Federated Hermes launches active ETF offering investors access to leading international companies

Rhea-AI Summary

Federated Hermes (NYSE:FHI) launched the Federated Hermes International Leaders ETF (CBOE: FHIL), an actively managed fund targeting long-term capital growth from developed-market, high-quality foreign companies trading below intrinsic value. The high-conviction portfolio typically holds 60–85 stocks and is run by the International Core/Value Team.

According to Federated Hermes, FHIL extends a strategy also used in the $1.5 billion Federated Hermes International Leaders Fund. The firm manages $2.6 billion in ETF assets and $907.1 billion overall, and highlights FHIL as a potential core international equity allocation with tax-efficient ETF features.

Positive

• Launch of FHIL active ETF focused on developed-market international leaders
• Portfolio typically holds 60–85 high-conviction international companies
• Strategy also used in $1.5 billion International Leaders mutual fund
• International Core/Value Team has more than 25 years of experience
• Federated Hermes manages $2.6 billion in ETF assets as of May 31, 2026
• Firm reports $907.1 billion in assets under management as of March 31, 2026

Negative

• New fund with limited operating history for investor evaluation
• Risk that FHIL may not attract sufficient assets for efficiencies
• International investing adds currency, political and volatility risks
• Use of derivatives introduces risks different from direct securities
• ETF shares may trade at premiums or discounts to NAV
• Brokerage commissions on ETF trades can reduce investor returns

News Market Reaction – FHI

+0.92%

+0.92% News Effect

On the day this news was published, FHI gained 0.92%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement highlights Federated Hermes’ continued expansion of its ETF lineup with an activel...

Analysis

This announcement highlights Federated Hermes’ continued expansion of its ETF lineup with an actively managed international leaders strategy, leveraging an existing $1.5 billion mutual fund and the firm’s broader $907.1 billion AUM platform. Historically, product launches and leadership updates have drawn more noticeable price responses than routine dividend news. Investors tracking this development may focus on asset gathering in the new ETF, competitive positioning within international equities, and how it complements the firm’s existing ETF assets of over $2.6 billion.

Key Figures

International Leaders Fund AUM: $1.5 billion ETF portfolio size: 60 to 85 companies ETF platform AUM: $2.6 billion +5 more

8 metrics

International Leaders Fund AUM $1.5 billion Assets in Federated Hermes International Leaders Fund managed by same team

ETF portfolio size 60 to 85 companies Typical number of holdings in International Leaders ETF

ETF platform AUM $2.6 billion Federated Hermes ETF assets as of May 31, 2026

Firm AUM $907.1 billion Assets under management as of March 31, 2026

Client count More than 11,000 Institutions and intermediaries served worldwide

Employees More than 2,000 Federated Hermes global workforce

Optimal allocation mix 39% US, 21% intl, 40% bonds Portfolio Construction analysis of 1976–2024 index returns

Study period 1/1/1976–12/31/2024 Backtest window for allocation analysis

Historical Context

5 past events · Latest: Jun 10 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 10	Fund dividend	Positive	-0.6%	Premier Municipal Income Fund declared unchanged monthly tax-free dividend.
Jun 09	Product launch	Positive	+1.3%	Launch of money market fund structured for GENIUS Act compliance.
May 15	Portfolio data	Neutral	-2.9%	Released month-end portfolio and performance data for municipal fund.
May 11	Fund dividend	Positive	-0.4%	Announced unchanged tax-free monthly dividend for municipal fund.
May 07	Leadership change	Positive	+3.0%	Appointed new Chief Investment Officer for Global Equities franchise.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent product and leadership announcements often coincided with positive price reactions, while routine fund dividend updates saw mild negative moves, indicating stronger sensitivity to strategic news than to income-related headlines.

Recent Company History

Over the past months, Federated Hermes has reported several fund-related and corporate developments. A CIO appointment for Global Equities on May 7, 2026 aligned with a +2.96% move. Launch of a GENIUS Act-compliant money market fund on June 9, 2026 also saw a positive reaction. By contrast, recurring municipal fund dividend declarations on May 11 and June 10, 2026 coincided with small declines. Today’s international active ETF launch fits the pattern of product-expansion news that previously aligned with constructive price action.

Key Terms

etf, derivative instruments, growth stocks, value stocks, +4 more

8 terms

etf financial

"Federated Hermes International Leaders ETF (CBOE: FHIL), designed for investors seeking"

An ETF, or exchange-traded fund, is like a basket of different investments such as stocks or bonds that you can buy or sell easily on the stock market, just like a regular share. It allows people to invest in many companies at once, making it a simple way to grow savings without picking individual stocks.

View in glossary

derivative instruments financial

"The fund's use of derivative instruments involves risks different from, or possibly"

Contracts whose value is tied to the price or performance of something else—like a stock, bond, commodity, currency or market index. Think of them as a bet or an insurance policy that lets investors gain exposure, hedge risk, or speculate without owning the asset itself; their use can amplify gains or losses and affect a portfolio’s risk profile, liquidity and potential returns.

growth stocks financial

"Growth stocks tend to have higher valuations and thus are typically more"

Shares of companies expected to grow sales and profits faster than the overall market; these firms typically reinvest earnings to expand rather than pay out big dividends. Investors buy them hoping the company’s future success will lift the stock price, offering capital gains; think of planting a young tree that may grow tall rather than taking fruit now. Growth stocks can offer higher returns but often come with greater price swings and risk if growth slows.

View in glossary

value stocks financial

"Value stocks tend to have higher dividends and thus have a higher"

Shares of companies that appear inexpensive relative to basic financial measures such as profits, cash flow, or the value of their assets. Investors treat them like a high-quality item found on sale, expecting prices to rise as the market recognizes the company's true worth or its business improves. Value stocks matter because they can offer lower downside risk and potential for steady long-term returns compared with richly priced shares.

View in glossary

nav financial

"ETF shares are bought and sold on an exchange at market price (not NAV)"

Net asset value (NAV) is the total value of all the investments and assets in a fund or company, minus any debts or liabilities, divided by the number of shares or units outstanding. It represents the per-share worth, giving investors an idea of what each share is truly worth based on the underlying assets. Think of it like a company's total worth divided among its shares, helping investors assess whether a share is fairly priced.

View in glossary

bloomberg us aggregate bond index financial

"Bloomberg US Aggregate Bond Index: Is an unmanaged index composed of securities"

A broad yardstick that tracks the performance of U.S. investment-grade bonds, including government, corporate, and mortgage-related debt. Think of it as a large basket representing the overall U.S. bond market; investors and fund managers use it to judge whether a bond investment is doing better or worse than the market as a whole. Its movements matter because they influence interest-rate expectations, portfolio risk, and the returns of many bond funds and pension investments.

msci eafe index financial

"MSCI Europe, Australasia and Far East Index (EAFE): Is an equity index"

A widely followed stock market yardstick that tracks the performance of big and medium-sized companies in developed markets outside the United States and Canada. Investors use it to see how international developed-market stocks are doing overall and to compare the returns of funds or portfolios that focus on those regions; think of it as a thermometer that shows the health of overseas developed-market stocks compared with domestic holdings.

s&p 500 financial

"Based on returns from 1/1/76-12/31/24 of the S&P 500® (US equities)"

The S&P 500 is a broad stock market index that tracks the performance of 500 large U.S. companies, weighted so bigger firms have a larger impact. Investors use it like a thermometer or benchmark to judge how the overall U.S. stock market or a portfolio is doing; movements in the index influence investor sentiment, fund performance, and many passive investment products that aim to match its returns.

View in glossary

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• Federated Hermes International Leaders ETF can serve as core international equity allocation
• Federated Hermes strategically expands ETF lineup to meet client interests and objectives in a wide range of market conditions

PITTSBURGH, June 17, 2026 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today introduced Federated Hermes International Leaders ETF (CBOE: FHIL), designed for investors seeking international equity exposure through well-known, established global companies.

Utilizing deep fundamental analysis to identify undervalued companies across international markets, Federated Hermes International Leaders ETF seeks to achieve its objective of long-term capital growth by investing primarily in developed market stocks of high-quality, foreign companies that appear to be trading below their intrinsic value. Its high-conviction portfolio typically consists of 60 to 85 companies.  

The ETF is managed by Richard Winkowski, Jr., senior portfolio manager and head of the International Core/Value Team, and Dariusz Czoch, CFA, senior portfolio manager, who also manage the $1.5 billion Federated Hermes International Leaders Fund. Federated Hermes International Core/Value Team has more than 25 years of experience managing international equity strategies.

"Research from Federated Hermes' Portfolio Construction Team suggests incorporating international equities into the equity sleeve of a traditional stock-and-bond portfolio may improve risk-adjusted returns¹," said Paul A. Uhlman, president and chief executive officer of the Federated Advisory Companies. "With a concentrated portfolio filled with international industry leaders that provide products or services essential to everyday life, Federated Hermes International Leaders ETF is a compelling option for an international equity allocation."

"In expanding our ETF lineup, we have focused on meeting investor demand by offering ETF versions of our most popular strategies," said Brandon Clark, ETF business director at Federated Hermes. "Federated Hermes International Leaders ETF offers investors access to the benefits of international equity investments with the ETF vehicle's tax efficiency, transparency, liquidity and ease of use."

Federated Hermes offers actively managed ETFs designed to pursue growth, diversification or income generation for strategic or tactical needs. As of May 31, 2026, Federated Hermes manages more than $2.6 billion in ETF assets.

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $907.1 billion in assets under management, as of March 31, 2026. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.

Investors should carefully consider the ETF's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us at 1-800-341-7400 or visit FederatedHermes.com/us. Please carefully read the summary prospectus or the prospectus before investing.

ETFs are subject to risks and fluctuate in value.

Diversification does not assure a profit nor protect against loss

The value of equity securities in the fund's portfolio will fluctuate and, as a result, the fund's share price may decline. Equity securities may decline in value because of an increase in interest rates or changes in the stock market.          

The fund is a new fund that recently commenced operations. New funds have limited operating histories for investors to evaluate and new funds may not attract sufficient assets to achieve investment and trading efficiencies.

While stocks have higher return potential, they may be more volatile than bonds.

International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging market securities can be significantly more volatile than the prices of securities in developed countries, and currency risk and political risks are accentuated in emerging markets.

The fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments.

Growth stocks tend to have higher valuations and thus are typically more volatile than value stocks. Growth stocks also may not pay dividends or may pay lower dividends than value stocks.

Value stocks tend to have higher dividends and thus have a higher income-related component in their total return than growth stocks. Value stocks also may lag growth stocks in performance, particularly in late stages of a market advance.

ETFs are generally more tax efficient than traditional mutual funds due to their structure. When investors redeem shares, ETFs can do so in-kind, meaning they exchange shares for underlying assets without triggering capital gains taxes for remaining investors. ETFs often distribute fewer capital gains to investors compared to mutual funds, leading to lower tax liabilities.

ETF shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. NAVs are calculated using prices as of the end of regular trading on the New York Stock Exchange (normally 4:00 PM Eastern Time). Recent information, including information about the fund's NAV, market price, premiums and discounts, and bid-ask spreads, is included on the fund's website at FederatedHermes.com/us.

¹ Sources: Morningstar, Inc., Federated Hermes, Inc. Based on returns from 1/1/76-12/31/24 of the S&P 500® (US equities), MSCI EAFE Index (international equities) and Bloomberg US Aggregate Bond Index (bonds), Federated Hermes Portfolio Construction Solutions Team analysis found that a 39% allocation to US equities, 21% allocation to international equities and 40% allocation to bonds produced the highest long-term return with the lowest risk (standard deviation/volatility of returns) versus other allocation mixes in a traditional 60/40 stock-and-bond portfolio. This information is for illustrative purposes only and is not indicative of any specific investment. Past performance is no guarantee of future results.

Bloomberg US Aggregate Bond Index: Is an unmanaged index composed of securities from the Bloomberg Government/Corporate Bond Index, Mortgage-Backed Securities Index and the Asset-Backed Securities Index.

MSCI Europe, Australasia and Far East Index (EAFE): Is an equity index which captures large- and mid-cap representation across Developed Markets countries around the world, excluding the U.S. and Canada. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

S&P 500®: 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.

Federated Securities Corp.is Distributor of the Federated Hermes Funds.

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View original content:https://www.prnewswire.com/news-releases/federated-hermes-launches-active-etf-offering-investors-access-to-leading-international-companies-302803059.html

SOURCE Federated Hermes, Inc.

FAQ

What is the Federated Hermes International Leaders ETF (CBOE: FHIL)?

Federated Hermes International Leaders ETF (FHIL) is an actively managed international equity ETF seeking long-term capital growth. According to Federated Hermes, it invests mainly in developed-market, high-quality foreign companies trading below perceived intrinsic value, using a concentrated portfolio of roughly 60–85 stocks.

How does FHIL support international equity exposure for Federated Hermes (NYSE:FHI) investors?

FHIL offers targeted international equity exposure through established global companies outside the United States. According to Federated Hermes, it is designed to serve as a core international equity allocation, complementing a traditional stock-and-bond portfolio and aiming to improve diversification and potential risk-adjusted returns.

Who manages the Federated Hermes International Leaders ETF (FHIL) and what is their track record?

FHIL is managed by Richard Winkowski Jr. and Dariusz Czoch, CFA, from the International Core/Value Team. According to Federated Hermes, this team also manages the $1.5 billion International Leaders Fund and has more than 25 years of international equity strategy experience.

What investment strategy does FHIL use to select international stocks?

FHIL uses deep fundamental analysis to find undervalued international companies in developed markets. According to Federated Hermes, the ETF focuses on high-quality foreign stocks that appear to trade below intrinsic value and builds a concentrated, high-conviction portfolio typically holding between 60 and 85 positions.

What are the main risks of investing in Federated Hermes International Leaders ETF (FHIL)?

Key risks include equity market volatility, international and emerging-market risks, and currency and political uncertainties. According to Federated Hermes, FHIL also faces risks from derivatives use, potential premiums or discounts to NAV, brokerage commissions, and its limited operating history as a new fund.

How does the ETF structure of FHIL compare to mutual funds for taxes and trading?

FHIL uses an ETF structure that can enhance tax efficiency versus many mutual funds. According to Federated Hermes, ETFs can redeem shares in-kind, often distributing fewer capital gains, while investors trade shares on an exchange at market prices, subject to premiums, discounts and brokerage commissions.