Federated Fixed Income Securities Inc.

05/28/2024 | Press release | Distributed by Public on 05/28/2024 07:01

Semi-Annual Report by Investment Company - Form N-CSRS

EDGAR HTML

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

811-6447

(Investment Company Act File Number)

Federated Hermes Fixed Income Securities, Inc.

______________________________________________________________

(Exact Name of Registrant as Specified in Charter)

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 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: 09/30/24

Date of Reporting Period: Six months ended 03/31/24

Item 1. Reports to Stockholders
Semi-Annual Shareholder Report
March 31, 2024
Share Class | Ticker
A | FMUUX
Institutional | FMUSX
R6 | FMULX
Federated Hermes Municipal Ultrashort Fund
Fund Established 2000
A Portfolio of Federated Hermes Fixed Income Securities, Inc.
Dear Valued Shareholder,
We are pleased to present the Semi-Annual Shareholder Report for your fund covering the period from October 1, 2023 through March 31, 2024. This report includes 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, FederatedHermes.com/us 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
CONTENTS
Portfolio of Investments Summary Table
1
Portfolio of Investments
2
Financial Highlights
17
Statement of Assets and Liabilities
20
Statement of Operations
21
Statement of Changes in Net Assets
22
Notes to Financial Statements
23
Shareholder Expense Example
31
Evaluation and Approval of Advisory Contract
33
Liquidity Risk Management Program-
Annual Evaluation of Adequacy and Effectiveness
43
Voting Proxies on Fund Portfolio Securities
45
Quarterly Portfolio Schedule
45
Portfolio of Investments Summary Table (unaudited)
At March 31, 2024, the Fund's sector composition1 was as follows:
Sector Composition
Percentage of
Total Net Assets
Industrial Development Bond/Pollution Control Revenue
17.5%
Multi-Family Housing
15.7%
General Obligation-Local
9.7%
Electric & Gas
8.9%
Hospital
8.4%
Prepaid Gas Utility
7.3%
Higher Education
3.7%
Water & Sewer
2.5%
Toll Road
2.4%
General Obligation-State
1.4%
Other²
20.7%
Other Assets and Liabilities-Net3
1.8%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the
economic sector and/or revenue source of the underlying obligor, as determined by the Fund's
Adviser. For securities that have been enhanced by a third party guarantor, such as bond insurers
and banks, sector classifications are based upon the economic sector and/or revenue source of
the underlying obligor, as determined by the Fund's Adviser. IDB/PCR contains total corporate
exposure in multiple corporate sectors for Fund diversification.
2
For purposes of this table, sector classifications constitute 77.5% of the Fund's total net assets.
Remaining sectors have been aggregated under the designation "Other."
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and
Liabilities.
Semi-Annual Shareholder Report
1
Portfolio of Investments
March 31, 2024 (unaudited)
Principal
Amount
Value
MUNICIPAL BONDS-   72.9%
Alabama-   6.1%
$ 5,000,000
Black Belt Energy Gas District, AL, Gas Prepay Revenue Bonds Project
No. 4 (Series 2019A-1), (Morgan Stanley GTD), 4.000%, Mandatory
Tender 12/1/2025
$5,018,585
1,000,000
Black Belt Energy Gas District, AL, Gas Revenue Bonds (Series 2022B-1),
(Goldman Sachs Group, Inc. GTD), 4.000%, Mandatory
Tender 10/1/2027
1,004,335
25,500,000
1
Black Belt Energy Gas District, AL, Gas Revenue Bonds Project No.7
(Series 2021C-2) FRNs, (Goldman Sachs Group, Inc. GTD), 3.990%
(SIFMA 7-day +0.350%), Mandatory Tender 12/1/2026
24,695,416
1,250,000
Jefferson County, AL (Jefferson County, AL Sewer System), Sewer
Revenue Warrants (Series 2024), 5.000%, 10/1/2025
1,277,792
1,750,000
Jefferson County, AL (Jefferson County, AL Sewer System), Sewer
Revenue Warrants (Series 2024), 5.000%, 10/1/2026
1,819,025
1,250,000
Jefferson County, AL (Jefferson County, AL Sewer System), Sewer
Revenue Warrants (Series 2024), 5.000%, 10/1/2027
1,323,587
25,000,000
Mobile, AL IDB (Alabama Power Co.), Pollution Control Revenue Bonds
(Series 2007B), 3.920%, Mandatory Tender 6/2/2026
25,080,250
3,650,000
Selma, AL IDB (International Paper Co.), Gulf Opportunity Zone
Revenue Refunding Bonds (Series 2019A), 2.000%, Mandatory
Tender 10/1/2024
3,611,589
5,250,000
Selma, AL IDB (International Paper Co.), Gulf Opportunity Zone
Revenue Refunding Bonds (Series 2020A), 1.375%, Mandatory
Tender 6/16/2025
5,088,081
TOTAL
68,918,660
Arizona-   1.3%
630,000
1
Arizona Health Facilities Authority (Banner Health), (Series 2015B) FRNs,
(United States Treasury PRF 11/4/2025@100), 3.890% (SIFMA 7-day
+0.250%), 1/1/2046
628,233
3,870,000
1
Arizona Health Facilities Authority (Banner Health), (Series 2015B) FRNs,
3.890% (SIFMA 7-day +0.250%), Mandatory Tender 11/4/2026
3,815,082
1,000,000
Arizona State IDA (TWG Glendale LP), Unity at West Glendale
Multifamily Housing Revenue Bonds (Series 2024), (United States
Treasury GTD), 5.000%, Mandatory Tender 9/1/2026
1,024,235
1,000,000
Coconino County, AZ Pollution Control Corp. (Nevada Power Co.),
Pollution Control Refunding Revenue Bonds (Series 2017B), 3.750%,
Mandatory Tender 3/31/2026
993,261
8,000,000
Maricopa County, AZ, IDA (Banner Health), Revenue Bonds
(Series 2023A-1), 5.000%, Mandatory Tender 5/15/2026
8,247,476
TOTAL
14,708,287
Arkansas-   0.6%
3,500,000
Arkansas Development Finance Authority (APP Fair Oaks Partners,
LLLP), Collateralized Multifamily Housing Bonds (Series 2023), (United
States Treasury GTD), 3.550%, Mandatory Tender 6/1/2027
3,451,343
Semi-Annual Shareholder Report
2
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Arkansas-   continued
$ 3,895,000
Arkansas State, Federal Highway Grant and Tax Revenue Bonds
(Series 2012), 3.000%, 4/1/2024
$3,895,000
TOTAL
7,346,343
California-   5.1%
7,250,000
1
Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue
Bonds (Series 2021B) FRNs, 3.920% (SIFMA 7-day +0.280%), Mandatory
Tender 4/1/2024
7,250,000
9,000,000
1
Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue
Bonds (Series 2021C) FRNs, 4.090% (SIFMA 7-day +0.450%), Mandatory
Tender 4/1/2026
8,897,972
7,000,000
1
Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue
Bonds (SIFMA Index Rate Bonds Series 2021D) FRNs, 3.940% (SIFMA
7-day +0.300%), Mandatory Tender 4/1/2027
6,854,747
5,000,000
California Infrastructure & Economic Development Bank (Brightline West
Passenger Rail Project), (Series 2020A), (United States Treasury GTD),
3.950%, Mandatory Tender 1/30/2025
4,987,277
6,750,000
1
California Infrastructure & Economic Development Bank (Los Angeles
County Museum of Art), Refunding Revenue Bonds (Series 2021B)
FRNs, 4.340% (SIFMA 7-day +0.700%), Mandatory Tender 6/1/2026
6,594,165
9,000,000
California Pollution Control Financing Authority (Republic Services, Inc.),
(Series 2023), 4.125%, Mandatory Tender 8/15/2024
8,982,991
140,000
2
California Public Finance Authority (Kendal at Sonoma), Enso Village
TEMPS-50 Senior Living Revenue Refunding Bonds (Series B-3),
2.125%, 11/15/2027
140,005
9,300,000
San Diego, CA Housing Authority (Bernardo Family Housing, LP),
SkyLINE Multifamily Housing Revenue Bonds (Series 2023B), (United
States Treasury GTD), 5.000%, Mandatory Tender 11/1/2026
9,591,249
2,000,000
Western Placer, CA Unified School District, Community Facilities District
No. 1 2020 BANs, 2.000%, 6/1/2025
1,943,882
2,730,000
Western Placer, CA Unified School District, Community Facilities District
No. 2 2020 BANs, 2.000%, 6/1/2025
2,647,405
TOTAL
57,889,693
Colorado-   1.6%
3,100,000
Colorado Housing and Finance Authority (OPG Eagle Point Partners,
LLC), Multifamily Housing Revenue Bonds (Series 2024), (United States
Treasury GTD), 3.500%, Mandatory Tender 11/1/2026
3,100,257
4,860,000
1
Colorado School of Mines Board of Trustees (Colorado School of Mines,
CO), Institutional Enterprise Revenue Refunding Bonds (Series 2022D)
FRNs, 4.510% (SIFMA 7-day +0.870%), 12/1/2025
4,860,694
6,000,000
1
Colorado State Health Facilities Authority (Intermountain Healthcare
Obligated Group), Revenue Bonds (Series 2022D) FRNs, 4.190% (SIFMA
7-day +0.550%), Mandatory Tender 8/17/2026
5,958,021
4,000,000
1
E-470 Public Highway Authority, CO, Senior Revenue SOFR Index Term
Rate Bonds (Series 2021B) FRNs, 3.914% (SOFR x 0.67 +0.350%),
Mandatory Tender 9/1/2024
3,993,394
TOTAL
17,912,366
Semi-Annual Shareholder Report
3
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Connecticut-   0.3%
$ 3,000,000
Connecticut State Health & Educational Facilities (Yale University),
Revenue Bonds (Series 2017C-2), 2.800%, Mandatory Tender 2/3/2026
$2,947,973
Florida-   1.6%
3,500,000
Broward County, FL HFA (St. Joseph Manor II, LLLP), Multifamily
Housing Revenue Bonds (Series 2023), (United States Treasury COL),
3.500%, Mandatory Tender 4/1/2026
3,471,649
775,000
Escambia County, FL (International Paper Co.), Environmental
Improvement Revenue Refunding Bonds (Series 2019B), 2.000%,
Mandatory Tender 10/1/2024
766,844
2,500,000
Lee County, FL HFA (Aria Landings), Multifamily Housing Revenue
Bonds (Series 2023), (United States Treasury GTD), 3.550%, Mandatory
Tender 8/1/2025
2,474,267
11,500,000
1
Miami-Dade County, FL IDA (Waste Management, Inc.), Solid Waste
Disposal Revenue Bonds (Series 2018B) FRNs, 3.825% (SIFMA 7-day
+0.375%), Mandatory Tender 7/1/2024
11,475,826
TOTAL
18,188,586
Georgia-   3.4%
3,000,000
Burke County, GA Development Authority (Georgia Power Co.), Vogtle
Project PCRBs (First Series 2013), 3.375%, Mandatory Tender 3/12/2027
2,981,581
6,700,000
Burke County, GA Development Authority (Georgia Power Co.), Vogtle
Project Pollution Control Revenue Bonds (Fifth Series 1994), 2.150%,
Mandatory Tender 6/13/2024
6,664,010
3,000,000
Burke County, GA Development Authority (Georgia Power Co.), Vogtle
Project Pollution Control Revenue Bonds (First Series 1996), 3.875%,
Mandatory Tender 3/6/2026
3,019,524
5,650,000
Burke County, GA Development Authority (Georgia Power Co.), Vogtle
Project Pollution Control Revenue Bonds (First Series 2012), 2.875%,
Mandatory Tender 8/19/2025
5,525,819
5,000,000
Burke County, GA Development Authority (Georgia Power Co.), Vogtle
Project Pollution Control Revenue Bonds (Second Series 2008), 3.375%,
Mandatory Tender 3/12/2027
4,969,302
6,495,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2021A), (Royal Bank of Canada GTD), 4.000%, Mandatory
Tender 9/1/2027
6,546,505
1,000,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2022A), (Citigroup, Inc. GTD), 4.000%, 12/1/2025
992,931
350,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2024B), (Royal Bank of Canada GTD), 5.000%, 3/1/2026
355,937
400,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2024B), (Royal Bank of Canada GTD), 5.000%, 3/1/2027
411,284
700,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2024B), (Royal Bank of Canada GTD), 5.000%, 3/1/2028
728,482
265,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2024B), (Royal Bank of Canada GTD), 5.000%, 9/1/2026
271,225
425,000
Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds
(Series 2024B), (Royal Bank of Canada GTD), 5.000%, 9/1/2027
439,806
Semi-Annual Shareholder Report
4
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Georgia-   continued
$ 3,500,000
Monroe County, GA Development Authority (Georgia Power Co.),
Scherer Project Pollution Control Revenue Bonds (First Series 2013),
3.875%, Mandatory Tender 3/6/2026
$3,522,778
1,750,000
Monroe County, GA Development Authority (Georgia Power Co.),
Scherer Project Pollution Control Revenue Bonds (Second Series 2009),
3.875%, Mandatory Tender 3/6/2026
1,761,389
TOTAL
38,190,573
Illinois-   1.9%
2,000,000
Chicago, IL O'Hare International Airport, General Airport Senior Lien
Revenue Refunding Bonds (Series 2022C), 5.000%, 1/1/2025
2,012,890
3,500,000
Chicago, IL O'Hare International Airport, General Airport Senior Lien
Revenue Refunding Bonds (Series 2022C), 5.000%, 1/1/2026
3,571,411
2,000,000
Illinois Housing Development Authority (6900 Crandon LIHTC, LLC),
Multifamily Housing Revenue Bonds (Series 2023), (United States
Treasury GTD), 5.000%, Mandatory Tender 2/1/2026
2,034,245
2,170,000
Illinois Housing Development Authority (South Shore HHDC LIHTC,
LLC), Multifamily Housing Revenue Bonds (Series 2023), (United States
Treasury GTD), 5.000%, Mandatory Tender 2/1/2026
2,207,155
3,000,000
Illinois State, UT GO Bonds (Series 2023D), 5.000%, 7/1/2025
3,056,183
3,500,000
Illinois State, UT GO Bonds (Series 2023D), 5.000%, 7/1/2026
3,627,793
5,000,000
Illinois State, UT GO Bonds (Series 2023D), 5.000%, 7/1/2027
5,281,868
TOTAL
21,791,545
Indiana-   0.8%
6,195,000
1
Indiana State Finance Authority (Deaconess Health System), Revenue
Bonds (Series 2021B) FRNs, 3.940% (SIFMA 7-day +0.300%), Mandatory
Tender 3/1/2027
6,016,856
1,000,000
Indiana State Finance Authority (Republic Services, Inc.), (Series 2010A),
4.200%, Mandatory Tender 6/3/2024
999,241
2,000,000
Indiana State Finance Authority (Republic Services, Inc.), (Series 2012),
4.500%, Mandatory Tender 6/3/2024
1,998,482
TOTAL
9,014,579
Iowa-   0.5%
3,000,000
Iowa Finance Authority (Gevo NW Iowa RNG, LLC), Solid Waste Facility
Revenue Bonds Renewable Gas Project (Series 2021), (Citibank N.A.,
New York LOC), 1.500%, Mandatory Tender 4/1/2024
3,000,000
3,500,000
1
Iowa Finance Authority (Lifespace Communities, Inc.), Revenue Bonds
(Series 2021B) FRNs, 4.274% (SOFR x 0.70 +0.550%), Mandatory
Tender 5/15/2026
3,258,060
TOTAL
6,258,060
Kentucky-   4.0%
1,000,000
Kentucky Economic Development Finance Authority (Republic Services,
Inc.), (Series A), 4.200%, Mandatory Tender 6/3/2024
999,241
7,795,000
Kentucky Housing Corp. (Beecher IV, LLC), Multifamily Housing Revenue
Bonds (Series 2023), (United States Treasury COL), 5.000%, Mandatory
Tender 9/1/2026
7,976,851
Semi-Annual Shareholder Report
5
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Kentucky-   continued
$20,000,000
Knott County, KY, (Series 2024), (United States Treasury COL), 4.000%,
Mandatory Tender 4/1/2025
$19,978,248
13,000,000
Public Energy Authority of Kentucky, Gas Supply Revenue Bonds
(Series 2018B), (BP PLC GTD), 4.000%, Mandatory Tender 1/1/2025
12,994,150
3,250,000
Rural Water Financing Agency, KY, Public Projects Construction Notes
(Series 2023A), 3.900%, 11/1/2025
3,236,061
TOTAL
45,184,551
Louisiana-   2.9%
5,000,000
Louisiana Local Government Environmental Facilities Community
Development Authority (American Biocarbon, CT LLC), (Series 2021),
4.000%, Mandatory Tender 6/25/2024
4,995,639
3,000,000
Louisiana Local Government Environmental Facilities Community
Development Authority (East Baton Rouge Sewerage Commission),
Subordinate Lien Multi-Modal Revenue Refunding Bonds (Series 2020B),
0.875%, Mandatory Tender 2/1/2025
2,911,826
8,000,000
Louisiana State Offshore Terminal Authority (Loop LLC), Deepwater Port
Revenue Bonds (Series 2007B-1B), 4.200%, Mandatory
Tender 10/1/2025
8,011,114
2,500,000
Louisiana State Offshore Terminal Authority (Loop LLC), Deepwater Port
Revenue Bonds (Series 2007B-2A), 4.200%, Mandatory
Tender 10/1/2026
2,537,351
8,885,000
St. John the Baptist Parish, LA (Marathon Oil Corp.), Revenue Refunding
Bonds (Series 2017B-1), 2.125%, Mandatory Tender 7/1/2024
8,827,889
5,500,000
St. John the Baptist Parish, LA (Marathon Oil Corp.), Revenue Refunding
Bonds (Series 2019 A-1), 4.050%, Mandatory Tender 7/1/2026
5,461,254
TOTAL
32,745,073
Massachusetts-   0.3%
3,250,000
1
Massachusetts Development Finance Agency (Mass General Brigham),
Revenue Bonds (Series 2019T-1) FRNs, 4.240% (SIFMA 7-day +0.600%),
Mandatory Tender 1/29/2026
3,238,496
Michigan-   0.4%
2,000,000
Michigan State Finance Authority (Beaumont Health Spectrum Health
System), Hospital Revenue Refunding Bonds (Series 2022A),
5.000%, 4/15/2024
2,000,727
3,125,000
1
Michigan State Finance Authority (Beaumont Health Spectrum Health
System), Hospital Revenue Refunding Bonds (Series 2022C) FRNs,
4.390% (SIFMA 7-day +0.750%), Mandatory Tender 4/15/2027
3,098,694
TOTAL
5,099,421
Missouri-   0.6%
6,300,000
Kansas City, MO Planned Industrial Expansion Authority (The Depot on
Old Santa Fe, LP), The Depot on Old Santa Fe Apartments Multifamily
Housing Revenue Bonds (Series 2023), (United States Treasury GTD),
5.000%, Mandatory Tender 7/1/2027
6,507,240
Nevada-   1.5%
2,000,000
Clark County, NV (Nevada Power Co.), Pollution Control Refunding
Revenue Bonds (Series 2017), 3.750%, Mandatory Tender 3/1/2026
1,986,521
Semi-Annual Shareholder Report
6
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Nevada-   continued
$ 2,500,000
Director of the State of Nevada Department of Business and Industry
(Brightline West Passenger Rail Project), (Series 2020A), (United States
Treasury GTD), 4.000%, Mandatory Tender 1/30/2025
$2,491,831
3,500,000
Director of the State of Nevada Department of Business and Industry
(Republic Services, Inc.), Solid Waste Disposal Revenue Bonds
(Series 2001), 4.500%, Mandatory Tender 6/3/2024
3,498,718
7,000,000
Humboldt County, NV (Idaho Power Co.), Pollution Control Revenue
Refunding Bonds (Series 2003), 1.450%, 12/1/2024
6,843,689
1,000,000
Washoe County, NV (Sierra Pacific Power Co.), Gas and Water Facilities
Refunding Revenue Bonds (Series 2016B), 3.625%, Mandatory
Tender 10/1/2029
1,007,718
1,000,000
Washoe County, NV (Sierra Pacific Power Co.), Water Facilities
Refunding Revenue Bonds (Series 2016G), 3.625%, Mandatory
Tender 10/1/2029
1,006,721
TOTAL
16,835,198
New Hampshire-   0.7%
1,500,000
National Finance Authority, NH (Waste Management, Inc.), Solid Waste
Disposal Refunding Revenue Bonds (Series 2019A-1), 2.150%,
Mandatory Tender 7/1/2024
1,492,282
4,000,000
National Finance Authority, NH (Waste Management, Inc.), Solid Waste
Disposal Refunding Revenue Bonds (Series 2019A-3), 2.150%,
Mandatory Tender 7/1/2024
3,978,930
2,000,000
National Finance Authority, NH (Waste Management, Inc.), Solid Waste
Disposal Refunding Revenue Bonds (Series 2019A-4), 2.150%,
Mandatory Tender 7/1/2024
1,989,465
TOTAL
7,460,677
New Jersey-   3.5%
9,000,000
Belleville, NJ BANs, 5.000%, 7/10/2024
9,016,050
4,000,000
Camden County, NJ Improvement Authority (Northgate Preservation
Urban Renewal, LLC), Multifamily Housing Revenue Bonds (Series 2023),
(United States Treasury GTD), 5.000%, Mandatory Tender 3/1/2026
4,088,726
4,238,130
Haledon, NJ BANs, 4.500%, 9/27/2024
4,247,139
5,000,000
New Jersey EDA (New Jersey State), School Facilities Construction
Refunding Bonds (Series 2023RRR), 5.000%, 3/1/2025
5,065,404
3,100,000
New Jersey EDA (New Jersey-American Water Co., Inc.), Water
Facilities Refunding Revenue Bonds (Series 2020E), 0.850%, 12/1/2025
2,875,817
2,665,000
New Jersey Housing & Mortgage Finance Agency (Hamilton Square
Urban Renewal LLC), Multifamily Conduit Revenue Bonds
(Series 2023B), (United States Treasury GTD), 4.080%, Mandatory
Tender 12/1/2025
2,669,119
4,000,000
New Jersey Housing & Mortgage Finance Agency (New Center City
Apartments Urban Renewal, LLC), Multifamily Conduit Revenue Bonds
(Series 2023-C), (United States Treasury COL), 5.000%, 6/1/2025
4,037,143
3,170,000
New Jersey Housing & Mortgage Finance Agency (New Irvine Turner
Apartments Urban Renewal, LLC), Multifamily Conduit Revenue Bonds
(Series 2024C), (United States Treasury GTD), 3.670%, 2/1/2026
3,152,204
Semi-Annual Shareholder Report
7
Principal
Amount
Value
MUNICIPAL BONDS-   continued
New Jersey-   continued
$ 2,210,000
New Jersey State Transportation Trust Fund Authority (New Jersey
State), Transportation System Bonds (Series 2021A), 5.000%, 6/15/2025
$2,249,683
2,000,000
Winslow Township, NJ, (Series A) BANs, 4.000%, 9/12/2024
1,999,120
TOTAL
39,400,405
New Mexico-   1.5%
5,000,000
Farmington, NM (Public Service Co., NM), Pollution Control Revenue
Refunding Bonds San Juan Project (Series 2010C), 1.150%, Mandatory
Tender 6/4/2024
4,971,455
3,000,000
New Mexico Mortgage Finance Authority (JLG NM ABQ 2023, LLLP),
Mountain View I & II Apartments Project Multifamily Housing Revenue
Bonds (Series 2023), (United States Treasury GTD), 5.000%, Mandatory
Tender 9/1/2025
3,030,239
4,500,000
New Mexico Mortgage Finance Authority (JLG NM SAF 2023, LLLP),
Santa Fe Apartments and Sangre De Cristo Project Multifamily Housing
Revenue Bonds (Series 2023), (United States Treasury GTD), 5.000%,
Mandatory Tender 6/1/2025
4,518,378
4,000,000
New Mexico State Hospital Equipment Loan Council (Presbyterian
Healthcare Services), Hospital System Revenue Bonds (Series 2019B),
5.000%, Mandatory Tender 8/1/2025
4,064,294
TOTAL
16,584,366
New York-   3.7%
16,693,774
Adirondack, NY Central School District BANs, 4.500%, 6/27/2024
16,710,433
4,485,000
Carthage, NY Central School District BANs, 4.500%, 6/26/2024
4,488,440
6,270,000
Groton Central School District, NY BANs, 4.750%, 6/20/2024
6,277,163
1,500,000
Mayfield, NY Central School District BANs, 4.500%, 6/20/2024
1,500,890
2,000,000
Monroe County, NY IDA (Andrews Terrace Community Partners, LP),
Multifamily Housing Revenue Bonds (Series 2023B-2), (United States
Treasury GTD), 5.000%, Mandatory Tender 7/1/2027
2,051,823
2,250,000
New York City, NY, UT GO Bonds (Fiscal 2023 Series C),
5.000%, 8/1/2025
2,303,541
1,000,000
New York Transportation Development Corporation (JFK International
Air Terminal LLC), Special Facilities Revenue Bonds (Series 2020C),
5.000%, 12/1/2024
1,006,972
8,000,000
Newburgh, NY BANs, 4.450%, 8/9/2024
8,000,694
TOTAL
42,339,956
North Carolina-   2.3%
2,950,000
Asheville, NC Housing Authority (Vanderbilt TC2 Senior Housing LP),
Multifamily Housing Revenue Bonds (Series 2023), (United States
Treasury COL), 5.000%, Mandatory Tender 11/1/2025
2,992,495
4,000,000
Charlotte-Mecklenburg Hospital Authority, NC (Atrium Health
(previously Carolinas HealthCare) System), Variable Rate Health Care
Revenue Bonds (Series 2018E), 0.800%, Mandatory Tender 10/31/2025
3,833,429
3,500,000
Charlotte-Mecklenburg Hospital Authority, NC (Atrium Health
(previously Carolinas HealthCare) System), Variable Rate Health Care
Revenue Bonds (Series 2021B), 5.000%, Mandatory Tender 12/2/2024
3,531,476
Semi-Annual Shareholder Report
8
Principal
Amount
Value
MUNICIPAL BONDS-   continued
North Carolina-   continued
$   850,000
Columbus County, NC Industrial Facilities & Pollution Control Financing
Authority (International Paper Co.), Recovery Zone Facility Revenue
Refunding Bonds (Series 2019B), 2.000%, Mandatory Tender 10/1/2024
$841,055
1,000,000
Columbus County, NC Industrial Facilities & Pollution Control Financing
Authority (International Paper Co.), Recovery Zone Facility Revenue
Refunding Bonds (Series 2020A), 1.375%, Mandatory Tender 6/16/2025
969,158
13,635,000
1
University of North Carolina at Chapel Hill, General Revenue Refunding
Bonds (SOFR Floating Rate Note) (Series 2019B) FRNs, 4.214% (SOFR x
0.67 +0.650%), Mandatory Tender 6/1/2025
13,644,962
TOTAL
25,812,575
North Dakota-   0.9%
10,000,000
Cass County Joint Water Resource District, ND, UT GO Temporary
Refunding Improvement Bonds (Series 2021A), 0.480%, 5/1/2024
9,972,236
Ohio-   3.2%
4,350,000
Cuyahoga, OH Metropolitan Housing Authority (Wade Park
Apartments), Multifamily Housing Revenue Bonds (Series 2022), (United
States Treasury COL), 4.750%, Mandatory Tender 12/1/2025
4,386,415
18,425,000
Lancaster, OH Port Authority, Gas Supply Revenue Refunding Bonds
(Series 2019), (Royal Bank of Canada GTD), 5.000%, Mandatory
Tender 2/1/2025
18,587,339
2,917,000
Ohio HFA (Riverview San Marco, LLC), Multifamily Housing Revenue
Bonds (Series 2023), (United States Treasury COL), 5.000%, Mandatory
Tender 8/1/2025
2,948,371
2,665,000
Ohio HFA (Thornwood Commons Homes, LLC), Multifamily Housing
Revenue Bonds (Series 2023), (United States Treasury COL), 5.000%,
Mandatory Tender 12/1/2025
2,704,755
2,500,000
Ohio State Hospital Revenue (Cleveland Clinic), Hospital Revenue
Bonds (Series 2019C), 2.750%, Mandatory Tender 5/1/2028
2,441,231
5,500,000
River Valley, OH Local School District BANs, 5.000%, 6/3/2024
5,510,135
TOTAL
36,578,246
Oregon-   0.4%
590,000
Multnomah County, OR Hospital Facilities Authority (Terwilliger Plaza,
Inc.), Parkview Project TEMPS-50 Revenue and Refunding Bonds
(Series 2021B-2), 0.950%, 6/1/2027
535,861
1,000,000
Multnomah County, OR Hospital Facilities Authority (Terwilliger Plaza,
Inc.), Parkview Project TEMPS-65 Revenue and Refunding Bonds
(Series 2021B-1), 1.200%, 6/1/2028
884,001
3,300,000
Oregon State Housing and Community Services Department (Susan
Emmons Apartments LP), (United States Treasury COL),
4.350%, 6/1/2024
3,297,325
TOTAL
4,717,187
Pennsylvania-   4.7%
5,500,000
1
Allegheny County, PA Higher Education Building Authority (Carnegie
Mellon University), Revenue Bonds (Series 2022A) FRNs, 4.014% (SOFR
x 0.70 +0.290%), Mandatory Tender 8/1/2027
5,420,533
Semi-Annual Shareholder Report
9
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Pennsylvania-   continued
$ 2,480,000
1
Bethlehem, PA Area School District Authority, School Revenue Bonds
(Series 2021A) FRNs, 3.914% (SOFR x 0.67 +0.350%), Mandatory
Tender 11/1/2025
$2,441,489
3,245,000
1
Bethlehem, PA Area School District Authority, School Revenue Bonds
(Series 2021B) FRNs, 3.914% (SOFR x 0.67 +0.350%), Mandatory
Tender 11/1/2025
3,194,610
15,000,000
1
Delaware Valley, PA Regional Finance Authority, Local Government
Revenue Bonds (Series 2022C) FRNs, 4.054% (SOFR x 0.67 +0.490%),
Mandatory Tender 3/1/2027
14,688,519
9,410,000
1
Lehigh County, PA General Purpose Authority (Muhlenberg College),
College Revenue Bonds (Series 2019) FRNs, 4.220% (SIFMA 7-day
+0.580%), Mandatory Tender 11/1/2024
9,388,104
4,000,000
1
Northampton County, PA General Purpose Authority (St. Luke's
University Health Network), Variable Rate Hospital Revenue Bonds
(Series 2018B) FRNs, 4.848% (1-month USLIBOR x 0.70 +1.040%),
Mandatory Tender 8/15/2024
4,000,042
4,900,000
Pennsylvania Economic Development Financing Authority (Waste
Management, Inc.), Solid Waste Disposal Revenue Bonds
(Series 2017A), 0.580%, Mandatory Tender 8/1/2024
4,840,839
9,000,000
1
Pennsylvania Economic Development Financing Authority (Waste
Management, Inc.), Solid Waste Disposal Revenue Bonds (Series 2021A)
FRNs, 4.040% (SIFMA 7-day +0.400%), Mandatory Tender 6/3/2024
8,986,848
TOTAL
52,960,984
Tennessee-   2.5%
3,000,000
Johnson City, TN Health & Education Facilities Board (Roan Hill, LP),
Tapestry at Roan Hill Collateralized Multifamily Housing Bonds
(Series 2023), (United States Treasury GTD), 3.600%, Mandatory
Tender 12/1/2026
2,982,036
3,500,000
Knoxville, TN Community Development Corp. (Austin Homes 1B),
(Series 2021), 4.250%, 10/1/2024
3,504,301
5,000,000
Knoxville, TN Community Development Corp. (DGA Grosvenor Square
LP), Collateralized Multifamily Housing Bonds (Series 2022), (United
States Treasury GTD), 4.000%, Mandatory Tender 6/1/2026
5,023,124
1,750,000
Knoxville, TN Community Development Corp. (DGA Holston LP), Willow
Place Collateralized Multifamily Housing Bonds (Series 2022), (United
States Treasury GTD), 3.750%, Mandatory Tender 6/1/2026
1,742,616
700,000
Knoxville, TN Community Development Corp. (DGA Holston LP), Willow
Place Collateralized Multifamily Housing Bonds (Series 2022), (United
States Treasury GTD), 3.750%, Mandatory Tender 6/1/2026
697,190
4,500,000
Memphis, TN Health, Educational and Housing Facility Board (APP
Greenbriar Partners, LLLP), Collateralized Multifamily Housing Bonds
(Series 2023), (United States Treasury GTD), 3.550%, Mandatory
Tender 6/1/2027
4,426,007
3,000,000
Metropolitan Government of Nashville & Davidson County, TN Health &
Educational Facilities Board (301 Ben Allen LP), Multifamily Housing
Revenue Bonds (Series 2022B), (United States Treasury COL), 3.850%,
Mandatory Tender 2/1/2026
3,000,020
Semi-Annual Shareholder Report
10
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Tennessee-   continued
$ 7,200,000
Tennergy Corp., TN Gas Revenue, Gas Supply Revenue Bonds
(Series 2019A), (Royal Bank of Canada GTD), 5.000%, Mandatory
Tender 10/1/2024
$7,237,431
TOTAL
28,612,725
Texas-   8.2%
3,400,000
Austin, TX Airport System, Revenue Refunding Bonds (Series 2019),
5.000%, 11/15/2024
3,416,978
4,000,000
Clear Creek, TX Independent School District, Variable Rate UT GO
School Building Bonds (Series 2013B), (Texas Permanent School Fund
Guarantee Program GTD), 0.280%, Mandatory Tender 8/15/2024
3,942,379
3,500,000
Denton County, TX HFA (THF Pathway on Woodrow, LP), Multifamily
Housing Revenue Bonds (Series 2022), (United States Treasury COL),
5.000%, Mandatory Tender 2/1/2025
3,523,870
1,760,000
Eanes, TX Independent School District, Variable Rate UT School
Building Bonds (Series 2019B), (Texas Permanent School Fund
Guarantee Program GTD), 1.750%, Mandatory Tender 8/1/2025
1,719,233
2,705,000
Eanes, TX Independent School District, Variable Rate UT School
Building Bonds (Series 2019B), (United States Treasury PRF
8/1/2024@100), 1.750%, Mandatory Tender 8/1/2024
2,686,008
3,840,000
Fort Bend, TX Independent School District, Variable Rate UT School
Building and Refunding Bonds (Series 2020B), (Texas Permanent School
Fund Guarantee Program GTD), 0.875%, Mandatory Tender 8/1/2025
3,693,339
5,000,000
1
Harris County, TX Cultural Education Facilities Finance Corp. (Memorial
Hermann Health System), Hospital Revenue Bonds (Series 2019C-2)
FRNs, 4.020% (SIFMA 7-day +0.570%), Mandatory Tender 12/4/2024
4,989,161
2,750,000
1
Harris County, TX Cultural Education Facilities Finance Corp. (Memorial
Hermann Health System), Hospital Revenue Bonds (Series 2022C) FRNs,
4.490% (SIFMA 7-day +0.850%), Mandatory Tender 12/1/2026
2,735,793
4,000,000
Harris County, TX Cultural Education Facilities Finance Corp. (Texas
Medical Center), Revenue Bonds (Series 2020A), 0.900%, Mandatory
Tender 5/15/2025
3,844,858
850,000
Houston, TX, Public Improvement and Refunding Bonds (Series 2023),
5.000%, 3/1/2025
861,892
1,000,000
Houston, TX, Public Improvement and Refunding Bonds (Series 2023),
5.000%, 3/1/2026
1,033,964
925,000
Houston, TX, Public Improvement and Refunding Bonds (Series 2023),
5.000%, 3/1/2028
997,170
5,750,000
Mission, TX Economic Development Corp. (Waste Management, Inc.),
(Series 2023A), (Waste Management Holdings, Inc. GTD), 4.250%,
Mandatory Tender 6/3/2024
5,746,298
7,500,000
North Texas Tollway Authority, First Tier Revenue Refunding Bonds
(Series 2023A), 5.000%, 1/1/2026
7,736,463
14,985,000
Ponder, TX Independent School District, Variable Rate UT School
Building Bonds (Series 2021), (Texas Permanent School Fund Guarantee
Program GTD), 0.750%, Mandatory Tender 8/15/2024
14,794,613
Semi-Annual Shareholder Report
11
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Texas-   continued
$ 3,370,000
1
San Antonio, TX Electric & Gas System, Junior Lien Revenue Refunding
Bonds (Series 2022) FRNs, 4.510% (SIFMA 7-day +0.870%), Mandatory
Tender 12/1/2025
$3,364,841
2,500,000
Texas Municipal Gas Acquisition & Supply Corp. III, Gas Supply Revenue
Refunding Bonds (Series 2021), (Macquarie Group Ltd. GTD),
5.000%, 12/15/2026
2,565,000
2,126,000
Texas State Affordable Housing Corp. (Eden Court Senior Housing LP),
(Series 2023), (United States Treasury GTD), 5.000%, Mandatory
Tender 4/1/2026
2,170,723
11,000,000
Texas State Department of Housing & Community Affairs (THF Park at
Kirkstall Apartments, LP), Multifamily Housing Revenue Bonds
(Series 2021), 0.650%, Mandatory Tender 12/1/2024
10,652,023
4,009,000
The Texas Home Collaborative (1518 Apartments Ltd), Multifamily
Housing Revenue Bonds (Series 2023), 5.000%, Mandatory
Tender 10/1/2026
4,134,248
8,000,000
Trinity River, TX Public Facilities Authority (Cowan Place Apartments),
(Series 2021), (United States Treasury COL), 4.400%, Mandatory
Tender 4/1/2024
8,000,000
TOTAL
92,608,854
Virginia-   3.3%
1,175,000
Harrisonburg, VA Redevelopment & Housing Authority (John Early
Apartments), Multifamily Housing Revenue Bonds (Series 2023), (United
States Treasury GTD), 4.000%, Mandatory Tender 12/1/2025
1,175,318
1,650,000
Harrisonburg, VA Redevelopment & Housing Authority (Wesley
Apartments), Multifamily Housing Revenue Bonds (Series 2023), (United
States Treasury GTD), 4.000%, Mandatory Tender 12/1/2026
1,663,253
5,500,000
Norfolk, VA Redevelopment and Housing Authority (Standard Braywood
Manor Venture LP), Multifamily Housing Revenue Bonds (Series 2023),
(United States Treasury COL), 5.000%, Mandatory Tender 5/1/2026
5,606,467
3,720,000
Northampton County and Towns, VA EDA (Myrtle Landing Renewal
LLC), Multifamily Housing Revenue Bonds (Series 2023), (United States
Treasury COL), 4.500%, Mandatory Tender 4/1/2025
3,730,340
6,500,000
Southampton County, VA IDA (PRTI-Virginia One, LLC), Environmental
Improvement Revenue Bonds (Series 2023), (United States Treasury
COL), 4.875%, Mandatory Tender 12/12/2024
6,491,787
2,000,000
Virginia Beach, VA Development Authority (Westminster-Canterbury on
Chesapeake Bay), Residential Care Facility Revenue Bonds TEMPS-50
(Series 2023B-3), 5.375%, 9/1/2029
2,080,368
5,500,000
Virginia Peninsula Port Authority (Dominion Terminal Associates), Coal
Terminal Revenue Refunding Bonds (Series 2003), 3.800%, Mandatory
Tender 10/1/2024
5,472,281
6,500,000
Virginia Small Business Financing Authority (Pure Salmon Virginia LLC),
(Series 2022), (United States Treasury COL), 5.000%, Mandatory
Tender 11/15/2024
6,499,884
Semi-Annual Shareholder Report
12
Principal
Amount
Value
MUNICIPAL BONDS-   continued
Virginia-   continued
$ 5,000,000
Wise County, VA IDA (Virginia Electric & Power Co.), Solid Waste and
Sewage Disposal Revenue Bonds (Series 2009A), 0.750%, Mandatory
Tender 9/2/2025
$4,670,636
TOTAL
37,390,334
Washington-   2.2%
4,000,000
King County, WA Housing Authority, Affordable Housing Revenue
Bonds Kirkland Heights Project (Series 2023A-1), 5.000%, 1/1/2028
4,099,945
5,000,000
1
King County, WA Sewer System, Junior Lien Revenue Bonds
(Series 2021A) FRNs, 3.870% (SIFMA 7-day +0.230%), Mandatory
Tender 1/1/2027
4,900,670
9,250,000
1
Seattle, WA (Seattle, WA Municipal Light & Power), Refunding Revenue
Bonds (Series 2021B) FRNs, 3.890% (SIFMA 7-day +0.250%), Mandatory
Tender 11/1/2026
9,018,850
2,500,000
Washington State Health Care Facilities Authority (CommonSpirit
Health), Revenue Bonds (Series 2019B-1), 5.000%, Mandatory
Tender 8/1/2024
2,501,336
4,801,000
Washington State Housing Finance Commission (Ardea TWG, LLLP),
Ardea at Totem Lake Apartments Multifamily Housing Revenue Bonds
(Series 2023), (United States Treasury GTD), 5.000%, Mandatory
Tender 2/1/2027
4,920,591
TOTAL
25,441,392
West Virginia-   1.2%
8,750,000
West Virginia EDA (Appalachian Power Co.), Solid Waste Disposal
Facilities Revenue Refunding Bonds (Series 2015A), 3.375%, Mandatory
Tender 6/15/2028
8,710,269
5,500,000
West Virginia EDA Solid Waste Disposal Facilities (Appalachian Power
Co.), Revenue Bonds (Series 2011A), 1.000%, Mandatory
Tender 9/1/2025
5,189,309
TOTAL
13,899,578
Wisconsin-   1.7%
7,500,000
Public Finance Authority (Duke Energy Progress LLC), Pollution Control
Revenue Refunding Bonds (Series 2022A-1), 3.300%, Mandatory
Tender 10/1/2026
7,421,915
4,500,000
Wisconsin Health & Educational Facilities Authority (Advocate Aurora
Health), Revenue Bonds (Series 2018B-2), 5.000%, Mandatory
Tender 6/24/2026
4,629,494
7,500,000
2
Wisconsin Health & Educational Facilities Authority (Forensic Science
and Protective Medicine Collaboration, Inc.), Revenue Bonds
(Series 2024), 5.000%, 8/1/2027
7,669,420
TOTAL
19,720,829
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $832,456,392)
826,276,988
Semi-Annual Shareholder Report
13
Principal
Amount
Value
1
SHORT-TERM MUNICIPALS-   25.3%
California-   3.9%
$16,775,000
Los Angeles, CA Multifamily Housing Revenue Bonds (CORE Related/
GALA Rentals, LP), SPEAR's 3a-7 (Series DBE-8081) Weekly VRDNs,
(Deutsche Bank AG LIQ)/(Deutsche Bank AG LOC), 3.850%, 4/4/2024
$16,775,000
17,300,000
Nuveen California AMT-Free Quality Municipal Income Fund, (Series A)
MuniFund Preferred Shares Weekly VRDPs, 3.900%, 4/1/2024
17,300,000
10,000,000
Nuveen California Quality Municipal Income Fund, RIB Floater Trust
(Series 2022-FR-RI-005) (Series 2 Preferred Shares) VRENs, (Barclays
Bank plc LIQ)/(Barclays Bank plc LOC), 4.040%, 4/4/2024
10,000,000
TOTAL
44,075,000
Florida-   0.2%
1,700,000
Miami-Dade County, FL HFA (Cordoba FL TC, LP), Mizuho 3a-7
(2021-MIZ9072) VRENs, (Mizuho Bank Ltd. GTD)/(Mizuho Bank Ltd.
LIQ), 4.010%, 4/4/2024
1,700,000
Idaho-   0.5%
6,000,000
American Falls, ID Reservoir District (Idaho Power Co.), (Series 2000)
Weekly VRDNs, 3.900%, 4/3/2024
6,000,000
Indiana-   1.0%
11,600,000
Indiana State Finance Authority Environmental (ArcelorMittal SA),
(Series 2006) Weekly VRDNs, (Banco Bilbao Vizcaya Argentaria SA LOC),
3.800%, 4/3/2024
11,600,000
Kentucky-   0.5%
600,000
Meade County, KY Industrial Building Revenue Authority (Nucor Corp.),
(Series 2020B-1) Daily VRDNs, 4.560%, 4/1/2024
600,000
5,095,000
Meade County, KY Industrial Building Revenue Authority (Nucor Corp.),
(Series 2021A-1) Daily VRDNs, 5.160%, 4/1/2024
5,095,000
TOTAL
5,695,000
Multi State-   10.6%
50,200,000
Invesco Municipal Opportunity Trust, PUTTERs 3a-7 (VMTP 5029) Daily
VRDNs, (JPMorgan Chase Bank, N.A. LIQ), 5.000%, 4/1/2024
50,200,000
24,100,000
Invesco Value Municipal Income Trust, PUTTERs 3a-7 (VMTP 5027) Daily
VRDNs, (JPMorgan Chase Bank, N.A. LIQ), 5.000%, 4/1/2024
24,100,000
18,800,000
Nuveen AMT-Free Municipal Credit Income Fund, (Series B) MuniFund
Preferred Shares Weekly VRDPs, 4.090%, 4/1/2024
18,800,000
13,300,000
Nuveen AMT-Free Municipal Credit Income Fund, (Series C) MuniFund
Preferred Shares Weekly VRDPs, 3.900%, 4/1/2024
13,300,000
13,975,000
Nuveen AMT-Free Quality Municipal Income Fund, (Series D) MuniFund
Preferred Shares Weekly VRDPs, 3.900%, 4/1/2024
13,975,000
TOTAL
120,375,000
New York-   0.9%
10,000,000
New York State HFA (42nd and 10th Street Associates LLC), 3a-7 High
Grade Trust (Series 2022-007) VRENs, (Barclays Bank plc LIQ)/(Barclays
Bank plc LOC), 4.090%, 4/4/2024
10,000,000
Ohio-   1.1%
8,500,000
Ohio State Hospital Revenue (University Hospitals Health System, Inc.),
(Series B) VRENs, 3.900%, 4/1/2024
8,500,000
Semi-Annual Shareholder Report
14
Principal
Amount
Value
1
SHORT-TERM MUNICIPALS-   continued
Ohio-   continued
$ 4,000,000
Ohio State Hospital Revenue (University Hospitals Health System, Inc.),
(Series C) VRENs, 3.900%, 4/1/2024
$4,000,000
500,000
Ohio State Hospital Revenue (University Hospitals Health System, Inc.),
Hospital Revenue Bonds (Series 2014B) VRENs, 3.900%, 4/4/2024
500,000
TOTAL
13,000,000
Oklahoma-   0.8%
8,950,000
Oklahoma Development Finance Authority (INTEGRIS Obligated
Group), R-Float (Series 2020B) Weekly VRENs, 4.280%, 4/1/2024
8,950,000
Pennsylvania-   0.6%
6,645,000
Central Bradford Progress Authority, PA (Guthrie Healthcare System,
PA), R-Float (Series 2021D) Weekly VRENs, 4.260%, 4/4/2024
6,645,000
Texas-   5.2%
5,000,000
Harris County, TX Cultural Education Facilities Finance Corp. (Baylor
College of Medicine), R-Float (Series 2024B) Weekly VRENs,
4.150%, 4/4/2024
5,000,000
14,500,000
Port of Port Arthur Navigation District of Jefferson County, TX (Motiva
Enterprises LLC), (Series 2002) Weekly VRDNs, 3.850%, 4/3/2024
14,500,000
24,100,000
Port of Port Arthur Navigation District of Jefferson County, TX (Motiva
Enterprises LLC), (Series 2010D) Weekly VRDNs, 3.800%, 4/3/2024
24,100,000
10,175,000
Port of Port Arthur Navigation District of Jefferson County, TX (Motiva
Enterprises LLC), (Series 2010E) Weekly VRDNs, 3.850%, 4/3/2024
10,175,000
5,000,000
San Antonio, TX Housing Finance Corp. (Leon Creek Flats Apartments),
Tender Option Bond Trust Certificates (Series DBE-8123) Daily VRDNs,
(Deutsche Bank AG LIQ)/(Deutsche Bank AG LOC), 4.800%, 4/1/2024
5,000,000
TOTAL
58,775,000
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $286,815,000)
286,815,000
TOTAL INVESTMENT IN SECURITIES-98.2%
(IDENTIFIED COST $1,119,271,392)3
1,113,091,988
OTHER ASSETS AND LIABILITIES - NET-1.8%4
20,538,910
TOTAL NET ASSETS-100%
$1,133,630,898
Securities that are subject to the federal alternative minimum tax (AMT) represent 21.6% of the Fund's portfolio as calculated based upon total market value.
1
Current rate and current maturity or next reset date shown for floating rate notes and variable
rate notes/demand instruments. Certain variable rate securities are not based on a published
reference rate and spread but are determined by the issuer or agent and are based on current
market conditions. These securities do not indicate a reference rate and spread in their
description above.
2
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 March 31, 2024, these restricted
securities amounted to $7,809,425, which represented 0.7% of total net assets.
3
The cost of investments for federal tax purposes amounts to $1,119,233,086.
Semi-Annual Shareholder Report
15
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 March 31, 2024.
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.
As of March 31, 2024, all investments of the Fund utilized Level 2 inputs in valuing the Fund's assets carried at fair value.
The following acronym(s) are used throughout this portfolio:
AMT
-Alternative Minimum Tax
BANs
-Bond Anticipation Notes
COL
-Collateralized
EDA
-Economic Development Authority
FRNs
-Floating Rate Notes
GO
-General Obligation
GTD
-Guaranteed
HFA
-Housing Finance Authority
IDA
-Industrial Development Authority
IDB
-Industrial Development Bond
LIBOR
-London Interbank Offered Rate
LIQ
-Liquidity Agreement
LOC
-Letter of Credit
LP
-Limited Partnership
PRF
-Pre-refunded
PUTTERs
-Puttable Tax-Exempt Receipts
SIFMA
-Securities Industry and Financial Markets Association
SOFR
-Secured Overnight Financing Rate
TEMPS
-Tax Exempt Mandatory Paydown Securities
UT
-Unlimited Tax
VMTP
-Variable Municipal Term Preferred
VRDNs
-Variable Rate Demand Notes
VRDPs
-Variable Rate Demand Preferreds
VRENs
-Variable Rate Extendible Notes
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
16
Financial Highlights-Class A Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)

3/31/2024
Year Ended September 30,
2023
2022
2021
2020
2019
Net Asset Value, Beginning of
Period
$9.88
$9.84
$10.04
$10.03
$10.01
$9.98
Income From Investment
Operations:
Net investment income1
0.15
0.25
0.05
0.02
0.09
0.13
Net realized and unrealized gain (loss)
0.07
0.04
(0.20)
0.01
0.02
0.03
TOTAL FROM INVESTMENT
OPERATIONS
0.22
0.29
(0.15)
0.03
0.11
0.16
Less Distributions:
Distributions from net investment
income
(0.15)
(0.25)
(0.05)
(0.02)
(0.09)
(0.13)
Net Asset Value, End of Period
$9.95
$9.88
$9.84
$10.04
$10.03
$10.01
Total Return2
2.27%
3.02%
(1.49)%
0.33%
1.14%
1.59%
Ratios to Average Net Assets:
Net expenses3
0.51%4,5
0.51%5
0.51%
0.51%
0.57%5
0.81%5
Net investment income
3.08%4
2.53%
0.45%
0.23%
0.94%
1.28%
Expense waiver/reimbursement6
0.10%4
0.08%
0.09%
0.08%
0.09%
0.13%
Supplemental Data:
Net assets, end of period (000
omitted)
$234,958
$270,423
$407,000
$692,467
$584,371
$626,570
Portfolio turnover7
23%
44%
30%
61%
100%
83%
1
Per share number has 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. Total returns for periods of less than one year are
not annualized.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
Computed on an annualized basis.
5
The net expense ratios are calculated without reduction for expense offset arrangements. The
net expense ratios are 0.51%, 0.51%, 0.57% and 0.81% for the six months ended March 31, 2024
and for the years ended September 30, 2023, 2020 and 2019, respectively, after taking into
account these expense reductions.
6
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.
7
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
17
Financial Highlights-Institutional Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)

3/31/2024
Year Ended September 30,
2023
2022
2021
2020
2019
Net Asset Value, Beginning
of Period
$9.88
$9.85
$10.04
$10.03
$10.01
$9.98
Income From Investment
Operations:
Net investment income1
0.16
0.27
0.07
0.04
0.11
0.17
Net realized and unrealized
gain (loss)
0.08
0.03
(0.19)
0.01
0.02
0.03
TOTAL FROM
INVESTMENT
OPERATIONS
0.24
0.30
(0.12)
0.05
0.13
0.20
Less Distributions:
Distributions from net
investment income
(0.16)
(0.27)
(0.07)
(0.04)
(0.11)
(0.17)
Net Asset Value, End of
Period
$9.96
$9.88
$9.85
$10.04
$10.03
$10.01
Total Return2
2.45%
3.07%
(1.24)%
0.48%
1.35%
2.04%
Ratios to Average Net
Assets:
Net expenses3
0.36%4,5
0.36%5
0.36%
0.36%
0.36%5
0.36%5
Net investment income
3.23%4
2.67%
0.60%
0.39%
1.14%
1.72%
Expense waiver/
reimbursement6
0.10%4
0.09%
0.09%
0.08%
0.08%
0.08%
Supplemental Data:
Net assets, end of period (000
omitted)
$786,819
$791,126
$1,332,830
$2,133,831
$2,162,027
$2,158,811
Portfolio turnover7
23%
44%
30%
61%
100%
83%
1
Per share number has been calculated using the average shares method.
2
Based on net asset value. Total returns for periods of less than one year are not annualized.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
4
Computed on an annualized basis.
5
The net expense ratios are calculated without reduction for expense offset arrangements. The
net expense ratios are 0.36%, 0.36%, 0.36% and 0.36% for the six months ended March 31, 2024
and for the years ended September 30, 2023, 2020 and 2019, respectively, after taking into
account these expense reductions.
6
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.
7
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
18
Financial Highlights-Class R6 Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)

03/31/2024
Year Ended September 30,
Period
Ended
9/30/20191
2023
2022
2021
2020
Net Asset Value, Beginning of Period
$9.88
$9.84
$10.04
$10.03
$10.01
$10.00
Income From Investment Operations:
Net investment income2
0.16
0.27
0.07
0.04
0.12
0.05
Net realized and unrealized gain
0.07
0.04
(0.20)
0.01
0.02
0.01
TOTAL FROM INVESTMENT
OPERATIONS
0.23
0.31
(0.13)
0.05
0.14
0.06
Less Distributions:
Distributions from net investment
income
(0.16)
(0.27)
(0.07)
(0.04)
(0.12)
(0.05)
Net Asset Value, End of Period
$9.95
$9.88
$9.84
$10.04
$10.03
$10.01
Total Return3
2.35%
3.20%
(1.32)%
0.50%
1.37%
0.66%
Ratios to Average Net Assets:
Net expenses4
0.34%5,6
0.34%6
0.34%
0.34%
0.34%6
0.34%5,6
Net investment income
3.25%5
2.69%
0.65%
0.38%
0.99%
1.52%5
Expense waiver/reimbursement7
0.07%5
0.07%
0.06%
0.06%
0.06%
0.07%5
Supplemental Data:
Net assets, end of period (000 omitted)
$111,854
$100,886
$148,888
$208,627
$60,784
$12,263
Portfolio turnover8
23%
44%
30%
61%
100%
83%9
1
Reflects operations for the period from May 29, 2019 (commencement of operations) to
September 30, 2019.
2
Per share number has been calculated using the average shares method.
3
Based on net asset value. Total returns for periods of less than one year are not annualized.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund
may invest.
5
Computed on an annualized basis.
6
The net expense ratios are calculated without reduction for expense offset arrangements. The
net expense ratios are 0.34%, 0.34%, 0.34% and 0.34% for the six months ended
March 31, 2024, for the years ended September 30, 2023 and 2020 and the period ended
September 30, 2019, respectively, after taking into account these expense reductions.
7
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.
8
Securities that mature are considered sales for purposes of this calculation.
9
Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the
fiscal year ended September 30, 2019.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
19
Statement of Assets and LiabilitiesMarch 31, 2024 (unaudited)
Assets:
Investment in securities, at value(identified cost $1,119,271,392)
$1,113,091,988
Cash
182,346
Receivable for investments sold
25,000,000
Income receivable
8,891,835
Receivable for shares sold
1,156,623
Total Assets
1,148,322,792
Liabilities:
Payable for investments purchased
$11,850,000
Payable for shares redeemed
1,604,571
Income distribution payable
837,125
Payable for investment adviser fee (Note5)
30,429
Payable for other service fees (Notes 2 and5)
29,784
Payable for administrative fee (Note5)
9,246
Payable for Directors'/Trustees' fees (Note5)
205
Accrued expenses (Note 5)
330,534
TOTAL LIABILITIES
14,691,894
Net assets for 113,875,051 shares outstanding
$1,133,630,898
Net Assets Consist of:
Paid-in capital
$1,160,261,559
Total distributable earnings (loss)
(26,630,661)
TOTAL NET ASSETS
$1,133,630,898
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Class A Shares:
Net asset value per share ($234,957,999 ÷ 23,603,990 shares outstanding)
$0.001 par value, 500,000,000 shares authorized
$9.95
Offering price per share
$9.95
Redemption proceeds per share
$9.95
Institutional Shares:
Net asset value per share ($786,818,588 ÷ 79,032,779 shares outstanding)
$0.001 par value, 500,000,000 shares authorized
$9.96
Offering price per share
$9.96
Redemption proceeds per share
$9.96
Class R6 Shares:
Net asset value per share ($111,854,311 ÷ 11,238,282 shares outstanding)
$0.001 par value, 500,000,000 shares authorized
$9.95
Offering price per share
$9.95
Redemption proceeds per share
$9.95
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
20
Statement of OperationsSix Months Ended March 31, 2024 (unaudited)
Investment Income:
Interest
$20,560,486
Expenses:
Investment adviser fee (Note5)
$1,660,493
Administrative fee (Note5)
446,672
Custodian fees
37,139
Transfer agent fees (Notes 2 and 5)
284,054
Directors'/Trustees' fees (Note5)
4,671
Auditing fees
19,652
Legal fees
6,383
Other service fees (Notes 2 and 5)
182,078
Portfolio accounting fees
100,473
Share registration costs
34,566
Printing and postage
17,295
Miscellaneous (Note5)
17,514
TOTAL EXPENSES
2,810,990
Waiver, Reimbursement and Reduction:
Waiver of investment adviser fee (Note5)
(412,173)
Reimbursement of other operating expenses (Notes 2 and 5)
(138,087)
Reduction of custodian fees (Note6)
(7,923)
TOTAL WAIVER, REIMBURSEMENT AND REDUCTION
(558,183)
Net expenses
2,252,807
Net investment income
18,307,679
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments
(365,630)
Net change in unrealized depreciation of investments
8,635,149
Net realized and unrealized gain (loss) on investments
8,269,519
Change in net assets resulting from operations
$26,577,198
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
21
Statement of Changes in Net Assets
Six Months
Ended
(unaudited)
3/31/2024
Year Ended
9/30/2023
Increase (Decrease) in Net Assets
Operations:
Net investment income
$18,307,679
$38,162,116
Net realized loss
(365,630)
(5,765,858)
Net change in unrealized appreciation/depreciation
8,635,149
13,113,919
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
26,577,198
45,510,177
Distributions to Shareholders:
Class A Shares
(3,742,299)
(8,240,031)
Institutional Shares
(12,766,891)
(26,696,009)
Class R6 Shares
(1,779,366)
(3,268,073)
CHANGE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS
(18,288,556)
(38,204,113)
Share Transactions:
Proceeds from sale of shares
248,253,275
344,741,191
Net asset value of shares issued to shareholders in payment of
distributions declared
2,381,234
28,428,798
Cost of shares redeemed
(287,726,766)
(1,106,759,300)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(37,092,257)
(733,589,311)
Change in net assets
(28,803,615)
(726,283,247)
Net Assets:
Beginning of period
1,162,434,513
1,888,717,760
End of period
$1,133,630,898
$1,162,434,513
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
22
Notes to Financial Statements
March 31, 2024 (unaudited)
1. ORGANIZATION
Federated Hermes Fixed Income Securities, Inc. (the "Corporation") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Corporation consists of two portfolios. The financial statements included herein are only those of Federated Hermes Municipal Ultrashort Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolio 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 three classes of shares: Class A 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 current income exempt from federal regular income tax. Interest income from the Fund's investments may be subject to the federal AMT for individuals and state and local taxes.
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:

Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by Federated Investment Management Company (the "Adviser").

Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.

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 ask quotations.

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.

For securities that are fair valued in accordance with procedures established by and under the general supervision of the Adviser, 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 Adviser's valuation policies and procedures for the Fund, or if
Semi-Annual Shareholder Report
23
information furnished by a pricing service, in the opinion of the Adviser's 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 Procedures
Pursuant to Rule 2a-5 under the Act, the Fund's Board of Directors (the "Directors") has designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Directors' oversight and certain reporting and other requirements intended to provide the Directors the information needed to oversee the Adviser's fair value determinations.
The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Adviser. The Directors periodically review the fair valuations made by the Valuation Committee. The Directors have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review 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 ask 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 Adviser.
Semi-Annual Shareholder Report
24
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 daily and paid monthly. 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, reimbursement and reduction of $558,183 is disclosed in this Note 2, Note 5 and Note 6. 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 six months ended March 31, 2024, transfer agent fees for the Fund were as follows:
Transfer Agent
Fees Incurred
Transfer Agent
Fees Reimbursed
Class A Shares
$64,735
$(106,518)
Institutional Shares
215,284
(31,569)
Class R6 Shares
4,035
-
TOTAL
$284,054
$(138,087)
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 to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. The Fund's Class A Shares will not incur and pay such other service fees to exceed 0.15% until such time as approved by the Directors. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the six months ended March 31, 2024, other service fees for the Fund were as follows:
Other Service
Fees Incurred
Class A Shares
$182,078
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (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 six months ended March 31, 2024, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and
Semi-Annual Shareholder Report
25
penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of March 31, 2024, tax years 2020 through 2023 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America, the State of Maryland and the Commonwealth of Pennsylvania.
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.
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 Directors. 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 Adviser.
Additional information on restricted securities held at March 31, 2024, is as follows:
Security
Acquisition
Date
Acquisition
Cost
Value
California Public Finance Authority (Kendal at Sonoma), Enso
Village TEMPS-50 Senior Living Revenue Refunding Bonds
(Series B-3), 2.125%, 11/15/2027
5/27/2021
$140,000
$140,005
Wisconsin Health & Educational Facilities Authority (Forensic
Science and Protective Medicine Collaboration, Inc.),
Revenue Bonds (Series 2024), 5.000%, 8/1/2027
2/22/2024
$7,679,574
$7,669,420
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.
Semi-Annual Shareholder Report
26
3. CAPITAL STOCK
The following tables summarize capital stock activity:
Six Months Ended
3/31/2024
Year Ended
9/30/2023
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
2,856,410
$28,435,308
4,180,687
$41,362,341
Shares issued to shareholders in payment of
distributions declared
54,879
546,042
749,268
7,411,229
Shares redeemed
(6,669,669)
(66,281,622)
(18,910,042)
(186,958,813)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
(3,758,380)
$(37,300,272)
(13,980,087)
$(138,185,243)
Six Months Ended
3/31/2024
Year Ended
9/30/2023
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
19,062,644
$189,493,100
26,085,079
$257,906,909
Shares issued to shareholders in payment of
distributions declared
158,531
1,578,968
2,057,653
20,356,721
Shares redeemed
(20,228,419)
(201,044,857)
(83,469,453)
(825,050,607)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
(1,007,244)
$(9,972,789)
(55,326,721)
$(546,786,977)
Six Months Ended
3/31/2024
Year Ended
9/30/2023
Class R6 Shares:
Shares
Amount
Shares
Amount
Shares sold
3,056,730
$30,324,867
4,602,084
$45,471,941
Shares issued to shareholders in payment of
distributions declared
25,786
256,224
66,814
660,848
Shares redeemed
(2,053,972)
(20,400,287)
(9,585,256)
(94,749,880)
NET CHANGE RESULTING FROM
CLASS R6 SHARE TRANSACTIONS
1,028,544
$10,180,804
(4,916,358)
$(48,617,091)
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(3,737,080)
$(37,092,257)
(74,223,166)
$(733,589,311)
4. FEDERAL TAX INFORMATION
At March 31, 2024, the cost of investments for federal tax purposes was $1,119,233,086. The net unrealized depreciation of investments for federal tax purposes was $6,141,098. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $1,157,014 and unrealized depreciation from investments for those securities having an excess of cost over value of $7,298,112.
As of September 30, 2023, the Fund had a capital loss carryforward of $20,087,033 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.
Semi-Annual Shareholder Report
27
The following schedule summarizes the Fund's capital loss carryforwards:
Short-Term
Long-Term
Total
$9,069,519
$11,017,514
$20,087,033
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 0.29% of the Fund's average daily net assets. Prior to August 1, 2023, the advisory agreement between the Fund and the Adviser provided for an annual fee equal to 0.30% 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 competitive reasons such as to maintain the Fund's expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the six months ended March 31, 2024, the Adviser voluntarily waived $412,173 of its fee and voluntarily reimbursed $138,087 of transfer agent fees.
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 six months ended March 31, 2024, 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.
Other Service Fees
For the six months ended March 31, 2024, FSSC received $268 of other service fees disclosed in Note2.
Interfund Transactions
During the six months ended March 31, 2024, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $46,175,000 and $43,850,000, respectively. Net realized gain (loss) recognized on these transactions was $0.
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Expense Limitation
The Adviser and certain of its affiliates (which may include 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, Institutional Shares and Class R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.51%, 0.36% and 0.34% (the "Fee Limit"), respectively, up to but not including the later of (the "Termination Date"): (a) December 1, 2024; or (b) the date of the Fund's next effective Prospectus. 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 Directors.
Directors'/Trustees' and Miscellaneous Fees
Certain Officers and Directors 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. EXPENSE REDUCTION
Through arrangements with the Fund's custodian, net credits realized as a result of uninvested cash balances were used to offset custody expenses. For the six months ended March 31, 2024, the Fund's expenses were offset by $7,923 under these arrangements.
7. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the six months ended March 31, 2024, were as follows:
Purchases
$194,343,357
Sales
$216,453,743
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 21, 2023. 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 (a) the highest, on any day, of (i) the federal funds effective rate, (ii) the published secured overnight financing rate plus an assigned percentage, and
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(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 March 31, 2024, the Fund had no outstanding loans. During the six months ended March 31, 2024, the Fund did not utilize the LOC.
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 March 31, 2024, there were no outstanding loans. During the six months ended March 31, 2024, the program was not utilized.
10. INDEMNIFICATIONS
Under the Fund's organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party's actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
11. RECENT ACCOUNTING PRONOUNCEMENTS
In December 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-06 "Reference Rate Reform (Topic 848)". ASU No. 2022-06 updates and clarifies ASU No. 2020-04, 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 LIBOR and other interbank-offered reference rates. The temporary relief provided by ASU No. 2022-06 is effective immediately for certain reference rate-related contract modifications that occur through December 31, 2024. Management does not expect ASU No. 2022-06 to have a material impact on the financial statements.
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur 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 October 1, 2023 to March 31, 2024.
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. 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.
Beginning
Account Value
10/1/2023
Ending
Account Value
3/31/2024
Expenses Paid
During Period1
Actual:
Class A Shares
$1,000.00
$1,022.70
$2.58
Institutional Shares
$1,000.00
$1,024.50
$1.82
Class R6 Shares
$1,000.00
$1,023.50
$1.72
Hypothetical (assuming a 5% return
before expenses):
Class A Shares
$1,000.00
$1,022.45
$2.58
Institutional Shares
$1,000.00
$1,023.20
$1.82
Class R6 Shares
$1,000.00
$1,023.30
$1.72
1
Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average
account value over the period, multiplied by 183/366 (to reflect the one-half-year period). The
annualized net expense ratios are as follows:
Class A Shares
0.51%
Institutional Shares
0.36%
Class R6 Shares
0.34%
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Evaluation and Approval of Advisory Contract-May 2023
Federated Hermes Municipal Ultrashort Fund (the "Fund")
At its meetings in May 2023 (the "May Meetings"), the Fund's Board of Directors (the "Board"), including those Directors who are not "interested persons" of the Fund, as defined in the Investment Company Act of 1940 (the "Independent Directors"), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the "Adviser") (the "Contract") 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 Directors, the Fund's Chief Compliance Officer (the "CCO") furnished to the Board in advance of its May Meetings an independent written evaluation of the Fund's management fee (the "CCO Fee Evaluation Report"). The Board considered 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 Directors. At the request of the Independent Directors, 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 by independent legal counsel on behalf of the Independent Directors encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Directors
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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 nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; Federated Hermes' business and operations; the Adviser's investment philosophy, personnel and processes; the Fund's investment objectives and 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); the Fund's fees and 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 financial condition of Federated Hermes; the Adviser's profitability with respect to managing the Fund; distribution and sales activity for the Fund; and the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in evaluating 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 the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser's cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize "economies of scale" as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any "fall-out" benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fee and expense structures, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 the adviser's services and fees. The Board noted that the Securities and Exchange Commission ("SEC") disclosure requirements
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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 evaluation 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 oversight of the other funds advised by Federated Hermes (each, a "Federated Hermes Fund" and, collectively, the "Federated Hermes Funds").
In addition, the Board considered the preferences and expectations of Fund shareholders and 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 likely have invested in the Fund based 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 there are a range of investment options available to the Fund's shareholders and such shareholders in the marketplace, 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 Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Directors were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Directors 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 Directors 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 family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
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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 Federated Hermes 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 Federated Hermes. The Board considered the Adviser's personnel, investment philosophy and process, investment research capabilities and resources, trade operations 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 Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Advisers, including the execution of portfolio transactions and the selection of brokers for those transactions. The Board also considered the Adviser's ability to deliver competitive investment performance for the Fund when compared to the Fund's Performance Peer Group (as defined below), which was deemed by the Board to be 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 that the significant acquisition of Hermes Fund Managers Limited by Federated Hermes has deepened Federated Hermes' investment management expertise and capabilities and its access to analytical resources related to environmental, social and governance ("ESG") factors and issuer engagement on ESG matters. The Board considered Federated Hermes' oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes' communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Federated Hermes Funds. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds' officers.
The Board received and evaluated information regarding Federated Hermes' regulatory and compliance environment. The Board considered Federated Hermes' compliance program and compliance history and reports from the CCO about Federated Hermes' 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 the compliance-related resources devoted by Federated Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the
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Investment Company Act of 1940, including Federated Hermes' commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes' approach to internal audits and risk management with respect to the Federated Hermes Funds and its 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, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard, including in connection with the implementation of new rules on derivatives risk management and fair valuation.
The Board also considered the implementation of Federated Hermes' business continuity plans. 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.
The Board considered Federated Hermes' efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted 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.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund's investment performance, the Board considered performance results in light of the Fund's investment objective, strategies and risks. 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 included, among other items, information on the Fund's gross and net returns, the Fund's investment performance compared to one or more relevant categories or groups of peer funds and the Fund's benchmark index, performance attribution information and commentary on the effect of market conditions. The Board considered that, in its evaluation of investment performance at meetings throughout the year, it focused particular attention on information indicating less favorable performance of certain
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Federated Hermes Funds for specific time periods and discussed with Federated Hermes the reasons for such performance as well as any specific actions Federated Hermes had taken, or had agreed to take, to seek to enhance Fund investment performance and the results of those actions.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the "Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted 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 the CCO's view that, in evaluating such comparisons, in some cases there may be differences in the funds' objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
The Board considered that for the one-year, three-year and five-year periods ended December 31, 2022, the Fund's performance was above the median of the Performance Peer Group.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser's overall capabilities to manage the Fund.
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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other registered funds with comparable investment programs more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered 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
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Fund's shareholders. The Board noted that the range of such other registered funds' fees and expenses, therefore, appears to be a relevant indicator of what investors 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. In 2023, the Board approved a reduction of 1 basis point in the contractual advisory fee, such reduction to be effective August 1, 2023.
The Board also received and considered information about the nature and extent of services offered and fees charged by Federated Hermes to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO's conclusion that non-registered 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 and fund liquidity; (vi) different administrative responsibilities; (vii) different degrees of risk associated with management; and (viii) 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 registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution's registered 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 registered 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.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
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Profitability
The Board received and considered profitability information furnished by Federated Hermes, as requested by the CCO. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made 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 on a fund-by-fund basis 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. 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's view that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.
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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. 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 determining 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information
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security programs; internal audit and risk management functions; and technology 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 are likely to be shared with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense 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 considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.
The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information is relevant to considering whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines economies of scale, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund advisory fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or "fall-out") benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. The Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds' investment advisory contracts, Federated Hermes' affiliates also receive fees for providing other services to the Federated Hermes Funds under separate service contracts including 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
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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 is 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 Directors, 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.
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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 Fixed Income Securities, Inc. (the Corporation) has adopted and implemented a liquidity risk management program (the "Program") for Federated Hermes Municipal Ultrashort 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 Directors of the Corporation (the "Board") has approved the designation of each Federated Hermes Fund's investment adviser as the administrator for the Program (the "Administrator") with respect to that Fund. 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 2023, 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, 2022 through March 31, 2023 (the "Period"). The Report addressed the operation of the Program and assessed the adequacy and effectiveness of its implementation, including, where applicable, the operation of any HLIM established for a Federated Hermes Fund. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and
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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 it was not necessary for the Fund to utilize, and the Fund did not utilize, any alternative funding sources that were available to the Federated Hermes Funds during the Period, such as the Federated Hermes Funds' interfund lending facility, redemptions in-kind, reverse repurchase agreement transactions, redemptions delayed beyond the normal T+1 settlement but within seven days of the redemption request, and committed lines of credit;
◾ 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 the Administrator's evaluation of the services performed by the vendor in support of this process, including the Administrator's view that the methodologies utilized by the vendor continue to be appropriate;
◾ 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 operation of 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 operation of the procedures for monitoring this limit;
◾ the fact that there were no liquidity events during the Period that materially affected the Fund's liquidity risk;
◾ the impact on liquidity and management of liquidity risk, if any, caused by extended non-U.S. market closures and confirmation that there were no issues for any of the affected Federated Hermes Funds in meeting shareholder redemptions at any time during these temporary non-U.S. market closures.
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, Option #4. 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 FederatedHermes.com/us/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 FederatedHermes.com/us.
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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.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY 
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400, Option #4.
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Federated Hermes Municipal Ultrashort Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us atFederatedHermes.com/us
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 31417P866
CUSIP 31417P858
CUSIP 31417P817
28391 (5/24)
© 2024 Federated Hermes, Inc.
Item 2. Code of Ethics

Not Applicable

Item 3. Audit Committee Financial Expert

Not Applicable

Item 4. Principal Accountant Fees and Services

Not Applicable

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 period covered by this 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 18. Recovery of Erroneously Awarded Compensation
(a) Not Applicable
(b) 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 Fixed Income Securities, Inc.

By /S/ Jeremy D. Boughton

Jeremy D. Boughton

Principal Financial Officer

Date May 24, 2024

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 May 24, 2024

By /S/ Jeremy D. Boughton

Jeremy D. Boughton

Principal Financial Officer

Date May 24, 2024