Federated Hermes launches Federated Hermes MDT Market Neutral ETF
MWN-AI** Summary
On September 25, 2025, Federated Hermes, Inc. (NYSE: FHI) announced the launch of the Federated Hermes MDT Market Neutral ETF (NYSE: MKTN), designed to provide investors with the potential for long-term capital appreciation while minimizing exposure to general stock market risks. This new fund draws on the expertise of the Federated MDTA LLC investment team, which has three decades of experience in portfolio management and market-neutral strategies.
Managed by a team of skilled professionals including Daniel Mahr, CFA, and Damien Zhang, CFA, the ETF employs a quantitative model to invest in long and short positions primarily within the Russell 3000® Index. The goal is to generate returns independent of market fluctuations. As of June 30, 2025, Federated MDT Advisers oversaw $21.4 billion in assets through various investment vehicles, including mutual funds and other ETFs.
John B. Fisher, President and CEO of Federated Advisory Companies, emphasized that the launch of this ETF is a response to the prevailing market uncertainty, offering investors diversification opportunities focused on capital growth and volatility reduction. Moreover, Brandon Clark, ETF Business Director, highlighted ongoing industry growth in ETF flows, stating a 35% increase compared to the previous year’s figures.
Since entering the ETF market in 2021, Federated Hermes has significantly expanded its offerings, now managing over $1.2 billion in ETF assets. In addition to the MDT Market Neutral ETF, the firm offers several other active ETFs, enabling investors to strategically manage their risk and tax concerns while leveraging the flexibility of active management. The firm’s commitment to providing comprehensive investment solutions continues to grow, ensuring it meets client needs amidst evolving market conditions.
MWN-AI** Analysis
The recent launch of the Federated Hermes MDT Market Neutral ETF (NYSE: MKTN) offers investors an intriguing opportunity, particularly in the context of current market volatility. This ETF seeks to achieve long-term capital appreciation while minimizing exposure to the broader stock market risk, a strategy that could be particularly appealing given the uncertain economic landscape.
Managed by a seasoned team with over three decades of experience, the fund employs a quantitative model focusing on long and short positions within the Russell 3000® Index. This approach enables it to target returns that are not directly correlated with market movements, providing a potential hedge against downturns in the equity markets. For investors concerned about inflation and interest rate fluctuations, the market neutral strategy could serve as a stabilizing component in a diversified portfolio.
Federated Hermes’ robust track record, managing $21.4 billion across various strategies, further substantiates confidence in the ETF's management. The firm’s experience in market neutral strategies, evidenced by successful offerings like the $1.7 billion Federated Hermes MDT Market Neutral Fund, reflects a disciplined investment philosophy and a strategic understanding of market dynamics.
In a time when ETF flows are surging, up 35% compared to last year, the launch aligns with the growing investor appetite for active management within ETF structures. Investors can leverage the flexibility of active management, aiming for enhanced returns while still enjoying the tax efficiency typically associated with ETFs.
In summary, the Federated Hermes MDT Market Neutral ETF represents a strategic option for investors aiming to mitigate risk while pursuing capital growth. It caters especially to those looking for diversification during uncertain market conditions. However, investors should conduct thorough due diligence, considering the potential risks associated with market neutral strategies and the ETF's newly minted status.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
- New product leverages MDT investment team's three decades of experience and skill
PITTSBURGH , Sept. 25, 2025 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today introduced Federated Hermes MDT Market Neutral ETF (NYSE: MKTN).
Federated Hermes MDT Market Neutral ETF seeks to pursue long-term capital appreciation while limiting exposure to general stock market risk. Drawing on Federated MDTA LLC's ("Federated Hermes MDT Advisers") three-decades-long differentiated approach to portfolio construction, the fund is managed by Daniel Mahr , CFA, head of MDT group; Damien Zhang , CFA, head of MDT research; Frederick L. Konopka , CFA, portfolio and trading manager; and John Paul Lewicke , research manager. The team employs a quantitative model to invest in long and short positions in companies primarily within the Russell 3000® Index universe, targeting returns that are uncorrelated to market direction. As of June 30, 2025 , Federated Hermes MDT Advisers ' strategies have $21.4 billion in assets across mutual funds, institutional separate accounts, separately managed accounts (SMAs), collective investment funds and four additional ETFs launched last year. Federated Hermes MDT Advisers have managed market neutral strategies since 1997 including the $1.7 billion Federated Hermes MDT Market Neutral Fund .
"Facing market uncertainty, investors can diversify their portfolios with strategies that seek to pursue specific goals such as building capital over time and limiting volatility," said John B. Fisher , president and chief executive officer of Federated Advisory Companies. "With our Federated Hermes MDT Market Neutral ETF, Federated Hermes continues to strategically introduce complementary offerings of our most popular investment strategies—in this case, a new ETF utilizing Federated Hermes MDT Advisers' time-tested, systematic investment process."
"Through the first half of the year, industry-wide ETF flows continued to grow, running 35% ahead of last year's flows i for the same time frame. Federated Hermes has taken a considered approach to launching ETFs with strategies that seek to meet client needs and fit market conditions," said Brandon Clark , ETF business director at Federated Hermes. "Combining active management's flexibility to seek investment opportunities to attempt to beat their benchmark with an ETF vehicle structure provides investors more options to strategically manage critical concerns such as risk exposure and taxes."
Since introducing its first ETF in 2021, Federated Hermes now manages more than $1.2 billion in ETF assets as of Aug. 31, 2025 . In addition to the newly launched ETF, Federated Hermes offers the following active ETFs:
- 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)
Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $845.7 billion in assets under management, as of June 30, 2025 . We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh , Federated Hermes has more than 2,000 employees in London , New York , Boston and offices worldwide. For more information, visit FederatedHermes.com/us .
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Certain statements in this press release, such as those related to an investors ability to diversify their portfolios and Federated Hermes continuing to strategically introduce complementary offerings constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Any forward-looking statements are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes MDT Market Neutral ETF's and Federated Hermes' control. Other risks and uncertainties include the risk factors discussed in the Federated Hermes MDT Market Neutral ETF's prospectus and statement of additional information, and Federated Hermes' annual and quarterly reports, as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the Federated Hermes MDT Market Neutral ETF, Federated Hermes, nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.
i Morningstar Direct 6/30/2025
Investors should carefully consider the ETF's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us at 1-800-341-7400 or visit FederatedHermes.com/us. Please carefully read the summary prospectus or the prospectus before investing.
Investments are subject to risks and fluctuate in value. Diversification does not assure a profit nor protect against loss.
The quantitative models and analysis used by Federated Hermes MDT Advisers may perform differently than expected and negatively affect portfolio performance. There is no guarantee that the use of long and short positions will succeed in limiting the Federated Hermes MDT Market Neutral ETF's exposure to domestic stock market movements, capitalization, sector-swings or other risk factors. The ETF may make short sales of securities, which involves unlimited risk including the possibility that losses may exceed the original amount invested.
The fund is a new fund that recently commenced operations. New funds have limited operating histories for investors to evaluate and new funds may not attract sufficient assets to achieve investment and trading efficiencies.
Past performance is no guarantee of future results.
Fund shares are bought and sold on an exchange at market price (not NAV) and are not individually redeemed from the Fund. However, shares may be redeemed at NAV directly by certain authorized broker-dealers (Authorized Participants) in very large creation/redemption units. The returns shown do not represent the returns you would receive if you traded shares at other times. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns. Market price returns are based on the official closing price of an ETF share or, if the official closing price isn't available, the midpoint between the national best bid and national best offer ("NBBO") as of the time the ETF calculates the current NAV per share. NAVs are calculated using prices as of the end of regular trading on the New York Stock Exchange (normally 4:00 PM Eastern Time ).
Russell 3000 ® Index: Measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.
Federated Securities Corp. is Distributor of the Federated Hermes Funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland .
SOURCE Federated Hermes, Inc.
FAQ**
How does the Federated Hermes MDT Market Neutral ETF leverage the experience of the MDT investment team, which has been managing market neutral strategies since 1997, including the Federated Hermes MDT Small Cap Core ETF (FSCC)?
What specific strategies or quantitative models does the Federated Hermes MDT Market Neutral ETF employ to generate uncorrelated returns relative to market movements while managing risks similar to those of the Federated Hermes MDT Small Cap Core ETF (FSCC)?
In what ways does the launch of the Federated Hermes MDT Market Neutral ETF align with the company's broader strategy to enhance its offering of active ETFs, including options like the Federated Hermes MDT Small Cap Core ETF (FSCC)?
Given that the Federated Hermes MDT Market Neutral ETF aims to limit exposure to stock market risk, how do its investment objectives differ from those of other ETFs in the Federated Hermes lineup, like the MDT Small Cap Core ETF (FSCC)?
**MWN-AI FAQ is based on asking OpenAI questions about Federated Hermes U.S. Strategic Dividend ETF (NYSE: FDV).
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