Federated Hermes seeking shareholder approval related to the Federated Hermes MDT Large Cap Growth ETF
Federated Hermes, Inc. (NYSE: FHI) announced that the Board of Trustees of Federated Hermes ETF Trust has approved a change in the fundamental policy for the Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG). The proposed change would shift the fund from a diversified to a non-diversified company, subject to shareholder approval. The record date for majority shareholder consent is set for Aug. 19, 2024, with determination on Aug. 23, 2024.
The change aims to provide greater flexibility in executing the fund's investment strategy, particularly when individual issuer weightings in the Russell 1000® Growth Index exceed diversification limits. If approved, the change is expected to be effective on Aug. 26, 2024. Federated Hermes, with $782.7 billion in assets under management as of June 30, 2024, is seeking this change to enhance long-term strategy execution without substantially affecting the fund's principal investment strategies.
Federated Hermes, Inc. (NYSE: FHI) ha annunciato che il Consiglio di Amministrazione del Federated Hermes ETF Trust ha approvato un cambiamento nella politica fondamentale per il Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG). Il cambiamento proposto sposterà il fondo da un'azienda diversificata a una società non diversificata, soggetto ad approvazione degli azionisti. La data di registrazione per il consenso della maggioranza degli azionisti è fissata per il 19 agosto 2024, con una determinazione prevista per il 23 agosto 2024.
Il cambiamento mira a fornire maggiore flessibilità nell'esecuzione della strategia di investimento del fondo, in particolare quando i pesi degli emittenti individuali nell'indice Russell 1000® Growth superano i limiti di diversificazione. Se approvato, il cambiamento entrerà in vigore il 26 agosto 2024. Federated Hermes, con $782,7 miliardi di attivi in gestione al 30 giugno 2024, cerca questo cambiamento per migliorare l'esecuzione della strategia a lungo termine senza influenzare sostanzialmente le strategie di investimento principali del fondo.
Federated Hermes, Inc. (NYSE: FHI) anunció que la Junta de Fideicomisarios de Federated Hermes ETF Trust ha aprobado un cambio en la política fundamental para el Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG). El cambio propuesto transformará el fondo de una compañía diversificada a una compañía no diversificada, sujeto a la aprobación de los accionistas. La fecha de registro para el consentimiento de la mayoría de los accionistas está fijada para el 19 de agosto de 2024, con la determinación prevista para el 23 de agosto de 2024.
El cambio tiene como objetivo proporcionar mayor flexibilidad en la ejecución de la estrategia de inversión del fondo, especialmente cuando los pesos de los emitentes individuales en el índice Russell 1000® Growth superen los límites de diversificación. Si se aprueba, el cambio se espera que entre en vigor el 26 de agosto de 2024. Federated Hermes, con $782.7 mil millones en activos bajo gestión al 30 de junio de 2024, busca este cambio para mejorar la ejecución de sus estrategias a largo plazo sin afectar sustancialmente las estrategias de inversión principales del fondo.
Federated Hermes, Inc. (NYSE: FHI)는 Federated Hermes ETF Trust의 이사회의 승인으로 Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG)의 기본 정책 변경을 발표했습니다. 제안된 변경 사항은 펀드를 다각화된 기업에서 비다각화 기업으로 전환하며 주주 승인에 따릅니다. 대다수 주주의 동의 기록일자는 2024년 8월 19일로 설정되며, 결정일은 2024년 8월 23일입니다.
이번 변화는 Russell 1000® Growth Index의 개별 발행자 비중이 다각화 한도를 초과할 때 펀드의 투자 전략을 실행하는 데 더 큰 유연성을 제공하기 위해 설정되었습니다. 승인되면 변경 사항은 2024년 8월 26일에 발효될 것으로 예상됩니다. Federated Hermes는 2024년 6월 30일 기준으로 7827억 달러의 자산을 관리하고 있으며, 이 변경을 통해 펀드의 주요 투자 전략에 중대한 영향을 미치지 않으면서 장기 전략 실행을 향상시키고자 합니다.
Federated Hermes, Inc. (NYSE: FHI) a annoncé que le Conseil des Fiduciaires du Federated Hermes ETF Trust a approuvé une modification de la politique fondamentale pour le Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG). Le changement proposé déplace le fonds d'une entreprise diversifiée vers une entreprise non diversifiée, sous réserve de l'approbation des actionnaires. La date d'enregistrement pour le consentement de la majorité des actionnaires est fixée au 19 août 2024, avec une décision prévue le 23 août 2024.
Le changement vise à offrir une plus grande flexibilité dans l'exécution de la stratégie d'investissement du fonds, en particulier lorsque les poids des émetteurs individuels dans l'indice Russell 1000® Growth dépassent les limites de diversification. Si approuvé, le changement devrait entrer en vigueur le 26 août 2024. Federated Hermes, avec 782,7 milliards de dollars d'actifs sous gestion au 30 juin 2024, recherche ce changement pour améliorer l'exécution de sa stratégie à long terme sans affecter de manière substantielle les stratégies d'investissement principales du fonds.
Federated Hermes, Inc. (NYSE: FHI) hat bekannt gegeben, dass der Vorstand des Federated Hermes ETF Trust eine Änderung der grundlegenden Politik für den Federated Hermes MDT Large Cap Growth ETF (NYSE: FLCG) genehmigt hat. Die vorgeschlagene Änderung würde den Fonds von einem diversifizierten zu einem nicht diversifizierten Unternehmen verschieben, vorbehaltlich der Zustimmung der Aktionäre. Das Stichtagsdatum für die Zustimmung der Mehrheit der Aktionäre ist auf den 19. August 2024 festgelegt, mit einer Entscheidung am 23. August 2024.
Die Änderung zielt darauf ab, größere Flexibilität bei der Umsetzung der Anlagestrategie des Fonds zu bieten, insbesondere wenn die Gewichtungen einzelner Emittenten im Russell 1000® Growth Index die Diversifizierungsgrenzen überschreiten. Bei Genehmigung wird die Änderung voraussichtlich am 26. August 2024 wirksam. Federated Hermes verwaltet zum 30. Juni 2024 782,7 Milliarden US-Dollar in verwalteten Vermögenswerten und strebt diese Änderung an, um die langfristige Strategieumsetzung zu verbessern, ohne die wesentlichen Anlagestrategien des Fonds wesentlich zu beeinträchtigen.
- Potential for greater flexibility in investment strategy execution
- Expected shareholder approval due to large majority held by fund adviser affiliate
- No substantial change to fund's principal investment strategies anticipated
- Shift from diversified to non-diversified status may increase concentration risk
- Potential for increased volatility due to reduced diversification requirements
Insights
The proposed change from a diversified to a non-diversified status for the Federated Hermes MDT Large Cap Growth ETF (FLCG) is a significant development for investors. This shift could potentially allow for greater concentration in individual holdings, which may increase both risk and return potential.
The fund's strategy of approximating the Russell 1000® Growth Index while actively managing investments suggests a quasi-passive approach. The move to non-diversified status could enable the fund to more closely mirror high-weighted stocks in the index, potentially improving tracking accuracy but also increasing single-stock risk.
Investors should note that while this change offers more flexibility, it doesn't necessarily mean immediate portfolio alterations. The
This move by Federated Hermes is intriguing from an ETF strategy perspective. By becoming non-diversified, FLCG gains the ability to potentially outperform its benchmark more significantly. However, this comes with increased volatility risk.
The fund's unique approach of approximating the Russell 1000® Growth Index while actively managing positions it in an interesting middle ground between passive and active strategies. This change could allow for more tactical overweighting of high-conviction positions, especially when index constituents exceed typical diversification limits.
Investors should watch for any shifts in the fund's tracking error and performance dispersion relative to the index following this change. It's a delicate balance between enhanced returns and risk management that will require careful execution by the fund managers.
The shareholder approval process for this fundamental policy change is noteworthy. With a large majority shareholder expected to approve via written consent, the usual proxy solicitation is bypassed. This streamlined approach, while legal, may raise questions about minority shareholder representation.
The shift to non-diversified status under the Investment Company Act of 1940 is significant. It allows the fund to exceed concentration limits typically imposed on diversified funds. However, this comes with increased regulatory scrutiny and potential volatility.
Investors should be aware that this change, while offering more flexibility, also alters the fund's risk profile. The fund's prospectus and risk disclosures will likely need updating to reflect these changes, ensuring full transparency for current and prospective investors.
As an affiliate of the Fund's adviser currently holds a large majority of the Fund's shares and is expected to continue to hold a majority as of the record date, it is expected that the proposed change will be approved by written consent in lieu of a shareholder meeting and that no proxy or solicitation will be necessary. If approved in this manner, the change is expected to be effective on Aug. 26, 2024.
The Fund pursues its principal investment strategy, in part, by seeking to approximate exposure to companies listed in the Russell 1000® Growth Index (the "Index") in relation to their index weightings, although the Fund is not designed to track the overall composition or returns of the Index and the investment adviser actively manages the Fund's investment strategy. The proposed change to the Fund's diversification classification is intended to provide the Fund with greater long-term flexibility in executing its investment strategy, in particular at times when the weightings of individual issuers in the Index exceed the diversification limits under the Investment Company Act of 1940. The change in the fundamental policy is not expected to substantially affect the Fund's principal investment strategies.
Investors can view fund and portfolio information in the Products section of FederatedHermes.com/us.
Federated Hermes, Inc. (NYSE: FHI) is a global leader in active, responsible investment management, with
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Certain statements in this press release, such as those related to the manner and timing of shareholder approval, the intended purpose behind the fundamental policy change, the Fund's investment strategies, and the intended effect of the fundamental policy change on the Fund's principal investment strategies, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Fund to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Any forward-looking statement, and the Fund's level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond the Fund's and its investment adviser's control. Risks and uncertainties could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the Fund's registration statement, including its prospectus and statement of additional information, as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and none of the Fund, its investment adviser, or any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.
For more complete information, visit FederatedHermes.com/us or contact your investment professional for summary prospectuses or prospectuses. You should consider the fund's investment objectives, risks, charges and expenses carefully before you invest. Information about these and other important subjects is in the fund's summary prospectus or prospectus, which you should read carefully before investing. Prospectuses are available by calling Federated Hermes at 1-800-341-7400 or by visiting FederatedHermes.com/us.
Fund 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. Investors purchasing and selling at market price may pay brokerage commissions which 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 4 p.m. Eastern Time.
Federated Securities Corp., Distributor
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SOURCE Federated Hermes, Inc.
FAQ
What change is Federated Hermes seeking for the MDT Large Cap Growth ETF (FLCG)?
When is the record date for shareholder consent on the FLCG fund change?
If approved, when will the FLCG fund policy change take effect?
How much assets under management does Federated Hermes (FHI) have as of June 30, 2024?
