Federated Hermes Unveils Groundbreaking Market Neutral ETF
Introduction to Federated Hermes MDT Market Neutral ETF
Federated Hermes, Inc. (NYSE: FHI), a renowned leader in active investment management, has announced the launch of the Federated Hermes MDT Market Neutral ETF (NYSE: MKTN). This innovative product is designed to help investors pursue long-term capital appreciation while mitigating exposure to the overall stock market's volatility.
Harnessing Experience for Modern Solutions
The MDT investment team at Federated Hermes brings three decades of expertise and skill in developing robust investment strategies. The fund's management is spearheaded by an impressive team, including Daniel Mahr, CFA, who leads the MDT group, along with Damien Zhang, Frederick L. Konopka, and John Paul Lewicke, all recognized professionals in their respective fields. Their collective insight is pivotal in crafting strategies aimed at achieving returns that are largely independent of market direction.
Fund Overview and Objective
The Federated Hermes MDT Market Neutral ETF employs a quantitative investment model, focusing on both long and short positions in companies primarily within the Russell 3000 Index. This strategy aims to generate returns that are uncorrelated with significant market fluctuations, providing investors with an effective tool for portfolio diversification. By as of June 30, 2025, the strategies offered by Federated Hermes MDT Advisers boast an impressive $21.4 billion in assets, reflecting their strong expertise and market standing.
Strategic Responses to Market Conditions
Brandon Clark, the ETF business director at Federated Hermes, highlighted the company’s strategic approach to launching ETFs, noting that industry-wide flows for ETFs have surged by 35% compared to the previous year. With the introduction of the MDT Market Neutral ETF, Federated Hermes invests in strategies that align with client needs while addressing current market conditions. This ETF utilizes a systematic investment approach that has been time-tested in the industry.
Supporting Active Management with ETF Structure
This new ETF structure combines the advantages of active management with the flexibility that ETFs provide. Investors can capitalize on unique opportunities while strategically managing their risks, such as volatility and tax implications. Currently, Federated Hermes manages over $1.2 billion in ETF assets as of August 31, 2025, showcasing their commitment to innovative investment solutions.
Current Active ETFs Offered by Federated Hermes
Besides the newly launched MDT Market Neutral ETF, Federated Hermes offers several other active ETFs, which include:
- MDT Large Cap Core ETF (NYSE: FLCC)
- MDT Large Cap Growth ETF (NYSE: FLCG)
- MDT Large Cap Value ETF (NYSE: FLCV)
- MDT Small Cap Core ETF (NYSE: FSCC)
- Short Duration Corporate ETF (NYSE: FCSH)
- Short Duration High Yield ETF (NYSE: FHYS)
- Total Return Bond ETF (NYSE: FTRB)
- U.S. Strategic Dividend ETF (NYSE: FDV)
A Commitment to Client-Centric Solutions
Federated Hermes remains dedicated to providing investment solutions tailored to the diverse needs of its clients. With $845.7 billion in assets under management as of June 30, 2025, the firm has established itself as a trusted partner for a wide array of clients, from corporations to government entities.
The Importance of Diversification
As market uncertainty shapes the investment landscape, investors are encouraged to diversify their portfolios strategically. The Federated Hermes MDT Market Neutral ETF addresses these concerns by offering a route to build capital over time while limiting volatility. As emphasized by John B. Fisher, president and CEO of Federated Advisory Companies, this particular ETF is an integral addition to their established investment strategies, representing a careful blend of risk management and growth potential.
Conclusion
With the launch of the Federated Hermes MDT Market Neutral ETF, investors are presented with new opportunities to diversify their investments. By leveraging rich experience, sound management, and a commitment to innovation, Federated Hermes is positioning this ETF as a valuable resource for informed investors seeking to navigate the complexities of today’s market.
Frequently Asked Questions
What is the goal of the Federated Hermes MDT Market Neutral ETF?
The fund seeks to achieve long-term capital appreciation while minimizing exposure to general stock market risks.
Who manages the Federated Hermes MDT Market Neutral ETF?
The fund is managed by a highly experienced team at Federated Hermes MDT Advisers, led by Daniel Mahr, CFA.
How does the quantitative model work in the ETF?
The fund employs a model that invests in both long and short positions within the Russell 3000 Index to target uncorrelated returns.
What types of other ETFs does Federated Hermes offer?
They offer various active ETFs, including those focused on large-cap core, growth, and value, as well as small-cap core options.
What should investors consider before investing in the ETF?
Investors should review the ETF's investment objectives, risks, charges, and expenses comprehensively before making investment decisions.
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