Fitch Ratings has affirmed Federated Hermes Sterling Cash Plus Fund's Fund Credit Quality Rating and Fund Market Risk Sensitivity Rating at 'AAAf'/'S1'.

The fund is managed by Federated Hermes (UK) LLP.

KEY RATING DRIVERS

The affirmation is driven by the fund's credit and market risk profiles. The ratings also reflect the capabilities and resources of Federated Hermes (UK) LLP, subsidiary of Federated Hermes, Inc. as investment manager, and the fund's investment guidelines.

Credit Quality

The fund's weighted average rating factor (WARF), which is Fitch's proprietary measure of credit quality under its Bond Fund Rating Criteria, met the 'AAAf' rating range of 0.0-0.3. The fund's WARF was 0.12 at end-January 2023.

The fund invests in a diversified portfolio of assets, typically comprising securities, instruments and obligations issued or guaranteed by the UK government or other sovereign governments or their agencies, and securities, instruments and obligations issued by supranational or public international bodies, banks, corporates or other commercial issuers. The minimum credit quality of the assets was 'A-' during the review period.

Market Risk

The fund's 'S1' Fund Market Risk Sensitivity Rating indicates very low sensitivity to market risk. The fund's market risk factor, which is Fitch's proprietary measure of market risk sensitivity under its Bond Fund Rating Criteria, was within the 'S1' market risk sensitivity rating range.

The fund's weighted average maturity (WAM), which measures sensitivity to interest-rate risk, and weighted average life (WAL), which measures sensitivity to spread risk, were in line with the fund's investment guidelines. The fund maintains a WAM of no more than 397 days and a WAL of no more than two years.

Fund Profile

Fitch views the legal and regulatory frameworks of the fund as satisfactory. The fund is a sub-fund of the umbrella fund, Federated Hermes Cash Management Funds , a UK UCITS that falls under the UK MMF Regulation and is domiciled in the UK. The fund is authorised and supervised by the FCA as variable net asset value standard money market fund.

The fund's investment objective is to provide investors with stability of capital and income through investment in short term fixed income and variable rate securities.

As of end-January 2023, the fund's total assets stood at GBP313 million.

INVESTMENT MANAGER

The fund is managed by Federated Hermes (UK) LLP, the UK investment management division of Federated Hermes, Inc. Federated Hermes, Inc. had USD669 billion assets under management as of 31 December 2022. Although the parent company is not rated, Fitch considers Federated Hermes (UK) LLP suitably qualified, competent and capable of managing the rated fund given the manager's financial position, established investment and operational processes and long track record of managing cash and liquidity products.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

The fund is rated at the highest possible rating level and therefore cannot be upgraded.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Fitch's stress testing of the fund shows that fund's credit quality and market risk profiles are robust at their current levels.

The ratings may be sensitive to material adverse changes in the fund's credit quality or market risk profile. A material adverse deviation from Fitch's guidelines for any key rating drivers could cause Fitch to downgrade the ratings. The fund could be downgraded if the WARF is consistently above its rating range of 0.3, or MRF above 2.0.

RATING ACTIONS

Entity / Debt

Rating

Prior

Federated Hermes Sterling Cash Plus Fund

Fund Cr Qual Rtg

AAAf

Affirmed

AAAf

Sensitivity

S1

Affirmed

S1

Page

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VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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