Federated Hermes Project and Trade Finance Tender Fund (XPTFX)

Comments

• stayCalm

  November 14 edited November 14

  Deleted comment
• WABAC

  November 14

  I am somewhat reminded of my grandfather, who was a real bills man, among other things. His ideas on commercial lending predated the invention of the term real bills.
• BaluBalu

  November 14 edited November 14

  Before you go too far into the weeds of researching this, pl check (and report back if u do not mind) in which brokerage this fund is available and whether this is some type of interval fund (i.e., restricted redemptions).
• Bartleby

  November 14

  From the factsheet: " The fund is not intended to be a trading vehicle and does not currently intend to list shares for trading on any national securities exchange. There is no secondary trading market for shares, and it is not expected that a secondary market will develop. Shares therefore are not readily marketable."
  
  But otherwise it looks interesting.
• stayCalm

  November 14 edited November 14

  Good callouts Balu and Bartleby.
  
  I cannot ticker trade it on Schwab but I do see a New Account application form at https://www.federatedhermes.com/us/products/closed-end-funds/project-and-trade-finance-tender.do
  
  I don't generally like to purchase outside of the brokerages but do make exceptions. I still haven't decided if this fund is worth the effort for me to buy direct from Federated.
• BaluBalu

  November 14 edited November 14

  @stayCalm,
  
  Let us know if you buy and what you learn.
  
  Pl check whether redemptions are entirely at the discretion of the board of directors. At least with interval funds, you may be able to get out 5% every quarter. A Tender fund may be more restrictive.
  
  Does not matter how reputable the fund company is, IMO the question to ask is, if there is no pre-determined path to getting one's money out, is one just happy getting high dividends (guessing based on what the invests in) with no visibility into share pricing or liquidity?
  
  My initial reaction is I have less than 5% probability of buying and so not spending time to research. It has a God like chart! and is appealing but I can not pursue everything appealing.
• stayCalm

  November 14 edited November 14

  I'm going to put it on my Consider Later list for now due to the Redemption policy being more restrictive than an interval fund. I'm interested in it because the strategy is not mainstream, Federated is a known name, international diversification and no negative year ever since inception in 2017 (that said, returns prior to 2023 are lackluster at best). Major con is that the minimum is too high for my liking.
  
  NO RIGHT OF REDEMPTION
  No Shareholder or other person holding Shares acquired from a shareholder will have the right to require the Fund to
  repurchase those Shares. There is no public market for Shares, and none is expected to develop. With limited exceptions,
  Shares are not transferable and liquidity normally will be provided only through repurchase offers that will be made from
  time to time by the Fund, as described below. Any transfer of Shares in violation of the Declaration of Trust, which
  requires Board approval of any transfer, will not be permitted and will be void. Consequently, Shareholders may not be
  able to liquidate their investment other than as a result of repurchases of Shares by the Fund, as described below. For
  information on the Fund’s policies regarding transfers of Shares, see “Repurchases, Mandatory Repurchases and Transfers
  of Shares” in the SAI.
• BaluBalu

  November 14 edited November 14

  "returns prior to 2023 are lackluster at best"
  
  Looking at the strategy in the OP and the chart, I am guessing this fund's duration and performance should be compared to floating rate short term funds accessible at the brokerages. This fund's returns should be comparable if not better (because not distracted by redemptions during market stress).
• stayCalm

  November 14

  Duration is 0.83 years (excellent) and coupon is 7.66%
• Bartleby

  November 14

  Other considerations: lack of liquidity implies a premium to return. However the underlying investments seem to be liquid, so it's an artificial restriction. Redemption offer via tender in August (only one this year) was limited to 5% of NAV. Also, to the extent the debt is in foreign currency that will be a +/- element in returns. That's been a tailwind recently.
  
  I like what they do, it's different and interesting and they've had good results. But definitely some hurdles to get over.
• BaluBalu

  November 14

  If I can ask you guys a favor, pl keep an eye on this fund as they are likely to make moves that would create liquidity for shareholders. It is just a question of how soon they get the AUM to their personal goal before they do that. Keep me posted if I am still around.