NPORT-EX 2 poi_fhgovtincomefund.htm POI - FEDERATED HERMES GOVERNMENT INCOME FUND EDGAR HTML
Federated Hermes Government Income Fund
Portfolio of Investments
April 30, 2021 (unaudited)  
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—98.0%
 
 
 
Federal Home Loan Mortgage Corporation—30.3%
 
$ 2,951,679
 
1.500%, 11/1/2050
$2,895,139  
 4,105,830
 
2.000%, 6/1/2050
4,154,804  
 4,000,000
 
2.000%, 4/1/2051
4,042,712  
 8,962,113
 
3.000%, 1/1/2046
9,654,403  
 7,357,715
 
3.000%, 7/1/2050
7,703,041  
12,197,069
 
3.000%, 10/1/2050
12,923,894 
 6,636,118
 
3.500%, 4/1/2050
7,082,851  
10,260,843
 
3.500%, 4/1/2050
11,049,706 
 4,936,868
 
4.000%, 4/1/2049
5,436,594  
   151,546
 
4.000%, 6/1/2049
162,624    
 2,642,523
 
4.000%, 4/1/2050
2,834,861  
   131,187
 
4.500%, 3/1/2024
137,116    
   250,649
 
4.500%, 11/1/2039
279,880    
   353,029
 
4.500%, 5/1/2040
396,663    
   585,361
 
4.500%, 6/1/2040
657,711    
   105,672
 
4.500%, 9/1/2040
118,733    
    76,374
 
5.000%, 8/1/2023
79,149     
    11,286
 
5.500%, 12/1/2021
11,416     
     2,075
 
5.500%, 1/1/2022
2,103      
     1,964
 
5.500%, 1/1/2022
1,990      
     6,476
 
5.500%, 1/1/2022
6,550      
   544,493
 
5.500%, 5/1/2034
626,282    
    18,169
 
5.500%, 12/1/2035
21,083     
    65,043
 
5.500%, 3/1/2036
75,554     
   219,429
 
5.500%, 1/1/2038
255,031    
    97,920
 
5.500%, 3/1/2038
113,981    
    75,359
 
5.500%, 11/1/2038
87,831     
    76,356
 
5.500%, 1/1/2039
88,884     
    72,805
 
6.000%, 3/1/2038
86,604     
    17,038
 
6.500%, 9/1/2029
19,141     
    29,057
 
7.000%, 2/1/2031
34,341     
    30,845
 
7.000%, 10/1/2031
35,085     
    30,015
 
7.000%, 1/1/2032
35,361     
    33,537
 
7.000%, 3/1/2032
38,918     
    87,299
 
7.500%, 6/1/2027
98,852     
    14,042
 
7.500%, 8/1/2029
16,329     
     4,293
 
7.500%, 1/1/2031
5,033      
    85,841
 
7.500%, 2/1/2031
100,551    
 
 
TOTAL
71,370,801
 
 
Federal National Mortgage Association—50.9%
 
13,301,205
 
2.000%, 9/1/2050
13,447,392 
 5,738,675
 
2.000%, 11/1/2050
5,801,746  
 5,500,000
 
2.000%, 5/1/2051
5,558,729  
 6,573,521
 
2.500%, 10/1/2050
6,829,985  
 1,781,725
 
3.000%, 6/1/2027
1,879,231  
1
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Federal National Mortgage Association—continued
 
$ 1,103,715
 
3.000%, 7/1/2027
$1,164,116  
 1,529,888
 
3.000%, 8/1/2045
1,617,946  
11,369,038
 
3.000%, 10/1/2046
12,051,849 
 4,544,087
 
3.000%, 9/1/2047
4,835,459  
10,362,281
 
3.000%, 3/1/2050
10,945,769 
 4,094,195
 
3.500%, 12/1/2041
4,467,814  
 2,125,599
 
3.500%, 9/1/2042
2,316,251  
   226,207
 
3.500%, 9/1/2042
246,497    
   669,152
 
3.500%, 12/1/2042
729,170    
 5,620,935
 
3.500%, 5/1/2049
6,077,670  
 4,274,506
 
3.500%, 9/1/2049
4,637,865  
 4,307,417
 
3.500%, 12/1/2049
4,666,842  
 5,351,395
 
3.500%, 12/1/2049
5,769,504  
 2,217,847
 
4.000%, 12/1/2031
2,409,771  
 1,390,134
 
4.000%, 12/1/2041
1,536,495  
 6,012,611
 
4.000%, 12/1/2041
6,645,654  
 1,336,797
 
4.000%, 6/1/2042
1,477,543  
 3,597,303
 
4.000%, 12/1/2042
3,974,924  
 1,644,569
 
4.500%, 9/1/2041
1,857,602  
   635,972
 
4.500%, 10/1/2041
714,379    
 1,260,815
 
4.500%, 11/1/2041
1,416,257  
   151,074
 
4.500%, 11/1/2041
169,699    
 2,413,829
 
4.500%, 8/1/2049
2,695,582  
    73,544
 
5.000%, 10/1/2023
76,521     
    43,910
 
5.000%, 4/1/2024
45,915     
   717,817
 
5.000%, 1/1/2040
824,161    
   276,114
 
5.500%, 12/1/2035
319,931    
     5,137
 
6.000%, 2/1/2022
5,202      
   522,928
 
6.000%, 2/1/2033
606,067    
    26,409
 
6.000%, 5/1/2036
31,166     
   104,262
 
6.000%, 7/1/2036
123,652    
   293,074
 
6.000%, 1/1/2037
347,464    
    25,867
 
6.000%, 9/1/2037
30,723     
    42,878
 
6.000%, 9/1/2037
50,992     
    85,360
 
6.000%, 6/1/2038
101,175    
    69,672
 
6.000%, 8/1/2038
82,782     
    38,019
 
6.000%, 10/1/2038
45,092     
     1,745
 
6.500%, 12/1/2027
1,952      
     2,798
 
6.500%, 6/1/2029
3,200      
     8,208
 
6.500%, 7/1/2029
9,377      
     6,568
 
6.500%, 8/1/2029
7,451      
     1,522
 
6.500%, 8/1/2029
1,731      
   128,676
 
6.500%, 5/1/2032
148,684    
    25,406
 
6.500%, 12/1/2035
30,138     
    28,017
 
6.500%, 7/1/2037
33,516     
   300,272
 
6.500%, 8/1/2037
358,008    
    64,087
 
6.500%, 9/1/2037
76,749     
       980
 
7.000%, 7/1/2029
1,129      
     2,465
 
7.000%, 9/1/2029
2,541      
       132
 
7.000%, 10/1/2031
144        
2
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Federal National Mortgage Association—continued
 
$    46,101
 
7.000%, 11/1/2031
$54,779     
    44,318
 
7.000%, 12/1/2031
52,717     
    12,178
 
7.000%, 12/1/2031
14,470     
    13,625
 
7.000%, 12/1/2031
16,055     
     5,249
 
7.000%, 1/1/2032
6,198      
    31,679
 
7.000%, 2/1/2032
37,756     
    16,930
 
7.500%, 7/1/2028
19,544     
    27,386
 
7.500%, 8/1/2031
32,433     
    52,085
 
8.000%, 12/1/2026
58,692     
 
 
TOTAL
119,599,848
 
 
Government National Mortgage Association—1.6%
 
   135,442
 
5.500%, 4/15/2034
154,070    
   393,085
 
5.500%, 6/15/2034
448,294    
    50,935
 
6.000%, 1/15/2032
58,775     
   177,960
 
6.000%, 5/15/2036
207,484    
     5,108
 
6.500%, 5/15/2027
5,680      
     4,193
 
6.500%, 1/15/2029
4,788      
    11,325
 
6.500%, 1/15/2029
12,852     
     6,330
 
6.500%, 1/20/2029
7,124      
     3,714
 
6.500%, 2/15/2029
4,026      
     2,060
 
6.500%, 3/20/2029
2,327      
     3,174
 
6.500%, 5/20/2029
3,595      
     7,391
 
6.500%, 7/20/2029
8,379      
     3,333
 
6.500%, 8/20/2029
3,785      
     1,698
 
6.500%, 10/20/2029
1,918      
     3,371
 
6.500%, 11/20/2029
3,847      
     2,632
 
6.500%, 10/20/2030
3,018      
     4,153
 
6.500%, 4/20/2031
4,783      
     2,197
 
6.500%, 5/20/2031
2,532      
    12,167
 
6.500%, 6/20/2031
14,032     
     2,507
 
6.500%, 7/15/2031
2,910      
       733
 
6.500%, 7/15/2031
851        
     3,315
 
6.500%, 7/20/2031
3,825      
     3,624
 
6.500%, 10/20/2031
4,188      
     2,988
 
6.500%, 11/20/2031
3,455      
     9,105
 
6.500%, 1/20/2032
10,513     
   131,829
 
6.500%, 10/20/2038
156,834    
    13,016
 
7.000%, 6/15/2026
14,380     
     4,339
 
7.000%, 6/15/2026
4,775      
     4,592
 
7.000%, 12/15/2026
5,053      
     6,345
 
7.000%, 6/15/2027
7,019      
     1,107
 
7.000%, 10/15/2027
1,235      
     3,100
 
7.000%, 11/15/2027
3,429      
     3,604
 
7.000%, 2/15/2028
4,033      
    10,779
 
7.000%, 4/15/2028
12,128     
     2,234
 
7.000%, 6/15/2028
2,532      
    15,448
 
7.000%, 6/15/2028
17,491     
     8,205
 
7.000%, 7/15/2028
9,200      
    13,319
 
7.000%, 7/15/2028
14,952     
    42,752
 
7.000%, 8/15/2028
48,738     
3
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Government National Mortgage Association—continued
 
$     5,054
 
7.000%, 8/15/2028
$5,704      
       869
 
7.000%, 9/15/2028
977        
     3,467
 
7.000%, 9/15/2028
3,921      
     3,879
 
7.000%, 10/15/2028
4,405      
    14,895
 
7.000%, 10/15/2028
16,812     
       464
 
7.000%, 11/15/2028
465        
    47,318
 
7.000%, 11/15/2028
54,144     
    11,409
 
7.000%, 12/15/2028
12,890     
    12,709
 
7.000%, 12/15/2028
14,569     
    33,052
 
7.000%, 12/15/2028
36,717     
    14,871
 
7.000%, 12/15/2028
16,803     
     3,555
 
7.000%, 1/15/2029
4,064      
     2,457
 
7.000%, 1/15/2029
2,819      
     4,546
 
7.000%, 1/15/2029
5,125      
     2,379
 
7.000%, 1/15/2029
2,560      
     2,266
 
7.000%, 1/15/2029
2,583      
    11,281
 
7.000%, 1/15/2029
12,849     
     3,314
 
7.000%, 1/15/2029
3,682      
     1,341
 
7.000%, 1/15/2029
1,394      
    10,205
 
7.000%, 1/15/2029
11,698     
    12,531
 
7.000%, 1/15/2029
14,390     
    28,697
 
7.000%, 1/15/2029
32,925     
     1,042
 
7.000%, 2/15/2029
1,184      
     2,632
 
7.000%, 2/15/2029
3,017      
     6,160
 
7.000%, 2/15/2029
7,049      
     2,059
 
7.000%, 2/15/2029
2,350      
     9,471
 
7.000%, 2/15/2029
10,827     
       206
 
7.000%, 2/15/2029
233        
       101
 
7.000%, 2/15/2029
111        
     1,171
 
7.000%, 3/15/2029
1,325      
     7,820
 
7.000%, 3/15/2029
8,759      
     2,334
 
7.000%, 3/15/2029
2,660      
     1,002
 
7.000%, 3/15/2029
1,150      
       976
 
7.000%, 3/15/2029
1,122      
     1,559
 
7.000%, 3/15/2029
1,789      
     1,003
 
7.000%, 3/15/2029
1,149      
     1,791
 
7.000%, 3/15/2029
2,048      
    42,440
 
7.000%, 4/15/2029
48,607     
     2,328
 
7.000%, 4/15/2029
2,666      
     1,425
 
7.000%, 4/15/2029
1,627      
     4,665
 
7.000%, 4/15/2029
5,348      
     8,198
 
7.000%, 4/15/2029
9,223      
     5,378
 
7.000%, 4/15/2029
5,850      
       207
 
7.000%, 4/15/2029
238        
     2,663
 
7.000%, 5/15/2029
3,039      
       634
 
7.000%, 5/15/2029
724        
     2,179
 
7.000%, 5/15/2029
2,505      
     2,653
 
7.000%, 5/15/2029
3,057      
     2,653
 
7.000%, 5/15/2029
3,036      
     5,599
 
7.000%, 6/15/2029
6,430      
4
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Government National Mortgage Association—continued
 
$     2,555
 
7.000%, 6/15/2029
$2,944      
     3,430
 
7.000%, 6/15/2029
3,910      
       278
 
7.000%, 6/15/2029
321        
       661
 
7.000%, 6/15/2029
762        
    10,013
 
7.000%, 6/15/2029
11,488     
     1,616
 
7.000%, 6/15/2029
1,862      
       737
 
7.000%, 6/15/2029
842        
     5,755
 
7.000%, 7/15/2029
6,585      
     1,749
 
7.000%, 7/15/2029
1,935      
     8,164
 
7.000%, 7/15/2029
9,392      
    48,101
 
7.000%, 7/15/2029
55,471     
     9,480
 
7.000%, 7/15/2029
10,932     
     1,004
 
7.000%, 7/15/2029
1,140      
     2,035
 
7.000%, 7/15/2029
2,345      
     5,266
 
7.000%, 7/15/2029
6,073      
     2,196
 
7.000%, 7/15/2029
2,493      
     6,473
 
7.000%, 7/15/2029
7,427      
       911
 
7.000%, 8/15/2029
1,048      
     1,823
 
7.000%, 8/15/2029
2,106      
     2,031
 
7.000%, 8/15/2029
2,321      
     1,395
 
7.000%, 8/15/2029
1,611      
     7,225
 
7.000%, 8/15/2029
8,259      
     1,920
 
7.000%, 9/15/2029
2,205      
    11,434
 
7.000%, 9/15/2029
13,071     
     5,592
 
7.000%, 9/15/2029
6,465      
     4,322
 
7.000%, 9/15/2029
4,985      
     6,627
 
7.000%, 9/15/2029
7,636      
     1,835
 
7.000%, 11/15/2029
2,122      
    17,029
 
7.000%, 12/15/2029
19,503     
     3,451
 
7.000%, 12/15/2029
3,945      
     3,162
 
7.000%, 1/15/2030
3,663      
    18,427
 
7.000%, 1/15/2030
21,364     
    17,604
 
7.000%, 2/15/2030
19,827     
     4,098
 
7.000%, 2/15/2030
4,748      
     9,203
 
7.000%, 2/15/2030
10,678     
    24,527
 
7.000%, 2/15/2030
28,456     
    47,744
 
7.000%, 3/15/2030
55,013     
    19,637
 
7.000%, 3/15/2030
22,550     
       362
 
7.000%, 4/15/2030
365        
     3,125
 
7.000%, 4/15/2030
3,629      
    15,519
 
7.000%, 6/15/2030
18,055     
     4,856
 
7.000%, 6/15/2030
5,630      
    23,016
 
7.000%, 8/15/2030
26,795     
     6,744
 
7.000%, 8/15/2030
7,737      
     9,371
 
7.000%, 9/15/2030
10,368     
    13,394
 
7.000%, 10/15/2030
15,550     
     3,925
 
7.000%, 10/15/2030
4,230      
     3,457
 
7.000%, 11/15/2030
4,036      
     8,654
 
7.000%, 2/15/2031
10,102     
   102,870
 
7.000%, 2/15/2031
119,841    
5
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Government National Mortgage Association—continued
 
$     3,799
 
7.000%, 3/15/2031
$4,417      
    26,584
 
7.000%, 3/15/2031
30,990     
       948
 
7.000%, 7/15/2031
1,097      
       379
 
7.000%, 9/15/2031
436        
    20,372
 
7.000%, 10/15/2031
23,758     
     9,076
 
7.000%, 11/15/2031
10,585     
     8,134
 
7.000%, 1/15/2032
9,299      
     8,050
 
7.000%, 4/15/2032
9,346      
    12,107
 
7.000%, 5/15/2032
14,120     
       636
 
7.000%, 11/15/2032
709        
       552
 
7.000%, 1/15/2033
647        
   145,898
 
7.500%, 11/15/2027
165,181    
   123,726
 
7.500%, 11/15/2027
140,411    
       463
 
7.500%, 4/15/2029
531        
     4,264
 
7.500%, 7/15/2029
4,765      
       355
 
7.500%, 7/15/2029
409        
     1,056
 
7.500%, 8/15/2029
1,224      
       458
 
7.500%, 8/15/2029
529        
    27,533
 
7.500%, 8/15/2029
31,528     
    22,556
 
7.500%, 8/15/2029
26,168     
     8,699
 
7.500%, 8/15/2029
10,147     
    33,637
 
7.500%, 8/15/2029
39,270     
    17,410
 
7.500%, 8/20/2029
20,085     
     4,292
 
7.500%, 9/15/2029
4,965      
    29,674
 
7.500%, 9/15/2029
34,361     
     4,464
 
7.500%, 10/15/2029
5,202      
     9,364
 
7.500%, 10/15/2029
10,589     
    17,063
 
7.500%, 10/15/2029
19,621     
     3,013
 
7.500%, 10/15/2029
3,521      
     5,252
 
7.500%, 12/15/2029
6,082      
     6,972
 
7.500%, 1/15/2030
8,081      
    11,025
 
7.500%, 3/20/2030
12,798     
    13,794
 
7.500%, 8/15/2030
15,973     
    11,627
 
7.500%, 10/15/2030
13,709     
    49,447
 
7.500%, 10/15/2030
54,706     
     9,295
 
7.500%, 10/15/2030
10,833     
     7,182
 
7.500%, 11/20/2030
8,373      
     7,028
 
7.500%, 12/15/2030
8,292      
     7,023
 
7.500%, 1/15/2031
8,299      
     5,733
 
7.500%, 2/15/2031
6,764      
    18,780
 
7.500%, 4/20/2031
22,053     
    54,965
 
7.500%, 7/15/2031
64,117     
     1,508
 
7.500%, 9/15/2031
1,767      
       284
 
7.500%, 9/15/2031
286        
    15,571
 
7.500%, 10/15/2031
18,375     
    11,426
 
7.500%, 11/15/2031
13,509     
    10,337
 
7.500%, 12/15/2031
11,471     
     8,421
 
7.500%, 3/15/2032
9,900      
     6,326
 
7.500%, 5/15/2032
7,502      
       831
 
8.000%, 11/15/2023
874        
6
Principal
Amount
or Shares
 
 
Value
          
1
MORTGAGE-BACKED SECURITIES—continued
 
 
 
Government National Mortgage Association—continued
 
$    28,111
 
8.000%, 11/15/2027
$31,434     
     8,916
 
8.000%, 5/15/2029
10,414     
    18,409
 
8.000%, 8/15/2029
21,539     
    65,554
 
8.000%, 11/15/2029
76,831     
    27,825
 
8.000%, 12/15/2029
32,639     
     2,521
 
8.000%, 1/15/2030
2,950      
    12,856
 
8.000%, 1/15/2030
15,105     
     2,729
 
8.000%, 1/15/2030
3,171      
       850
 
8.000%, 3/15/2030
878        
    11,491
 
8.000%, 4/15/2030
13,543     
       401
 
8.000%, 4/15/2030
472        
     6,134
 
8.000%, 4/15/2030
7,195      
       697
 
8.000%, 4/15/2030
811        
     5,336
 
8.000%, 4/15/2030
6,210      
     2,988
 
8.000%, 4/15/2030
3,508      
     1,925
 
8.000%, 5/15/2030
2,271      
     1,224
 
8.000%, 5/15/2030
1,428      
       240
 
8.000%, 5/15/2030
276        
     1,292
 
8.000%, 5/15/2030
1,504      
     3,011
 
8.000%, 5/15/2030
3,546      
     7,638
 
8.000%, 5/15/2030
8,889      
     4,773
 
8.000%, 6/15/2030
5,377      
       904
 
8.000%, 6/15/2030
1,065      
       916
 
8.000%, 6/15/2030
1,077      
     4,277
 
8.000%, 6/15/2030
4,968      
     8,384
 
8.000%, 6/15/2030
9,776      
    60,880
 
8.000%, 6/15/2030
71,412     
    29,758
 
8.000%, 6/15/2030
35,124     
     3,536
 
8.000%, 6/15/2030
3,844      
       644
 
8.000%, 7/15/2030
662        
    42,286
 
8.000%, 7/15/2030
49,838     
     2,359
 
8.000%, 7/15/2030
2,769      
     3,856
 
8.000%, 7/15/2030
4,551      
    20,030
 
8.500%, 6/15/2030
23,467     
 
 
TOTAL
3,657,524
 
2
Uniform Mortgage-Backed Securities, TBA—15.2%
 
34,500,000
 
2.500%, 5/1/2051
35,796,455 
 
 
TOTAL MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $227,980,570)
230,424,628
 
 
GOVERNMENT AGENCY—1.2%
 
 
 
Federal Farm Credit System—1.2%
 
 3,000,000
 
0.700%, 1/27/2027
(IDENTIFIED COST $3,000,000)
2,938,604  
 
 
INVESTMENT COMPANY—18.7%
 
43,964,485
3
Federated Hermes Government Obligations Fund, Premier Shares, 0.02%4
(IDENTIFIED COST $43,964,485)
43,964,485 
 
 
TOTAL INVESTMENT IN SECURITIES—117.9%
(IDENTIFIED COST $274,945,055)
277,327,717
 
 
OTHER ASSETS AND LIABILITIES - NET—(17.9)%5
(42,139,779)
 
 
TOTAL NET ASSETS—100%
$235,187,938
7
At April 30, 2021, the Fund had the following outstanding futures contracts:  
Description
Number of
Contracts
Notional
Value
Expiration
Date
Value and
Unrealized
Appreciation
(Depreciation)
Short Futures:
 
 
 
 
6United States Treasury Notes 10-Year Short Futures
85
$11,222,656
June 2021
$197,039
6United States Treasury Long Bond Short Futures
25
$3,931,250
June 2021
$(61,151)
6United States Treasury Notes 10-Year Ultra Short Futures
25
$3,638,672
June 2021
$91,851
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS
$227,739
The average notional value of short futures contracts held by the Fund throughout the period was $18,435,625. This is based on the contracts held as of each month-end throughout the three-month fiscal period.
Net Unrealized Appreciation on Futures Contracts is included in “Other Assets and Liabilities—Net.”
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 April 30, 2021, were as follows:  
 
Federated
Hermes
Government
Obligations Fund,
Premier Shares
Value as of 1/31/2021
$8,455,721
Purchases at Cost
$75,744,020
Proceeds from Sales
$(40,235,256)
Change in Unrealized Appreciation/Depreciation
N/A
Net Realized Gain/(Loss)
N/A
Value as of 4/30/2021
$43,964,485
Shares Held as of 4/30/2021
43,964,485
Dividend Income
$3,006
 
1
Due to monthly principal payments, the average lives of the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and Government
National Mortgage Association securities approximates one to ten years.
2
All or a portion of these To Be Announced Securities (TBAs) are subject to dollar-roll transactions.
3
All or a portion of these securities are segregated pending settlement of dollar-roll transactions.
4
7-day net yield.
5
Assets, other than investments in securities, less liabilities. A significant portion of this balance is the result of dollar-roll transactions as of April 30, 2021.
6
Non-income-producing security.
Note: The categories of investments are shown as a percentage of total net assets at April 30, 2021.
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
■ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by 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
8
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 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 Investment Management Company (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.
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 April 30, 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
Debt Securities:
 
 
 
 
Mortgage-Backed Securities
$—
$230,424,628
$—
$230,424,628
Government Agencies
—
2,938,604
—
2,938,604
Investment Company
43,964,485
—
—
43,964,485
TOTAL SECURITIES
$43,964,485
$233,363,232
$—
$277,327,717
Other Financial Instruments:1
 
 
 
 
Assets
$288,890
$—
$—
$288,890
Liabilities
(61,151)
—
—
(61,151)
TOTAL OTHER FINANCIAL INSTRUMENTS
$227,739
$—
$—
$227,739
 
1
Other financial instruments are futures contracts.
9