Federated Hermes Achieves Record AUM with Strong Q4 Results
Federated Hermes Announces Record Assets Under Management
Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, has once again demonstrated its strength in the market with exceptional earnings performance. Reporting Q4 2024 earnings per diluted share (EPS) of $1.04, Federated Hermes has shown a robust increase compared to last year’s $0.96. The full-year EPS for 2024 stands at $3.23, slightly down from $3.40 in 2023.
Total Assets Under Management Surge
The company reported total assets under management (AUM) reaching a record $829.6 billion as of December 31, 2024. This marks a significant increase of $72.0 billion, or 10%, compared to $757.6 billion the previous year. Federated Hermes attributes this exceptional growth primarily to the continued popularity of its money market products, which have witnessed remarkable increases across all segments.
High Demand for Liquidity Products
According to J. Christopher Donahue, president and chief executive officer of Federated Hermes, the impressive AUM growth resonates the strong client interest in liquidity products that offer excellent cash management solutions and competitive returns. Furthermore, the company has experienced sustained investor interest in a diverse array of fixed-income strategies, such as multisector, ultrashort, and emerging market debt.
Highlights of Financial Performance
Federated Hermes' total managed assets have exhibited notable performance. The average managed assets for Q4 2024 amounted to $804.4 billion, indicating an increase of $76.4 billion compared to the average managed assets of $728.0 billion for Q4 2023. This growth is attributed to the strong inflows experienced, especially in quantitative MDT equity products across various fund types and ETFs.
The board of directors has also declared a quarterly dividend of $0.31 per share, reflecting the company's commitment to return value to its shareholders. The dividend is set to be paid to shareholders of record on February 7, 2025, marking a positive signal of the firm's stable financial health.
Equity and Fixed-Income Fund Updates
As of December 31, 2024, Federated Hermes’ equity assets totaled $79.4 billion, witnessing a slight dip from $83.6 billion reported for the previous quarter. Key equity funds that contributed to the company’s strong performance include the Federated Hermes MDT Mid Cap Growth Fund and the Federated Hermes Conservative Municipal Microshort Fund.
In the fixed-income arena, Federated Hermes reported $98.1 billion in fixed-income assets, a modest increase from the previous year. The top-performing fixed-income funds during this quarter include the Federated Hermes Total Return Bond Fund and the Federated Hermes Emerging Markets Debt Fund. These funds highlight the company’s strategic focus on providing comprehensive investment solutions across various asset types.
Impacts of Economic Factors
Despite the challenges presented by fluctuating market conditions and varying interest rates, Federated Hermes has successfully navigated these environments. Revenue increased by 8% over the same period last year primarily due to the rise in average money market and equity assets, showcasing the firm's resilience in the face of economic headwinds.
The increased operating expenses of 9% are credited to higher compensation and distribution expenses, reflecting the firm's ongoing investment in talent and resources to maintain its competitive edge.
Continuing Forward in 2025
Looking ahead, Federated Hermes is strategically positioned to continue its growth trajectory, capitalizing on the burgeoning demand for active investment management solutions. As the investing landscape evolves, the company remains committed to innovating and enhancing its offerings to meet the diverse needs of clients across the globe.
Frequently Asked Questions
1. What are the key financial highlights for Q4 2024 at Federated Hermes?
Key highlights include an EPS of $1.04, total AUM of $829.6 billion, and a $0.31 quarterly dividend declaration.
2. How did Federated Hermes' total assets change in 2024?
Total managed assets increased by $72.0 billion or 10%, reaching a record high of $829.6 billion by the end of 2024.
3. What factors contributed to the growth in assets under management?
The growth was largely driven by increased investor interest in liquidity products, fixed-income strategies, and strong inflows into equity funds.
4. What are the top-performing funds of Federated Hermes?
Top funds include the Federated Hermes MDT Mid Cap Growth Fund and the Federated Hermes Total Return Bond Fund, among others.
5. What is the outlook for Federated Hermes in 2025?
Federated Hermes is well-positioned to sustain its growth by further adapting to market conditions and meeting client needs through innovative investment solutions.
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