2 unchanged sentences
As an investment manager, Federated Hermes’ business requires that it continuously identify, assess, monitor and manage market and other risks including those risks affecting its own investment portfolio.
−Removed: Federated Hermes invests in Federated Hermes Funds for the primary purpose of generating returns from capital appreciation, investment income, or both, or, in the case of newly launched Federated Hermes Funds or new Separate Account strategies, to provide the product or strategy with investable cash to establish a performance history.
+Added: Federated Hermes invests in Federated Hermes Funds for the primary purpose of generating returns from capital appreciation, investment income, or both, or, in the case of newly launched Federated Hermes Funds or new Separate Account strategies, to provide the offering with investable cash to establish a performance history.
These investments expose Federated Hermes to various market risks.
10 unchanged sentences
Price risk is the risk that the market price of an investment will decline and ultimately result in the recognition of a loss.
−Removed: Federated Hermes was exposed to price risk as a result of its $54.9 million investment in equity Federated Hermes Funds and Separate Accounts at December 31, 2023.
−Removed: Federated Hermes’ investment in these products and strategies represents its maximum exposure to loss.
+Added: Federated Hermes was exposed to price risk as a result of its $65.3 million investment primarily in equity Federated Hermes
+Added: Funds and Separate Accounts at December 31, 2024.
+Added: Federated Hermes’ investment in these offerings represents its maximum exposure to loss.
At December 31, 2024, management considered a hypothetical 20% fluctuation in fair value and determined that such a fluctuation on these investments could impact Federated Hermes’ results of operations and financial condition by approximately $13 million.
3 unchanged sentences
Federated Hermes also has certain investments in foreign operations, whose net assets and results of operations are exposed to foreign currency risk when translated into USD upon consolidation .
−Removed: During 2023, Federated Hermes entered into foreign currency forward transactions in order to hedge against foreign exchange rate fluctuations related to FHL, a British Pound
−Removed: Sterling-denominated subsidiary (combined notional amount of £84.3 million as of December 31, 2023).
+Added: During 2024, Federated Hermes entered into foreign currency forward transactions in order to hedge against foreign exchange rate fluctuations related to FHL, a British Pound Sterling-denominated subsidiary (combined notional amount of £92.6 million as of December 31, 2024).
Management considered a hypothetical 20% fluctuation in the currency exchange rate and determined that such a fluctuation could impact Federated Hermes’ results of operations and financial condition by approximately $5 million.
5 unchanged sentences
As such, the impact on net income from a decline in the market values of managed assets can be greater or less than the percentage decline in the market value of managed assets.
−Removed: For further discussion of managed assets and factors that impact Federated Hermes’ revenue, see Item 1A - Risk Factors and sections included in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - General and Asset Highlights.
+Added: For further discussion of managed assets and factors that impact Federated Hermes’ revenue, see Item 1A – Risk Factors and the General and Asset Highlights sections included in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.