631
$(111,350,669)
Annual Shareholder Report
26
 
Change in
Unrealized
Appreciation/
Depreciation
Net
Realized
Gain/
(Loss)
Value as of
7/31/2021
Shares
Held as of
7/31/2021
Dividend
Income
$86,811
$52,204
$4,255,287
440,962
$157,965
$(60,353)
$120,430
$2,857,224
280,120
$194,495
N/A
N/A
$168,995
168,995
$405
$1,162
$(162)
$16,947,898
16,941,121
$3,931
$132,640
$55,600
$5,962,186
931,592
$285,629
$(185,746)
$(3,071)
$6,610,200
665,680
$220,173
$30,926
$—
$3,205,801
361,421
$81,979
$5,440
$225,001
$40,007,591
19,789,891
$944,577
 
*
All or a portion of the balance/activity for the fund relates to cash collateral received on
securities lending transactions.
 
1
Non-income-producing security.
2
All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers.
3
Floating/variable note with current rate and current maturity or next reset date shown.
4
Perpetual Bond Security. The maturity date reflects the next call date.
5
All or a portion of this security is pledged as collateral to ensure the Fund is able to satisfy the
obligations of its outstanding futures contracts.
6
JPMorgan Chase & Co. has fully and unconditionally guaranteed Bear Stearns’ outstanding
registered debt securities.
7
7-day net yield.
8
The cost of investments for federal tax purposes amounts to $177,785,260.
9
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 total net assets at July 31, 2021.
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.
Annual Shareholder Report
27

The following is a summary of the inputs used, as of July 31, 2021, 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
Equity Securities:
 
 
 
 
Common Stocks
 
 
 
 
Domestic
$123,917,594
$—
$—
$123,917,594
International
1,853,068
—
—
1,853,068
Debt Securities:
 
 
 
 
Corporate Bonds
—
22,507,805
—
22,507,805
U.S. Treasuries
—
5,534,343
—
5,534,343
Asset-Backed Securities
—
1,869,003
—
1,869,003
Commercial Mortgage-Backed
Securities
—
1,687,766
—
1,687,766
Mortgage-Backed Securities
—
567,453
—
567,453
Government Agency
—
251,054
—
251,054
Municipal Bond
—
37,498
—
37,498
Collateralized Mortgage Obligations
—
5,156
—
5,156
Exchange-Traded Funds
17,338,433
—
—
17,338,433
Investment Companies1
36,801,790
—
—
40,007,591
TOTAL SECURITIES
$179,910,885
$32,460,078
$—
$215,576,764
Other Financial Instruments:2
 
 
 
 
Assets
$1,060
$—
$—
$1,060
Liabilities
(87,059)
—
—
(87,059)
TOTAL OTHER
FINANCIAL INSTRUMENTS
$(85,999)
$—
$—
$(85,999)
 
1
As permitted by U.S. generally accepted accounting principles (GAAP), an Investment Company
valued at $3,205,801 is measured at fair value using the net asset value (NAV) per share practical
expedient and has not been categorized in the chart above, but is included in the Total column.
The amount included herein is intended to permit reconciliation of the fair value classifications to
the amounts presented on the Statement of Assets and Liabilities. The price of shares redeemed
of Project and Trade Finance Core Fund may be determined as of the closing NAV of the fund up
to twenty-four days after receipt of a shareholder redemption request.
2
Other financial instruments are futures contracts.
 
The following acronym(s) are used throughout this portfolio:
 
ETF
—Exchange-Traded Fund
FREMF
—Freddie Mac Multifamily K-Deals
GMTN
—Global Medium Term Note
LIBOR
—London Interbank Offered Rate
MTN
—Medium Term Note
REIT
—Real Estate Investment Trust
REMIC
—Real Estate Mortgage Investment Conduit
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
28
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$19.59
$18.71
$19.59
$17.74
$16.52
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.16
0.19
0.25
0.21
0.26
Net realized and unrealized gain (loss)
4.30
1.46
0.57
1.89
1.23
Total From Investment Operations
4.46
1.65
0.82
2.10
1.49
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.07)
(0.24)
(0.19)
(0.25)
(0.27)
Distributions from net realized gain
(0.80)
(0.53)
(1.51)
—
—
Total Distributions
(0.87)
(0.77)
(1.70)
(0.25)
(0.27)
Net Asset Value, End of Period
$23.18
$19.59
$18.71
$19.59
$17.74
Total Return2
23.31%
9.08%
5.28%
11.91%
9.11%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.31%
1.31%
1.31%
1.32%
1.26%
Net investment income
0.77%
1.04%
1.35%
1.11%
1.51%
Expense waiver/reimbursement4
0.04%
0.07%
0.08%
0.06%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$124,559
$95,559
$84,243
$61,553
$61,405
Portfolio turnover
61%
152%
92%
89%
82%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
29
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$19.35
$18.50
$19.31
$17.49
$16.30
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.002
0.05
0.11
0.06
0.13
Net realized and unrealized gain (loss)
4.23
1.43
0.59
1.87
1.20
Total From Investment Operations
4.23
1.48
0.70
1.93
1.33
Less Distributions:
 
 
 
 
 
Distributions from net investment income
—
(0.10)
(0.00)2
(0.11)
(0.14)
Distributions from net realized gain
(0.80)
(0.53)
(1.51)
—
—
Total Distributions
(0.80)
(0.63)
(1.51)
(0.11)
(0.14)
Net Asset Value, End of Period
$22.78
$19.35
$18.50
$19.31
$17.49
Total Return3
22.37%
8.25%
4.54%
11.09%
8.23%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses4
2.06%
2.06%
2.06%
2.07%
2.01%
Net investment income
0.01%
0.29%
0.60%
0.35%
0.75%
Expense waiver/reimbursement5
0.05%
0.09%
0.10%
0.04%
0.13%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$16,941
$15,043
$15,492
$27,577
$29,007
Portfolio turnover
61%
152%
92%
89%
82%
 
1
Per share numbers have been calculated using the average shares method.
2
Represents less than $0.01.
3
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
5
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
30
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$19.67
$18.78
$19.64
$17.79
$16.57
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.22
0.24
0.30
0.26
0.30
Net realized and unrealized gain (loss)
4.30
1.46
0.58
1.89
1.23
Total From Investment Operations
4.52
1.70
0.88
2.15
1.53
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.11)
(0.28)
(0.23)
(0.30)
(0.31)
Distributions from net realized gain
(0.80)
(0.53)
(1.51)
—
—
Total Distributions
(0.91)
(0.81)
(1.74)
(0.30)
(0.31)
Net Asset Value, End of Period
$23.28
$19.67
$18.78
$19.64
$17.79
Total Return2
23.59%
9.33%
5.61%
12.15%
9.36%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.06%
1.06%
1.06%
1.07%
1.00%
Net investment income
1.02%
1.29%
1.62%
1.35%
1.77%
Expense waiver/reimbursement4
0.04%
0.07%
0.08%
0.02%
0.12%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$73,997
$54,440
$53,035
$54,358
$39,136
Portfolio turnover
61%
152%
92%
89%
82%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
31
Financial Highlights–Class R6 Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
20171
Net Asset Value, Beginning of Period
$19.61
$18.74
$19.62
$17.76
$16.49
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)2
0.22
0.24
0.27
0.26
0.28
Net realized and unrealized gain (loss)
4.31
1.44
0.60
1.90
1.24
Total From Investment Operations
4.53
1.68
0.87
2.16
1.52
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.10)
(0.28)
(0.24)
(0.30)
(0.25)
Distributions from net realized gain
(0.80)
(0.53)
(1.51)
—
—
Total Distributions
(0.90)
(0.81)
(1.75)
(0.30)
(0.25)
Net Asset Value, End of Period
$23.24
$19.61
$18.74
$19.62
$17.76
Total Return3
23.70%
9.26%
5.56%
12.24%
9.32%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses4
1.05%
1.05%
1.05%
1.06%
1.05%
Net investment income
1.03%
1.29%
1.40%
1.36%
1.64%
Expense waiver/reimbursement5
0.01%
0.03%
0.06%
0.02%
0.06%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$1,836
$1,516
$3,165
$12,178
$10,439
Portfolio turnover
61%
152%
92%
89%
82%
 
1
Effective September 1, 2016, the Fund’s Class R Shares were redesignated as Class R6 Shares.
2
Per share numbers have been calculated using the average shares method.
3
Based on net asset value.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
5
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
32
Statement of Assets and Liabilities
July 31, 2021
 
Assets:
 
Investment in securities, at value including $148,358 of securities loaned and
$40,007,591 of investment in affiliated holdings* (identified cost $177,828,350)
$215,576,764
Cash
221
Cash denominated in foreign currencies (identified cost $3,315)
3,494
Income receivable
293,096
Income receivable from affiliated holdings
77,081
Receivable for investments sold
1,963,544
Receivable for shares sold
261,768
Total Assets
218,175,968
Liabilities:
 
Payable for investments purchased
410,603
Payable for shares redeemed
44,658
Payable for variation margin on futures contracts
7,347
Payable for collateral due to broker for securities lending (Note 2)
168,995
Payable for investment adviser fee (Note 5)
8,889
Payable for administrative fee (Note 5)
932
Payable for auditing fees
32,600
Payable for custodian fees
13,512
Payable for legal fees
4,417
Payable for portfolio accounting fees
31,122
Payable for transfer agent fees
14,548
Payable for distribution services fee (Note 5)
10,601
Payable for other service fees (Notes 2 and 5)
56,828
Accrued expenses (Note 5)
37,787
Total Liabilities
842,839
Net assets for 9,374,653 shares outstanding
$217,333,129
Net Assets Consist of:
 
Paid-in capital
$167,223,291
Total distributable earnings (loss)
50,109,838
Total Net Assets
$217,333,129
Annual Shareholder Report
33
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
Class A Shares:
 
Net asset value per share ($124,559,143 ÷ 5,373,783 shares outstanding), no par value,
unlimited shares authorized
$23.18
Offering price per share (100/94.50 of $23.18)
$24.53
Redemption proceeds per share
$23.18
Class C Shares:
 
Net asset value per share ($16,940,707 ÷ 743,653 shares outstanding), no par value,
unlimited shares authorized
$22.78
Offering price per share
$22.78
Redemption proceeds per share (99.00/100 of $22.78)
$22.55
Institutional Shares:
 
Net asset value per share ($73,996,859 ÷ 3,178,183 shares outstanding), no par value,
unlimited shares authorized
$23.28
Offering price per share
$23.28
Redemption proceeds per share
$23.28
Class R6 Shares:
 
Net asset value per share ($1,836,420 ÷ 79,034 shares outstanding), no par value,
unlimited shares authorized
$23.24
Offering price per share
$23.24
Redemption proceeds per share
$23.24
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
34
Statement of Operations
Year Ended July 31, 2021
 
Investment Income:
 
Dividends (including $944,172 received from affiliated holdings*)
$2,848,598
Interest
1,066,706
Net income on securities loaned (includes $405 earned from an affiliated holding*
related to cash collateral balances) (Note 2)
7,434
TOTAL INCOME
3,922,738
Expenses:
 
Investment adviser fee (Note 5)
1,409,044
Administrative fee (Note 5)
152,676
Custodian fees
50,798
Transfer agent fees (Note 2)
162,099
Directors’/Trustees’ fees (Note 5)
2,292
Auditing fees
34,100
Legal fees
11,958
Portfolio accounting fees
114,194
Distribution services fee (Note 5)
119,429
Other service fees (Notes 2 and 5)
296,415
Share registration costs
75,545
Printing and postage
31,778
Miscellaneous (Note 5)
38,556
TOTAL EXPENSES
2,498,884
Waiver and Reimbursements:
 
Waiver/reimbursement of investment adviser fee (Note 5)
(11,958)
Reimbursement of other operating expenses (Notes 2 and 5)
(59,371)
TOTAL WAIVER AND REIMBURSEMENTS
(71,329)
Net expenses
2,427,555
Net investment income
1,495,183
Annual Shareholder Report
35
Statement of Operations–continued
Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions
and Futures Contracts:
 
Net realized gain on investments (including net realized gain of $225,001 on sales of
investments in affiliated holdings*)
$16,328,699
Net realized gain on foreign currency transactions
14,251
Net realized loss on futures contracts
(182,507)
Net change in unrealized appreciation of investments (including net change in
unrealized depreciation of $5,440 of investments in affiliated holdings*)
21,988,970
Net change in unrealized appreciation of translation of assets and liabilities in
foreign currency
110
Net change in unrealized appreciation of futures contracts
(103,580)
Net realized and unrealized gain (loss) on investments, foreign currency transactions
and futures contracts
38,045,943
Change in net assets resulting from operations
$39,541,126
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
36
Statement of Changes in Net Assets
 
 
Year Ended July 31
2021
2020
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$1,495,183
$1,653,661
Net realized gain (loss)
16,160,443
4,438,996
Net change in unrealized appreciation/depreciation
21,885,500
7,120,161
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
39,541,126
13,212,818
Distributions to Shareholders:
 
 
Class A Shares
(4,237,449)
(3,813,305)
Class C Shares
(600,829)
(539,280)
Institutional Shares
(2,568,687)
(2,518,867)
Class R6 Shares
(74,229)
(108,342)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(7,481,194)
(6,979,794)
Share Transactions:
 
 
Proceeds from sale of shares
36,726,310
29,726,646
Proceeds from shares issued in connection with the tax-free transfer
of assets from PNC Balanced Allocation Fund
—
11,298,197
Net asset value of shares issued to shareholders in payment of
distributions declared
7,145,158
6,622,021
Cost of shares redeemed
(25,156,864)
(43,256,472)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
18,714,604
4,390,392
Change in net assets
50,774,536
10,623,416
Net Assets:
 
 
Beginning of period
166,558,593
155,935,177
End of period
$217,333,129
$166,558,593
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
37
Notes to Financial Statements
July 31, 2021
1. ORGANIZATION
Federated Hermes MDT Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of five portfolios. The financial statements included herein are only those of Federated Hermes MDT Balanced Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers four classes of shares: Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is the possibility of long-term growth of capital and income.
On November 15, 2019, the Fund acquired all of the net assets of PNC Balanced Allocation Fund (the “Acquired Fund”), an open-end investment company, in a tax-free reorganization in exchange for shares of the Fund, pursuant to a plan of reorganization approved by the Acquired Fund’s shareholders on November 5, 2019. The purpose of the transaction was to combine two portfolios with comparable investment objectives and strategies. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Fund’s realized gains and losses with amounts distributable to shareholders for tax purposes.
For every one share of the Acquired Fund’s Class A Shares exchanged, a shareholder received 0.616 shares of the Fund’s Class A Shares.
For every one share of the Acquired Fund’s Class C Shares exchanged, a shareholder received 0.609 shares of the Fund’s Class C Shares.
For every one share of the Acquired Fund’s Class I Shares exchanged, a shareholder received 0.610 shares of the Fund’s Institutional Shares.
The Fund received net assets from the Acquired Fund as a result of the tax-free reorganization as follows:  
Shares of the
Fund Issued
Acquired Fund’s
Net Assets
Received
Unrealized
Appreciation1
Net Assets
of the Fund
Immediately
Prior to
Combination
Net Assets
of the Fund
Immediately
After
Combination
593,132
$11,298,197
$2,170,935
$154,177,771
$165,475,968
 
1
Unrealized Appreciation is included in the Net Assets Received amount shown above.
Annual Shareholder Report
38
Assuming the acquisition had been completed on August 1, 2019, the beginning of the annual reporting period of the Fund, the Fund’s pro forma results of operations for the year ended July 31, 2020, were as follows:  
Net investment income
$1,721,772
Net realized and unrealized gain on investments
11,959,769
Net increase in net assets resulting from operations
$13,681,541
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amount of earnings of the Acquired Fund that has been included in the Fund’s Statement of Changes in Net Assets as of July 31, 2020.
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 GAAP.
Investment Valuation
In calculating its NAV, the Fund generally values investments as follows:
■
Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
■
Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■
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 asked quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, 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 Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the 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
Annual Shareholder Report
39
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.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee 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-party pricing 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 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 Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and 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 asked 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-income securities 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 Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser 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;
Annual Shareholder Report
40
■
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 Trustees have 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 Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
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. Amortization/accretion of premium and discount is included in investment income. Gains and losses realized on principal payment of mortgage-backed securities (paydown
Annual Shareholder Report
41
gains and losses) are classified as part of investment income. Positive or negative inflation adjustments on Treasury Inflation-Protected Securities are included in interest income. Distributions of net investment income, if any, are declared and paid annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursements of $71,329 is disclosed in various locations in this Note 2 and Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Transfer Agent Fees
For the year ended July 31, 2021, transfer agent fees for the Fund were as follows:  
 
Transfer Agent
Fees Incurred
Transfer Agent
Fees Reimbursed
Class A Shares
$98,241
$(34,572)
Class C Shares
14,028
(6,215)
Institutional Shares
49,167
(18,584)
Class R6 Shares
663
—
TOTAL
$162,099
$(59,371)
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees.
For the year ended July 31, 2021, other service fees for the Fund were as follows:  
 
Other Service
Fees Incurred
Class A Shares
$256,690
Class C Shares
39,725
TOTAL
$296,415
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue 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 July 31, 2021, 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 July 31, 2021, tax years 2018 through 2021 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
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The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.
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.
Futures Contracts
The Fund purchases and sells financial futures contracts to seek to increase returns and to manage currency, duration, market, sector/asset class and yield curve risks. Upon entering into a financial futures contract with a broker, the Fund is required to deposit with a broker, either U.S. government securities or a specified amount of cash, which is shown as due from broker in the Statement of Assets and Liabilities. Futures contracts are valued daily and unrealized gains or losses are recorded in a “variation margin” account. The Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. There is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures contracts, guarantees the futures contracts against default.
Futures contracts outstanding at period end are listed after the Fund’s Portfolio of Investments.
The average notional value of long and short futures contracts held by the Fund throughout the period was $12,644,074 and $3,064,820, respectively. This is based on amounts held as of each month-end throughout the fiscal period.
Foreign Currency Translation
The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
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Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.
Securities Lending
The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund normally receives cash collateral for securities loaned that may be invested in affiliated money market funds, other money market instruments and/or repurchase agreements. Investments in money market funds may include funds with a “floating” NAV that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if the investee fund’s NAV decreases, result in the Fund recognizing losses and being required to cover the decrease in the value of the cash collateral. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
Securities lending transactions are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated below, the cash collateral received by the Fund exceeds the market value of the securities loaned reducing the net settlement amount to zero. The chart below identifies the amount of collateral received as well as the market value of securities on loan. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.
As of July 31, 2021, securities subject to this type of arrangement and related collateral were as follows:  
Market Value of
Securities Loaned
Collateral
Received
$148,358
$168,995
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44
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 Trustees.
Additional Disclosure Related to Derivative Instruments  
Fair Value of Derivative Instruments
 
Liabilities
 
Statement of
Assets and
Liabilities
Location
Fair
Value
Derivatives not accounted for as hedging
instruments under ASC Topic 815
 
 
Interest rate contracts
Payable for variation margin on futures
contracts
$85,999*
 
*
Includes cumulative net depreciation of futures contracts as reported in the footnotes to the
Portfolio of Investments. Only the current day’s variation margin is reported within the Statement
of Assets and Liabilities.
The Effect of Derivative Instruments on the Statement of Operations for the Year Ended July 31, 2021  
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$(182,507)
 
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$(103,580)
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45
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:  
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
871,492
$18,715,026
602,633
$11,030,108
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
425,056
8,093,068
Shares issued to shareholders in payment of
distributions declared
194,924
3,995,498
191,088
3,554,535
Shares redeemed
(571,167)
(12,038,249)
(842,124)
(15,137,260)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
495,249
$10,672,275
376,653
$7,540,451
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
194,456
$4,082,733
156,794
$2,848,857
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
24,943
468,430
Shares issued to shareholders in payment of
distributions declared
27,279
549,947
26,632
488,464
Shares redeemed
(255,679)
(5,368,466)
(268,255)
(4,750,816)
NET CHANGE RESULTING FROM CLASS C
SHARE TRANSACTIONS
(33,944)
$(735,786)
(59,886)
$(945,065)
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
629,515
$13,538,386
806,718
$15,223,232
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
143,133
2,736,699
Shares issued to shareholders in payment of
distributions declared
122,521
2,525,489
132,428
2,472,322
Shares redeemed
(342,167)
(7,302,718)
(1,138,214)
(21,041,358)
NET CHANGE RESULTING FROM INSTITUTIONAL
SHARE TRANSACTIONS
409,869
$8,761,157
(55,935)
$(609,105)
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46
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class R6 Shares:
Shares
Amount
Shares
Amount
Shares sold
18,465
$390,165
33,882
$624,449
Shares issued to shareholders in payment of
distributions declared
3,611
74,224
5,727
106,700
Shares redeemed
(20,326)
(447,431)
(131,269)
(2,327,038)
NET CHANGE RESULTING FROM CLASS R6
SHARE TRANSACTIONS
1,750
$16,958
(91,660)
$(1,595,889)
NET CHANGE RESULTING FROM TOTAL FUND
SHARE TRANSACTIONS
872,924
$18,714,604
169,172
$4,390,392
4. FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended July 31, 2021 and 2020, was as follows:  
 
2021
2020
Ordinary income1
$5,122,149
$4,219,861
Long-term capital gains
$2,359,045
$2,759,933
 
1
For tax purposes, short-term capital gain distributions are considered ordinary
income distributions.
As of July 31, 2021, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income1
$7,945,885
Net unrealized appreciation
$37,767,459
Undistributed long-term capital gains
$4,396,494
 
1
For tax purposes, short-term capital gains are considered ordinary income in determining
distributable earnings.
The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for the deferral of losses on wash sales, mark to market of futures contracts, deferral of paydown losses, straddle loss deferrals and partnership adjustments.
At July 31, 2021, the cost of investments for federal tax purposes was $177,785,260. The net unrealized appreciation of investments for federal tax purposes was $37,767,214. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $39,310,024 and net unrealized depreciation from investments for those securities having an excess of cost over value of $1,542,810. The amounts presented are inclusive of derivative contracts.
At July 31, 2021, for federal tax purposes, the Fund had $24,290 in straddle loss deferrals.
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47
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 0.75% of the Fund’s average daily net assets. 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 the year ended July 31, 2021, the Adviser voluntarily waived $7,335 of its fee and voluntarily reimbursed $59,371 of transfer agent fees.
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 July 31, 2021, the Adviser reimbursed $4,623.
Certain of the Fund’s assets are managed by Federated Investment Management Company (the “Sub-Adviser”). Under the terms of a sub-advisory agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund’s adviser fee. The fee is paid by the Adviser out of its resources and is not an incremental Fund expense. For the year ended July 31, 2021, the Sub-Adviser earned a fee of $152,788.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:  
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the annualized fee paid to FAS was 0.081% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
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48
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’s Class A Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:  
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class C Shares
0.75%
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 July 31, 2021, distribution services fees for the Fund were as follows:  
 
Distribution Services
Fees Incurred
Class C Shares
$119,429
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares.
For the year ended July 31, 2021, FSC retained $12,764 of fees paid by the Fund. For the year ended July 31, 2021, the Fund’s Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended July 31, 2021, FSC retained $19,415 in sales charges from the sale of Class A Shares. FSC also retained $2,091 of CDSC relating to redemptions of Class C Shares.
Other Service Fees
For the year ended July 31, 2021, FSSC received $16,181 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Effective October 1, 2021, total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.31%, 2.07%, 1.06% and 1.05% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) October 1, 2022; or (b) the date of the Fund’s next effective Prospectus. Prior to October 1, 2021, the Fee Limit for the Class C Shares was 2.06%. While the Adviser and
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49
its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the 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. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended July 31, 2021, were as follows:  
Purchases
$94,160,543
Sales
$98,467,076
7. CONCENTRATION OF RISK
The Fund may invest a portion of its assets in securities of companies that are deemed by the Fund’s management to be classified in similar business sectors. Economic developments may have an effect on the liquidity and volatility of the portfolio securities.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 23, 2021. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), or a replacement rate as appropriate, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of July 31, 2021, the Fund had no outstanding loans. During the year ended July 31, 2021, the Fund did not utilize the LOC.
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9. 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 July 31, 2021, there were no outstanding loans. During the year ended July 31, 2021, the program was not utilized.
10. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
11. Recent Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04 “Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the LIBOR and other interbank-offered reference rates. The temporary relief provided by ASU 2020-04 is effective immediately for certain reference rate-related contract modifications that occur through December 31, 2022. Management does not expect ASU 2020-04 to have a material impact on the financial statements.
12. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended July 31, 2021, the amount of long-term capital gains designated by the Fund was $2,359,045.
For the fiscal year ended July 31, 2021, 13.36% of total ordinary income (including short-term capital gain) distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.
Of the ordinary income (including short-term capital gain) distributions made by the Fund during the year ended July 31, 2021, 10.99% qualify for the dividend received deduction available to corporate shareholders.
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Report of Independent Registered Public Accounting Firm
TO THE board of trustees OF federated Hermes MDT Series and shareholders of Federated Hermes MDT Balanced Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes MDT Balanced Fund (the “Fund”) (one of the portfolios constituting Federated Hermes MDT Series (the “Trust”)), including the portfolio of investments, as of July 31, 2021, 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 five years in the period then ended 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 MDT Series) at July 31, 2021, 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 five years in the period then ended, 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 standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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.
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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 July 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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
September 23, 2021
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2021 to July 31, 2021.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.  
 
Beginning
Account Value
2/1/2021
Ending
Account Value
7/31/2021
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$1,122.50
$6.89
Class C Shares
$1,000
$1,118.30
$10.82
Institutional Shares
$1,000
$1,124.10
$5.58
Class R6 Shares
$1,000
$1,124.30
$5.53
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,018.30
$6.56
Class C Shares
$1,000
$1,014.58
$10.29
Institutional Shares
$1,000
$1,019.54
$5.31
Class R6 Shares
$1,000
$1,019.59
$5.26
 
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
 
Class A Shares
1.31%
Class C Shares
2.06%
Institutional Shares
1.06%
Class R6 Shares
1.05%
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Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2020, the Trust comprised five portfolio(s), and the Federated Hermes Fund Family consisted of 41 investment companies (comprising 163 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: May 2006
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
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Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Vice President, Federated Hermes, Inc.; President, Director/Trustee
and CEO, Federated Advisory Services Company, Federated Equity
Management Company of Pennsylvania, Federated Global Investment
Management Corp., Federated Investment Counseling, Federated
Investment Management Company; President of some of the Funds in
the Federated Hermes Fund Family and Director, Federated Investors
Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Director, Federated Hermes, Inc.;
Chairman and Director, Southpointe Distribution Services, Inc. and
President, Technology, Federated Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors,
Director, KLX Energy Services Holdings, Inc. (oilfield services); former
Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
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57
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty
Furniture Companies, Inc.; formerly, Director, Member of Governance
and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; and Director and Vice Chair, Our Campaign for the
Church Alive!, Inc.
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58
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity and
Director, The Golisano Children’s Museum of Naples, Florida.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Senior Vice President for Legal Affairs, General Counsel
and Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Director of Risk Management and Associate General Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms. Reilly served as Assistant General Counsel of Compliance and
Enterprise Risk as well as Senior Counsel of Environment, Health and
Safety, PPG Industries.
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
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59
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
OFFICERS 
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
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60
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: June 2006
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR VICE
PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
Stephen F. Auth
Birth Date:
September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: June 2012
Principal Occupations: Stephen F. Auth is Chief Investment Officer of
various Funds in the Federated Hermes Fund Family; Executive Vice
President, Federated Investment Counseling, Federated Global
Investment Management Corp. and Federated Equity Management
Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment
Management Company and Passport Research, Ltd. (investment
advisory subsidiary of Federated); Senior Vice President, Global
Portfolio Management Services Division; Senior Vice President,
Federated Investment Management Company and Passport
Research, Ltd.; Senior Managing Director and Portfolio Manager,
Prudential Investments.
 
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61
Evaluation and Approval of Advisory Contract–May 2021
Federated Hermes MDT Balanced Fund (the “Fund”)
At its meetings in May 2021 (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 MDTA LLC (the “Adviser”) and the investment sub-advisory contract between the Adviser and Federated Investment Management Company (the “Sub-Adviser” and together with the Adviser, the “Advisers”) with respect to the Fund (together, the “Contracts”) for an additional one-year term. The Board’s determination to approve the continuation of the Contracts 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 arrangements. 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 presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (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 Contracts. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.
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 Contracts 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 Advisers and their affiliates (collectively, “Federated Hermes”) in response to requests posed to Federated Hermes on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional
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62
matters as the Independent Trustees deemed reasonably necessary to evaluate the Contracts, 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 Contracts included review of materials and information covering the following matters, among others: the Advisers’ investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate) and comments on the reasons for the Fund’s performance; the Fund’s investment objectives; the Fund’s expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Advisers and their affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring and managing the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund’s relationship to the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the “Federated Hermes Funds”), which include a comprehensive array of funds with different investment objectives, policies and strategies, and the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Hermes Funds and Federated Hermes’ affiliates that service them (including communications from regulatory agencies), as well as Federated Hermes’ responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Hermes Funds and/or Federated Hermes may be responding to them. The Board noted that its evaluation process is evolutionary and that the criteria considered and the emphasis placed on relevant criteria may change in recognition of changing circumstances in the mutual fund marketplace.
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in determining to approve the Contracts. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the
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63
fund, its benchmark, and comparable funds); (2) an adviser’s cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with a fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the 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 an adviser’s services and fees). The Board noted 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 review of the Contracts 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 Federated Hermes Funds.
In addition to considering the above-referenced factors, the Board was mindful of 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 Contracts. In particular, the Board recognized that many shareholders have invested in the Fund 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 in the marketplace there are a range of investment options available to the Fund’s shareholders 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 Contracts, 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 Contracts 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 Contracts. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection
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64
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 Contracts for the Fund as part of its consideration of agreements for funds across the Federated Hermes Funds family, 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 Advisers and the resources of the Advisers and their affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contracts and the range of services provided to the Fund by the Advisers and their affiliates. The Board considered the Advisers’ personnel, investment philosophy and process, investment research capabilities and resources, trade execution 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 the Advisers’ ability and experience in attracting and retaining qualified personnel to service the Fund. The Fund’s ability to deliver competitive performance when compared to its Performance Peer Group (as defined below) was also deemed to be relevant by the Board as a useful indicator of how the Advisers are 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 significant acquisition of Hermes Fund Managers Limited by Federated Hermes in 2018, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters.
The Board considered the quality of the Advisers’ communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account the Advisers’ communications with the Board in light of the market volatility amidst the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
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The Board received and evaluated information regarding the Advisers’ regulatory and compliance environment. The Board considered the Advisers’ compliance program, compliance history, and reports from the CCO about the Advisers’ 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, in particular, the compliance-related resources devoted by the Advisers and their affiliates in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including the Advisers’ commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ 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 to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered discussions with Federated Hermes regarding the implementation of its business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. 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, including changes associated with the pandemic.
Based on these considerations, the Board concluded that the nature, extent and quality of the Advisers’ investment management and related services warrant the continuation of the Contracts.
Fund Investment Performance
In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks, as disclosed in the Fund’s prospectus. The Board considered detailed investment reports on, and the Advisers’ 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 include, among other items, information on the Fund’s gross and net returns, the Fund’s investment performance compared to one or more relevant investment categories and the Fund’s benchmark index, portfolio attribution information and commentary on the effect of current and recent market conditions.
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The Board also reviewed comparative information regarding the performance of other mutual funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”), noting the CCO’s view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Advisers in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds’ investment objectives or investment management techniques, or the costs to implement funds, even within the same Performance Peer Group. In this connection, the Board considered that the Fund’s quantitative focus makes fee and expense comparisons particularly difficult as the funds in the Performance Peer Group varied widely in their complexity, and the management of the Fund is among the more complex relative to its Performance Peer Group. The Board also considered a report comparing the performance of the Fund solely to other funds with a quantitative focus in the Performance Peer Group.
For the one-year, three-year and five-year periods ended December 31, 2020, the Fund’s performance was above the median of the Performance Peer Group.
Following such evaluation and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Contracts.
Fund Expenses
The Board considered the advisory fee, sub-advisory 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 advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its deliberations. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because such comparisons are believed to be more relevant. The Board considered that other mutual funds are the products most like the Fund, in that they are readily available to Fund
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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 mutual funds’ fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.
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. In this regard, the Board had been previously advised that, while comparisons to its Expense Peer Group are relevant in judging the reasonableness of advisory fees, the Fund’s quantitative focus makes fee and expense comparisons particularly difficult. Although the Fund’s advisory fee was above the median of its Expense Peer Group range, the funds in the Expense Peer Group varied widely in their complexity, and the Board has been informed that the management of the Fund is among the more complex funds relative to its Expense Peer Group.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-mutual fund clients (such as institutional separate accounts) and third-party unaffiliated mutual funds for which any of the Advisers or their affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that mon-mutual 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, addressing different administrative responsibilities, and addressing different degrees of risk associated with management; and (vi) 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 mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s mutual 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
Annual Shareholder Report
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unaffiliated third-party mutual 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’ advisory fees
Following such evaluation and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Contracts.
Profitability and Other Benefits
The Board also received financial information about Federated Hermes, including information regarding the compensation and ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. This information covered not only the fees under the Federated Hermes Funds’ investment advisory contracts, but also fees received by Federated Hermes’ affiliates for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of 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 any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds. In addition, the Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Hermes Fund shareholders and/or reported to the Board their intention to do so (or continue to do so) in the future. Moreover, the Board received and considered regular reports from Federated Hermes throughout the year as to the institution, adjustment or elimination of these voluntary waivers and/or reimbursements.
The Board received and considered information furnished by Federated Hermes, as requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses 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 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. The allocation information, including the CCO’s view that cost allocations on a fund-by-fund basis may be unreliable, was considered in the evaluation by the Board. In addition, the Board considered
Annual Shareholder Report
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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 Contracts 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 that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
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 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 calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as personnel and processes for the portfolio management (including market data on which portfolio managers make investment decisions), trading operations, issuer engagement (including with respect to ESG matters), shareholder services, compliance, business continuity, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and use of data. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments (as well as the benefits of any economies of scale, should they exist) are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and that such waivers and 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 also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered the beliefs of Federated Hermes and the CCO that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply
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breakpoints, at higher levels and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fees as a fund attains a certain size.
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 was 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 Contracts by the CCO. The CCO also recognized that the Board’s 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 for future reporting to the Board or further consideration by management 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 Contracts. The Board based its determination to approve the Contracts 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. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contracts reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangements.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes MDT Series (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes MDT Balanced Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s investment adviser as the administrator for the Program with respect to the Fund (the “Administrator”). Each affiliated Federated Hermes advisory subsidiary (including the Fund’s investment adviser) that serves as investment adviser to a Federated Hermes Fund (including the Fund) has been approved as the administrator of the Program with respect to each Federated Hermes Fund that is managed by such advisory subsidiary (collectively, the “Administrator”). The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2021, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2020 through March 31, 2021 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where
Annual Shareholder Report
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applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
■ confirmation that the Fund did not utilize alternative funding sources during the Period;
■ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
■ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
■ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
■ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit; and
■ liquidity events during the Period, including the impact on liquidity caused by extended non-U.S. market closures and the March-April 2020 market conditions, and the fact that there were no specific liquidity events during the Period that materially affected the Fund’s liquidity risk.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual 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 mutual funds involves investment risk, including the possible loss of principal.
This Report 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 MDT Balanced Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31421R841
CUSIP 31421R833
CUSIP 31421R825
CUSIP 31421R692
37326 (9/21)
© 2021 Federated Hermes, Inc.
 
Annual Shareholder Report
July 31, 2021
 
 
Share Class | Ticker
A | QALGX
B | QBLGX
C | QCLGX
Institutional | QILGX
Federated Hermes MDT Large Cap Growth Fund
Fund Established 2005
A Portfolio of Federated Hermes MDT Series
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from August 1, 2020 through July 31, 2021. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,  
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes MDT Large Cap Growth Fund (the “Fund”), based on net asset value for the 12-month reporting period ended July 31, 2021, was 35.00% for Class A Shares, 33.97% for Class B Shares, 34.01% for Class C Shares and 35.33% for the Institutional Shares. The total return for the Russell 1000® Growth Index (R1000G),1 the Fund’s broad-based securities market index, was 36.68% for the same period. The total return of the Morningstar Large Growth Funds Average (MLGFA),2 a peer group average for the Fund, was 35.53% during the same period. The Fund’s and MLGFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the R1000G.
During the reporting period, the Fund’s investment strategy focused on stock selection. Stock selection was the most significant factor affecting the Fund’s performance relative to the R1000G during the period.
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the R1000G.
MARKET OVERVIEW
The reporting period was marked by the gradual but continuing recovery of the economy from the pandemic. The market has been less volatile than during the prior reporting period, and the market preferences for style in these 12 months have reversed some of the large differentials of the prior period. During the previous 12-month reporting period, the growth style led the value style by almost 35% (the Russell 3000® Growth Index (R3000G)3 returned 28.24% while the Russell 3000® Value Index (R3000V)4 returned -6.67%). During this reporting period, the value style led the growth style by a much more moderate amount of just under 4% (R3000V returned 40.72% and R3000G returned 36.83%). Similarly, in the capitalization ranges, the small cap stocks5 in the Russell 2000® Index6 led the mega-cap stocks in the Russell Top 200® Index7 by 15.53% this period rather than trailing by 20.43% for the prior period. The market still reacted quickly to new economic data, but now there was far less uncertainty about the future than there was at the end of the prior reporting period.
The best performing sectors in the R1000G during the reporting period were Energy (56.63%), Communication Services (51.23%) and Information Technology (42.25%). Underperforming sectors during the same period included Consumer Staples (20.12%), Real Estate (22.14%) and Materials (23.33%).
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STOCK SELECTION
When looking at the Fund’s performance in terms of fundamental and technical characteristics, the most significant driver of underperformance during the reporting period was mature stocks with very high analyst conviction and prices very near 52-week highs. Strong performance of mature stocks with very high analyst conviction, but prices not near 52-week highs provided a partial offset. The Fund’s sector exposures continued to remain close to R1000G weights; there were no significant overweight or underweight positions at the end of the reporting period. Unfavorable stock selection in the Consumer Staples and Consumer Discretionary sectors was the biggest contributor to the Fund’s underperformance during the period. Favorable stock selection in the Information Technology and Financials sectors was the largest favorable offset to the underperformance of the reporting period.
Individual stocks enhancing the Fund’s performance during the reporting period included Fortinet, Inc., Amazon.com, Inc. and Spirit AeroSystems Holdings, Inc. (Class A). Amazon.com underperformed the R1000G but was underweighted by the Fund.
Individual stocks detracting from the Fund’s performance during the reporting period included Tesla Inc., Vertex Pharmaceuticals Incorporated and Clorox Company. Tesla outperformed the R1000G but was underweighted by the Fund.
1
Please see the footnotes to the line graphs below for definitions of, and further information about, the R1000G.
2
Please see the footnotes to the line graphs below for definitions of, and further information about, the Morningstar peer group average.
3
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000® Growth Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad growth market. The Russell 3000® Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.*
4
The Russell 3000® Value Index measures the performance of the broad value segment of U.S. equity universe. It includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market. The Russell 3000® Value Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.*
5
Small-cap stocks may be less liquid and subject to greater price volatility than large-cap stocks.
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2
6
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.*
7
The Russell Top 200® Index measures the performance of the largest cap segment of the U.S. equity universe. The Russell Top 200® Index is a subset of the Russell 3000® Index. It includes approximately 200 of the largest securities based on a combination of their market cap and current index membership and represents approximately 68% of the total market capitalization of the U.S. market. The Russell Top 200® Index is constructed to provide a comprehensive and unbiased barometer for this very large cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.*
*
The index is unmanaged, and it is not possible to invest directly in an index.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes MDT Large Cap Growth Fund (the “Fund”) from July 31, 2011 to July 31, 2021, compared to the Russell 1000® Growth Index (R1000G)2and the Morningstar Large Growth Funds Average (MLGFA).3 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of July 31, 2021  
■ Total returns shown for Class B Shares include the maximum contingent deferred sales charge of 5.50% as applicable. 
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the line graph above.
Average Annual Total Returns for the Period Ended 7/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charge as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
27.56%
21.57%
15.70%
Class B Shares
28.47%
21.85%
15.66%
Class C Shares
33.01%
22.04%
15.66%
Institutional Shares
35.33%
23.25%
16.65%
R1000G
36.68%
23.32%
18.37%
MLGFA
35.53%
21.40%
16.43%
 
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Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charges = $9,450); for Class B Shares, the maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date; for Class C Shares, a 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The R1000G and MLGFA have been adjusted to reflect reinvestment of dividends on securities.
2
The R1000G measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. The R1000G is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The R1000G is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics. The R1000G is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. The R1000G is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance.
3
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
Annual Shareholder Report
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Portfolio of Investments Summary Table (unaudited)
At July 31, 2021, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Information Technology
44.5%
Consumer Discretionary
17.5%
Communication Services
11.9%
Health Care
10.1%
Industrials
5.3%
Financials
3.4%
Consumer Staples
2.8%
Materials
1.7%
Real Estate
0.7%
Energy
0.4%
Cash Equivalents2
1.8%
Other Assets and Liabilities—Net3
(0.1)%
TOTAL
100%
 
1
Except for Cash Equivalents and Other Assets and Liabilities, sector classifications are based
upon, and individual portfolio securities are assigned to, the classifications of the Global Industry
Classification Standard (GICS) except that the Adviser assigns a classification to securities not
classified by the GICS and to securities for which the Adviser does not have access to the
classification made by the GICS.
2
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements.
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and
Liabilities.
Annual Shareholder Report
6
Portfolio of Investments
July 31, 2021  
Shares
 
 
Value
         
 
COMMON STOCKS—   98.3%
 
 
 
Communication Services—   11.9%
 
14,175
 
Activision Blizzard, Inc.
$1,185,313  
4,637
1
Alphabet, Inc., Class A
12,494,536 
716
1
Charter Communications, Inc.
532,740    
4,816
 
Electronic Arts, Inc.
693,311    
17,980
1
Facebook, Inc.
6,406,274  
3,381
1
Netflix, Inc.
1,749,904  
6,361
1
Pinterest, Inc.
374,663    
3,968
1
Take-Two Interactive Software, Inc.
688,131    
 
 
TOTAL
24,124,872
 
 
Consumer Discretionary—   17.5%
 
2,774
1
Amazon.com, Inc.
9,230,735  
650
1
AutoZone, Inc.
1,055,320  
6,201
1
Burlington Stores, Inc.
2,076,095  
5,979
 
Domino’s Pizza, Inc.
3,141,905  
7,164
 
eBay, Inc.
488,656    
7,988
 
Home Depot, Inc.
2,621,582  
8,093
 
L Brands, Inc.
648,006    
16,071
 
Lowe’s Cos., Inc.
3,096,721  
4,005
 
McDonald’s Corp.
972,054    
9,176
 
Nike, Inc., Class B
1,537,072  
3,456
1
O’Reilly Automotive, Inc.
2,086,871  
3,286
 
Starbucks Corp.
399,019    
3,906
 
Tempur Sealy International, Inc.
169,013    
5,335
1
Tesla, Inc.
3,666,212  
1,838
 
Tractor Supply Co.
332,549    
1,220
1
Ulta Beauty, Inc.
409,676    
19,905
1
YETI Holdings, Inc.
1,917,449  
12,068
 
Yum! Brands, Inc.
1,585,614  
 
 
TOTAL
35,434,549
 
 
Consumer Staples—   2.8%
 
4,590
 
Costco Wholesale Corp.
1,972,415  
12,712
 
Energizer Holdings, Inc.
544,709    
1,874
 
Estee Lauder Cos., Inc., Class A
625,597    
15,326
 
Flowers Foods, Inc.
361,081    
5,835
 
Hershey Foods Corp.
1,043,765  
7,233
 
PepsiCo, Inc.
1,135,219  
 
 
TOTAL
5,682,786
Annual Shareholder Report
7
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Energy—   0.4%
 
21,146
 
Continental Resources, Inc.
$722,136    
 
 
Financials—   3.4%
 
7,831
1
Arch Capital Group Ltd.
305,409    
6,575
 
Blackstone Group, Inc./The
757,900    
6,756
 
MSCI, Inc., Class A
4,026,306  
5,820
 
The Travelers Cos., Inc.
866,715    
11,870
 
Tradeweb Markets, Inc.
1,029,485  
 
 
TOTAL
6,985,815
 
 
Health Care—   10.1%
 
17,111
 
AbbVie, Inc.
1,990,009  
11,452
 
Amgen, Inc.
2,766,116  
1,412
 
Anthem, Inc.
542,222    
16,873
1
Avantor, Inc.
634,087    
179
1
IDEXX Laboratories, Inc.
121,457    
12,033
1
IQVIA Holdings, Inc.
2,980,574  
2,078
1
Jazz Pharmaceuticals PLC.
352,263    
10,514
 
McKesson Corp.
2,143,069  
2,895
 
Merck & Co., Inc.
222,539    
305
1
Mettler-Toledo International, Inc.
449,481    
4,859
1
Moderna, Inc.
1,718,142  
1,468
1
Molina Healthcare, Inc.
400,779    
4,792
1
Veeva Systems, Inc.
1,594,346  
9,098
1
Vertex Pharmaceuticals, Inc.
1,833,975  
13,961
 
Zoetis, Inc.
2,829,895  
 
 
TOTAL
20,578,954
 
 
Industrials—   5.3%
 
8,738
 
Allegion PLC
1,193,611  
50,485
 
Carrier Global Corp.
2,789,296  
8,188
 
Flowserve Corp.
344,633    
974
1
Generac Holdings, Inc.
408,457    
5,748
 
Huntington Ingalls Industries, Inc.
1,179,087  
19,070
1
IAA Spinco, Inc.
1,153,354  
20,996
1
KAR Auction Services, Inc.
346,014    
2,763
 
TransUnion
331,726    
6,935
 
United Parcel Service, Inc.
1,327,081  
3,744
 
Vertiv Holdings Co.
104,982    
10,845
1
XPO Logistics, Inc.
1,504,093  
605
 
Xylem, Inc.
76,139     
 
 
TOTAL
10,758,473
 
 
Information Technology—   44.5%
 
5,503
1
Adobe, Inc.
3,420,830  
Annual Shareholder Report
8
Shares
 
 
Value
         
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   continued
 
152,752
 
Apple, Inc.
$22,280,407 
5,329
 
Applied Materials, Inc.
745,687    
6,514
1
Arista Networks, Inc.
2,477,860  
755
1
Autodesk, Inc.
242,453    
3,047
 
Bentley Systems, Inc.
185,288    
5,299
 
Broadcom, Inc.
2,572,135  
1,028
1
CloudFlare, Inc.
121,952    
9,486
1
Crowdstrike Holdings, Inc.
2,405,744  
1,384
1
Datadog, Inc.
153,209    
1,987
1
Dell Technologies, Inc.
191,984    
20,659
1
Dropbox, Inc.
650,552    
9,356
1
EPAM Systems, Inc.
5,237,489  
3,274
1
FleetCor Technologies, Inc.
845,412    
13,904
1
Fortinet, Inc.
3,785,225  
4,020
1
GoDaddy, Inc.
337,077    
6,097
1
HubSpot, Inc.
3,633,934  
10,143
 
Mastercard, Inc.
3,914,589  
55,751
 
Microsoft Corp.
15,884,017 
21,173
1
Nutanix, Inc.
762,651    
29,756
 
NVIDIA Corp.
5,802,122  
5,340
 
Oracle Corp.
465,328    
3,817
1
Palo Alto Networks, Inc.
1,523,174  
2,850
 
Paychex, Inc.
324,387    
4,483
1
Paylocity Corp.
930,043    
18,607
1
PayPal Holdings, Inc.
5,126,787  
26,327
 
Qualcomm, Inc.
3,943,785  
1,457
1
Salesforce.com, Inc.
352,492    
1,190
1
ServiceNow, Inc.
699,589    
35,773
 
Western Union Co.
830,291    
2,139
1
Workday, Inc.
501,382    
 
 
TOTAL
90,347,875
 
 
Materials—   1.7%
 
34,203
1
Berry Global Group, Inc.
2,198,911  
20,567
 
Dow, Inc.
1,278,445  
 
 
TOTAL
3,477,356
 
 
Real Estate—   0.7%
 
7,215
 
Coresite Realty Corp.
997,185    
2,155
 
Crown Castle International Corp.
416,109    
 
 
TOTAL
1,413,294
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $110,599,963)
199,526,110
Annual Shareholder Report
9
Shares
 
 
Value
 
 
INVESTMENT COMPANY—   1.8%
 
3,685,847
 
Federated Hermes Institutional Prime Value Obligations Fund, Institutional
Shares, 0.02%2
(IDENTIFIED COST $3,686,697)
$3,687,321  
 
 
TOTAL INVESTMENT IN SECURITIES—100.1%
(IDENTIFIED COST $114,286,660)3
203,213,431
 
 
OTHER ASSETS AND LIABILITIES - NET—(0.1)%4
(192,648)
 
 
TOTAL NET ASSETS—100%
$203,020,783
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended July 31, 2021, were as follows:  
 
Federated
Hermes
Government
Obligations Fund,
Premier Shares*
Federated
Hermes
Institutional
Prime Value
Obligations Fund,
Institutional Shares
Total of
Affiliated
Transactions
Value as of 7/31/2020
$640,284
$3,806,381
$4,446,665
Purchases at Cost
$1,639,586
$35,573,112
$37,212,698
Proceeds from Sales
$(2,279,870)
$(35,691,533)
$(37,971,403)
Change in Unrealized Appreciation/
Depreciation
N/A
$(2,259)
$(2,259)
Net Realized Gain/(Loss)
N/A
$1,620
$1,620
Value as of 7/31/2021
$—
$3,687,321
$3,687,321
Shares Held as of 7/31/2021
—
3,685,847
3,685,847
Dividend Income
$129
$2,856
$2,985
 
*
All or a portion of the balance/activity for the fund relates to cash collateral received on
securities lending transactions.
 
1
Non-income-producing security.
2
7-day net yield.
3
The cost of investments for federal tax purposes amounts to $114,504,875.
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 total net assets at July 31, 2021.
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).
Annual Shareholder Report
10
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
At July 31, 2021, all investments of the Fund utilized Level 1 inputs in valuing the Fund’s assets carried at fair value.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
11
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$25.03
$20.81
$20.66
$17.46
$15.18
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.07)
(0.04)
(0.05)
(0.07)
0.01
Net realized and unrealized gain (loss)
8.36
5.37
2.01
4.67
2.36
Total From Investment Operations
8.29
5.33
1.96
4.60
2.37
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(2.10)
(1.11)
(1.81)
(1.40)
(0.09)
Net Asset Value, End of Period
$31.22
$25.03
$20.81
$20.66
$17.46
Total Return2
35.00%
26.91%
11.28%
27.38%
15.66%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.99%
1.11%
1.48%
1.52%
1.52%
Net investment income (loss)
(0.27)%
(0.19)%
(0.27)%
(0.38)%
0.02%
Expense waiver/reimbursement4
0.38%
0.30%
0.00%5
0.02%
0.08%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$123,486
$93,740
$67,513
$59,355
$49,794
Portfolio turnover
39%
220%
97%
104%
104%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
12
Financial Highlights–Class B Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$22.13
$18.66
$18.85
$16.16
$14.16
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.24)
(0.18)
(0.18)
(0.20)
(0.11)
Net realized and unrealized gain (loss)
7.30
4.76
1.80
4.29
2.20
Total From Investment Operations
7.06
4.58
1.62
4.09
2.09
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(2.10)
(1.11)
(1.81)
(1.40)
(0.09)
Net Asset Value, End of Period
$27.09
$22.13
$18.66
$18.85
$16.16
Total Return2
33.97%
25.95%
10.51%
26.38%
14.81%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.74%
1.90%
2.23%
2.27%
2.27%
Net investment income (loss)
(1.01)%
(0.96)%
(1.02)%
(1.13)%
(0.71)%
Expense waiver/reimbursement4
0.38%
0.27%
0.00%5
0.02%
0.08%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$8,233
$9,662
$12,612
$14,432
$13,654
Portfolio turnover
39%
220%
97%
104%
104%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
13
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$21.43
$18.10
$18.35
$15.76
$13.81
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.23)
(0.17)
(0.18)
(0.19)
(0.11)
Net realized and unrealized gain (loss)
7.06
4.61
1.74
4.18
2.15
Total From Investment Operations
6.83
4.44
1.56
3.99
2.04
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(2.10)
(1.11)
(1.81)
(1.40)
(0.09)
Net Asset Value, End of Period
$26.16
$21.43
$18.10
$18.35
$15.76
Total Return2
34.01%
25.99%
10.46%
26.42%
14.82%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.74%
1.88%
2.23%
2.27%
2.27%
Net investment income (loss)
(1.02)%
(0.95)%
(1.03)%
(1.13)%
(0.72)%
Expense waiver/reimbursement4
0.38%
0.29%
0.00%5
0.02%
0.08%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$17,671
$14,536
$12,445
$10,685
$9,672
Portfolio turnover
39%
220%
97%
104%
104%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
5
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
14
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$26.39
$21.83
$21.52
$18.10
$15.69
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.002
0.03
(0.01)
(0.03)
0.05
Net realized and unrealized gain (loss)
8.85
5.64
2.13
4.85
2.45
Total From Investment Operations
8.85
5.67
2.12
4.82
2.50
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(2.10)
(1.11)
(1.81)
(1.40)
(0.09)
Net Asset Value, End of Period
$33.14
$26.39
$21.83
$21.52
$18.10
Total Return3
35.33%
27.22%
11.59%
27.65%
15.98%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses4
0.74%
0.81%
1.22%
1.27%
1.27%
Net investment income (loss)
0.01%
0.13%
(0.04)%
(0.14)%
0.27%
Expense waiver/reimbursement5
0.37%
0.34%
0.00%6
0.02%
0.08%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$53,631
$90,113
$37,076
$11,966
$7,649
Portfolio turnover
39%
220%
97%
104%
104%
 
1
Per share numbers have been calculated using the average shares method.
2
Represents less than $0.01.
3
Based on net asset value.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
5
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
6
Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
15
Statement of Assets and Liabilities
July 31, 2021
 
Assets:
 
Investment in securities, at value including $3,687,321 of investments in an affiliated
holding* (identified cost $114,286,660)
$203,213,431
Cash
9,980
Income receivable
59,222
Income receivable from an affiliated holding
140
Receivable for investments sold
334,456
Receivable for shares sold
34,103
Total Assets
203,651,332
Liabilities:
 
Payable for investments purchased
386,291
Payable for shares redeemed
50,167
Payable for investment adviser fee (Note 5)
4,420
Payable for administrative fee (Note 5)
874
Payable for transfer agent fees
32,912
Payable for auditing fees
23,600
Payable for share registration costs
15,690
Payable for transfer agent fees
32,912
Payable for distribution services fee (Note 5)
16,365
Payable for other service fees (Notes 2 and 5)
56,353
Accrued expenses (Note 5)
10,965
Total Liabilities
630,549
Net assets for 6,553,240 shares outstanding
$203,020,783
Net Assets Consist of:
 
Paid-in capital
$83,808,630
Total distributable earnings (loss)
119,212,153
Total Net Assets
$203,020,783
Annual Shareholder Report
16
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
Class A Shares:
 
Net asset value per share ($123,485,719 ÷ 3,955,198 shares outstanding), no par value,
unlimited shares authorized
$31.22
Offering price per share (100/94.50 of $31.22)
$33.04
Redemption proceeds per share
$31.22
Class B Shares:
 
Net asset value per share ($8,232,934 ÷ 303,919 shares outstanding), no par value,
unlimited shares authorized
$27.09
Offering price per share
$27.09
Redemption proceeds per share (94.50/100 of $27.09)
$25.60
Class C Shares:
 
Net asset value per share ($17,670,751 ÷ 675,584 shares outstanding), no par value,
unlimited shares authorized
$26.16
Offering price per share
$26.16
Redemption proceeds per share (99.00/100 of $26.16)
$25.90
Institutional Shares:
 
Net asset value per share ($53,631,379 ÷ 1,618,539 shares outstanding), no par value,
unlimited shares authorized
$33.14
Offering price per share
$33.14
Redemption proceeds per share
$33.14
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Statement of Operations
Year Ended July 31, 2021
 
Investment Income:
 
Dividends (including $2,856 received from an affiliated holding*)
$1,362,145
Net income on securities loaned (includes $129 earned from an affiliated holding*
related to cash collateral balances) (Note 2)
368
TOTAL INCOME
1,362,513
Expenses:
 
Investment adviser fee (Note 5)
1,388,810
Administrative fee (Note 5)
145,742
Custodian fees
23,133
Transfer agent fees
228,589
Directors’/Trustees’ fees (Note 5)
2,324
Auditing fees
27,800
Legal fees
11,958
Portfolio accounting fees
96,308
Distribution services fee (Note 5)
189,818
Other service fees (Notes 2 and 5)
328,360
Share registration costs
69,224
Printing and postage
47,320
Miscellaneous (Note 5)
34,535
TOTAL EXPENSES
2,593,921
Waiver/reimbursement of investment adviser fee (Note 5)
(696,377)
Net expenses
1,897,544
Net investment loss
(535,031)
Realized and Unrealized Gain (Loss) on Investments:
 
Net realized gain on investments (including net realized gain of $1,620 on sales of
investments in an affiliated holding*)
31,959,465
Net change in unrealized appreciation of investments (including net change in
unrealized appreciation of $(2,259) of investments in an affiliated holding*)
25,038,051
Net realized and unrealized gain (loss) on investments
56,997,516
Change in net assets resulting from operations
$56,462,485
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
18
Statement of Changes in Net Assets
 
 
Year Ended July 31
2021
2020
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment loss
$(535,031)
$(285,104)
Net realized gain (loss)
31,959,465
12,827,359
Net change in unrealized appreciation/depreciation
25,038,051
31,352,658
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
56,462,485
43,894,913
Distributions to Shareholders:
 
 
Class A Shares
(7,852,771)
(4,102,840)
Class B Shares
(806,820)
(700,438)
Class C Shares
(1,466,534)
(770,197)
Institutional Shares
(3,474,993)
(3,849,963)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(13,601,118)
(9,423,438)
Share Transactions:
 
 
Proceeds from sale of shares
27,778,342
25,421,100
Proceeds from shares issued in connection with the tax-free transfer
of assets from PNC Multi-Factor Large Cap Growth Fund
—
101,740,899
Net asset value of shares issued to shareholders in payment of
distributions declared
12,716,551
8,888,859
Cost of shares redeemed
(88,385,510)
(92,117,585)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(47,890,617)
43,933,273
Change in net assets
(5,029,250)
78,404,748
Net Assets:
 
 
Beginning of period
208,050,033
129,645,285
End of period
$203,020,783
$208,050,033
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
19
Notes to Financial Statements
July 31, 2021
1. ORGANIZATION
Federated Hermes MDT Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of five portfolios. The financial statements included herein are only those of Federated Hermes MDT Large Cap Growth Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is long-term capital appreciation.
On November 15, 2019, the Fund acquired all of the net assets of PNC Multi-Factor Large Cap Growth Fund (the “Acquired Fund”), an open-end investment company, in a tax-free reorganization in exchange for shares of the Fund, pursuant to a plan of reorganization approved by the Acquired Fund shareholders on November 5, 2019. The purpose of the transaction was to combine two portfolios with comparable investment objectives and strategies. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Fund’s realized gains and losses with amounts distributable to shareholders for tax purposes.
For every one share of the Acquired Fund’s Class A Shares exchanged, a shareholder received 1.586 shares of the Fund’s Class A Shares.
For every one share of the Acquired Fund’s Class C Shares exchanged, a shareholder received 1.581 shares of the Fund’s Class C Shares.
For every one share of the Acquired Fund’s Class I Shares exchanged, a shareholder received 1.545 shares of the Fund’s Institutional Shares.
The Fund received net assets from the Acquired Fund as the result of the tax-free reorganization as follows:  
Shares of the
Fund Issued
Acquired Fund’s
Net Assets
Received
Unrealized
Appreciation1
Net Assets
of the Fund
Immediately
Prior to
Combination
Net Assets
of the Fund
Immediately
After
Combination
4,605,196
$101,740,899
$9,990,130
$117,706,237
$219,447,136
 
1
Unrealized Appreciation is included in the Net Assets Received amount shown above.
Annual Shareholder Report
20
Assuming the acquisition had been completed on August 1, 2019, the beginning of the annual reporting period of the Fund, the Fund’s pro forma results of operations for the year ended July 31, 2020, were as follows:  
Net investment income (loss)
$(26,688)
Net realized and unrealized gain on investments
47,081,335
Net increase in net assets resulting from operations
$47,054,647
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amount of earnings of the Acquired Fund that has been included in the Fund’s Statement of Change in Net Assets, as of July 31, 2020.
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:
■
Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■
Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
■
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 asked quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, 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 Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the 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
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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.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee 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-party pricing 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 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 Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and 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 asked 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-income securities 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 Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser 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;
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22
■
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 Trustees have 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 Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
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 annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/
Annual Shareholder Report
23
accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursement of $696,377 is disclosed in Note 5.
Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares, Class B Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees.
For the year ended July 31, 2021, other service fees for the Fund were as follows:  
 
Other Service
Fees Incurred
Class A Shares
$265,088
Class B Shares
22,404
Class C Shares
40,868
TOTAL
$328,360
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue 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 July 31, 2021, 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 July 31, 2021, tax years 2018 through 2021 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
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.
Securities Lending
The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund normally receives cash collateral for securities loaned that may be invested in affiliated money market funds, other money market instruments and/or
Annual Shareholder Report
24
repurchase agreements. Investments in money market funds may include funds with a “floating” NAV that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if the investee fund’s NAV decreases, result in the Fund recognizing losses and being required to cover the decrease in the value of the cash collateral. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
As of July 31, 2021, the Fund had no outstanding securities on loan.
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:  
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
582,106
$15,708,186
448,019
$9,256,462
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
703,729
14,926,094
Shares issued to shareholders in payment of
distributions declared
282,938
7,231,879
185,136
3,734,190
Shares redeemed
(654,609)
(17,644,211)
(836,434)
(17,393,596)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
210,435
$5,295,854
500,450
$10,523,150
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class B Shares:
Shares
Amount
Shares
Amount
Shares sold
9,308
$212,138
18,918
$376,860
Shares issued to shareholders in payment of
distributions declared
34,632
771,950
38,249
685,430
Shares redeemed
(176,631)
(4,193,531)
(296,608)
(5,312,408)
NET CHANGE RESULTING FROM CLASS B
SHARE TRANSACTIONS
(132,691)
$(3,209,443)
(239,441)
$(4,250,118)
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Year Ended
7/31/2021
Year Ended
7/31/2020
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
141,379
$3,201,533
137,996
$2,411,329
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
18,359
337,996
Shares issued to shareholders in payment of
distributions declared
67,645
1,455,733
43,943
762,414
Shares redeemed
(211,687)
(4,821,813)
(209,547)
(3,655,507)
NET CHANGE RESULTING FROM CLASS C
SHARE TRANSACTIONS
(2,663)
$(164,547)
(9,249)
$(143,768)
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
302,157
$8,656,485
609,210
$13,376,449
Proceeds from shares issued in connection with the
tax-free transfer of assets from the Acquired Fund
—
—
3,883,108
86,476,809
Shares issued to shareholders in payment of
distributions declared
120,229
3,256,989
174,603
3,706,825
Shares redeemed
(2,218,569)
(61,725,955)
(2,950,847)
(65,756,074)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
(1,796,183)
$(49,812,481)
1,716,074
$37,804,009
NET CHANGE RESULTING FROM TOTAL FUND
SHARE TRANSACTIONS
(1,721,102)
$(47,890,617)
1,967,834
$43,933,273
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 result from a Fair Fund settlement.
For the year ended July 31, 2021, permanent differences identified and reclassified among the components of net assets were as follows:  
Increase (Decrease)
Paid-In Capital
Total Distributable
Earnings (Loss)
$(9,980)
$9,980
Net assets were not affected by this reclassification.
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended July 31, 2021 and 2020, was as follows:  
 
2021
2020
Ordinary income1
$9,003,465
$3,443,870
Long-term capital gains
$4,597,653
$5,979,568
 
1
For tax purposes, short-term capital gain distributions are considered ordinary
income distributions.
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26
As of July 31, 2021, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income1
$19,066,352
Net unrealized appreciation
$88,708,556
Undistributed long-term capital gains
$11,437,245
 
1
For tax purposes, short-term capital gains are considered ordinary income in determining
distributable earnings.
The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for the deferral of losses on wash sales.
At July 31, 2021, the cost of investments for federal tax purposes was $114,504,875. The net unrealized appreciation of investments for federal tax purposes was $88,708,556. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $89,248,308 and net unrealized depreciation from investments for those securities having an excess of cost over value of $539,752.
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 0.75% of the Fund’s average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the Adviser voluntarily waived $694,005 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 July 31, 2021, the Adviser reimbursed $2,372.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:  
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the annualized fee paid to FAS was 0.078% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
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27
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’s Class A Shares, Class B Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:  
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class B Shares
0.75%
Class C Shares
0.75%
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 July 31, 2021, distribution services fees for the Fund were as follows:  
 
Distribution Services
Fees Incurred
Class B Shares
$67,213
Class C Shares
122,605
TOTAL
$189,818
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares.
For the year ended July 31, 2021, FSC retained $91,553 of fees paid by the Fund. For the year ended July 31, 2021, the Fund’s Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended July 31, 2021, FSC retained $9,851 in sales charges from the sale of Class A Shares. FSC also retained $4,580 and $355 of CDSC relating to redemptions of Class B Shares and Class C Shares, respectively.
Other Service Fees
For the year ended July 31, 2021, FSSC received $47,388 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative 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, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class B Shares, Class C Shares and Institutional Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.99%, 1.74%, 1.74% and 0.74% (the “Fee Limit”),
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respectively, up to but not including the later of (the “Termination Date”): (a) October 1, 2022; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the 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. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended July 31, 2021, were as follows:  
Purchases
$72,444,448
Sales
$134,402,614
7. CONCENTRATION OF RISK
The Fund may invest a portion of its assets in securities of companies that are deemed by the Fund’s management to be classified in similar business sectors. Economic developments may have an effect on the liquidity and volatility of the portfolio securities.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 23, 2021. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), or a replacement rate as appropriate, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of July 31, 2021, the Fund had no outstanding loans. During the year ended July 31, 2021, the Fund did not utilize the LOC.
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29
9. 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 July 31, 2021, there were no outstanding loans. During the year ended July 31, 2021, the program was not utilized.
10. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
11. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended July 31, 2021, the amount of long-term capital gains designated by the Fund was $4,597,653.
For the fiscal year ended July 31, 2021, 15.84% of total ordinary income (including short-term capital gain) distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.
Of the ordinary income (including short-term capital gain) distributions made by the Fund during the year ended July 31, 2021, 16.38% qualify for the dividend received deduction available to corporate shareholders.
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Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES OF FEDERATED HERMES MDT SERIES AND SHAREHOLDERS OF FEDERATED HERMES MDT LARGE CAP GROWTH FUND:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes MDT Large Cap Growth Fund (the “Fund”) (one of the portfolios constituting Federated Hermes MDT Series (the “Trust”)), including the portfolio of investments, as of July 31, 2021, 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 five years in the period then ended 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 MDT Series) at July 31, 2021, 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 five years in the period then ended, 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 standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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.
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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 July 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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
September 23, 2021
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2021 to July 31, 2021.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.  
 
Beginning
Account Value
2/1/2021
Ending
Account Value
7/31/2021
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$1,181.70
$5.36
Class B Shares
$1,000
$1,177.30
$9.39
Class C Shares
$1,000
$1,177.30
$9.39
Institutional Shares
$1,000
$1,182.80
$4.01
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,019.89
$4.96
Class B Shares
$1,000
$1,016.17
$8.70
Class C Shares
$1,000
$1,016.17
$8.70
Institutional Shares
$1,000
$1,021.12
$3.71
 
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
 
Class A Shares
0.99%
Class B Shares
1.74%
Class C Shares
1.74%
Institutional Shares
0.74%
Annual Shareholder Report
34
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2020, the Trust comprised five portfolio(s), and the Federated Hermes Fund Family consisted of 41 investment companies (comprising 163 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: May 2006
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
Annual Shareholder Report
35
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Vice President, Federated Hermes, Inc.; President, Director/Trustee
and CEO, Federated Advisory Services Company, Federated Equity
Management Company of Pennsylvania, Federated Global Investment
Management Corp., Federated Investment Counseling, Federated
Investment Management Company; President of some of the Funds in
the Federated Hermes Fund Family and Director, Federated Investors
Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Director, Federated Hermes, Inc.;
Chairman and Director, Southpointe Distribution Services, Inc. and
President, Technology, Federated Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors,
Director, KLX Energy Services Holdings, Inc. (oilfield services); former
Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
36
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty
Furniture Companies, Inc.; formerly, Director, Member of Governance
and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; and Director and Vice Chair, Our Campaign for the
Church Alive!, Inc.
Annual Shareholder Report
37
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity and
Director, The Golisano Children’s Museum of Naples, Florida.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Senior Vice President for Legal Affairs, General Counsel
and Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Director of Risk Management and Associate General Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms. Reilly served as Assistant General Counsel of Compliance and
Enterprise Risk as well as Senior Counsel of Environment, Health and
Safety, PPG Industries.
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
Annual Shareholder Report
38
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
OFFICERS 
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Annual Shareholder Report
39
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: June 2006
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen F. Auth
Birth Date:
September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: June 2012
Principal Occupations: Stephen F. Auth is Chief Investment Officer of
various Funds in the Federated Hermes Fund Family; Executive Vice
President, Federated Investment Counseling, Federated Global
Investment Management Corp. and Federated Equity Management
Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment
Management Company and Passport Research, Ltd. (investment
advisory subsidiary of Federated); Senior Vice President, Global
Portfolio Management Services Division; Senior Vice President,
Federated Investment Management Company and Passport
Research, Ltd.; Senior Managing Director and Portfolio Manager,
Prudential Investments.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR VICE
PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
 
Annual Shareholder Report
40
Evaluation and Approval of Advisory Contract–May 2021
Federated Hermes MDT Large Cap Growth Fund (the “Fund”)
At its meetings in May 2021 (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 MDTA LLC (the “Adviser”) 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 presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (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. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.
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 on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional
Annual Shareholder Report
41
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: the Adviser’s investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate) and comments on the reasons for the Fund’s performance; the Fund’s investment objectives; the Fund’s expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring and managing the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund’s relationship to the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the “Federated Hermes Funds”), which include a comprehensive array of funds with different investment objectives, policies and strategies, and the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Hermes Funds and Federated Hermes’ affiliates that service them (including communications from regulatory agencies), as well as Federated Hermes’ responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Hermes Funds and/or Federated Hermes may be responding to them. The Board noted that its evaluation process is evolutionary and that the criteria considered and the emphasis placed on relevant criteria may change in recognition of changing circumstances in the mutual fund marketplace.
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the
Annual Shareholder Report
42
fund, its benchmark, and comparable funds); (2) an adviser’s cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with a fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the 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 an adviser’s services and fees). The Board noted 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 review 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 Federated Hermes Funds.
In addition to considering the above-referenced factors, the Board was mindful of 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 have invested in the Fund 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 in the marketplace there are a range of investment options available to the Fund’s shareholders 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 Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection
Annual Shareholder Report
43
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 Federated Hermes Funds family, 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 the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by the Adviser and its affiliates. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade execution 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 the Adviser’s ability and experience in attracting and retaining qualified personnel to service the Fund. The Fund’s ability to deliver competitive performance when compared to its Performance Peer Group (as defined below) was also deemed to be relevant by the Board as 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 significant acquisition of Hermes Fund Managers Limited by Federated Hermes in 2018, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters.
The Board considered the quality of the Adviser’s communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account the Adviser’s communications with the Board in light of the market volatility amidst the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
Annual Shareholder Report
44
The Board received and evaluated information regarding the Adviser’s regulatory and compliance environment. The Board considered the Adviser’s compliance program, compliance history, and reports from the CCO about the Adviser’s 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, in particular, the compliance-related resources devoted by the Adviser and its affiliates in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including the Adviser’s commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ 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 to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered discussions with Federated Hermes regarding the implementation of its business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. 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, including changes associated with the pandemic.
Based on these considerations, the Board concluded that the nature, extent and quality of the Adviser’s investment management and related services warrant the continuation of the Contract.
Fund Investment Performance
In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks, as disclosed in the Fund’s prospectus. 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 include, among other items, information on the Fund’s gross and net returns, the Fund’s investment performance compared to one or more relevant investment categories and the Fund’s benchmark index, portfolio attribution information and commentary on the effect of current and recent market conditions.
Annual Shareholder Report
45
The Board also reviewed comparative information regarding the performance of other mutual funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”), noting 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, in evaluating such comparisons, that in some cases there may be differences in the funds’ investment objectives or investment management techniques, or the costs to implement funds, even within the same Performance Peer Group. In this connection, the Board considered that the Fund’s quantitative focus makes fee and expense comparisons particularly difficult as the funds in the Performance Peer Group varied widely in their complexity, and the management of the Fund is among the more complex relative to its Performance Peer Group. The Board also considered a report comparing the performance of the Fund solely to other funds with a quantitative focus in the Performance Peer Group.
For the one-year, three-year and five-year periods ended December 31, 2020, the Fund’s performance was above the median of the Performance Peer Group. In addition, the Board was informed by the Adviser that, for the same periods, the Fund underperformed its benchmark index for the one-year, three-year and five-year periods.
Following such evaluation and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Contract.
Fund Expenses
The Board considered the advisory 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 advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its deliberations. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because such comparisons are
Annual Shareholder Report
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believed to be more relevant. The Board considered that other mutual funds are the products most like the Fund, in that they are readily available to 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 mutual funds’ fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.
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. In this regard, the Board had been previously advised that, while comparisons to its Expense Peer Group are relevant in judging the reasonableness of advisory fees, the Fund’s quantitative focus makes fee and expense comparisons particularly difficult. Although the Fund’s advisory fee was above the median of its Expense Peer Group range, the funds in the Expense Peer Group varied widely in their complexity, and the Board has been informed that the management of the Fund is among the more complex funds relative to its Expense Peer Group.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-mutual fund clients (such as institutional separate accounts) and third-party unaffiliated mutual funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that mon-mutual 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, addressing different administrative responsibilities, and addressing different degrees of risk associated with management; and (vi) 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 mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s mutual 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
Annual Shareholder Report
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unaffiliated third-party mutual 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’ advisory fees.
Following such evaluation and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Contract.
Profitability and Other Benefits
The Board also received financial information about Federated Hermes, including information regarding the compensation and ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. This information covered not only the fees under the Federated Hermes Funds’ investment advisory contracts, but also fees received by Federated Hermes’ affiliates for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of 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 any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds. In addition, the Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Hermes Fund shareholders and/or reported to the Board their intention to do so (or continue to do so) in the future. Moreover, the Board received and considered regular reports from Federated Hermes throughout the year as to the institution, adjustment or elimination of these voluntary waivers and/or reimbursements.
The Board received and considered information furnished by Federated Hermes, as requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses 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 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. The allocation information, including the CCO’s view that cost allocations on a fund-by-fund basis may be unreliable, was considered in the evaluation by the Board. In addition, the Board considered
Annual Shareholder Report
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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 that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
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 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 calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as personnel and processes for the portfolio management (including market data on which portfolio managers make investment decisions), trading operations, issuer engagement (including with respect to ESG matters), shareholder services, compliance, business continuity, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and use of data. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments (as well as the benefits of any economies of scale, should they exist) are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and that such waivers and 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 also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered the beliefs of Federated Hermes and the CCO that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply
Annual Shareholder Report
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breakpoints, at higher levels and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fees as a fund attains a certain size.
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 was 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 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 for future reporting to the Board or further consideration by management 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. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes MDT Series (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes MDT Large Cap Growth Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s investment adviser as the administrator for the Program with respect to the Fund (the “Administrator”). Each affiliated Federated Hermes advisory subsidiary (including the Fund’s investment adviser) that serves as investment adviser to a Federated Hermes Fund (including the Fund) has been approved as the administrator of the Program with respect to each Federated Hermes Fund that is managed by such advisory subsidiary (collectively, the “Administrator”). The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2021, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2020 through March 31, 2021 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where
Annual Shareholder Report
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applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
■ confirmation that the Fund did not utilize alternative funding sources during the Period;
■ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
■ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
■ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
■ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit; and
■ liquidity events during the Period, including the impact on liquidity caused by extended non-U.S. market closures and the March-April 2020 market conditions, and the fact that there were no specific liquidity events during the Period that materially affected the Fund’s liquidity risk.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual 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 mutual funds involves investment risk, including the possible loss of principal.
This Report 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 MDT Large Cap Growth Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31421R700
CUSIP 31421R684
CUSIP 31421R809
CUSIP 31421R882
37329 (9/21)
© 2021 Federated Hermes, Inc.
 
Annual Shareholder Report
July 31, 2021
 
 
Share Class | Ticker
A  | QASCX
C | QCSCX
Institutional | QISCX
R6 | QLSCX
Federated Hermes MDT Small Cap Core Fund
Fund Established 2005
A Portfolio of Federated Hermes MDT Series
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from August 1, 2020 through July 31, 2021. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,  
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes MDT Small Cap Core Fund (the “Fund”), based on net asset value for the 12-month reporting period ended July 31, 2021, was 54.38% for Class A Shares, 53.16% for Class C Shares, 54.73% for Institutional Shares and 54.79% for Class R6 Shares. The total return for the Russell 2000® Index (R2000),1 the Fund’s broad-based securities market index, was 51.97% for the same period. The total return of the Morningstar Small Blend Funds Average (MSBFA),2 a peer group average for the Fund, was 52.54% during the same period. The Fund’s and MSBFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the R2000.
During the reporting period, the Fund’s investment strategy focused on stock selection. This was the most significant factor affecting the Fund’s performance relative to the R2000 during the period.
The following discussion will focus on the performance of the Fund’s R6 Shares relative to the R2000.
MARKET OVERVIEW
The reporting period was marked by the gradual but continuing recovery of the economy from the pandemic. The market has been less volatile than during the prior reporting period, and the market preferences for style in these 12 months have reversed some of the large differentials of the prior period. During the previous 12-month reporting period, the growth style led the value style by almost 35% (the Russell 3000® Growth Index (R3000G)3 returned 28.24% while the Russell 3000® Value Index (R3000V)4 returned -6.67%). During this reporting period, the value style led the growth style by a much more moderate amount of just under 4% (R3000V returned 40.72% and R3000G returned 36.83%). Similarly, in the capitalization ranges, the small cap stocks5 in the Russell 2000® Index6 led the mega-cap stocks in the Russell Top 200® Index7 by 15.53% this period rather than trailing by 20.43% for the prior period. The market still reacted quickly to new economic data, but now there was far less uncertainty about the future than there was at the end of the prior reporting period.
The best performing sectors in the R2000 during the reporting period were Energy (90.80%), Consumer Discretionary (78.80%) and Materials (73.86%). Underperforming sectors during the same period included Utilities (21.18%), Health Care (31.63%) and Information Technology (46.30%).
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1
STOCK SELECTION
The Fund buys stocks with many different combinations of fundamental and technical characteristics that have signaled market outperformance historically. The primary cause of outperformance in the reporting period was the Fund’s overweight position in stocks with depressed prices that required no significant external financing. The largest offset to that outperformance came from the Fund’s overweight position in and weak stock selection among young stocks with strong technical factors and very high analyst conviction. The Fund’s sector exposures continued to remain close to R2000 weights; there were no significant overweight or underweight positions at the end of the reporting period. Strong stock selection in the Industrials, Health Care and Information Technology sectors contributed the most to the Fund’s outperformance. Weak stock selection in the Financials, Real Estate and Consumer Staples sectors offset some of that outperformance.
Individual stocks enhancing the Fund’s performance during the reporting period included Conduent, Inc., Intellia Therapeutics, Inc. and Advanced Drainage Systems, Inc.
Individual stocks detracting from the Fund’s performance during the reporting period included Wingstop, Inc., QTS Realty Trust, Inc. (Class A) and Portland General Electric Company.
1
Please see the footnotes to the line graphs below for definitions of, and further information about, the R2000.
2
Please see the footnotes to the line graphs below for definitions of, and further information about, the Morningstar peer group average.
3
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000® Growth Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad growth market. The Russell 3000® Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.*
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2
4
The Russell 3000® Value Index measures the performance of the broad value segment of the U.S. equity universe. It includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market. The Russell 3000® Value Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.*
5
Small-cap stocks may be less liquid and subject to greater price volatility than large-cap stocks.
6
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.*
7
The Russell Top 200® Index measures the performance of the largest cap segment of the U.S. equity universe. The Russell Top 200® Index is a subset of the Russell 3000® Index. It includes approximately 200 of the largest securities based on a combination of their market cap and current index membership and represents approximately 68% of the total market capitalization of the U.S. market. The Russell Top 200® Index is constructed to provide a comprehensive and unbiased barometer for this very large cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.*
*
The index is unmanaged, and it is not possible to invest directly in an index.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes MDT Small Cap Core Fund from July 31, 2011 to July 31, 2021, compared to the Russell 2000® Index (R2000)2 and the Morningstar Small Blend Funds Average (MSBFA).3 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 INVESTMENT
Growth of $10,000 as of July 31, 2021  
■ Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00%, as applicable.
The Fund offers multiple shares classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Returns table below for the returns of additional classes not shown in the line graph above.
Average Annual Total Returns for the Periods Ended 7/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
45.89%
12.73%
12.68%
Class C Shares
52.16%
13.16%
12.66%
Institutional Shares
54.73%
14.29%
13.62%
Class R6 Shares4
54.79%
14.31%
13.13%
R2000
51.97%
14.28%
12.34%
MSBFA
52.54%
12.42%
11.40%
Annual Shareholder Report
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Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450); for Class C Shares, a 1.00% contingent deferred sales charge would be applied on any redemption less than one year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The R2000 and MSBFA have been adjusted to reflect reinvestment of dividends on securities.
2
The R2000 measures the performance of the small-cap segment of the U.S. equity universe. The R2000 is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The R2000 is constructed to provide a comprehensive and unbiased small-cap barometer, and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. The R2000 is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. The R2000 is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance.
3
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
4
The Fund’s R6 Class commenced operations on June 29, 2016. It is anticipated that this class will have the lowest net expenses of all outstanding share classes. For the period prior to the commencement of operations of the R6 class, the R6 class performance information shown is for the Institutional Share class, adjusted to reflect the expenses of the Fund’s R6 class for each period for which the Fund’s R6 class gross expenses would have exceeded the actual expense paid by the Fund’s Institutional Share class.
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Portfolio of Investments Summary Table (unaudited)
At July 31, 2021, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Health Care
19.3%
Financials
15.2%
Information Technology
14.7%
Industrials
13.9%
Consumer Discretionary
13.7%
Real Estate
8.2%
Materials
3.4%
Consumer Staples
3.3%
Communication Services
2.7%
Energy
2.5%
Utilities
1.3%
Securities Lending Collateral2
0.4%
Cash Equivalents3
1.9%
Other Assets and Liabilities—Net4
(0.5)%
TOTAL
100%
 
1
Except for Securities Lending Collateral, Cash Equivalents and Other Assets and Liabilities,
sector classifications are based upon, and individual portfolio securities are assigned to, the
classifications of the Global Industry Classification System (GICS), except that the Adviser
assigns a classification to securities not classified by the GICS and to securities for which the
Adviser does not have access to the classification made by the GICS.
2
Represents cash collateral received for portfolio securities on loan that may be invested in
affiliated money market funds, other money market instruments and/or repurchase agreements.
3
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements other than those representing cash collateral for securities lending.
4
Assets, other than investments in securities, less liabilities. See Statement of Assets and
Liabilities.
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Portfolio of Investments
July 31, 2021  
Shares
 
 
Value
          
 
COMMON STOCKS—   98.2%
 
 
 
Communication Services—   2.7%
 
96,108
1
AMC Networks, Inc.
$4,809,244    
230,538
1
Cars.com, Inc.
2,784,899    
9,383
1
Chicken Soup For The Soul Entertainment, Inc.
336,662      
23,060
 
Cogent Communications Holdings, Inc.
1,789,687    
11,598
1
iHeartMedia, Inc.
299,808      
489,592
1
Yelp, Inc.
18,310,741   
 
 
TOTAL
28,331,041
 
 
Consumer Discretionary—   13.7%
 
191,988
1
Abercrombie & Fitch Co., Class A
7,259,066    
114,603
1
Academy Sports and Outdoors, Inc.
4,246,041    
323,928
1
American Axle & Manufacturing Holdings, Inc.
3,138,862    
10,736
1
American Public Education, Inc.
318,000      
113,412
1
Bed Bath & Beyond, Inc.
3,236,778    
45,224
 
Big Lots, Inc.
2,605,355    
134,377
1
Bloomin Brands, Inc.
3,376,894    
42,279
1
Boot Barn Holdings, Inc.
3,653,751    
142,069
2
Camping World Holdings, Inc.
5,591,836    
38,297
1
Citi Trends, Inc.
3,054,186    
90,372
1
Container Store Group, Inc.
950,713      
71,697
1
CROCs, Inc.
9,737,170    
15,255
 
Dillards, Inc., Class A
2,795,784    
194,537
1
Everi Holdings, Inc.
4,414,045    
102,313
1
Funko, Inc.
1,909,161    
14,233
1
Groupon, Inc.
517,654      
54,423
1
Houghton Mifflin Harcourt Co.
616,068      
47,572
1
iRobot Corp.
4,162,550    
30,552
 
Jack in the Box, Inc.
3,325,891    
81,412
 
Kontoor Brands, Inc.
4,508,597    
22,444
1
Lakes Gaming, Inc.
1,021,426    
7,822
1
Lands’ End, Inc.
299,817      
11,770
1
LGI Homes, Inc.
2,011,493    
5,164
1
Lovesac Co./The
313,455      
187,759
1
Macy’s, Inc.
3,191,903    
139,972
1
Modine Manufacturing Co.
2,341,732    
73,993
 
Movado Group, Inc.
2,224,970    
58,125
1
Nesco Holdings, Inc.
452,794      
37,984
1
Party City Holdco, Inc.
324,383      
Annual Shareholder Report
7
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Consumer Discretionary—   continued
 
37,639
1
Perdoceo Education Corp.
$446,399      
11,131
1
Red Robin Gourmet Burgers
291,966      
246,597
1
Red Rock Resorts, Inc.
9,715,922    
77,062
1
Revolve Group, Inc.
5,364,286    
57,594
1
Sally Beauty Holdings, Inc.
1,089,678    
11,114
1
Scientific Games Corp.
685,845      
22,853
1
SeaWorld Entertainment, Inc.
1,083,461    
43,186
 
Shutterstock, Inc.
4,685,249    
46,624
 
Sonic Automotive, Inc.
2,543,339    
243,533
1
Sonos, Inc.
8,129,132    
8,592
1
Tilly’s, Inc.
127,419      
122,888
1
Vista Outdoor, Inc.
4,963,446    
25,853
 
Wingstop, Inc.
4,428,877    
55,525
1,3
XPEL, Inc.
5,141,615    
124,517
1
YETI Holdings, Inc.
11,994,723   
 
 
TOTAL
142,291,732
 
 
Consumer Staples—   3.3%
 
199,380
1
Bellring Brands, Inc.
6,593,497    
68,563
1
BJ’s Wholesale Club Holdings, Inc.
3,472,030    
82,634
1
Central Garden & Pet Co., Class A
3,578,879    
18,493
 
Coca-Cola Bottling Co.
7,381,481    
17,484
1
elf Beauty, Inc.
482,733      
22,429
 
Energizer Holdings, Inc.
961,083      
51,735
1
Hostess Brands, Inc.
832,416      
26,420
 
Ingles Markets, Inc., Class A
1,578,859    
53,001
 
Primo Water Corp.
876,107      
67,693
 
SpartanNash Co.
1,316,629    
48,752
1
Sprouts Farmers Market, Inc.
1,198,324    
52,274
1
United Natural Foods, Inc.
1,731,315    
120,282
 
Vector Group Ltd.
1,606,967    
416,881
1
Veru, Inc.
2,863,972    
 
 
TOTAL
34,474,292
 
 
Energy—   2.5%
 
154,063
1
Antero Resources Corp.
2,095,257    
39,505
 
Bonanza Creek Energy, Inc.
1,519,757    
29,745
 
Brigham Minerals, Inc.
584,192      
41,414
 
Cactus, Inc.
1,492,561    
102,141
1
CONSOL Energy, Inc.
2,145,983    
111,305
1
Gulf Island Fabrication, Inc.
507,551      
26,603
1
Laredo Petroleum
1,464,761    
471,121
1
Magnolia Oil & Gas Corp.
6,595,694    
Annual Shareholder Report
8
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Energy—   continued
 
44,826
 
Matador Resources Co.
$1,385,123    
19,079
1
Nabors Industries Ltd.
1,669,603    
253,565
1
Newpark Resources, Inc.
819,015      
28,051
1
Oceaneering International, Inc.
371,956      
115,117
 
Ovintiv, Inc.
2,953,902    
28,157
 
PDC Energy, Inc.
1,113,609    
24,164
1
Whiting Petroleum Corp.
1,133,292    
 
 
TOTAL
25,852,256
 
 
Financials—   15.2%
 
10,366
 
1st Source Corp.
474,659      
217,441
 
Ares Commercial Real Estate Corp.
3,279,010    
221,738
 
Artisan Partners Asset Management, Inc.
10,663,380   
8,095
 
BankUnited, Inc.
320,400      
178,568
 
Chimera Investment Corp.
2,628,521    
45,701
 
Cowen Group, Inc.
1,827,126    
169,443
1
Customers Bancorp, Inc.
6,137,225    
100,997
 
Donegal Group, Inc., Class A
1,562,424    
121,482
1
Donnelley Financial Solutions, Inc.
3,912,935    
930,062
 
Eastern Bankshares, Inc.
16,973,632   
48,387
 
Employers Holdings, Inc.
2,009,028    
62,276
 
Financial Institutions, Inc.
1,833,405    
184,192
 
First Bancorp, Inc.
7,367,680    
145,788
 
First Foundation, Inc.
3,436,223    
142,917
 
Granite Point Mortgage Trust, Inc.
2,016,559    
277,245
 
Great Western Bancorp, Inc.
8,539,146    
136,994
1
Green Dot Corp.
6,311,314    
46,590
 
Heartland Financial USA, Inc.
2,125,436    
146,181
 
HomeStreet, Inc.
5,512,486    
115,974
 
Horace Mann Educators Corp.
4,616,925    
20,085
 
Houlihan Lokey, Inc.
1,789,574    
38,484
 
Independent Bank Corp.- Michigan
809,319      
453,070
 
Investors Bancorp, Inc.
6,261,427    
130,465
 
KKR Real Estate Finance Trust, Inc.
2,780,209    
7,227
 
Merchants Bancorp, Inc.
264,797      
151,317
 
Moelis & Co.
8,965,532    
233,740
 
Navient Corp.
4,775,308    
3,322
1
Nicolet Bankshares, Inc.
240,480      
42,829
 
Peapack-Gladstone Financial Corp.
1,379,522    
26,019
 
PJT Partners, Inc.
2,033,905    
17,855
 
Preferred Bank Los Angeles, CA
1,053,088    
277,040
 
ProAssurance Corp.
5,618,371    
Annual Shareholder Report
9
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Financials—   continued
 
146,879
 
QCR Holdings, Inc.
$7,210,290    
18,225
 
Sculptor Capital Management, Inc.
423,185      
17,521
 
Selective Insurance Group, Inc.
1,425,333    
82,015
 
StepStone Group, Inc.
3,732,503    
41,900
 
TriCo Bancshares
1,652,117    
97,179
1
Triumph Bancorp, Inc.
7,449,742    
95,899
 
Veritex Holdings, Inc.
3,217,411    
141,145
 
Waterstone Financial, Inc.
2,784,791    
134,084
 
Western New England Bancorp, Inc.
1,134,351    
171,039
2
WisdomTree Investments, Inc.
1,057,021    
 
 
TOTAL
157,605,790
 
 
Health Care—   19.3%
 
96,400
1,2
Acorda Therapeutics, Inc.
361,500      
66,205
4
Adeptus Health, Inc.
0            
859,140
1
Akebia Therapeutics, Inc.
2,122,076    
27,440
1
Alector, Inc.
659,520      
54,675
1
Alkermes, Inc.
1,414,442    
96,407
1
Amphastar Pharmaceuticals, Inc.
2,019,727    
118,462
1
ANI Pharmaceuticals, Inc.
4,019,416    
112,921
1
Antigenics, Inc.
584,931      
96,713
1
Apellis Pharmaceuticals, Inc.
6,188,665    
12,793
1,2
Apollo Medical Holdings, Inc.
1,130,517    
31,412
1
Arvinas, Inc.
3,175,753    
143,707
1,2
Assembly Biosciences, Inc.
498,663      
43,567
1
Avid Bioservices, Inc.
1,117,494    
57,188
1
AxoGen, Inc.
1,164,920    
335,240
1
BioCryst Pharmaceuticals, Inc.
5,404,069    
73,303
1
Biohaven Pharmaceutical Holding Co. Ltd.
9,236,911    
13,694
1,2
Black Diamond Therapeutics, Inc.
130,915      
13,965
1
Blueprint Medicines Corp.
1,227,105    
370,078
1
Brookdale Senior Living, Inc.
2,782,987    
239,793
1
Catalyst Pharmaceutical Partners, Inc.
1,400,391    
31,534
1,2
Co-Diagnostics, Inc.
318,809      
76,385
1
Collegium Pharmaceutical, Inc.
1,901,223    
296,264
1
Community Health Systems, Inc.
3,946,236    
11,206
1,2
Cortexyme, Inc.
633,251      
123,014
1
Cross Country Healthcare, Inc.
2,019,890    
64,753
1
Cutera, Inc.
3,363,918    
398,791
1
Cytomx Therapeutics, Inc.
2,157,459    
12,350
1
Denali Therapeutics, Inc.
630,220      
148,535
1
Dicerna Pharmaceuticals, Inc.
5,571,548    
Annual Shareholder Report
10
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
48,942
1
Eagle Pharmaceuticals, Inc.
$2,275,803    
27,778
1
Evolent Health, Inc.
637,227      
73,279
1
Evolus, Inc.
792,879      
51,830
1
Frequency Therapeutics, Inc.
431,744      
129,377
1
GlycoMimetics, Inc.
261,342      
34,812
1
Harpoon Therapeutics, Inc.
340,809      
30,317
1
Health Catalyst, Inc.
1,760,205    
159,074
1
Homology Medicines, Inc.
1,011,711    
56,036
1
Hookipa Pharma, Inc.
433,158      
52,241
1
IDEAYA Biosciences, Inc.
1,279,904    
46,507
1
Inogen, Inc.
3,709,863    
302,402
1
Inovalon Holdings, Inc.
11,454,988   
35,062
1
Intellia Therapeutics, Inc.
4,973,545    
29,091
1
iRhythm Technologies, Inc.
1,487,132    
148,250
1
Ironwood Pharmaceuticals, Inc.
1,967,277    
47,293
1
Krystal Biotech, Inc.
2,763,803    
26,428
 
LeMaitre Vascular, Inc.
1,439,269    
25,678
1
Ligand Pharmaceuticals, Inc., Class B
2,914,710    
106,404
1
Magenta Therapeutics, Inc.
757,596      
6,212
1
Morphic Holding, Inc.
357,935      
122,230
1
NextCure, Inc.
847,054      
76,682
1
OptimizeRX Corp.
4,238,214    
11,367
1
Oramed Pharmaceuticals, Inc.
161,298      
71,404
1
Organogenesis Holdings, Inc.
1,095,337    
121,082
1
Ortho Clinical Diagnostics Holdings PLC
2,720,713    
20,181
1
Orthofix Medical, Inc.
801,993      
29,143
 
Owens & Minor, Inc.
1,347,864    
49,708
1
Pacira BioSciences, Inc.
2,930,287    
15,215
 
Patterson Cos., Inc.
473,643      
108,603
1
Prestige Consumer Healthcare, Inc.
5,707,088    
185,943
1
Progyny, Inc.
10,355,166   
131,178
1
Protagonist Therapeutics, Inc.
6,484,128    
40,514
1
Prothena Corp. PLC
2,029,751    
113,734
1
Puma Biotechnology, Inc.
855,280      
168,132
 
Select Medical Holdings Corp.
6,632,807    
154,374
1
Selecta Biosciences, Inc.
534,134      
190,894
1,2
Sesen Bio, Inc.
712,035      
77,807
1
Shockwave Medical, Inc.
14,160,874   
114,298
1
SI-BONE, Inc.
3,467,801    
91,581
1
Surgery Partners, Inc.
4,996,659    
99,608
1
The Joint Corp.
7,868,036    
Annual Shareholder Report
11
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
140,894
1
Translate Bio, Inc.
$3,894,310    
266,334
1
Vanda Pharmaceuticals, Inc.
4,343,908    
23,382
1
Varex Imaging Corp.
638,329      
9,000
1
Vericel Corp.
476,460      
106,988
1
Vocera Communications, Inc.
4,489,216    
303,474
1
Voyager Therapeutics, Inc.
955,943      
33,049
1
Xencor, Inc.
1,017,248    
 
 
TOTAL
200,469,032
 
 
Industrials—   13.9%
 
64,543
 
Advanced Drainage System, Inc.
7,880,055    
9,737
1
Allegiant Travel Co.
1,851,198    
26,251
 
ArcBest Corp.
1,551,697    
226,806
1
Astronics Corp.
3,873,846    
129,392
1
Atkore, Inc.
9,718,633    
76,684
1
Atlas Air Worldwide Holdings, Inc.
5,135,527    
42,533
1
Avis Budget Group, Inc.
3,520,456    
157,957
1
Beacon Roofing Supply, Inc.
8,447,540    
147,371
 
Boise Cascade Co.
7,538,027    
204,738
1
CECO Environmental Corp.
1,441,356    
25,868
1
Cimpress PLC
2,645,003    
340,414
 
Costamare, Inc.
3,690,088    
164,541
1
Echo Global Logistics, Inc.
5,089,253    
20,641
 
EnPro Industries, Inc.
1,922,090    
102,939
1
Franklin Covey Co.
3,766,538    
341,727
1
GMS, Inc.
16,789,048   
36,625
 
Heidrick & Struggles International, Inc.
1,564,254    
43,122
1
Herc Holdings, Inc.
5,348,853    
246,238
 
Hillenbrand, Inc.
11,154,581   
74,619
 
Hurco Co., Inc.
2,532,569    
246,857
1
Mistras Group, Inc.
2,591,999    
252,200
1
MRC Global, Inc.
2,312,674    
82,537
1
MYR Group, Inc.
7,893,013    
197,808
1
Now, Inc.
1,952,365    
42,674
 
Powell Industries, Inc.
1,241,387    
171,526
1
Resideo Technologies, Inc.
5,060,017    
10,425
 
Tennant Co.
824,826      
38,402
 
Terex Corp.
1,840,224    
191,908
1
Titan Machinery, Inc.
5,475,135    
82,554
1
TriNet Group, Inc.
6,850,331    
43,391
1
Veritiv Corp.
2,659,000    
 
 
TOTAL
144,161,583
Annual Shareholder Report
12
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   14.7%
 
61,608
1
Altair Engineering, Inc.
$4,297,774    
56,468
1
Ambarella, Inc.
5,561,533    
110,080
1
Asana, Inc.
7,822,285    
135,621
1
Avaya Holdings Corp.
3,284,741    
72,995
1
Axcelis Technologies, Inc.
2,813,957    
43,417
1
Blackbaud, Inc.
3,096,935    
14,975
1
Box, Inc.
358,202      
136,016
1
Brightcove, Inc.
1,560,104    
78,384
1
Cambium Networks Corp.
3,452,815    
277,002
1
Commvault Systems, Inc.
20,938,581   
413,634
1
Conduent, Inc.
2,775,484    
82,994
1
Domo, Inc.
7,330,860    
36,141
 
Evertec, Inc.
1,579,362    
106,772
1
Evo Payments, Inc.
3,117,742    
45,274
1
Exlservice Holding, Inc.
5,125,922    
224,349
1
Extreme Networks, Inc.
2,470,083    
219,926
1
Grid Dynamics Holdings, Inc.
4,629,442    
14,660
1
Ichor Holdings Ltd.
756,016      
140,773
1
MA-COM Technology Solutions Holdings, Inc.
8,688,510    
80,195
1
Mimecast Ltd.
4,454,832    
13,244
1
Netgear, Inc.
453,607      
16,504
1
OSI Systems, Inc.
1,651,225    
37,047
1
Rapid7, Inc.
4,214,096    
31,465
1
Rimini Street, Inc.
273,431      
18,444
1
Sanmina Corp.
708,618      
136,248
1
Secureworks Corp.
2,733,135    
70,348
1
SMART Global Holdings, Inc.
3,295,100    
98,549
1
Sprout Social, Inc.
8,755,093    
77,987
1
SPS Commerce, Inc.
8,496,684    
166,525
1
Synchronoss Technologies, Inc.
472,931      
318,578
1
TTM Technologies, Inc.
4,456,906    
44,059
1
Turtle Beach Corp.
1,361,423    
17,115
1
Ultra Clean Holdings, Inc.
924,381      
104,123
1
Workiva, Inc.
13,512,042   
403,819
1
Zuora, Inc.
6,982,031    
 
 
TOTAL
152,405,883
 
 
Materials—   3.4%
 
284,505
1
Alcoa Corp.
11,422,876   
28,442
1
Clearwater Paper Corp.
838,755      
60,586
 
Commercial Metals Corp.
1,987,221    
67,665
1
Koppers Holdings, Inc.
2,077,992    
Annual Shareholder Report
13
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Materials—   continued
 
89,378
 
Myers Industries, Inc.
$1,893,026    
154,866
1
O-I Glass, Inc.
2,290,468    
235,025
1
Ranpak Holdings Corp.
6,021,340    
53,805
1
Ryerson Holding Corp.
846,353      
178,898
 
SunCoke Energy, Inc.
1,382,881    
120,166
 
Trinseo SA
6,532,224    
 
 
TOTAL
35,293,136
 
 
Real Estate—   8.2%
 
56,883
 
CareTrust REIT, Inc.
1,372,018    
303,692
1,2
DigitalBridge Group, Inc.
2,113,696    
41,341
 
Gladstone Land Corp.
964,072      
489,041
 
Independence Realty Trust
9,428,710    
68,529
 
Macerich Co. (The)
1,117,023    
92,295
1
Marcus & Millichap Co., Inc.
3,672,418    
436,329
 
National Storage Affiliates Trust
23,635,942   
184,509
 
Newmark Group, Inc.
2,376,476    
27,485
 
NexPoint Residential Trust, Inc.
1,620,241    
308,661
 
Plymouth Industrial REIT, Inc.
7,123,896    
113,412
 
PotlatchDeltic Corp.
5,890,619    
33,279
1
Realogy Hldgs. Corp.
589,704      
240,253
 
RMR Group, Inc./The
9,427,528    
38,184
 
STAG Industrial, Inc.
1,577,763    
27,072
 
Terreno Realty Corp.
1,850,642    
1,101,665
 
Uniti Group, Inc.
12,900,497   
 
 
TOTAL
85,661,245
 
 
Utilities—   1.3%
 
7,773
 
Chesapeake Utilities Corp.
968,438      
139,064
 
Clearway Energy, Inc.
3,747,775    
52,824
 
Consolidated Water Co.
669,808      
157,403
 
Portland General Electric Co.
7,697,007    
 
 
TOTAL
13,083,028
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $836,989,402)
1,019,629,018
 
 
INVESTMENT COMPANIES—   2.3%
 
4,285,672
 
Federated Hermes Government Obligations Fund, Premier Shares,
0.01%5
4,285,672    
Annual Shareholder Report
14
Shares
 
 
Value
 
 
INVESTMENT COMPANIES—   continued
 
19,578,581
 
Federated Hermes Institutional Prime Value Obligations Fund,
Institutional Shares, 0.02%5
$19,586,412   
 
 
TOTAL INVESTMENT COMPANIES
(IDENTIFIED COST $23,869,213)
23,872,084
 
 
TOTAL INVESTMENT IN SECURITIES—100.5%
(IDENTIFIED COST $860,858,615)6
1,043,501,102
 
 
OTHER ASSETS AND LIABILITIES - NET—(0.5)%7
(4,914,438)
 
 
TOTAL NET ASSETS—100%
$1,038,586,664
Annual Shareholder Report
15
An affiliated company is a company in which the Fund, alone or in combination with other affiliated funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the period ended July 31, 2021, were as follows:  
Affiliated
Value as of
7/31/2020
Purchases
at Cost*
Proceeds
from Sales*
Consumer Discretionary:
 
 
 
Lovesac Co./The**
$—
$3,785,391
$(4,017,970)
Wingstop, Inc.
$16,774,688
$4,299,053
$(14,680,260)
Financials:
 
 
 
StepStone Group, Inc.
$—
$2,651,683
$—
Health Care:
 
 
 
Acorda Therapeutics, Inc.**
$394,351
$—
$(31,511)
Alector, Inc.
$—
$993,686
$—
Amphastar Pharmaceuticals, Inc.
$1,702,621
$229,700
$—
IDEAYA Biosciences, Inc.
$—
2,877,611
(1,379,427)
Frequency Therapeutics, Inc.
$—
$3,337,856
$(2,144,852)
Translate Bio, Inc.
$—
$8,219,001
$(2,922,073)
Information Technology:
 
 
 
Domo, Inc.
$2,670,618
$7,272,873
$(5,565,646)
Grid Dynamics Holdings, Inc.
$—
$3,491,039
$—
Affiliated issuers no longer in the portfolio at period end
$6,775,889
$2,795,466
$(12,994,433)
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS
$28,318,167
$39,953,359
$(43,736,172)
Annual Shareholder Report
16
 
Change in
Unrealized
Appreciation/
Depreciation*
Net
Realized Gain/
(Loss)*
Value as of
7/31/2021
Shares
Held as of
7/31/2021
Dividend
Income*
 
 
 
 
 
$40,012
$506,022
$313,455
5,164
$—
$(8,175,999)
$6,211,395
$4,428,877
25,853
$ 145,130
 
 
 
 
 
$1,080,820
$—
$3,732,503
82,015
$10,860
 
 
 
 
 
$709,535
$(710,875)
$361,500
96,400
$—
$(334,166)
$—
$659,520
27,440
$—
$87,406
$—
$2,019,727
96,407
$—
$114,418
$(332,698)
$1,279,904
52,241
$—
$17,207
$(778,467)
$431,744
51,830
$—
$(145,523)
$(1,257,095)
$3,894,310
140,894
$—
 
 
 
 
 
$639,651
$2,313,364
$7,330,860
82,994
$—
$1,138,403
$—
$4,629,442
219,926
$—
$(492,048)
$3,915,126
$—
—
$—
$(5,320,284)
$9,866,772
$29,081,842
881,164
$155,990
 
*
A portion of the amount shown may have been recorded when the Fund did not have ownership
of at least 5% of the voting shares.
**
At July 31, 2021, the Fund no longer has ownership of at least 5% of the voting shares.
Annual Shareholder Report
17
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended July 31, 2021, were as follows:  
 
Federated
Hermes
Government
Obligations Fund,
Premier Shares*
Federated
Hermes
Institutional
Prime Value
Obligations Fund,
Institutional Shares*
Total of
Affiliated
Transactions
Value as of 7/31/2020
$31,624,077
$44,520,839
$76,144,916
Purchases at Cost
$170,787,043
$326,501,832
$497,288,875
Proceeds from Sales
$(198,125,448)
$(351,434,267)
$(549,559,715)
Change in Unrealized Appreciation/
Depreciation
N/A
$693
$693
Net Realized Gain/(Loss)
N/A
$(2,685)
$(2,685)
Value as of 7/31/2021
$4,285,672
$19,586,412
$23,872,084
Shares Held as of 7/31/2021
4,285,672
19,578,581
23,864,253
Dividend Income
$8,348
$28,918
$37,266
 
*
All or a portion of the balance/activity for the fund relates to cash collateral received on
securities lending transactions.
 
1
Non-income-producing security.
2
All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers.
3
Denotes a restricted security that either: (a) cannot be offered for public sale without first being
registered, or availing of an exemption from registration, under the Securities Act of 1933; or
(b) is subject to a contractual restriction on public sales. At July 31, 2021, this restricted security
amounted to $5,141,615, which represented 0.5% of total net assets.
4
Market quotations and price evaluations are not available. Fair value determined using
significant unobservable inputs in accordance with procedures established by and under the
general supervision of the Fund’s Board of Trustees (the “Trustees”).
5
7-day net yield.
6
The cost of investments for federal tax purposes amounts to $866,106,815.
7
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 total net assets at July 31, 2021.
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.
Annual Shareholder Report
18

The following is a summary of the inputs used, as of July 31, 2021, 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
Equity Securities:
 
 
 
 
Common Stocks
 
 
 
 
Domestic
$970,624,072
$—
$0
$970,624,072
International
49,004,946
—
—
49,004,946
Investment Companies
23,872,084
—
—
23,872,084
TOTAL SECURITIES
$1,043,501,102
$—
$0
$1,043,501,102
 
The following acronym(s) are used throughout this portfolio:
 
REIT
—Real Estate Investment Trust
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
19
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$17.19
$18.87
$21.19
$18.69
$15.08
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.01)
0.04
0.01
(0.01)
(0.02)
Net realized and unrealized gain (loss)
9.35
(1.68)
(1.70)
3.38
3.78
Total From Investment Operations
9.34
(1.64)
(1.69)
3.37
3.76
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.05)
(0.04)
—
—
—
Distributions from net realized gain
—
—
(0.63)
(0.87)
(0.15)
Total Distributions
(0.05)
(0.04)
(0.63)
(0.87)
(0.15)
Net Asset Value, End of Period
$26.48
$17.19
$18.87
$21.19
$18.69
Total Return2
54.38%
(8.71)%
(7.69)%
18.49%
24.97%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.13%
1.13%
1.13%
1.14%
1.14%
Net investment income (loss)
(0.03)%
0.24%
0.07%
(0.06)%
(0.13)%
Expense waiver/reimbursement4
0.29%
0.31%
0.22%
0.37%
0.55%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$101,026
$78,347
$68,546
$74,396
$37,031
Portfolio turnover
150%
223%
121%
88%
91%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
20
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$15.03
$16.58
$18.84
$16.83
$13.70
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.15)
(0.08)
(0.12)
(0.14)
(0.14)
Net realized and unrealized gain (loss)
8.14
(1.47)
(1.51)
3.02
3.42
Total From Investment Operations
7.99
(1.55)
(1.63)
2.88
3.28
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
—
—
(0.63)
(0.87)
(0.15)
Net Asset Value, End of Period
$23.02
$15.03
$16.58
$18.84
$16.83
Total Return2
53.16%
(9.35)%
(8.35)%
17.60%
23.98%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.88%
1.88%
1.88%
1.89%
1.89%
Net investment income (loss)
(0.78)%
(0.51)%
(0.69)%
(0.81)%
(0.89)%
Expense waiver/reimbursement4
0.18%
0.23%
0.28%
0.38%
0.57%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$29,567
$22,720
$28,411
$30,072
$15,223
Portfolio turnover
150%
223%
121%
88%
91%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
21
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$17.87
$19.59
$21.94
$19.30
$15.54
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.05
0.09
0.06
0.03
0.02
Net realized and unrealized gain (loss)
9.71
(1.74)
(1.76)
3.50
3.90
Total From Investment Operations
9.76
(1.65)
(1.70)
3.53
3.92
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.10)
(0.07)
(0.02)
(0.02)
—
Distributions from net realized gain
—
—
(0.63)
(0.87)
(0.16)
Total Distributions
(0.10)
(0.07)
(0.65)
(0.89)
(0.16)
Net Asset Value, End of Period
$27.53
$17.87
$19.59
$21.94
$19.30
Total Return2
54.73%
(8.45)%
(7.45)%
18.78%
25.24%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.88%
0.88%
0.88%
0.89%
0.89%
Net investment income
0.21%
0.49%
0.31%
0.13%
0.10%
Expense waiver/reimbursement4
0.15%
0.18%
0.22%
0.34%
0.53%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$843,803
$574,041
$842,221
$708,805
$179,219
Portfolio turnover
150%
223%
121%
88%
91%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
22
Financial Highlights–Class R6 Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$17.87
$19.59
$21.94
$19.30
$15.54
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
0.06
0.09
0.06
0.02
0.01
Net realized and unrealized gain (loss)
9.71
(1.74)
(1.76)
3.51
3.91
Total From Investment Operations
9.77
(1.65)
(1.70)
3.53
3.92
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.10)
(0.07)
(0.02)
(0.02)
—
Distributions from net realized gain
—
—
(0.63)
(0.87)
(0.16)
Total Distributions
(0.10)
(0.07)
(0.65)
(0.89)
(0.16)
Net Asset Value, End of Period
$27.54
$17.87
$19.59
$21.94
$19.30
Total Return2
54.79%
(8.44)%
(7.45)%
18.78%
25.24%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.87%
0.87%
0.87%
0.88%
0.88%
Net investment income
0.24%
0.49%
0.32%
0.08%
0.04%
Expense waiver/reimbursement4
0.08%
0.08%
0.12%
0.26%
0.41%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$64,191
$47,631
$33,753
$13,374
$1,017
Portfolio turnover
150%
223%
121%
88%
91%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
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.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
23
Statement of Assets and Liabilities
July 31, 2021
 
Assets:
 
Investment in securities, at value including $4,027,250 of securities loaned and
$23,872,084 of investment in affiliated holdings and $29,081,842 of investment in
affiliated companies* (identified cost $860,858,615)
$1,043,501,102
Income receivable
282,911
Income receivable from affiliated holdings
747
Receivable for investments sold
4,608,681
Receivable for shares sold
659,926
Total Assets
1,049,053,367
Liabilities:
 
Payable for investments purchased
4,885,658
Payable for shares redeemed
916,949
Payable for collateral due to broker for securities lending (Note 2)
4,305,673
Payable for investment adviser fee (Note 5)
42,568
Payable for administrative fee (Note 5)
4,472
Payable for distribution services fee (Note 5)
18,711
Payable for other service fees (Notes 2 and 5)
51,613
Accrued expenses (Note 5)
241,059
Total Liabilities
10,466,703
Net assets for 38,086,250 shares outstanding
$1,038,586,664
Net Assets Consist of:
 
Paid-in capital
$754,483,083
Total distributable earnings (loss)
284,103,581
Total Net Assets
$1,038,586,664
Annual Shareholder Report
24
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
Class A Shares:
 
Net asset value per share ($101,025,749 ÷ 3,815,129 shares outstanding), no par
value, unlimited shares authorized
$26.48
Offering price per share (100/94.50 of $26.48)
$28.02
Redemption proceeds per share
$26.48
Class C Shares:
 
Net asset value per share ($29,566,891 ÷ 1,284,437 shares outstanding), no par
value, unlimited shares authorized
$23.02
Offering price per share
$23.02
Redemption proceeds per share (99.00/100 of $23.02)
$22.79
Institutional Shares:
 
Net asset value per share ($843,803,421 ÷ 30,655,466 shares outstanding), no par
value, unlimited shares authorized
$27.53
Offering price per share
$27.53
Redemption proceeds per share
$27.53
Class R6 Shares:
 
Net asset value per share ($64,190,603 ÷ 2,331,218 shares outstanding), no par
value, unlimited shares authorized
$27.54
Offering price per share
$27.54
Redemption proceeds per share
$27.54
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
25
Statement of Operations
Year Ended July 31, 2021
 
Investment Income:
 
Dividends (including $167,002 received from affiliated companies and holdings* and
net of foreign taxes withheld of $12,763)
$9,188,742
Net income on securities loaned (includes $26,254 earned from affiliated holdings*
related to cash collateral balances) (Note 2)
329,189
TOTAL INCOME
9,517,931
Expenses:
 
Investment adviser fee (Note 5)
6,956,258
Administrative fee (Note 5)
682,755
Custodian fees
94,184
Transfer agent fees (Note 2)
983,631
Directors’/Trustees’ fees (Note 5)
5,266
Auditing fees
31,900
Legal fees
11,957
Portfolio accounting fees
154,957
Distribution services fee (Note 5)
193,493
Other service fees (Notes 2 and 5)
292,392
Share registration costs
100,263
Printing and postage
63,855
Miscellaneous (Note 5)
40,759
TOTAL EXPENSES
9,611,670
Waiver and Reimbursements:
 
Waiver/reimbursement of investment adviser fee (Note 5)
(654,804)
Reimbursement of other operating expenses (Notes 2 and 5)
(778,817)
TOTAL WAIVER AND REIMBURSEMENTS
(1,433,621)
Net expenses
8,178,049
Net investment income
1,339,882
Realized and Unrealized Gain (Loss) on Investments:
 
Net realized gain on investments (including net realized gain of $9,864,087 on sales of
investments in affiliated companies and holdings*)
219,512,886
Net change in unrealized appreciation of investments (including net change in
unrealized appreciation of $(5,319,591) of investments in affiliated companies and
holdings*)
129,381,772
Net realized and unrealized gain (loss) on investments
348,894,658
Change in net assets resulting from operations
$350,234,540
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
26
Statement of Changes in Net Assets
 
 
Year Ended July 31
2021
2020
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$1,339,882
$3,688,491
Net realized gain (loss)
219,512,886
(93,227,069)
Net change in unrealized appreciation/depreciation
129,381,772
(25,083,286)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
350,234,540
(114,621,864)
Distributions to Shareholders:
 
 
Class A Shares
(196,391)
(241,559)
Institutional Shares
(2,867,383)
(3,139,873)
Class R6 Shares
(226,555)
(217,595)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(3,290,329)
(3,599,027)
Share Transactions:
 
 
Proceeds from sale of shares
309,924,317
332,219,364
Proceeds from shares issued in connection with the tax-free
transfer of assets from the Acquired Funds
—
244,171,911
Net asset value of shares issued to shareholders in payment of
distributions declared
2,877,418
3,176,105
Cost of shares redeemed
(343,897,658)
(711,539,671)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(31,095,923)
(131,972,291)
Change in net assets
315,848,288
(250,193,182)
Net Assets:
 
 
Beginning of period
722,738,376
972,931,558
End of period
$1,038,586,664
$722,738,376
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
27
Notes to Financial Statements
July 31, 2021
1. ORGANIZATION
Federated Hermes MDT Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of five portfolios. The financial statements included herein are only those of Federated Hermes MDT Small Cap Core Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers four classes of shares: Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is long-term capital appreciation.
On November 15, 2019, the Fund acquired all of the net assets of PNC Multi-Factor Small Cap Core Fund, PNC Multi-Factor Small Cap Value Fund, and PNC Small Cap Fund (each an “Acquired Fund” or collectively, the “Acquired Funds”), each an open-end investment company, in a tax-free reorganization in exchange for shares of the Fund, pursuant to a plan of reorganization approved by each Acquired Funds’ shareholders on November 5, 2019. The purpose of the transaction was to combine portfolios with comparable investment objectives and strategies. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Funds was carried forward to align ongoing reporting of the Fund’s realized gains and losses with amounts distributable to shareholders for tax purposes.
For every one share of the Acquired Fund Share Class exchanged, a shareholder received the following shares of the Fund:  
PNC Fund
Share Class
Exchanged
Fund Shares
Received
Multi-Factor Small Cap Core Fund
A
1.172 Class A Shares
 
C
1.333 Class C Shares
 
I
1.137 Institutional Shares
 
R6
1.135 Institutional Shares
Multi-Factor Small Cap Value Fund
A
1.042 Class A Shares
 
C
1.039 Class C Shares
 
I
1.102 Institutional Shares
Small Cap Fund
A
0.494 Class A Shares
 
C
0.391 Class C Shares
 
I
0.529 Institutional Shares
Annual Shareholder Report
28
The Fund received net assets from the Acquired Funds as the result of the tax-free reorganization as follows:  
Shares of the
Fund Issued
Acquired Funds’
Net Assets
Received
Unrealized
Appreciation1
Net Assets
of the Fund
Immediately
Prior to
Combination
Net Assets
of the Fund
Immediately
After
Combination
12,798,626
$244,171,911
$71,610,835
$881,235,561
$1,125,407,472
 
1
Unrealized Appreciation is included in the Net Assets Received amount shown above.
Assuming the acquisition had been completed on August 1, 2019, the beginning of the annual reporting period of the Fund, the Fund’s pro forma results of operations for the year ended July 31, 2020, were as follows:  
Net investment income
$4,044,354
Net realized and unrealized loss on investments
(123,022,814)
Net decrease in net assets resulting from operations
$(118,978,460)
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amount of earnings of the Acquired Funds that has been included in the Fund’s Statement of Changes in Net Assets as of July 31, 2020.
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:
■
Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■
Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
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 asked quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, 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
Annual Shareholder Report
29
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 Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the 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.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC (the “Adviser”), and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee 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-party pricing 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 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 Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and 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 asked 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-income securities 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 Trustees.
Annual Shareholder Report
30
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser 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 Trustees have 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 Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
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.
Annual Shareholder Report
31
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 annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursements of $1,433,621 is disclosed in this Note 2 and Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Transfer Agent Fees
For the year ended July 31, 2021, transfer agent fees for the Fund were as follows:  
 
Transfer Agent
Fees Incurred
Transfer Agent
Fees Reimbursed
Class A Shares
$225,159
$(201,687)
Class C Shares
33,988
(25,962)
Institutional Shares
716,754
(551,168)
Class R6 Shares
7,730
—
TOTAL
$983,631
$(778,817)
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees.
For the year ended July 31, 2021, other service fees for the Fund were as follows:  
 
Other Service
Fees Incurred
Class A Shares
$229,756
Class C Shares
62,636
TOTAL
$292,392
Annual Shareholder Report
32
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code (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 July 31, 2021, 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 July 31, 2021, tax years 2018 through 2021 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.
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.
Securities Lending
The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund normally receives cash collateral for securities loaned that may be invested in affiliated money market funds, other money market instruments and/or repurchase agreements. Investments in money market funds may include funds with a “floating” NAV that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if the investee fund’s NAV decreases, result in the Fund recognizing losses and being required to cover the decrease in the value of the cash collateral. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
Securities lending transactions are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As
Annual Shareholder Report
33
indicated below, the cash collateral received by the Fund exceeds the market value of the securities loaned reducing the net settlement amount to zero. The chart below identifies the amount of collateral received as well as the market value of securities on loan. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.
As of July 31, 2021, securities subject to this type of arrangement and related collateral were as follows:  
Market Value of
Securities Loaned
Collateral
Received
$4,027,250
$4,305,673
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:  
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
842,707
$20,026,192
1,048,052
$17,685,551
Proceeds from shares issued in connection
with the tax-free transfer of assets from the
Acquired Funds
—
—
3,213,962
59,940,394
Shares issued to shareholders in payment of
distributions declared
7,630
172,214
11,235
216,722
Shares redeemed
(1,591,861)
(35,663,870)
(3,349,156)
(57,418,270)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
(741,524)
$(15,465,464)
924,093
$20,424,397
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
205,908
$4,350,950
212,811
$3,235,458
Proceeds from shares issued in connection
with the tax-free transfer of assets from the
Acquired Funds
—
—
474,115
7,751,772
Shares issued to shareholders in payment of
distributions declared
—
—
—
—
Shares redeemed
(433,456)
(7,859,418)
(888,543)
(13,324,178)
NET CHANGE RESULTING FROM CLASS C
SHARE TRANSACTIONS
(227,548)
$(3,508,468)
(201,617)
$(2,336,948)
Annual Shareholder Report
34
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
10,605,368
$264,872,807
16,340,991
$281,920,986
Proceeds from shares issued in connection
with the tax-free transfer of assets from the
Acquired Funds
—
—
8,269,174
160,173,907
Shares issued to shareholders in payment of
distributions declared
107,874
2,526,411
140,423
2,809,864
Shares redeemed
(12,187,496)
(273,756,445)
(35,614,006)
(613,866,572)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
(1,474,254)
$(6,357,227)
(10,863,418)
$(168,961,815)
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class R6 Shares:
Shares
Amount
Shares
Amount
Shares sold
851,601
$20,674,368
1,624,311
$29,377,369
Proceeds from shares issued in connection
with the tax-free transfer of assets from the
Acquired Funds
—
—
841,375
16,305,838
Shares issued to shareholders in payment of
distributions declared
7,631
178,793
7,469
149,519
Shares redeemed
(1,193,084)
(26,617,925)
(1,530,700)
(26,930,651)
NET CHANGE RESULTING FROM
CLASS R6 SHARE TRANSACTIONS
(333,852)
$(5,764,764)
942,455
$18,902,075
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(2,777,178)
$(31,095,923)
(9,198,487)
$(131,972,291)
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 result from a Fair Fund settlement.
For the year ended July 31, 2021, permanent differences identified and reclassified among the components of net assets were as follows:  
Increase (Decrease)
Paid-In Capital
Total Distributable
Earnings (Loss)
$(46)
$46
Net assets were not affected by this reclassification.
Annual Shareholder Report
35
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended July 31, 2021 and 2020, was as follows:  
 
2021
2020
Ordinary income1
$3,290,329
$3,599,027
 
1
For tax purposes, short-term capital gain distributions are considered ordinary
income distributions.
As of July 31, 2021, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income2
$89,481,322
Net unrealized appreciation
$177,394,287
Undistributed long-term capital gains
$17,949,612
Capital loss carryforwards and deferrals
$(721,640)
 
2
For tax purposes, short-term capital gains are considered ordinary income in determining
distributable earnings.
The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for the deferral of losses on wash sales and return of capital adjustments.
At July 31, 2021, the cost of investments for federal tax purposes was $866,106,815. The net unrealized appreciation of investments for federal tax purposes was $177,394,287. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $199,647,025 and net unrealized depreciation from investments for those securities having an excess of cost over value of $22,252,738.
As of July 31, 2021, the Fund had a capital loss carryforward of $721,640 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
$721,640
$—
$721,640
The Fund used capital loss carryforwards of $86,408,837 to offset capital gains realized during the year ended July 31, 2021.
Annual Shareholder Report
36
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 0.80% of the Fund’s average daily net assets. 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 the year ended July 31, 2021, the Adviser voluntarily waived $630,320 of its fee and voluntarily reimbursed $778,817 of transfer agent fees.
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 July 31, 2021, the Adviser reimbursed $24,484.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:  
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the annualized fee paid to FAS was 0.079% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
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’s Class A Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:  
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class C Shares
0.75%
Annual Shareholder Report
37
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 July 31, 2021, distribution services fees for the Fund were as follows:  
 
Distribution Services
Fees Incurred
Class C Shares
$193,493
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares.
For the year ended July 31, 2021, FSC retained $23,252 of fees paid by the Fund. For the year ended July 31, 2021, Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended July 31, 2021, FSC retained $5,962 in sales charges from the sale of Class A Shares. FSC also retained $6,217 of CDSC relating to redemptions of Class A Shares and $1,333 relating to redemptions of Class C Shares, respectively.
Other Service Fees
For the year ended July 31, 2021, FSSC received $3,116 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Effective October 1, 2021, total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.13%, 1.98%, 0.88% and 0.87% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) November 1, 2022; or (b) the date of the Fund’s next effective Prospectus. Prior to October 1, 2021, the Fee Limit for the Class C Shares was 1.88%. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the 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. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the
Annual Shareholder Report
38
Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended July 31, 2021, were as follows:  
Purchases
$1,269,474,102
Sales
$1,315,177,342
7. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 23, 2021. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), or a replacement rate as appropriate, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of July 31, 2021, the Fund had no outstanding loans. During the year ended July 31, 2021, the Fund did not utilize the LOC.
8. 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 July 31, 2021, there were no outstanding loans. During the year ended July 31, 2021, the program was not utilized.
9. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that
Annual Shareholder Report
39
may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
10. Subsequent Event
On September 10, 2021, the shareholders of Hancock Horizon Burkenroad Small Cap Fund and Hancock Horizon Microcap Fund, each a series of The Advisors’ Inner Circle Fund II, approved the reorganization of each fund into the Fund. Each reorganization is expected to occur during the third quarter of 2021.
11. FEDERAL TAX INFORMATION (UNAUDITED)
For the fiscal year ended July 31, 2021, 83.12% of total ordinary income (including short-term capital gain) distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.
Of the ordinary income (including short-term capital gain) distributions made by the Fund during the year ended July 31, 2021, 83.03% qualify for the dividend received deduction available to corporate shareholders.
Annual Shareholder Report
40
Report of Independent Registered Public Accounting Firm
TO THE board of trustees OF federated Hermes MDT Series and shareholders of Federated Hermes MDT Small Cap Core Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes MDT Small Cap Core Fund (the “Fund”) (one of the portfolios constituting Federated Hermes MDT Series (the “Trust”)), including the portfolio of investments, as of July 31, 2021, 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 five years in the period then ended 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 MDT Series) at July 31, 2021, 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 five years in the period then ended, 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 standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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.
Annual Shareholder Report
41
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 July 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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
September 23, 2021
Annual Shareholder Report
42
Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2021 to July 31, 2021.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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43
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.  
 
Beginning
Account Value
2/1/2021
Ending
Account Value
7/31/2021
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$1,155.30
$6.04
Class C Shares
$1,000
$1,151.00
$10.03
Institutional Shares
$1,000
$1,157.20
$4.71
Class R6 Shares
$1,000
$1,157.10
$4.65
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,019.19
$5.66
Class C Shares
$1,000
$1,015.47
$9.39
Institutional Shares
$1,000
$1,020.43
$4.41
Class R6 Shares
$1,000
$1,020.48
$4.36
 
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
 
Class A Shares
1.13%
Class C Shares
1.88%
Institutional Shares
0.88%
Class R6 Shares
0.87%
Annual Shareholder Report
44
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2020, the Trust comprised five portfolio(s), and the Federated Hermes Fund Family consisted of 41 investment companies (comprising 163 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: May 2006
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
Annual Shareholder Report
45
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Vice President, Federated Hermes, Inc.; President, Director/Trustee
and CEO, Federated Advisory Services Company, Federated Equity
Management Company of Pennsylvania, Federated Global Investment
Management Corp., Federated Investment Counseling, Federated
Investment Management Company; President of some of the Funds in
the Federated Hermes Fund Family and Director, Federated Investors
Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Director, Federated Hermes, Inc.;
Chairman and Director, Southpointe Distribution Services, Inc. and
President, Technology, Federated Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors,
Director, KLX Energy Services Holdings, Inc. (oilfield services); former
Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
46
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty
Furniture Companies, Inc.; formerly, Director, Member of Governance
and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; and Director and Vice Chair, Our Campaign for the
Church Alive!, Inc.
Annual Shareholder Report
47
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity and
Director, The Golisano Children’s Museum of Naples, Florida.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Senior Vice President for Legal Affairs, General Counsel
and Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Director of Risk Management and Associate General Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms. Reilly served as Assistant General Counsel of Compliance and
Enterprise Risk as well as Senior Counsel of Environment, Health and
Safety, PPG Industries.
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
Annual Shareholder Report
48
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
OFFICERS 
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Annual Shareholder Report
49
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: June 2006
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR VICE
PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
Stephen F. Auth
Birth Date:
September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: June 2012
Principal Occupations: Stephen F. Auth is Chief Investment Officer of
various Funds in the Federated Hermes Fund Family; Executive Vice
President, Federated Investment Counseling, Federated Global
Investment Management Corp. and Federated Equity Management
Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment
Management Company and Passport Research, Ltd. (investment
advisory subsidiary of Federated); Senior Vice President, Global
Portfolio Management Services Division; Senior Vice President,
Federated Investment Management Company and Passport
Research, Ltd.; Senior Managing Director and Portfolio Manager,
Prudential Investments.
 
Annual Shareholder Report
50
Evaluation and Approval of Advisory Contract–May 2021
Federated Hermes MDT Small Cap Core Fund (the “Fund”)
At its meetings in May 2021 (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 MDTA LLC (the “Adviser”) 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 presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (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. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.
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 on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional
Annual Shareholder Report
51
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: the Adviser’s investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate) and comments on the reasons for the Fund’s performance; the Fund’s investment objectives; the Fund’s expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring and managing the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund’s relationship to the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the “Federated Hermes Funds”), which include a comprehensive array of funds with different investment objectives, policies and strategies, and the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Hermes Funds and Federated Hermes’ affiliates that service them (including communications from regulatory agencies), as well as Federated Hermes’ responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Hermes Funds and/or Federated Hermes may be responding to them. The Board noted that its evaluation process is evolutionary and that the criteria considered and the emphasis placed on relevant criteria may change in recognition of changing circumstances in the mutual fund marketplace.
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the
Annual Shareholder Report
52
fund, its benchmark, and comparable funds); (2) an adviser’s cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with a fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the 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 an adviser’s services and fees). The Board noted 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 review 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 Federated Hermes Funds.
In addition to considering the above-referenced factors, the Board was mindful of 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 have invested in the Fund 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 in the marketplace there are a range of investment options available to the Fund’s shareholders 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 Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection
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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 Federated Hermes Funds family, 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 the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by the Adviser and its affiliates. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade execution 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 the Adviser’s ability and experience in attracting and retaining qualified personnel to service the Fund. The Fund’s ability to deliver competitive performance when compared to its Performance Peer Group (as defined below) was also deemed to be relevant by the Board as 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 significant acquisition of Hermes Fund Managers Limited by Federated Hermes in 2018, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters.
The Board considered the quality of the Adviser’s communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account the Adviser’s communications with the Board in light of the market volatility amidst the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
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The Board received and evaluated information regarding the Adviser’s regulatory and compliance environment. The Board considered the Adviser’s compliance program, compliance history, and reports from the CCO about the Adviser’s 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, in particular, the compliance-related resources devoted by the Adviser and its affiliates in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including the Adviser’s commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ 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 to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered discussions with Federated Hermes regarding the implementation of its business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. 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, including changes associated with the pandemic.
Based on these considerations, the Board concluded that the nature, extent and quality of the Adviser’s investment management and related services warrant the continuation of the Contract.
Fund Investment Performance
In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks, as disclosed in the Fund’s prospectus. 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 include, among other items, information on the Fund’s gross and net returns, the Fund’s investment performance compared to one or more relevant investment categories and the Fund’s benchmark index, portfolio attribution information and commentary on the effect of current and recent market conditions.
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The Board also reviewed comparative information regarding the performance of other mutual funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”), noting 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, in evaluating such comparisons, that in some cases there may be differences in the funds’ investment objectives or investment management techniques, or the costs to implement funds, even within the same Performance Peer Group. In this connection, the Board considered that the Fund’s quantitative focus makes fee and expense comparisons particularly difficult as the funds in the Performance Peer Group varied widely in their complexity, and the management of the Fund is among the more complex relative to its Performance Peer Group. The Board also considered a report comparing the performance of the Fund solely to other funds with a quantitative focus in the Performance Peer Group.
For the one-year, three-year and five-year periods ended December 31, 2020, the Fund’s performance was above the median of the Performance Peer Group. In addition, the Board was informed by the Adviser that, for the same periods, the Fund outperformed its benchmark index for the five-year period and underperformed its benchmark index for the one-year and three-year periods.
Following such evaluation and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Contract.
Fund Expenses
The Board considered the advisory 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 advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its deliberations. The Board focused on comparisons with other similar mutual funds more heavily
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than non-mutual fund products or services because such comparisons are believed to be more relevant. The Board considered that other mutual funds are the products most like the Fund, in that they are readily available to 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 mutual funds’ fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.
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 below the median of the Expense Peer Group, and the Board was satisfied that the overall expense structure of the Fund remained competitive.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-mutual fund clients (such as institutional separate accounts) and third-party unaffiliated mutual funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that mon-mutual 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, addressing different administrative responsibilities, and addressing different degrees of risk associated with management; and (vi) 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 mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s mutual 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 mutual 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’ advisory fees.
Following such evaluation and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Contract.
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Profitability and Other Benefits
The Board also received financial information about Federated Hermes, including information regarding the compensation and ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. This information covered not only the fees under the Federated Hermes Funds’ investment advisory contracts, but also fees received by Federated Hermes’ affiliates for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of 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 any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds. In addition, the Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Hermes Fund shareholders and/or reported to the Board their intention to do so (or continue to do so) in the future. Moreover, the Board received and considered regular reports from Federated Hermes throughout the year as to the institution, adjustment or elimination of these voluntary waivers and/or reimbursements.
The Board received and considered information furnished by Federated Hermes, as requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses 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 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. The allocation information, including the CCO’s view that cost allocations on a fund-by-fund basis may be unreliable, was considered in the evaluation by the Board. 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 that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
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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 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.
In 2019, the Board approved a reduction of 5 basis points in the contractual advisory fee.
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 calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as personnel and processes for the portfolio management (including market data on which portfolio managers make investment decisions), trading operations, issuer engagement (including with respect to ESG matters), shareholder services, compliance, business continuity, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and use of data. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments (as well as the benefits of any economies of scale, should they exist) are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and that such waivers and 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 also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered the beliefs of Federated Hermes and the CCO that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply breakpoints, at higher levels and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fees as a fund attains a certain size.
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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 was 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 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 for future reporting to the Board or further consideration by management 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. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes MDT Series (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes MDT Small Cap Core Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s investment adviser as the administrator for the Program with respect to the Fund (the “Administrator”). Each affiliated Federated Hermes advisory subsidiary (including the Fund’s investment adviser) that serves as investment adviser to a Federated Hermes Fund (including the Fund) has been approved as the administrator of the Program with respect to each Federated Hermes Fund that is managed by such advisory subsidiary (collectively, the “Administrator”). The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2021, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2020 through March 31, 2021 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where
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applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
■ confirmation that the Fund did not utilize alternative funding sources during the Period;
■ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
■ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
■ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
■ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit; and
■ liquidity events during the Period, including the impact on liquidity caused by extended non-U.S. market closures and the March-April 2020 market conditions, and the fact that there were no specific liquidity events during the Period that materially affected the Fund’s liquidity risk.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual 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 mutual funds involves investment risk, including the possible loss of principal.
This Report 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 MDT Small Cap Core Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31421R817
CUSIP 31421R791
CUSIP 31421R783
CUSIP 31421R627
37328 (9/21)
© 2021 Federated Hermes, Inc.
 
Annual Shareholder Report
July 31, 2021
 
 
Share Class | Ticker
A | QASGX
C | QCSGX
 
 
Institutional | QISGX
R6 | QLSGX
 
Federated Hermes MDT Small Cap Growth Fund
Fund Established 2005
A Portfolio of Federated Hermes MDT Series
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from August 1, 2020 through July 31, 2021. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,  
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes MDT Small Cap Growth Fund (the “Fund”), based on net asset value for the 12-month reporting period ended July 31, 2021, was 42.03% for Class A Shares, 40.93% for Class C Shares, 42.40% for Institutional Shares and 42.38% for Class R6 Shares. The total return for the Russell 2000® Growth Index (R2000G),1 the Fund’s broad-based securities market index, was 41.00% for the same period. The total return of the Morningstar Small Growth Funds Average (MSGFA),2 a peer group average for the Fund, was 45.68% during the same period. The Fund’s and MSGFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the R2000G.
During the reporting period, the Fund’s investment strategy focused on stock selection. Stock selection was the most significant factor affecting the Fund’s performance relative to the R2000G during the period.
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the R2000G.
MARKET OVERVIEW
The reporting period was marked by the gradual but continuing recovery of the economy from the pandemic. The market has been less volatile than during the prior reporting period, and the market preferences for style in these 12 months have reversed some of the large differentials of the prior period. During the previous 12-month reporting period, the growth style led the value style by almost 35% (the Russell 3000® Growth Index (R3000G)3 returned 28.24% while the Russell 3000® Value Index (R3000V)4 returned -6.67%). During this reporting period, the value style led the growth style by a much more moderate amount of just under 4% (R3000V returned 40.72% and R3000G returned 36.83%). Similarly, in the capitalization ranges, the small cap stocks5 in the Russell 2000® Index6 led the mega-cap stocks in the Russell Top 200® Index7 by 15.53% this period rather than trailing by 20.43% for the prior period. The market still reacted quickly to new economic data, but now there was far less uncertainty about the future than there was at the end of the prior reporting period.
The best performing sectors in the R2000G during the reporting period were Energy (85.28%), Industrials (56.10%) and Information Technology (42.82%). Underperforming sectors during the same period included Health Care (30.79%), Utilities (32.57%) and Financials (37.62%).
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STOCK SELECTION
The Fund buys stocks with many different combinations of fundamental and technical characteristics that have signaled market outperformance historically. The primary driver of outperformance during the reporting period was strong stock selection among stocks with flat or improving earnings to price ratios and neutral to high analyst conviction. An overweight position in and poor stock selection among young companies with strong technical factors detracted the most from performance. The Fund’s sector exposures continued to remain close to R2000G weights at the end of the fiscal year, except for a small overweight position in the Consumer Discretionary sector and a small underweight position in the Industrials sector. Strong stock selection in the Health Care, Industrials and Information Technology sectors contributed the most to Fund outperformance. Unfavorable stock selection in the Real Estate, Financials and Consumer Discretionary sectors provided a partial offset.
Individual stocks enhancing the Fund’s performance included Intellia Therapeutics, Inc., Immunomedics, Inc. and Shockwave Medical, Inc.
Individual stocks detracting from the Fund’s performance included QTS Realty Trust, Inc. (Class A), Qualys, Inc. and Wingstop, Inc.
1
Please see the footnotes to the line graphs below for definitions of, and further information about, the R2000G.
2
Please see the footnotes to the line graphs below for definitions of, and further information about, the Morningstar peer group average.
3
The Russell 3000® Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000® Growth Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad growth market. The Russell 3000® Growth Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.*
4
The Russell 3000® Value Index measures the performance of the broad value segment of U.S. equity universe. It includes those Russell 3000® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad value market. The Russell 3000® Value Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.*
5
Small-cap stocks may be less liquid and subject to greater price volatility than large-cap stocks.
6
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.*
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7
The Russell Top 200® Index measures the performance of the largest cap segment of the U.S. equity universe. The Russell Top 200® Index is a subset of the Russell 3000® Index. It includes approximately 200 of the largest securities based on a combination of their market cap and current index membership and represents approximately 68% of the capitalization of the U.S. market. The Russell Top 200® Index is constructed to provide a comprehensive and unbiased barometer for this very large cap segment and is completely reconstituted annually to ensure new and growing equities are reflected.*
*
The index is unmanaged, and it is not possible to invest directly in an index.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in the Federated Hermes MDT Small Cap Growth Fund from July 31, 2011 to July 31, 2021, compared to the Russell 2000 Growth® Index (R2000G)2 and the Morningstar Small Growth Funds Average (MSGFA).3 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of July 31, 2021  
■ Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00% as applicable. 
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the line graph above.
Average Annual Total Returns for the Period Ended 7/31/2021
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
34.22%
15.78%
13.66%
Class C Shares
39.93%
16.22%
13.62%
Institutional Shares
42.40%
17.39%
14.59%
Class R6 Shares4
42.38%
17.40%
14.50%
R2000G
41.00%
16.40%
13.56%
MSGFA
45.68%
19.18%
14.30%
Annual Shareholder Report
4
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charges = $9,450); for Class C Shares, a 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The R2000G and MSGFA have been adjusted to reflect reinvestment of dividends on securities.
2
The R2000G measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000® Index companies with higher price-to-value ratios and higher forecasted growth values. The R2000G is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment. The R2000G is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect growth characteristics. The R2000G is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. The R2000G is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance.
3
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
4
The Fund’s Class R6 Shares commenced operations on June 29, 2016. It is anticipated that this class will have the lowest net expenses of all outstanding share classes. For the period prior to the commencement of operations of Class R6 Shares, the performance information shown is for the Fund’s Institutional Shares adjusted to reflect expenses of the Class R6 Shares for each year for which the gross expenses of Class R6 Shares would have exceeded the actual expenses paid by Institutional Shares.
Annual Shareholder Report
5
Portfolio of Investments Summary Table (unaudited)
At July 31, 2021, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Health Care
27.8%
Information Technology
22.4%
Consumer Discretionary
17.4%
Industrials
11.9%
Financials
5.8%
Real Estate
4.0%
Consumer Staples
3.3%
Communication Services
2.7%
Materials
1.6%
Energy
1.5%
Securities Lending Collateral2
0.7%
Cash Equivalents3
1.9%
Other Assets and Liabilities—Net4
(1.0)%
TOTAL
100%
 
1
Except for Securities Lending Collateral, Cash Equivalents and Other Assets and Liabilities,
sector classifications are based upon, and individual portfolio securities are assigned to, the
classifications of the Global Industry Classification Standard (GICS), except that the Adviser
assigns a classification to securities not classified by the GICS and to securities for which the
Adviser does not have access to the classification made by the GICS.
2
Represents cash collateral received for portfolio securities on loan that may be invested in
affiliated money market funds, other money market instruments and/or repurchase agreements.
3
Cash Equivalents include any investments in money market mutual funds and/or overnight
repurchase agreements other than those representing cash collateral for securities lending.
4
Assets, other than investments in securities, less liabilities. See Statement of Assets and
Liabilities.
Annual Shareholder Report
6
Portfolio of Investments
July 31, 2021  
Shares
 
 
Value
          
 
COMMON STOCKS—   98.4%
 
 
 
Communication Services—   2.7%
 
84,727
1
AMC Networks, Inc.
$4,239,739  
253,949
1
Cars.com, Inc.
3,067,704  
2,042
1
Chicken Soup For The Soul Entertainment, Inc.
73,267     
50,567
 
Cogent Communications Holdings, Inc.
3,924,505  
12,468
1
EverQuote, Inc.
376,284    
332,755
1
Yelp, Inc.
12,445,037 
 
 
TOTAL
24,126,536
 
 
Consumer Discretionary—   17.4%
 
107,920
1
Abercrombie & Fitch Co., Class A
4,080,455  
135,086
1
Academy Sports and Outdoors, Inc.
5,004,936  
9,319
 
American Eagle Outfitters, Inc.
321,226    
25,214
 
American Outdoor Brands Corp.
591,268    
62,455
 
Big Lots, Inc.
3,598,033  
111,453
1
Bloomin Brands, Inc.
2,800,814  
63,513
1
Boot Barn Holdings, Inc.
5,488,793  
5,744
1
Brinker International, Inc.
312,129    
153,672
 
Camping World Holdings, Inc.
6,048,530  
107,478
1
CROCs, Inc.
14,596,587 
194,247
1
Everi Holdings, Inc.
4,407,464  
18,965
1
Fox Factory Holding Corp.
3,063,606  
24,922
1
Funko, Inc.
465,044    
25,025
1
Groupon, Inc.
910,159    
109,217
1
Houghton Mifflin Harcourt Co.
1,236,336  
78,097
1
International Game Technology PLC
1,464,319  
55,336
1
iRobot Corp.
4,841,900  
35,591
 
Jack in the Box, Inc.
3,874,436  
33,030
1,2
Kirkland’s, Inc.
642,764    
9,612
 
Kontoor Brands, Inc.
532,313    
51,427
1
Lakes Gaming, Inc.
2,340,443  
16,947
1
LGI Homes, Inc.
2,896,242  
32,929
1
Lovesac Co./The
1,998,790  
11,968
1
National Vision Holdings, Inc.
646,033    
18,208
1
Neogames SA
878,536    
26,552
1
Onewater Marine, Inc.
1,247,413  
15,766
 
Papa Johns International, Inc.
1,799,216  
239,681
1
Party City Holdco, Inc.
2,046,876  
139,473
1
Perdoceo Education Corp.
1,654,150  
Annual Shareholder Report
7
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Consumer Discretionary—   continued
 
177,104
1
Red Rock Resorts, Inc.
$6,977,898  
89,309
1
Revolve Group, Inc.
6,216,799  
2,299
1
RH
1,526,720  
199,438
1
Sally Beauty Holdings, Inc.
3,773,367  
32,401
1
Scientific Games Corp.
1,999,466  
32,424
1
SeaWorld Entertainment, Inc.
1,537,222  
82,230
 
Shutterstock, Inc.
8,921,133  
12,810
 
Signet Jewelers Ltd.
824,195    
15,189
1
Sleep Number Corp.
1,506,901  
332,294
1
Sonos, Inc.
11,091,974 
8,686
 
The Aaron’s Company, Inc.
250,765    
48,220
 
Wingstop, Inc.
8,260,568  
85,142
1,3
XPEL, Inc.
7,884,149  
161,200
1
YETI Holdings, Inc.
15,528,396 
 
 
TOTAL
156,088,364
 
 
Consumer Staples—   3.3%
 
142,998
1
Bellring Brands, Inc.
4,728,944  
106,377
1
BJ’s Wholesale Club Holdings, Inc.
5,386,931  
104,269
1
Central Garden & Pet Co., Class A
4,515,890  
20,765
 
Coca-Cola Bottling Co.
8,288,350  
63,944
 
Energizer Holdings, Inc.
2,740,000  
578,441
1
Veru, Inc.
3,973,890  
 
 
TOTAL
29,634,005
 
 
Energy—   1.5%
 
131,658
1
Antero Resources Corp.
1,790,549  
50,592
 
Cactus, Inc.
1,823,336  
10,533
1
Callon Petroleum Corp.
414,579    
107,524
1
Centennial Resource Development, Inc.
560,200    
31,803
1
Laredo Petroleum
1,751,073  
435,941
1
Magnolia Oil & Gas Corp.
6,103,174  
29,345
 
Matador Resources Co.
906,760    
 
 
TOTAL
13,349,671
 
 
Financials—   5.8%
 
168,505
 
Artisan Partners Asset Management, Inc.
8,103,405  
24,541
 
CNB Financial Corp.
565,916    
41,164
 
Cowen Group, Inc.
1,645,737  
48,612
1
Customers Bancorp, Inc.
1,760,727  
120,802
1
Donnelley Financial Solutions, Inc.
3,891,032  
533,842
 
Eastern Bankshares, Inc.
9,742,617  
26,294
 
Great Western Bancorp, Inc.
809,855    
127,893
1
Green Dot Corp.
5,892,031  
Annual Shareholder Report
8
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Financials—   continued
 
36,685
 
Guaranty Bancshares, Inc.
$1,227,113  
39,779
 
Houlihan Lokey, Inc.
3,544,309  
172,321
 
Moelis & Co.
10,210,019 
19,166
 
Origin Bancorp, Inc.
779,673    
72,336
 
StepStone Group, Inc.
3,292,011  
 
 
TOTAL
51,464,445
 
 
Health Care—   27.8%
 
51,904
1,4
Adeptus Health, Inc.
0          
962,850
1
Akebia Therapeutics, Inc.
2,378,239  
37,653
1
Alector, Inc.
904,990    
11,008
1
Alkermes, Inc.
284,777    
33,798
1
Amphastar Pharmaceuticals, Inc.
708,068    
23,779
1
AnaptysBio, Inc.
546,441    
135,073
1
ANI Pharmaceuticals, Inc.
4,583,027  
196,022
1
Antigenics, Inc.
1,015,394  
132,923
1
Apellis Pharmaceuticals, Inc.
8,505,743  
13,276
1,2
Apollo Medical Holdings, Inc.
1,173,200  
33,931
1,2
Aravive, Inc.
140,814    
53,500
1
Arvinas, Inc.
5,408,850  
362,368
1
Assembly Biosciences, Inc.
1,257,417  
44,624
1
Atreca, Inc.
244,986    
10,419
1
AtriCure, Inc.
879,989    
89,064
1
Avid Bioservices, Inc.
2,284,492  
55,080
1
AxoGen, Inc.
1,121,980  
19,999
1
Axonics, Inc.
1,358,932  
293,809
1
BioCryst Pharmaceuticals, Inc.
4,736,201  
81,948
1
Biohaven Pharmaceutical Holding Co. Ltd.
10,326,267 
20,561
1
Blueprint Medicines Corp.
1,806,695  
8,224
1,2
Cassava Sciences, Inc.
571,815    
373,362
1
Catalyst Pharmaceutical Partners, Inc.
2,180,434  
48,932
1,2
Co-Diagnostics, Inc.
494,703    
89,399
1
Collegium Pharmaceutical, Inc.
2,225,141  
103,759
1
Community Health Systems, Inc.
1,382,070  
19,619
1,2
Cortexyme, Inc.
1,108,670  
281,779
1
Cross Country Healthcare, Inc.
4,626,811  
77,434
1
Cutera, Inc.
4,022,696  
478,874
1
Cytomx Therapeutics, Inc.
2,590,708  
73,675
1
Denali Therapeutics, Inc.
3,759,635  
223,465
1
Dicerna Pharmaceuticals, Inc.
8,382,172  
73,633
1
Eagle Pharmaceuticals, Inc.
3,423,934  
88,954
1
Endo International PLC
450,107    
Annual Shareholder Report
9
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
81,173
1
Evolent Health, Inc.
$1,862,109  
70,764
1
Evolus, Inc.
765,666    
212,114
1
GlycoMimetics, Inc.
428,470    
91,049
1
Harpoon Therapeutics, Inc.
891,370    
79,680
1
Health Catalyst, Inc.
4,626,221  
195,405
1
Homology Medicines, Inc.
1,242,776  
108,828
1
Hookipa Pharma, Inc.
841,240    
38,229
1
IDEAYA Biosciences, Inc.
936,610    
53,411
1
Inogen, Inc.
4,260,595  
324,022
1
Inovalon Holdings, Inc.
12,273,953 
68,465
1
Intellia Therapeutics, Inc.
9,711,760  
24,797
1
iRhythm Technologies, Inc.
1,267,623  
316,943
1
Ironwood Pharmaceuticals, Inc.
4,205,834  
49,880
1
Krystal Biotech, Inc.
2,914,987  
96,760
2
LeMaitre Vascular, Inc.
5,269,550  
5,394
1
LHC Group, Inc.
1,160,681  
32,139
1
Ligand Pharmaceuticals, Inc., Class B
3,648,098  
3,298
1
Madrigal Pharmaceuticals, Inc.
287,981    
84,062
1
Magenta Therapeutics, Inc.
598,521    
101,846
1,2
Mannkind Corp.
417,569    
45,557
1
MeiraGTx Holdings PLC
637,342    
14,699
1
Merit Medical Systems, Inc.
1,030,253  
15,493
1
Morphic Holding, Inc.
892,707    
374,788
1
NextCure, Inc.
2,597,281  
42,419
1
NextGen Healthcare, Inc.
688,036    
1,782
1
Omnicell, Inc.
261,063    
113,620
1
OptimizeRX Corp.
6,279,777  
110,829
1
Organogenesis Holdings, Inc.
1,700,117  
84,013
1
Ortho Clinical Diagnostics Holdings PLC
1,887,772  
34,780
1
Orthofix Medical, Inc.
1,382,157  
35,054
1
Pacira BioSciences, Inc.
2,066,433  
75,623
1,2
PAVmed, Inc.
519,530    
38,233
1
Precision Biosciences, Inc.
376,977    
46,601
1
Prestige Consumer Healthcare, Inc.
2,448,883  
212,564
1
Progyny, Inc.
11,837,689 
118,841
1
Protagonist Therapeutics, Inc.
5,874,311  
30,827
1
Prothena Corp. PLC
1,544,433  
148,540
1,2
Puma Biotechnology, Inc.
1,117,021  
28,570
1
Radius Health, Inc.
432,264    
144,208
 
Select Medical Holdings Corp.
5,689,006  
225,611
1
Selecta Biosciences, Inc.
780,614    
Annual Shareholder Report
10
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Health Care—   continued
 
95,600
1,2
Senseonics Holdings, Inc.
$293,492    
167,404
1,2
Sesen Bio, Inc.
624,417    
94,191
1
Shockwave Medical, Inc.
17,142,762 
111,500
1
SI-BONE, Inc.
3,382,910  
24,148
1
Staar Surgical Co.
3,089,012  
34,944
1,2
Stoke Therapeutics, Inc.
1,000,447  
80,841
1
Surgery Partners, Inc.
4,410,685  
68,829
1
The Joint Corp.
5,436,803  
150,306
1
Translate Bio, Inc.
4,154,458  
207,043
1
Vanda Pharmaceuticals, Inc.
3,376,871  
57,869
1,2
Verastem, Inc.
186,917    
44,719
1
Vericel Corp.
2,367,424  
144,865
1
Vocera Communications, Inc.
6,078,535  
354,898
1
Voyager Therapeutics, Inc.
1,117,929  
115,088
1
Xencor, Inc.
3,542,409  
 
 
TOTAL
248,745,749
 
 
Industrials—   11.9%
 
99,651
 
Advanced Drainage System, Inc.
12,166,391 
7,074
1
Allegiant Travel Co.
1,344,909  
67,000
 
Apogee Enterprises, Inc.
2,657,890  
103,228
1
Atkore, Inc.
7,753,455  
83,470
1
Atlas Air Worldwide Holdings, Inc.
5,589,986  
50,108
1
Avis Budget Group, Inc.
4,147,439  
32,379
1
Beacon Roofing Supply, Inc.
1,731,629  
3,145
1
BlueLinx Holdings, Inc.
135,109    
173,929
 
Boise Cascade Co.
8,896,468  
41,144
1
Cimpress PLC
4,206,974  
163,237
1
Echo Global Logistics, Inc.
5,048,920  
36,543
1
Evoqua Water Technologies Corp.
1,206,284  
108,824
1
Franklin Covey Co.
3,981,870  
99,652
1
GMS, Inc.
4,895,903  
113,267
 
Heidrick & Struggles International, Inc.
4,837,634  
19,715
1
Herc Holdings, Inc.
2,445,449  
196,159
1
Mistras Group, Inc.
2,059,670  
303,184
1
MRC Global, Inc.
2,780,197  
58,981
1
MYR Group, Inc.
5,640,353  
155,446
1
Resideo Technologies, Inc.
4,585,657  
81,329
 
REV Group, Inc.
1,228,881  
20,501
 
Rexnord Corp.
1,154,821  
9,715
1
Saia, Inc.
2,195,590  
28,082
 
Tennant Co.
2,221,848  
Annual Shareholder Report
11
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Industrials—   continued
 
5,839
 
Terex Corp.
$279,805    
105,253
1
TriNet Group, Inc.
8,733,894  
24,116
1
Upwork, Inc.
1,248,968  
82,476
 
Werner Enterprises, Inc.
3,769,978  
 
 
TOTAL
106,945,972
 
 
Information Technology—   22.4%
 
147,863
1
Altair Engineering, Inc.
10,314,923 
56,551
1
Ambarella, Inc.
5,569,708  
120,650
1
Asana, Inc.
8,573,389  
182,294
1
Avaya Holdings Corp.
4,415,161  
142,936
1
Axcelis Technologies, Inc.
5,510,183  
57,713
1
Blackbaud, Inc.
4,116,668  
115,658
1
Box, Inc.
2,766,539  
178,566
1
Brightcove, Inc.
2,048,152  
109,589
1
Cambium Networks Corp.
4,827,395  
150,254
1
ChannelAdvisor Corp.
3,499,416  
84,532
1,2
Coda Octopus Group, Inc.
765,860    
278,777
1
Commvault Systems, Inc.
21,072,753 
139,914
1
Domo, Inc.
12,358,604 
50,524
 
Evertec, Inc.
2,207,899  
21,248
1
Evo Payments, Inc.
620,442    
33,385
1
Exlservice Holding, Inc.
3,779,850  
357,846
1
Extreme Networks, Inc.
3,939,884  
48,385
1
FormFactor, Inc.
1,802,825  
215,794
1
Grid Dynamics Holdings, Inc.
4,542,464  
43,186
1
Ichor Holdings Ltd.
2,227,102  
161,433
1
MA-COM Technology Solutions Holdings, Inc.
9,963,645  
89,084
1
Mimecast Ltd.
4,948,616  
24,281
1
OSI Systems, Inc.
2,429,314  
78,678
1
Rapid7, Inc.
8,949,622  
29,216
1
Rimini Street, Inc.
253,887    
172,715
1
Secureworks Corp.
3,464,663  
41,939
1
Semtech Corp.
2,596,443  
4,143
1
Sitime Corp.
561,957    
84,222
1
SMART Global Holdings, Inc.
3,944,958  
119,977
1
Sprout Social, Inc.
10,658,757 
119,992
1
SPS Commerce, Inc.
13,073,128 
12,896
 
TTEC Holdings, Inc.
1,347,632  
45,167
1
Ultra Clean Holdings, Inc.
2,439,470  
163,745
1
Workiva, Inc.
21,249,189 
Annual Shareholder Report
12
Shares
 
 
Value
          
 
COMMON STOCKS—   continued
 
 
 
Information Technology—   continued
 
534,113
1
Zuora, Inc.
$9,234,814  
 
 
TOTAL
200,075,312
 
 
Materials—   1.6%
 
132,089
1
Koppers Holdings, Inc.
4,056,453  
15,427
 
Louisiana-Pacific Corp.
855,273    
19,079
 
Myers Industries, Inc.
404,093    
86,100
1,4
Rentech, Inc.
0          
103,128
1
Ryerson Holding Corp.
1,622,204  
137,495
 
Trinseo SA
7,474,228  
 
 
TOTAL
14,412,251
 
 
Real Estate—   4.0%
 
20,605
1
Marcus & Millichap Co., Inc.
819,873    
195,975
 
National Storage Affiliates Trust
10,615,966 
127,115
 
Plymouth Industrial REIT, Inc.
2,933,814  
235,040
 
RMR Group, Inc./The
9,222,970  
1,077,085
 
Uniti Group, Inc.
12,612,665 
 
 
TOTAL
36,205,288
 
 
TOTAL COMMON STOCKS
(IDENTIFIED COST $721,367,728)
881,047,593
 
 
INVESTMENT COMPANIES—   2.6%
 
6,436,827
 
Federated Hermes Government Obligations Fund, Premier Shares, 0.01%5
6,436,827  
16,724,292
 
Federated Hermes Institutional Prime Value Obligations Fund, Institutional
Shares, 0.02%5
16,730,982 
 
 
TOTAL INVESTMENT COMPANIES
(IDENTIFIED COST $23,167,809)
23,167,809
 
 
TOTAL INVESTMENT IN SECURITIES—101.0%
(IDENTIFIED COST $744,535,537)6
904,215,402
 
 
OTHER ASSETS AND LIABILITIES - NET—(1.0)%7
(9,210,372)
 
 
TOTAL NET ASSETS—100%
$895,005,030
Annual Shareholder Report
13
An affiliated company is a company in which the Fund, alone or in combination with other funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the period ended July 31, 2021, were as follows:  
 
Value as of
7/31/2020
Purchases
at Cost*
Proceeds
from Sales*
Consumer Discretionary:
 
 
 
Wingstop, Inc.**
$19,605,937
$6,652,308
$(16,871,705)
Lovesac Co./The
$872,806
$3,333,696
$(3,811,679)
Health Care:
 
 
 
Alector, Inc.
$411,776
$1,369,768
$(361,562)
Amphastar Pharmaceuticals, Inc.
$—
$686,809
$—
AnaptysBio, Inc.**
$5,832,007
$—
$(7,709,808)
IDEAYA Biosciences, Inc.
$—
$1,853,821
$(808,643)
Translate Bio, Inc.
$—
$9,019,559
$(3,986,353)
Information Technology:
 
 
 
Domo, Inc.
$3,144,887
$11,036,800
$(5,667,668)
Grid Dynamics Holdings, Inc.
$—
$3,430,951
$—
Financials:
 
 
 
StepStone Group, Inc.
$—
$2,459,000
$—
Affiliated issuers no longer in the portfolio at period end
$4,484,899
$3,849,920
$(10,964,411)
TOTAL OF AFFILIATED COMPANIES TRANSACTIONS
$34,352,312
$43,692,632
$(50,181,829)
Annual Shareholder Report
14
 
Change in
Unrealized
Appreciation/
Depreciation
Net
Realized Gain/
(Loss)*
Value as of
7/31/2021
Shares
Held as of
7/31/2021
Dividend
Income*
 
 
 
 
 
$(8,381,418)
$7,255,446
$8,260,568
48,220
$193,524
$957,042
$646,925
$1,998,790
32,929
$—
 
 
 
 
 
$(431,833)
$(83,159)
$904,990
37,653
$—
$21,259
$—
$708,068
33,798
$—
$(269,798)
$2,694,040
$546,441
23,779
$—
$80,159
$(188,727)
$936,610
38,229
$—
$7,629
$(886,377)
$4,154,458
150,306
$—
 
 
 
 
 
$1,737,366
$2,107,219
$12,358,604
139,914
$—
$1,111,513
$—
$4,542,464
215,794
$—
 
 
 
 
 
$833,011
$—
$3,292,011
72,336
$—
$(444,139)
$3,073,731
$—
—
$—
$(4,779,209)
$14,619,098
$37,703,004
792,958
$193,524
 
*
A portion of the amount shown may have been recorded when the Fund did not have ownership
of at least 5% of the voting shares.
**
At July 31, 2021, the Fund no longer has ownership of at least 5% of the voting shares.
Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended July 31, 2021, were as follows:  
 
Federated
Hermes
Government
Obligations Fund,
Premier Shares*
Federated
Hermes
Institutional
Prime Value
Obligations Fund,
Institutional Shares*
Total of
Affiliated
Transactions
Value as of 7/31/2020
$35,185,159
$62,871,883
$98,057,042
Purchases at Cost
$149,371,203
$323,592,884
$472,964,087
Proceeds from Sales
$(178,119,535)
$(369,732,026)
$(547,851,561)
Change in Unrealized Appreciation/
Depreciation
N/A
$—
$—
Net Realized Gain/(Loss)
N/A
$(1,759)
$(1,759)
Value as of 7/31/2021
$6,436,827
$16,730,982
$23,167,809
Shares Held as of 7/31/2021
6,436,827
16,724,292
23,161,119
Dividend Income
$9,573
$37,342
$46,915
 
*
All or a portion of the balance/activity for the fund relates to cash collateral received on
securities lending transactions.
Annual Shareholder Report
15
 
1
Non-income-producing security.
2
All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers.
3
Denotes a restricted security that either: (a) cannot be offered for public sale without first being
registered, or availing of an exemption from registration, under the Securities Act of 1933; or
(b) is subject to a contractual restriction on public sales. At July 31, 2021, these restricted
securities amounted to $7,884,149, which represented 0.9% of total net assets.
4
Market quotations and price evaluations are not available. Fair value determined using
significant unobservable inputs in accordance with procedures established by and under the
general supervision of the Fund’s Board of Trustees (the “Trustees”).
5
7-day net yield.
6
The cost of investments for federal tax purposes amounts to $750,445,756.
7
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 total net assets at July 31, 2021.
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 July 31, 2021, 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
Equity Securities:
 
 
 
 
Common Stocks
 
 
 
 
Domestic
$829,550,864
$—
$0
$829,550,864
International
51,496,729
—
—
51,496,729
Investment Companies
23,167,809
—
—
23,167,809
TOTAL SECURITIES
$904,215,402
$—
$0
$904,215,402
 
The following acronym(s) are used throughout this portfolio:
 
REIT
—Real Estate Investment Trust
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
16
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$23.89
$23.30
$25.67
$21.89
$17.66
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.15)
(0.07)
(0.08)
(0.11)
(0.08)
Net realized and unrealized gain (loss)
10.16
0.66
(0.84)
5.09
4.63
Total From Investment Operations
10.01
0.59
(0.92)
4.98
4.55
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(0.14)
—
(1.45)
(1.20)
(0.32)
Net Asset Value, End of Period
$33.76
$23.89
$23.30
$25.67
$21.89
Total Return2
42.03%
2.53%
(2.83)%
23.50%
26.00%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.13%
1.13%
1.13%
1.14%
1.15%
Net investment income (loss)
(0.50)%
(0.32)%
(0.36)%
(0.48)%
(0.39)%
Expense waiver/reimbursement4
0.23%
0.30%
0.29%
0.44%
0.70%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$129,226
$92,389
$82,170
$82,953
$47,681
Portfolio turnover
163%
227%
142%
129%
118%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$20.69
$20.32
$22.77
$19.69
$16.03
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.33)
(0.21)
(0.23)
(0.26)
(0.21)
Net realized and unrealized gain (loss)
8.77
0.58
(0.77)
4.54
4.19
Total From Investment Operations
8.44
0.37
(1.00)
4.28
3.98
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(0.14)
—
(1.45)
(1.20)
(0.32)
Net Asset Value, End of Period
$28.99
$20.69
$20.32
$22.77
$19.69
Total Return2
40.93%
1.82%
(3.58)%
22.54%
25.08%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.88%
1.88%
1.88%
1.89%
1.90%
Net investment income (loss)
(1.25)%
(1.07)%
(1.12)%
(1.23)%
(1.15)%
Expense waiver/reimbursement4
0.15%
0.20%
0.29%
0.41%
0.66%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$28,084
$17,481
$22,639
$18,008
$10,007
Portfolio turnover
163%
227%
142%
129%
118%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent
deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
18
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$25.05
$24.37
$26.71
$22.67
$18.24
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.08)
(0.02)
(0.02)
(0.06)
(0.03)
Net realized and unrealized gain (loss)
10.67
0.70
(0.87)
5.30
4.78
Total From Investment Operations
10.59
0.68
(0.89)
5.24
4.75
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(0.14)
—
(1.45)
(1.20)
(0.32)
Net Asset Value, End of Period
$35.50
$25.05
$24.37
$26.71
$22.67
Total Return2
42.40%
2.79%
(2.60)%
23.85%
26.27%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.88%
0.88%
0.88%
0.89%
0.90%
Net investment income (loss)
(0.25)%
(0.07)%
(0.10)%
(0.25)%
(0.15)%
Expense waiver/reimbursement4
0.16%
0.19%
0.25%
0.41%
0.63%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$428,578
$354,204
$455,597
$364,248
$112,742
Portfolio turnover
163%
227%
142%
129%
118%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
19
Financial Highlights–Class R6 Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended July 31,
 
2021
2020
2019
2018
2017
Net Asset Value, Beginning of Period
$25.06
$24.36
$26.70
$22.67
$18.24
Income From Investment Operations:
 
 
 
 
 
Net investment income (loss)1
(0.08)
(0.02)
(0.02)
(0.06)
(0.01)
Net realized and unrealized gain (loss)
10.67
0.72
(0.87)
5.29
4.76
Total From Investment Operations
10.59
0.70
(0.89)
5.23
4.75
Less Distributions:
 
 
 
 
 
Distributions from net realized gain
(0.14)
—
(1.45)
(1.20)
(0.32)
Net Asset Value, End of Period
$35.51
$25.06
$24.36
$26.70
$22.67
Total Return2
42.38%
2.87%
(2.60)%
23.81%
26.27%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.87%
0.87%
0.87%
0.88%
0.88%
Net investment income (loss)
(0.24)%
(0.07)%
(0.07)%
(0.24)%
(0.04)%
Expense waiver/reimbursement4
0.09%
0.09%
0.15%
0.30%
0.42%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$309,117
$283,103
$333,059
$89,307
$24,795
Portfolio turnover
163%
227%
142%
129%
118%
 
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
This expense decrease is reflected in both the net expense and the net investment income
(loss) ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by
investment companies in which the Fund may invest.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
20
Statement of Assets and Liabilities
July 31, 2021
 
Assets:
 
Investment in securities, at value including $6,040,073 of securities loaned and
$23,167,809 of investment in affiliated holdings and $37,703,004 of investment in
affiliated companies* (identified cost $744,535,537)
$904,215,402
Cash
180,244
Income receivable
202,731
Income receivable from affiliated holdings
570
Receivable for investments sold
3,155,045
Receivable for shares sold
554,320
Total Assets
908,308,312
Liabilities:
 
Payable for investments purchased
4,770,895
Payable for shares redeemed
1,762,236
Payable for collateral due to broker for securities lending
6,436,827
Payable for investment adviser fee (Note 5)
35,786
Payable for administrative fee (Note 5)
3,855
Payable for distribution services fee (Note 5)
17,758
Payable for other service fees (Notes 2 and 5)
73,767
Accrued expenses (Note 5)
202,158
Total Liabilities
13,303,282
Net assets for 25,574,905 shares outstanding
$895,005,030
Net Assets Consist of:
 
Paid-in capital
$544,298,463
Total distributable earnings (loss)
350,706,567
Total Net Assets
$895,005,030
Annual Shareholder Report
21
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
Class A Shares:
 
Net asset value per share ($129,225,613 ÷ 3,827,883 shares outstanding), no par value,
unlimited shares authorized
$33.76
Offering price per share (100/94.50 of $33.76)
$35.72
Redemption proceeds per share
$33.76
Class C Shares:
 
Net asset value per share ($28,084,479 ÷ 968,719 shares outstanding), no par value,
unlimited shares authorized
$28.99
Offering price per share
$28.99
Redemption proceeds per share (99.00/100 of $28.99)
$28.70
Institutional Shares:
 
Net asset value per share ($428,577,768 ÷ 12,073,974 shares outstanding), no par
value, unlimited shares authorized
$35.50
Offering price per share
$35.50
Redemption proceeds per share
$35.50
Class R6 Shares:
 
Net asset value per share ($309,117,170 ÷ 8,704,329 shares outstanding), no par value,
unlimited shares authorized
$35.51
Offering price per share
$35.51
Redemption proceeds per share
$35.51
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
22
Statement of Operations
Year Ended July 31, 2021
 
Investment Income:
 
Dividends (including $204,108 received from affiliated companies and holdings* and
net of foreign taxes withheld of $4,150)
$5,112,146
Net income on securities loaned (includes $36,331 received from affiliated holdings*
related to cash collateral balances) (Note 2)
214,499
TOTAL INCOME
5,326,645
Expenses:
 
Investment adviser fee (Note 5)
6,706,696
Administrative fee (Note 5)
657,609
Custodian fees
98,166
Transfer agent fees (Note 2)
747,194
Directors’/Trustees’ fees (Note 5)
5,321
Auditing fees
27,800
Legal fees
11,957
Portfolio accounting fees
154,107
Distribution services fee (Note 5)
168,597
Other service fees (Notes 2 and 5)
340,903
Share registration costs
74,380
Printing and postage
78,933
Miscellaneous (Note 5)
35,536
TOTAL EXPENSES
9,107,199
Waiver and Reimbursements:
 
Waiver/reimbursement of investment adviser fee (Note 5)
(731,804)
Waiver/reimbursements of other operating expenses (Notes 2 and 5)
(469,595)
TOTAL WAIVER AND REIMBURSEMENTS
(1,201,399)
Net expenses
7,905,800
Net investment loss
(2,579,155)
Realized and Unrealized Gain (Loss) on Investments:
 
Net realized gain on investments (including net realized gain of $14,617,339 on sales
of investments in affiliated companies and holdings*)
237,616,876
Net change in unrealized appreciation of investments (including net change in
unrealized appreciation of $(4,779,209) of investments in affiliated companies*)
50,774,142
Net realized and unrealized gain (loss) on investments
288,391,018
Change in net assets resulting from operations
$285,811,863
 
*
See information listed after the Fund’s Portfolio of Investments.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
23
Statement of Changes in Net Assets
 
 
Year Ended July 31
2021
2020
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment loss
$(2,579,155)
$(996,224)
Net realized gain (loss)
237,616,876
(33,014,524)
Net change in unrealized appreciation/depreciation
50,774,142
37,205,285
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
285,811,863
3,194,537
Distributions to Shareholders:
 
 
Class A Shares
(548,250)
—
Class C Shares
(104,815)
—
Institutional Shares
(1,863,850)
—
Class R6 Shares
(1,369,095)
—
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(3,886,010)
—
Share Transactions:
 
 
Proceeds from sale of shares
235,454,733
260,125,039
Proceeds from shares issued in connection with the tax-free transfer
of assets from PNC Multi-Factor Small Cap Growth Fund
—
102,652,108
Net asset value of shares issued to shareholders in payment of
distributions declared
3,462,937
—
Cost of shares redeemed
(373,015,518)
(512,259,924)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(134,097,848)
(149,482,777)
Change in net assets
147,828,005
(146,288,240)
Net Assets:
 
 
Beginning of period
747,177,025
893,465,265
End of period
$895,005,030
$747,177,025
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
24
Notes to Financial Statements
July 31, 2021
1. ORGANIZATION
Federated Hermes MDT Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of five portfolios. The financial statements included herein are only those of Federated Hermes MDT Small Cap Growth Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers four classes of shares: Class A Shares, Class C Shares, Institutional Shares and Class R6 Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide long-term capital appreciation.
On November 15, 2019, the Fund acquired all of the net assets of PNC Multi-Factor Small Cap Growth Fund (the “Acquired Fund”), an open-end investment company, in a tax-free reorganization in exchange for shares of the Fund, pursuant to a plan of reorganization approved by the Acquired Fund’s shareholders on November 5, 2019. The purpose of the transaction was to combine two portfolios with comparable investment objectives and strategies. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Fund’s realized gains and losses with amounts distributable to shareholders for tax purposes.
For every one share of the Acquired Fund’s Class A Shares exchanged, a shareholder received 0.896 shares of the Fund’s Class A Shares.
For every one share of the Acquired Fund’s Class C Shares exchanged, a shareholder received 0.971 shares of the Fund’s Class C Shares.
For every one share of the Acquired Fund’s Class I Shares exchanged, a shareholder received 0.883 shares of the Fund’s Institutional Shares.
For every one share of the Acquired Fund’s Class R6 Shares exchanged, a shareholder received 0.883 shares of the Fund’s R6 Shares.
The Fund received net assets from the Acquired Fund as the result of the tax-free reorganization as follows:  
Shares of the
Fund Issued
Acquired Fund’s
Net Assets
Received
Unrealized
Appreciation1
Net Assets
of the Fund
Immediately
Prior to
Combination
Net Assets
of the Fund
Immediately
After
Combination
4,360,352
$102,652,108
$20,727,223
$897,256,665
$999,908,773
 
1
Unrealized Appreciation is included in the Net Assets Received amount shown above.
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Assuming the acquisition had been completed on August 1, 2019, the beginning of the annual reporting period of the Fund, the Fund’s pro forma results of operations for the year ended July 31, 2020, were as follows:  
Net investment income (loss)
$(964,618)
Net realized and unrealized gain on investments
3,068,318
Net increase in net assets resulting from operations
$2,103,700
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the earnings of the Acquired Fund that have been included in the Fund’s Statement of Changes in Net Assets as of July 31, 2020.
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:
■
Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■
Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■
Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
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 asked quotations.
■
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■
For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, 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 Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the 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
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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.
Fair Valuation and Significant Events Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated MDTA LLC (the “Adviser”), and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee 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-party pricing 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 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 Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and 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 asked 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-income securities 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 Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser 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;
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■
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 Trustees have 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 Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.
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 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. Distributions of net investment income, if any, are declared and paid annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized
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gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursements of $1,201,399 is disclosed in various locations in this Note 2 and Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Transfer Agent Fees
For the year ended July 31, 2021, transfer agent fees for the Fund were as follows:  
 
Transfer Agent
Fees Incurred
Transfer Agent
Fees Reimbursed
Class A Shares
$216,321
$(168,719)
Class C Shares
24,041
(13,629)
Institutional Shares
428,705
(287,247)
Class R6 Shares
78,127
—
TOTAL
$747,194
$(469,595)
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees.
For the year ended July 31, 2021, other service fees for the Fund were as follows:  
 
Other Service
Fees Incurred
Class A Shares
$287,092
Class C Shares
53,811
TOTAL
$340,903
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code (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 July 31, 2021, 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 July 31, 2021, tax years 2018 through 2021 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
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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.
Securities Lending
The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund normally receives cash collateral for securities loaned that may be invested in affiliated money market funds, other money market instruments and/or repurchase agreements. Investments in money market funds may include funds with a “floating” NAV that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if the investee fund’s NAV decreases, result in the Fund recognizing losses and being required to cover the decrease in the value of the cash collateral. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund’s securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
Securities lending transactions are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated below, the cash collateral received by the Fund exceeds the market value of the securities loaned reducing the net settlement amount to zero. The chart below identifies the amount of collateral received as well as the market value of securities on loan. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.
As of July 31, 2021, securities subject to this type of arrangement and related collateral were as follows:  
Market Value of
Securities Loaned
Collateral
Received
$6,040,073
$6,436,827
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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:  
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
998,380
$30,777,217
609,482
$13,104,153
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
1,446,327
33,251,055
Shares issued to shareholders in payment of
distributions declared
14,857
426,682
—
—
Shares redeemed
(1,052,585)
(32,379,214)
(1,715,867)
(36,704,330)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
(39,348)
$(1,175,315)
339,942
$9,650,878
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
443,130
$12,346,176
126,433
$2,399,164
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
182,602
3,655,701
Shares issued to shareholders in payment of
distributions declared
4,048
100,360
—
—
Shares redeemed
(323,452)
(8,035,514)
(577,979)
(11,036,748)
NET CHANGE RESULTING FROM CLASS C
SHARE TRANSACTIONS
123,726
$4,411,022
(268,944)
$(4,981,883)
 
Year Ended
7/31/2021
Year Ended
7/31/2020
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
3,584,938
$119,334,739
7,454,551
$168,193,983
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
2,548,202
61,335,218
Shares issued to shareholders in payment of
distributions declared
56,977
1,717,850
—
—
Shares redeemed
(5,706,924)
(181,239,928)
(14,562,017)
(326,516,625)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
(2,065,009)
$(60,187,339)
(4,559,264)
$(96,987,424)
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Year Ended
7/31/2021
Year Ended
7/31/2020
Class R6 Shares:
Shares
Amount
Shares
Amount
Shares sold
2,252,100
$72,996,601
3,418,303
$76,427,739
Proceeds from shares issued in connection with
the tax-free transfer of assets from the
Acquired Fund
—
—
183,221
4,410,134
Shares issued to shareholders in payment of
distributions declared
40,386
1,218,045
—
—
Shares redeemed
(4,884,633)
(151,360,862)
(5,976,222)
(138,002,221)
NET CHANGE RESULTING FROM CLASS R6
SHARE TRANSACTIONS
(2,592,147)
$(77,146,216)
(2,374,698)
$(57,164,348)
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(4,572,778)
$(134,097,848)
(6,862,964)
$(149,482,777)
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 regulatory settlement proceeds.
For the year ended July 31, 2021, permanent differences identified and reclassified among the components of net assets were as follows:  
Increase (Decrease)
Paid-In Capital
Total Distributable
Earnings (Loss)
$(134)
$134
Net assets were not affected by this reclassification.
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended July 31, 2021 and 2020, was as follows:  
 
2021
2020
Long-term capital gains
$3,886,010
$—
As of July 31, 2021, the components of distributable earnings on a tax-basis were as follows:  
Undistributed ordinary income1
$132,977,030
Net unrealized appreciation
$153,769,646
Undistributed long-term capital gains
$63,959,891
 
1
For tax purposes, short-term capital gains are considered ordinary income in determining
distributable earnings.
The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable to differing treatments for deferral of losses on wash sales and non taxable dividends.
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At July 31, 2021, the cost of investments for federal tax purposes was $750,445,756. The net unrealized appreciation of investments for federal tax purposes was $153,769,646. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $177,262,514 and net unrealized depreciation from investments for those securities having an excess of cost over value of $23,492,868.
The Fund used capital loss carryforwards of $24,245,488 to offset capital gains realized during the year ended July 31, 2021.
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 0.80% of the Fund’s average daily net assets. 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 the year ended July 31, 2021, the Adviser voluntarily waived $704,029 of its fee and voluntarily reimbursed $469,595 of transfer agent fees.
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 July 31, 2021, the Adviser reimbursed $27,775.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:  
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended July 31, 2021, the annualized fee paid to FAS was 0.078% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
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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’s Class A Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:  
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class C Shares
0.75%
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 July 31, 2021, distribution services fees for the Fund were as follows:  
 
Distribution Services
Fees Incurred
Class C Shares
$168,597
For the year ended July 31, 2021, FSC retained $12,892 of fees paid by the Fund.
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended July 31, 2021, the Fund’s Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended July 31, 2021, FSC retained $4,780 in sales charges from the sale of Class A Shares. FSC also retained $735 of CDSC relating to redemptions of Class A Shares and $144 relating to redemptions of Class C Shares, respectively.
Other Service Fees
For the year ended July 31, 2021, FSSC received $16,456 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Effective October 1, 2021, total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class C Shares,Institutional Shares and Class R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.13%, 1.98%, 0.88% and 0.87% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) October 1, 2022; or (b) the date of the Fund’s next effective Prospectus. Prior to October 1, 2021, the Fee Limit for the Class C Shares was 1.88%. While the Adviser and
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34
its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the 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. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended July 31, 2021, were as follows:  
Purchases
$1,324,073,469
Sales
$1,466,926,852
7. CONCENTRATION OF RISK
The Fund may invest a portion of its assets in securities of companies that are deemed by the Fund’s management to be classified in similar business sectors. Economic developments may have an effect on the liquidity and volatility of the portfolio securities. A substantial portion of the Fund’s portfolio may be comprised of entities in the Health Care and Information Technology sector. As a result, the Fund may be more susceptible to any economic, business, political or other developments which generally affect these entities.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 23, 2021. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), or a replacement rate as appropriate, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of July 31, 2021, the Fund had no outstanding loans. During the year ended July 31, 2021, the Fund did not utilize the LOC.
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9. 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 July 31, 2021, there were no outstanding loans. During the year ended July 31, 2021, the program was not utilized.
10. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
11. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended July 31, 2021, the amount of long-term capital gains designated by the Fund was $3,886,010.
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Report of Independent Registered Public Accounting Firm
TO THE board of trustees OF federated Hermes MDT Series and shareholders of Federated Hermes MDT Small Cap Growth Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes MDT Small Cap Growth Fund (the “Fund”) (one of the portfolios constituting Federated Hermes MDT Series (the “Trust”)), including the portfolio of investments, as of July 31, 2021, 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 five years in the period then ended 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 MDT Series) at July 31, 2021, 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 five years in the period then ended, 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 standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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.
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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 July 31, 2021, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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
September 23, 2021
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from February 1, 2021 to July 31, 2021.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Annual Shareholder Report
39
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.  
 
Beginning
Account Value
2/1/2021
Ending
Account Value
7/31/2021
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$1,064.60
$5.78
Class C Shares
$1,000
$1,060.40
$9.60
Institutional Shares
$1,000
$1,065.70
$4.51
Class R6 Shares
$1,000
$1,065.70
$4.46
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,019.19
$5.66
Class C Shares
$1,000
$1,015.47
$9.39
Institutional Shares
$1,000
$1,020.43
$4.41
Class R6 Shares
$1,000
$1,020.48
$4.36
 
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 181/365 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
 
Class A Shares
1.13%
Class C Shares
1.88%
Institutional Shares
0.88%
Class R6 Shares
0.87%
Annual Shareholder Report
40
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2020, the Trust comprised five portfolio(s), and the Federated Hermes Fund Family consisted of 41 investment companies (comprising 163 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
Annual Shareholder Report
41
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Vice President, Federated Hermes, Inc.; President, Director/Trustee
and CEO, Federated Advisory Services Company, Federated Equity
Management Company of Pennsylvania, Federated Global Investment
Management Corp., Federated Investment Counseling, Federated
Investment Management Company; President of some of the Funds in
the Federated Hermes Fund Family and Director, Federated Investors
Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Director, Federated Hermes, Inc.;
Chairman and Director, Southpointe Distribution Services, Inc. and
President, Technology, Federated Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors,
Director, KLX Energy Services Holdings, Inc. (oilfield services); former
Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
42
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty
Furniture Companies, Inc.; formerly, Director, Member of Governance
and Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; and Director and Vice Chair, Our Campaign for the
Church Alive!, Inc.
Annual Shareholder Report
43
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity and
Director, The Golisano Children’s Museum of Naples, Florida.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Senior Vice President for Legal Affairs, General Counsel
and Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Director of Risk Management and Associate General Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms. Reilly served as Assistant General Counsel of Compliance and
Enterprise Risk as well as Senior Counsel of Environment, Health and
Safety, PPG Industries.
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
Annual Shareholder Report
44
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
OFFICERS 
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Annual Shareholder Report
45
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: June 2006
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen F. Auth
Birth Date:
September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: June 2012
Principal Occupations: Stephen F. Auth is Chief Investment Officer of
various Funds in the Federated Hermes Fund Family; Executive Vice
President, Federated Investment Counseling, Federated Global
Investment Management Corp. and Federated Equity Management
Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment
Management Company and Passport Research, Ltd. (investment
advisory subsidiary of Federated); Senior Vice President, Global
Portfolio Management Services Division; Senior Vice President,
Federated Investment Management Company and Passport
Research, Ltd.; Senior Managing Director and Portfolio Manager,
Prudential Investments.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR VICE
PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
 
Annual Shareholder Report
46
Evaluation and Approval of Advisory Contract–May 2021
Federated Hermes MDT Small Cap Growth Fund (the “Fund”)
At its meetings in May 2021 (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 MDTA LLC (the “Adviser”) 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 presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (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. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.
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 on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional
Annual Shareholder Report
47
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: the Adviser’s investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate) and comments on the reasons for the Fund’s performance; the Fund’s investment objectives; the Fund’s expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring and managing the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund’s relationship to the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the “Federated Hermes Funds”), which include a comprehensive array of funds with different investment objectives, policies and strategies, and the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Hermes Funds and Federated Hermes’ affiliates that service them (including communications from regulatory agencies), as well as Federated Hermes’ responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Hermes Funds and/or Federated Hermes may be responding to them. The Board noted that its evaluation process is evolutionary and that the criteria considered and the emphasis placed on relevant criteria may change in recognition of changing circumstances in the mutual fund marketplace.
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the
Annual Shareholder Report
48
fund, its benchmark, and comparable funds); (2) an adviser’s cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with a fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the 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 an adviser’s services and fees). The Board noted 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 review 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 Federated Hermes Funds.
In addition to considering the above-referenced factors, the Board was mindful of 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 have invested in the Fund 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 in the marketplace there are a range of investment options available to the Fund’s shareholders 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 Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection
Annual Shareholder Report
49
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 Federated Hermes Funds family, 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 the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by the Adviser and its affiliates. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade execution 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 the Adviser’s ability and experience in attracting and retaining qualified personnel to service the Fund. The Fund’s ability to deliver competitive performance when compared to its Performance Peer Group (as defined below) was also deemed to be relevant by the Board as 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 significant acquisition of Hermes Fund Managers Limited by Federated Hermes in 2018, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters.
The Board considered the quality of the Adviser’s communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account the Adviser’s communications with the Board in light of the market volatility amidst the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
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50
The Board received and evaluated information regarding the Adviser’s regulatory and compliance environment. The Board considered the Adviser’s compliance program, compliance history, and reports from the CCO about the Adviser’s 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, in particular, the compliance-related resources devoted by the Adviser and its affiliates in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including the Adviser’s commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ 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 to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered discussions with Federated Hermes regarding the implementation of its business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. 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, including changes associated with the pandemic.
Based on these considerations, the Board concluded that the nature, extent and quality of the Adviser’s investment management and related services warrant the continuation of the Contract.
Fund Investment Performance
In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks, as disclosed in the Fund’s prospectus. 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 include, among other items, information on the Fund’s gross and net returns, the Fund’s investment performance compared to one or more relevant investment categories and the Fund’s benchmark index, portfolio attribution information and commentary on the effect of current and recent market conditions.
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The Board also reviewed comparative information regarding the performance of other mutual funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”), noting 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, in evaluating such comparisons, that in some cases there may be differences in the funds’ investment objectives or investment management techniques, or the costs to implement funds, even within the same Performance Peer Group. In this connection, the Board considered that the Fund’s quantitative focus makes fee and expense comparisons particularly difficult as the funds in the Performance Peer Group varied widely in their complexity, and the management of the Fund is among the more complex relative to its Performance Peer Group. The Board also considered a report comparing the performance of the Fund solely to other funds with a quantitative focus in the Performance Peer Group.
For the periods ended December 31, 2020, the Fund’s performance for the five-year period was above the median of the Performance Peer Group, and the Fund’s performance fell below the median of the Performance Peer Group for the one-year and three-year periods. In addition, the Board was informed by the Adviser that, for the same periods, the Fund outperformed its benchmark index for the five-year period and underperformed its benchmark index for the one-year and three-year periods. 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.
Following such evaluation and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Contract.
Fund Expenses
The Board considered the advisory 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 advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
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While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its deliberations. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because such comparisons are believed to be more relevant. The Board considered that other mutual funds are the products most like the Fund, in that they are readily available to 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 mutual funds’ fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.
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 below the median of the Expense Peer Group, and the Board was satisfied that the overall expense structure of the Fund remained competitive.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-mutual fund clients (such as institutional separate accounts) and third-party unaffiliated mutual funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that mon-mutual 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, addressing different administrative responsibilities, and addressing different degrees of risk associated with management; and (vi) 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 mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s mutual 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
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unaffiliated third-party mutual 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’ advisory fees.
Following such evaluation and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Contract.
Profitability and Other Benefits
The Board also received financial information about Federated Hermes, including information regarding the compensation and ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. This information covered not only the fees under the Federated Hermes Funds’ investment advisory contracts, but also fees received by Federated Hermes’ affiliates for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of 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 any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds. In addition, the Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Hermes Fund shareholders and/or reported to the Board their intention to do so (or continue to do so) in the future. Moreover, the Board received and considered regular reports from Federated Hermes throughout the year as to the institution, adjustment or elimination of these voluntary waivers and/or reimbursements.
The Board received and considered information furnished by Federated Hermes, as requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses 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 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. The allocation information, including the CCO’s view that cost allocations on a fund-by-fund basis may be unreliable, was considered in the evaluation by the Board. In addition, the Board considered
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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 that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
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 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.
In 2019, the Board approved a reduction of 5 basis points in the contractual advisory fee.
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 calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as personnel and processes for the portfolio management (including market data on which portfolio managers make investment decisions), trading operations, issuer engagement (including with respect to ESG matters), shareholder services, compliance, business continuity, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and use of data. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments (as well as the benefits of any economies of scale, should they exist) are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and that such waivers and 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 also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in
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connection with the May Meetings. The Board considered the beliefs of Federated Hermes and the CCO that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply breakpoints, at higher levels and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fees as a fund attains a certain size.
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 was 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 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 for future reporting to the Board or further consideration by management 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. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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56
Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes MDT Series (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes MDT Small Cap Growth Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of the Fund’s investment adviser as the administrator for the Program with respect to the Fund (the “Administrator”). Each affiliated Federated Hermes advisory subsidiary (including the Fund’s investment adviser) that serves as investment adviser to a Federated Hermes Fund (including the Fund) has been approved as the administrator of the Program with respect to each Federated Hermes Fund that is managed by such advisory subsidiary (collectively, the “Administrator”). The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2021, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2020 through March 31, 2021 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where
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57
applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
■ confirmation that the Fund did not utilize alternative funding sources during the Period;
■ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
■ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
■ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
■ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit; and
■ liquidity events during the Period, including the impact on liquidity caused by extended non-U.S. market closures and the March-April 2020 market conditions, and the fact that there were no specific liquidity events during the Period that materially affected the Fund’s liquidity risk.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual 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 mutual funds involves investment risk, including the possible loss of principal.
This Report 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 MDT Small Cap Growth Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31421R775
CUSIP 31421R767
CUSIP 31421R759
CUSIP 31421R619
37313 (9/21)
© 2021 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:   G. Thomas Hough and Thomas M. O'Neill. 

 

Item 4.Principal Accountant Fees and Services

 

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

Fiscal year ended 2021 – $149,400

Fiscal year ended 2020 - $146,200

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

Fiscal year ended 2021 - $0

Fiscal year ended 2020 - $0

 

Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $2,808 and $11,145 respectively. Fiscal year ended 2021- Audit consent fee for N-14 merger document. Fiscal year ended 2020- Audit consent fee for N-14 merger document.

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

Fiscal year ended 2021 - $0

Fiscal year ended 2020 - $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 2021 - $0

Fiscal year ended 2020 - $0

Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $43,494 and $42,456 respectively. Fiscal year ended 2021- Service fees for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2020- 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. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval 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 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 decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval 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 certain tax services; with limited exception, all tax services involving large and complex transactions must be specifically pre-approved 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 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 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 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 2021 – 0%

Fiscal year ended 2020 - 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 2021 – 0%

Fiscal year ended 2020 – 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 2021 – 0%

Fiscal year ended 2020 – 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 2021 - $60,979

Fiscal year ended 2020 - $150,395

(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.
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 Report to Stockholders filed under Item 1 of this form.

 

(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.

 

Item 7.Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

 

Not Applicable

 

Item 8.Portfolio Managers of Closed-End Management Investment Companies

 

Not Applicable

 

Item 9.Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

 

Not Applicable

 

Item 10.Submission of Matters to a Vote of Security Holders

 

No Changes to Report

 

Item 11.Controls and Procedures

 

(a) The registrant’s President and Treasurer 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 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 registrant’s most recent fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12.Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

 

Not Applicable

 

Item 13.Exhibits

 

(a)(1) Code of Ethics- Not Applicable to this Report.

 

(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.

 

(a)(3) 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 MDT Series

 

By /S/ Lori A. Hensler

 

Lori A. Hensler, Principal Financial Officer

 

Date September 23, 2021

 

 

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 September 23, 2021

 

 

By /S/ Lori A. Hensler

 

Lori A. Hensler, Principal Financial Officer

 

Date September 23, 2021