Exploring Federated Us Treasury Cash Reserves: Worth The Investment?

Investing in the Federated US Treasury Cash Reserves Inst fund can be a stable option for investors seeking to preserve their capital and generate a consistent income. The fund primarily invests in short-term US Treasury securities, with a focus on liquidity and stability of principal. While it aims to maintain a $1.00 share value, there is a risk of losing money as the fund's value may fluctuate. It is essential to carefully consider the fund's objectives, risks, charges, and expenses before investing. The fund's performance has been positive, with a 52-week average return of 4.98% and a YTD total return of 4.4%. However, past performance does not guarantee future results, and investors should be aware of the potential risks involved.

The fund's investment objectives, risks, charges and expenses

Investment Objectives

The Federated Hermes US Treasury Cash Reserves Institutional fund seeks to provide current income consistent with stability of principal and liquidity. The fund invests in a portfolio of US Treasury securities maturing in 397 days or less that pay interest exempt from state personal income tax. The fund may also hold cash, including cash earning interest at the fund's custodian.

Risks

As with any investment, there are risks associated with investing in the Federated Hermes US Treasury Cash Reserves Institutional fund. It is important to note that you could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor is not required to reimburse the fund for losses, and you should not expect financial support from the sponsor during periods of market stress.

The fund is subject to various risks, including credit risk, market risk, and liquidity risk. Credit risk refers to the possibility that the issuer of a security held by the fund may default on its obligations. Market risk refers to the potential loss that may occur due to unfavourable changes in the value of the fund's investments. Liquidity risk refers to the possibility that the fund may not be able to sell a security or investment in a timely manner or at a desired price.

Charges and Expenses

The fund has a net expense ratio of 0.20%. It is important to carefully consider the fund's charges and expenses before investing. The fund's adviser and/or certain fund service providers may waive or reimburse a portion of their fees, which can increase income to the fund and result in a higher return to investors. However, these waivers and reimbursements are voluntary and may be modified or terminated at any time, which can cause the fund's expenses to vary during its fiscal year.

The fund's income tax status

The Federated Hermes U.S. Treasury Cash Reserves Fund is a taxable money market fund. The fund invests in a portfolio of U.S. Treasury securities maturing in 397 days or less that pay interest exempt from state personal income tax. The fund may also hold cash, including cash earning interest at the fund's custodian.

The fund's income is subject to federal income tax. However, it is important to consult a tax advisor regarding the status of your account under state and local tax laws, as these may vary.

The fund is considered a "government money market fund" and is therefore not required to adopt a liquidity fee framework. This means that the fund is not obligated to reimburse investors for losses and is not guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

The fund seeks to preserve the value of your investment at $1.00 per share, but this cannot be guaranteed. The fund's shares are not guaranteed by the U.S. government, and there is a risk of losing money by investing in the fund.

The fund's performance and past performance

The Federated Hermes US Treasury Cash Reserves Fund seeks to provide current income consistent with the stability of principal and liquidity. The fund invests in short-term US Treasury securities that mature in 397 days or less and pay interest exempt from state personal income tax. The fund may also hold cash, including cash earning interest at the fund's custodian.

As of August 2024, the fund's 52-week average return was 4.98%, placing it in the 48th percentile for its Lipper Ranking. The fund's net expense ratio is 0.20%, and its total net assets are $35.044 billion.

The fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investors could lose money by investing in the fund, and the fund's sponsor is not required to reimburse it for losses. The fund's shares are not guaranteed by the US government, and income is subject to federal income tax.

The fund has a rating of AAAm by S&P Global Ratings and Aaa by Moody's, indicating that it is judged to be of the best quality. It is also on the National Association of Insurance Commissioner's list as a NAIC US Government Money Market Fund, which denotes that it meets certain quality and pricing guidelines.

The fund's liquidity

The fund seeks to provide current income consistent with stability of principal and liquidity. It invests in a portfolio of US Treasury securities maturing in 397 days or less that pay interest exempt from state personal income tax. The fund may also hold cash, including cash earning interest at the fund's custodian.

Prior to April 2, 2024, Rule 2a-7 required that money market funds maintain at least 10% daily liquidity assets and at least 30% weekly liquidity assets. Effective April 2, 2024, the daily and weekly liquid asset thresholds increased to 25% and 50%, respectively. These are "point of purchase" requirements, meaning that money market funds may, at any given time, have liquidity percentages reflecting less than the daily and weekly liquidity asset thresholds. In such cases, the portfolio manager must purchase securities to meet the requisite liquidity thresholds before purchasing longer-dated securities.

It's important to note that the fund's holdings are subject to change, and the percentages in the 2a-7 Liquidity table may not always align with the "Effective Maturity Schedule" due to differences in the SEC's definitions of "daily" and "weekly" maturities.

Although the fund aims to preserve the value of your investment at $1.00 per share, it cannot guarantee this. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor is not obligated to reimburse for losses, and financial support should not be expected during market stress periods.

The fund's sponsor and their obligations

The fund's sponsor is not required to reimburse the fund for losses, and investors should not expect the sponsor to provide financial support to the fund at any time, including during periods of market stress. The fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor is not contractually obligated to reimburse or provide financial support to the fund.

The fund's sponsor is Federated Securities Corp., which acts as the distributor. The fund seeks to preserve the value of investments at $1.00 per share but cannot guarantee it will do so. The fund's sponsor is not required to reimburse investors for losses. The fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

The fund's investment objectives are to provide current income consistent with stability of principal and liquidity. It invests in a portfolio of US Treasury securities maturing in 397 days or less, paying interest exempt from state personal income tax. The fund may also hold cash, including cash earning interest at the fund's custodian. The fund will operate as a "government money market fund," investing at least 99.5% of its total assets in cash, securities issued or guaranteed by the US government or certain agencies, and/or repurchase agreements that are fully collateralized.

The fund's sponsor, Federated Securities Corp., is a distributor of the fund. The fund is not guaranteed or insured by the Federal Deposit Insurance Corporation or any government agency. The fund's sponsor is not required to reimburse investors for losses and is not obligated to provide financial support during market stress. The fund seeks to preserve the value of investments but cannot guarantee it. The fund's expenses may vary during the fiscal year due to voluntary waivers and reimbursements by the adviser or fund service providers, which increase income and returns for investors.

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