N-CSR 1 msit-form.htm EDGAR HTML

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

 

 

 

 

811-6165

 

(Investment Company Act File Number)

 

Federated Hermes Municipal Securities Income Trust

_______________________________________________________________

 

(Exact Name of Registrant as Specified in Charter)

 

 

 

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 15086-7561

(Address of Principal Executive Offices)

 

 

(412) 288-1900

(Registrant's Telephone Number)

 

 

Peter J. Germain, Esquire

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

 

 

 

 

 

 

Date of Fiscal Year End: 08/31/22

 

 

Date of Reporting Period: 08/31/22

 

 

 

 

 

 

 

 

 

  Item 1. Reports to Stockholders

 

 

Annual Shareholder Report
August 31, 2022
 
 
Share Class | Ticker
A | MMIFX
Institutional | MMFIX
 
 
Federated Hermes Michigan Intermediate Municipal Fund
Fund Established 1991
A Portfolio of Federated Hermes Municipal Securities Income Trust
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from September 1, 2021 through August 31, 2022. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,
 
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Michigan Intermediate Municipal Fund (the “Fund”), based on net asset value for the 12-month reporting period ended August 31, 2022, was -6.05% for its Class A Shares and -5.81% for Institutional Shares. The -5.81% total return for the Institutional Shares for the reporting period consisted of 1.51% of tax-exempt dividends and price depreciation of -7.32% in the net asset value of the shares.1 The total return of the S&P Municipal Bond Intermediate Index (the “Intermediate Index”),2 the Fund’s broad-based securities market index, was -7.20% during the same period. The total return of the S&P Municipal Bond MI, Investment Grade, 1-15 Years (MIIG1-15),3,4 a secondary index for the Fund, was -5.29%. The total return of the Morningstar Muni Single State Intermediate Funds Average (MMSSIFA),5 a peer group average for the Fund, was -7.83% during the same reporting period. The Fund’s and the MMSSIFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and expenses, which were not reflected in the total return of the Intermediate Index.
During the reporting period, the Fund’s investment strategy focused on: (a) the effective duration of the portfolio (which indicates the portfolio’s sensitivity to changes in interest rates);6,7 (b) the selection of securities with different maturities (expressed by a yield curve showing the relative yield of similar securities with different maturities);8 (c) the allocation of the Fund’s portfolio among securities of similar issuers (referred to as “sectors”); (d) the credit quality of portfolio securities (which is shown through credit ratings which indicate the risk that securities may default);9 and (e) security selection. These were the most significant factors affecting the Fund’s performance relative to the MIIG1-15 during the reporting period.
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the MIIG1-15.
Market OVERVIEW
The emergence of the highest U.S. inflation in over 40 years drove Treasury and Municipal yields sharply higher during the reporting period. The Federal Reserve (the “Fed”) had incorrectly dismissed the rising inflation to transitory factors during much of 2021, keeping their policy rates near zero to support the ongoing expansion of the U.S. economy. While the U.S. economy expanded slowly and the unemployment rate declined from 5.2% to 3.7% over the reporting period, the rate of inflation increased rapidly. The year-over-year change in U.S. Consumer Price Index rose from an elevated 5.3% in August 2021 to a 41-year peak of 9.1% in June 2022. In response, the Fed rapidly refocused on its price stability mandate, tightening monetary policy by raising the upper bound of the federal funds target range from 0.25%, where it stood for the first half of the reporting period, to 2.50% by August 2022. The yield
Annual Shareholder Report
1
on the 10-year U.S. Treasury ended the reporting period at 3.20%, up 188 basis points (bp). Municipal yields increased sharply as well, with 2-, 5-, 10- and 30-year “AAA” municipal yields from Bloomberg Evaluation Services increasing 221 bp, 190 bp, 167 bp and 178 bp, respectively, over the period.
The sharp increase in municipal bond yields depressed prices and produced negative total returns for municipal bond portfolios. Municipal mutual funds experienced heavy net redemptions as investors reacted to the losses. Municipal credit spreads, the yield advantage on mid- and low-quality bonds relative to high-quality bonds, widened somewhat during the second half of the period amid concerns that the inflation shock and the Fed’s rapid monetary tightening would precipitate recession within the coming year. Widening credit spreads increased losses on mid- and lower-quality bonds relative to higher quality bonds.
Over the reporting period, spreads on Michigan State general obligation bonds widened by one to three basis points compared to the Thomson Municipal Market Data “AAA” Curve benchmark.
During the reporting period, Fitch upgraded Michigan’s general obligation credit rating from “AA” to “AA+;” Fitch also revised its outlook from positive to stable. Moody’s “Aa1” and S&P’s “AA” ratings were unchanged; both carried a stable outlook.
The Bond Buyer reported that issuance of Michigan municipal bonds for the reporting period was 21% lower than during the prior 12-month period. Nationally, issuance increased 2% over the same time frame.
DURATION
The Fund’s dollar-weighted average duration was 3.4 years at the end of the reporting period as compared to 3.8 years at the beginning of the period. Throughout the reporting period, the Fund’s duration ranged from 89% to 109% of the MIIG1-15. Rates rose steadily throughout the period, which had a negative impact on bond prices. During the first half of the reporting period, the Fund’s duration was long relative to the MIIG1-15, which had a negative impact on the Fund’s relative performance. Conversely, during the latter part of the period the Fund’s duration was generally short relative to the MIIG1-15, which had a positive impact on the Fund’s relative performance.
YIELD CURVE and MATURITY
During the reporting period, the Fund had an overweight position versus the MIIG1-15 in bonds with a duration between 2 and 6 years. The Fund’s yield curve positioning had a negative impact on the Fund’s relative performance against the MIIG1-15.
Annual Shareholder Report
2
SECTOR Allocation
During the reporting period, sector selection provided a positive contribution to total return relative to the MIIG1-15. The Fund’s best-performing sectors were Incremental Tax, Pre-Refunded and Other Revenue Bonds. Lagging sectors included Public Power, Lifecare and Tollroad bonds.
CREDIT QUALITY
During the reporting period, credit spreads widened, causing bond prices to fall. The Fund’s underweight position in “A”- and “BBB”-rated bonds contributed to relative outperformance versus the MIIG1-15.
SECURITY SELECTION
During the reporting period, security-specific factors included credit rating changes, calls and other idiosyncratic occurrences for individual bonds. Collectively, these individual items had a positive effect on the Fund’s performance versus the MIIG1-15.
1
Income may be subject to the federal alternative minimum tax for individuals (AMT).
2
Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Intermediate Index.
3
Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the MIIG1-15. The Fund’s secondary index is being used for comparison purposes because, while it is not the Fund’s broad-based securities market index, the Fund’s investment adviser (the “Adviser”) believes it more closely reflects the securities in which the Fund invests.
4
Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the Adviser believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard & Poor’s, Moody’s Investor Services, Inc. and Fitch Rating Service. When ratings vary, the highest rating is used. Credit ratings of “AA” or better are considered to be high credit quality; credit ratings of “A” are considered high or medium/good quality; and credit ratings of “BBB” are considered to be medium/good credit quality, and the lowest category of investment-grade securities; credit ratings of “BB” and below are lower-rated, noninvestment-grade securities or junk bonds; and credit ratings of “CCC” or below are noninvestment-grade securities that have high default risk. Any credit quality breakdown does not give effect to the impact of any credit derivative investments made by the Fund. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher rated securities and increased possibilities of default.
5
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” for the definition of, and more information about, the Morningstar peer group.
6
Duration is a measure of the price sensitivity of a fixed-income security to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations. For purposes of this Management Discussion of Fund Performance, duration is determined using a third-party analytical system.
7
Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
8
The yield curve is a graph showing the comparative yields of securities in a particular class according to maturity. Securities on the long end of the yield curve have longer maturities.
9
Credit ratings pertain only to the securities in the portfolio and do not protect the Fund shares against market risk.
Annual Shareholder Report
3
FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in Federated Hermes Michigan Intermediate Municipal Fund (the “Fund”) from August 31, 2012 to August 31, 2022, compared to the S&P Municipal Bond Intermediate Index (Intermediate Index),2 the S&P Municipal Bond MI, Investment Grade, 1-15 Years Index (MIIG1-15),3 and the Morningstar Muni Single State Intermediate Funds Average (MMSSIFA).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of a $10,000 Investment
Growth of $10,000 as of August 31, 2022
 
◾ Total returns shown for Class A Shares include the maximum sales charge of 3.00% ($10,000 investment minus $300 sales charge = $9,700).
Average Annual Total Returns for the Period Ended 8/31/2022
(returns reflect all applicable sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
-8.86%
0.13%
1.22%
Institutional Shares5
-5.81%
0.86%
1.59%
Intermediate Index
-7.20%
1.31%
2.20%
MIIG1-15
-5.29%
1.47%
2.11%
MMSSIFA
-7.83%
0.56%
1.39%
Annual Shareholder Report
4
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge for Class A Shares of 3.00% ($10,000 investment minus $300 sales charge = $9,700). The Fund’s performance assumes the reinvestment of all dividends and distributions. The Intermediate Index, MIIG1-15 and the MMSSIFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.
2
The Intermediate Index consists of bonds in the S&P Municipal Bond Index with a minimum maturity of 3 years and a maximum of 15 years. It is a subindex of the S&P Municipal Bond Index which tracks fixed-rate tax-free bonds and bonds subject to the AMT. The index includes bonds of all quality–from “AAA” to non-rated, including defaulted bonds–from all sectors of the municipal bond market. The Intermediate Index is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. The Intermediate Index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
3
The MIIG1-15 represents the portion of the MI Index composed solely of bonds that are rated ”BBB-/Baa3” or higher with remaining maturities from one to fifteen years. The MIIG1-15 Index is not adjusted to reflect sales charges, expenses and other fees that the SEC requires to be reflected in the Fund’s performance. The MIIG15 Index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of a $10,000 Investment line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
The Fund’s Institutional Shares commenced operations on April 28, 2020. For the periods prior to commencement of operations of the Fund’s IS class, the performance information shown is for the Fund’s A class. The performance of the A class has not been adjusted to reflect the expenses of the IS class since the IS class has a lower expense ratio than the A class. The performance information shown has been adjusted to reflect differences between the sales loads and charges imposed on the purchase and redemption of the Fund’s IS class and A class.
Annual Shareholder Report
5
Portfolio of Investments Summary Table (unaudited)
At August 31, 2022, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
General Obligation–Local
40.7%
Water & Sewer
17.0%
Hospital
9.9%
Higher Education
7.8%
General Obligation–State Appropriation
5.8%
Dedicated Tax
4.1%
Refunded
3.6%
Other Transportation
1.7%
Airport
1.6%
Electric & Gas
1.5%
Other2
7.2%
Other Assets and Liabilities—Net3
(0.9)%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. For securities that have been enhanced by a third-party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. Refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2
For purposes of this table, sector classifications constitute 93.7% of the Fund’s total net assets. Remaining sectors have been aggregated under the designation “Other.”
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Annual Shareholder Report
6
Portfolio of Investments
August 31, 2022 
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—97.2%
 
 
 
Michigan—97.2%
 
$1,200,000
 
Ann Arbor, MI Public School District, UT GO 2022 School
Building and Site Bonds, 5.000%, 5/1/2040
$1,332,847
1,255,000
 
Ann Arbor, MI, LT GO Capital Improvement Bonds
(Series 2019A), 4.000%, 5/1/2033
1,302,767
1,000,000
 
Berkley, MI School District, School Building & Site UT GO Bonds
(Series 2015), (Michigan School Bond Qualification and Loan
Program GTD), 5.000%, 5/1/2030
1,061,256
500,000
 
Birmingham, MI Public Schools, 2020 UT GO School Building and
Site and Refunding Bonds, 4.000%, 5/1/2023
505,100
410,000
 
Birmingham, MI Public Schools, School Building & Site UT GO
Bonds (Series 2015), 5.000%, 5/1/2027
436,314
1,690,000
 
Bishop, MI International Airport Authority, Refunding LT GO
(Series 2010A), (Assured Guaranty Municipal Corp. INS),
4.500%, 12/1/2023
1,693,122
500,000
 
Brighton, MI Area School District, UT GO 2020 School Building
and Site and Refunding Bonds, (Michigan School Bond
Qualification and Loan Program GTD), 5.000%, 5/1/2025
532,623
1,425,000
 
Calhoun County, MI Transportation Fund, Revenue Bonds,
4.000%, 11/1/2030
1,464,833
775,000
 
Crawford AuSable, MI School District, UT GO School Building
and Site Bonds (Series 2022-1), (Assured Guaranty Municipal
Corp. INS), 4.000%, 5/1/2030
829,048
830,000
 
Dearborn Heights, MI, LT GO Capital Improvement Bonds
(Series 2021), (Build America Mutual Assurance INS),
3.000%, 5/1/2026
837,361
2,000,000
 
Dearborn, MI School District, UT GO School Building & Site
Bonds (Series 2014A), (United States Treasury PRF
11/1/2023@100), 5.000%, 5/1/2025
2,059,551
500,000
 
Detroit, MI Downtown Development Authority, Tax Increment
Revenue Refunding Bonds (Catalyst Development Series 2018A),
(Assured Guaranty Municipal Corp. INS), 5.000%, 7/1/2035
518,306
375,000
 
Downriver Utility Wastewater Authority, Sewer System Revenue
Bonds (Series 2018), (Assured Guaranty Municipal Corp. INS),
5.000%, 4/1/2031
419,785
720,000
 
Ferndale, MI Public Schools, UT GO Refunding Bonds
(Series 2021A), (Michigan School Bond Qualification and Loan
Program GTD), 4.000%, 5/1/2024
737,579
1,000,000
 
Genesee, MI Water Supply System, Revenue Refunding Bonds
(Series 2014), (Build America Mutual Assurance INS),
5.000%, 11/1/2025
1,040,443
200,000
 
Gerald R. Ford International Airport, Limited Tax Revenue Bonds
(Series 2021), (Kent County, MI GTD), 5.000%, 1/1/2026
214,684
Annual Shareholder Report
7
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Michigan—continued
 
$250,000
 
Gerald R. Ford International Airport, Limited Tax Revenue Bonds
(Series 2021), (Kent County, MI GTD), 5.000%, 1/1/2027
$273,031
125,000
 
Gerald R. Ford International Airport, Limited Tax Revenue Bonds
(Series 2021), (Kent County, MI GTD), 5.000%, 1/1/2028
138,512
495,000
 
Grand Blanc, MI Community Schools, UT GO 2022 School
Building and Site Bonds, (Michigan School Bond Qualification
and Loan Program GTD), 5.000%, 11/1/2024
521,875
620,000
 
Grand Rapids, MI Public Schools, School Building & Site &
Refunding UT GO Bonds (Series 2016), (Assured Guaranty
Municipal Corp. INS), 5.000%, 5/1/2027
673,182
670,000
 
Grand Rapids, MI Public Schools, UT GO Refunding Bonds
(Series 2017), (Assured Guaranty Municipal Corp. INS),
5.000%, 5/1/2027
740,406
1,000,000
 
Grand Rapids, MI Sanitary Sewer System, Revenue Refunding
Bonds (Series 2016), 5.000%, 1/1/2034
1,070,779
555,000
 
Grand Traverse County, MI Hospital Finance Authority (Munson
Healthcare), Revenue Refunding Bonds (Series 2021),
5.000%, 7/1/2025
589,148
2,000,000
 
Great Lakes, MI Water Authority (Great Lakes, MI Water
Authority Sewage Disposal System), Senior Lien Revenue
Refunding Bonds (Series 2018B), 5.000%, 7/1/2029
2,271,125
500,000
 
Great Lakes, MI Water Authority (Great Lakes, MI Water
Authority Water Supply System), Water Supply System Revenue
Senior Lien Bonds (Series 2022A), 5.000%, 7/1/2035
561,289
300,000
 
Grosse Pointe, MI Public School System, UT GO 2021 School
Building and Site Bonds, 5.000%, 5/1/2024
312,733
500,000
 
Kalamazoo, MI, LT GO Refunding Bonds, (Assured Guaranty
Municipal Corp. INS), 4.000%, 10/1/2024
515,813
500,000
 
Kent County, MI, Michigan Transportation Fund LT GO Bonds
(Series 2021), 5.000%, 9/1/2025
537,125
500,000
 
Kent County, MI, Michigan Transportation Fund LT GO Bonds
(Series 2021), 5.000%, 9/1/2026
548,754
500,000
 
Lansing, MI Board of Water & Light, Utility System Revenue
Bonds (Series 2021B) TOBs, 2.000%, Mandatory Tender 7/1/2026
473,788
525,000
 
Lansing, MI Community College, College Building and Site
Refunding Bonds (Series 2017), 5.000%, 5/1/2030
585,381
625,000
 
Lansing, MI, LT GO Refunding Bonds (Series 2020), (Assured
Guaranty Municipal Corp. INS), 5.000%, 5/1/2025
664,281
500,000
 
Livonia, MI Public School District, UT GO School Building and
Site Bonds (Series 2021-I), (Build America Mutual Assurance INS),
5.000%, 5/1/2023
508,569
500,000
 
Ludington, MI Area School District, LT GO 2022 School Building
and Site Bonds (Series II), (Michigan School Bond Qualification
and Loan Program GTD), 5.000%, 11/1/2026
546,071
Annual Shareholder Report
8
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Michigan—continued
 
$360,000
 
Marquette, MI, Limited Tax General Obligation and Refunding
Bonds (Series 2021), (Build America Mutual Assurance INS),
4.000%, 5/1/2024
$368,612
500,000
 
Michigan State Building Authority, Facilities Program Revenue &
Refunding Bonds (Series 2013 1-A), 5.000%, 10/15/2022
501,596
1,000,000
 
Michigan State Building Authority, Facilities Program Revenue
Bonds (Series 2021-I), 4.000%, 10/15/2024
1,030,078
1,000,000
 
Michigan State Building Authority, Revenue Refunding Bonds
(Series 2015I), 5.000%, 4/15/2027
1,076,353
500,000
 
Michigan State Building Authority, Revenue Refunding Bonds
(Series 2020-I), 5.000%, 10/15/2027
558,888
1,000,000
 
Michigan State Comprehensive Transportation Fund, Refunding
Revenue Bonds (Series 2015), 5.000%, 11/15/2026
1,056,557
1,000,000
 
Michigan State Department of Transportation, Grant Anticipation
Refunding Bonds (Series 2016), 5.000%, 3/15/2025
1,062,013
750,000
 
Michigan State Finance Authority Revenue (Beaumont Health
Spectrum Health System), Hospital Revenue Refunding Bonds
(Series 2022A), 5.000%, 4/15/2030
858,536
500,000
 
Michigan State Finance Authority Revenue (Charter County of
Wayne Criminal Justice Center Project), Senior Lien State Aid
Revenue Bonds (Series 2018), 5.000%, 11/1/2033
559,644
1,000,000
 
Michigan State Finance Authority Revenue (Clean Water
Revolving Fund), Drinking Water Revolving Fund Revenue Bonds
(Series 2021B), 5.000%, 10/1/2026
1,098,980
250,000
 
Michigan State Finance Authority Revenue (Clean Water
Revolving Fund), Drinking Water Revolving Fund Revenue Bonds
(Series 2021B), 5.000%, 10/1/2027
280,274
1,000,000
 
Michigan State Finance Authority Revenue (Clean Water
Revolving Fund), Revenue Refunding Bonds (Series 2018B),
5.000%, 10/1/2032
1,133,400
2,000,000
 
Michigan State Finance Authority Revenue (Great Lakes, MI
Water Authority Water Supply System), Senior Lien Revenue
Bonds (Series 2014 D-2), (Assured Guaranty Municipal Corp. INS),
5.000%, 7/1/2025
2,091,090
250,000
 
Michigan State Finance Authority Revenue (MidMichigan
Obligated Group), Hospital Revenue Refunding Bonds
(Series 2014), (United States Treasury PRF 6/1/2024@100),
5.000%, 6/1/2026
260,763
2,000,000
 
Michigan State Hospital Finance Authority (Ascension Health
Alliance Senior Credit Group), Revenue Bonds (Series 1999B-3),
4.000%, 11/15/2032
2,048,904
500,000
 
Michigan State Hospital Finance Authority (Henry Ford Health
System, MI), Hospital Revenue Refunding Bonds (Series 2016),
5.000%, 11/15/2028
537,824
Annual Shareholder Report
9
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Michigan—continued
 
$1,000,000
 
Michigan State Hospital Finance Authority (Trinity Healthcare
Credit Group), Hospital Revenue & Refunding Bonds
(Series 2015MI), 5.500%, 12/1/2026
$1,078,903
250,000
 
Michigan State Hospital Finance Authority (Trinity Healthcare
Credit Group), Revenue Refunding Bonds (Series 2017C),
5.000%, 12/1/2031
274,032
455,000
 
Michigan State Trunk Line, State Trunk Line Fund Refunding
Bonds (Series 2020B, 5.000%, 11/15/2028
520,342
1,000,000
 
Michigan State Trunk Line, State Trunk Line Fund Revenue Bonds
(Series 2021A), 5.000%, 11/15/2025
1,079,376
1,250,000
 
Michigan State University Board of Trustees, General Revenue
Bonds (Series 2019B), 5.000%, 2/15/2034
1,381,504
1,000,000
 
Michigan Strategic Fund (Consumers Energy), Variable Rate
Limited Obligation Revenue Bonds (Series 2019) TOBs, 1.800%,
Mandatory Tender 10/1/2024
967,475
500,000
 
Michigan Strategic Fund (United Methodist Retirement
Community, Inc.), Limited Obligation Revenue Refunding Bonds
(Series 2019), 5.000%, 11/15/2034
495,461
250,000
 
Michigan Tobacco Settlement Finance Authority, Tobacco
Settlement Asset-Backed Senior Current Interest Bonds
(Series 2020A Class 1), 5.000%, 6/1/2025
262,288
200,000
 
Northern Michigan University, General Revenue Refunding Bonds
(Series 2021), 5.000%, 6/1/2028
223,403
500,000
 
Northview Michigan Public School District, UT GO Refunding
Bonds, (Michigan School Bond Qualification and Loan Program
GTD), 5.000%, 11/1/2025
536,386
500,000
 
Oakland-Macomb Interceptor Drain Drainage District, LT GO
Bonds (Series 2020A), 5.000%, 7/1/2025
534,429
500,000
 
Owosso, MI, UT GO Refunding Bonds (Series 2021), (Assured
Guaranty Municipal Corp. GTD), 4.000%, 5/1/2025
517,909
510,000
 
Port Huron, MI, LT GO Refunding Bonds (Series 2021), (Build
America Mutual Assurance INS), 4.000%, 10/1/2024
524,977
1,000,000
 
Romulus, MI Community Schools, UT GO Refunding Bonds
(Series 2021A), (Michigan School Bond Qualification and Loan
Program GTD), 4.000%, 5/1/2025
1,035,557
1,000,000
 
Royal Oak, MI Hospital Finance Authority (Beaumont Health
Credit Group), Hospital Revenue Refunding Bonds
(Series 2014D), 5.000%, 9/1/2023
1,025,667
500,000
 
Saginaw, MI City School District, UT GO School Building and Site
Bonds (Series 2021), (Michigan School Bond Qualification and
Loan Program GTD), 4.000%, 5/1/2027
526,403
1,070,000
 
Saginaw, MI Water Supply System, Water Supply System Revenue
Refunding Bonds (Series 2021), (Assured Guaranty Municipal
Corp. INS), 4.000%, 7/1/2026
1,121,649
Annual Shareholder Report
10
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Michigan—continued
 
$1,000,000
 
South Haven, MI Public Schools, UT GO School Building and Site
Bonds (Series 2021-I), (Michigan School Bond Qualification and
Loan Program INS), 5.000%, 5/1/2045
$1,100,330
500,000
 
South Lyon, MI Community School District, School Building and
Site UT GO Bonds (Series 2020-I), 4.000%, 11/1/2026
528,172
1,085,000
 
Southfield, MI Library Building Authority, Refunding LT GO
Bonds, 5.000%, 5/1/2026
1,156,081
1,000,000
 
Southfield, MI, UT GO 2018 Street Improvement Bonds,
4.000%, 5/1/2029
1,063,403
250,000
 
University of Michigan (The Regents of), General Revenue Bonds
(Series 2014A), 5.000%, 4/1/2024
260,305
1,000,000
 
University of Michigan (The Regents of), General Revenue Bonds
(Series 2017A), 5.000%, 4/1/2027
1,112,508
2,000,000
 
University of Michigan (The Regents of), Revenue Bonds
(Series 2018A), 4.000%, 4/1/2033
2,081,050
500,000
 
Utica, MI Community Schools, School Building & Site &
Refunding UT GO Bonds (Series 2015), (Michigan School Bond
Qualification and Loan Program GTD), 5.000%, 5/1/2029
530,761
675,000
 
Warren, MI, LT GO Bonds (Series 2021), 4.000%, 6/1/2032
725,538
1,000,000
 
Wayne County, MI Airport Authority, Airport Revenue Refunding
Bonds (Series 2015F), 5.000%, 12/1/2027
1,058,279
305,000
 
Western, MI School District, UT GO 2022 School Building and
Site Bonds, (Michigan School Bond Qualification and Loan
Program GTD), 5.000%, 5/1/2028
342,661
 
 
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $64,224,146)
63,105,842
 
1
SHORT-TERM MUNICIPALS—3.7%
 
 
 
Michigan—3.7%
 
1,000,000
 
Green Lake Township, MI (Interlochen Center) Daily VRDNs,
(BMO Harris Bank, N.A. LOC), 1.030%, 9/1/2022
1,000,000
900,000
 
Michigan State Strategic Fund (Henry Ford Museum & Greenfield
Village) Daily VRDNs, (Comerica Bank LOC), 1.130%, 9/1/2022
900,000
500,000
 
Michigan Strategic Fund (Air Products & Chemicals, Inc.),
(Series 2007) Daily VRDNs, 0.960%, 9/1/2022
500,000
 
 
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $2,400,000)
2,400,000
 
 
TOTAL INVESTMENT IN SECURITIES—100.9%
(IDENTIFIED COST $66,624,146)2
65,505,842
 
 
OTHER ASSETS AND LIABILITIES - NET—(0.9)%3
(556,841)
 
 
TOTAL NET ASSETS—100%
$64,949,001
Securities that are subject to the federal alternative minimum tax (AMT) represent 4.1% of the Fund’s portfolio as calculated based upon total market value (Unaudited).
Annual Shareholder Report
11
1
Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
2
Also represents cost of investments for federal tax purposes.
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of total net assets at August 31, 2022.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of August 31, 2022, all investments of the Fund utilized Level 2 inputs in valuing the Fund’s assets carried at fair value.
The following acronym(s) are used throughout this portfolio: 
GO
—General Obligation
GTD
—Guaranteed
INS
—Insured
LOC
—Letter of Credit
LT
—Limited Tax
PRF
—Pre-refunded
TOBs
—Tender Option Bonds
UT
—Unlimited Tax
VRDNs
—Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
12
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$11.34
$11.46
$11.42
$10.92
$11.30
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.15
0.20
0.25
0.27
0.25
Net realized and unrealized gain (loss)
(0.83)
(0.05)
0.05
0.53
(0.38)
TOTAL FROM INVESTMENT OPERATIONS
(0.68)
0.15
0.30
0.80
(0.13)
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.15)
(0.21)
(0.25)
(0.27)
(0.25)
Distributions from net realized gain
(0.05)
(0.06)
(0.01)
(0.03)
—
TOTAL DISTRIBUTIONS
(0.20)
(0.27)
(0.26)
(0.30)
(0.25)
Net Asset Value, End of Period
$10.46
$11.34
$11.46
$11.42
$10.92
Total Return1
(6.05)%
1.26%
2.67%
7.46%
(1.11)%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses2
0.77%
0.77%
0.77%3
0.77%3
0.77%3
Net investment income
1.42%
1.80%
2.20%
2.42%
2.29%
Expense waiver/reimbursement4
0.36%
0.32%
0.32%
0.29%
0.21%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$50,484
$66,554
$72,959
$78,276
$88,810
Portfolio turnover5
17%
20%
11%
21%
19%
1
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
2
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
3
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.77%, 0.77% and 0.77% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
4
This expense decrease is reflected in both the net expense and the net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
5
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
13
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
20201,2
Net Asset Value, Beginning of Period
$11.34
$11.46
$11.15
Income From Investment Operations:
 
 
 
Net investment income
0.18
0.23
0.09
Net realized and unrealized gain (loss)
(0.83)
(0.06)
0.31
TOTAL FROM INVESTMENT OPERATIONS
(0.65)
0.17
0.40
Less Distributions:
 
 
 
Distributions from net investment income
(0.18)
(0.23)
(0.09)
Distributions from net realized gain
(0.05)
(0.06)
—
TOTAL DISTRIBUTIONS
(0.23)
(0.29)
(0.09)
Net Asset Value, End of Period
$10.46
$11.34
$11.46
Total Return3
(5.81)%
1.50%
3.56%
Ratios to Average Net Assets:
 
 
 
Net expenses4
0.52%
0.52%
0.52%5,6
Net investment income
1.66%
2.03%
2.23%5
Expense waiver/reimbursement7
0.36%
0.32%
0.40%5
Supplemental Data:
 
 
 
Net assets, end of period (000 omitted)
$14,465
$10,675
$3,273
Portfolio turnover8
17%
20%
11%9
1
Reflects operations for the period from April 28, 2020 (commencement of operations) to August 31, 2020.
2
Certain ratios included in Ratios to Average Net Assets and per share amounts may be inflated or deflated as compared to the fee structure for each respective share class as a result of daily systematic allocations being rounded to the nearest penny for fund level income, expense and realized gain/ loss amounts. Such differences are immaterial.
3
Based on net asset value. Total returns for periods of less than one year are not annualized.
4
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
5
Computed on an annualized basis.
6
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.52% for the period ended August 31, 2020, after taking into account this expense reduction.
7
This expense decrease is reflected in both the net expense and the net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
8
Securities that mature are considered sales for purposes of this calculation.
9
Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the fiscal year ended August 31, 2020.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
14
Statement of Assets and Liabilities
August 31, 2022
 
Assets:
 
 
Investment in securities, at value (identified cost $66,624,146)
 
$65,505,842
Income receivable
 
845,104
Receivable for shares sold
 
592
TOTAL ASSETS
 
66,351,538
Liabilities:
 
 
Payable for investments purchased
$1,294,634
 
Payable for shares redeemed
30,578
 
Income distribution payable
17,234
 
Payable to bank
1,555
 
Payable for other service fees (Notes 2 and 5)
10,918
 
Payable for investment adviser fee (Note 5)
575
 
Payable for administrative fee (Note 5)
349
 
Accrued expenses (Note 5)
46,694
 
TOTAL LIABILITIES
 
1,402,537
Net assets for 6,210,560 shares outstanding
 
$64,949,001
Net Assets Consists of:
 
 
Paid-in capital
 
$65,642,836
Total distributable earnings (loss)
 
(693,835)
TOTAL NET ASSETS
 
$64,949,001
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
 
Class A Shares:
 
 
Net asset value per share ($50,483,812 ÷ 4,827,615 shares outstanding),
no par value, unlimited shares authorized
 
$10.46
Offering price per share (100/97.00 of $10.46)
 
$10.78
Redemption proceeds per share
 
$10.46
Institutional Shares:
 
 
Net asset value per share ($14,465,189 ÷ 1,382,945 shares outstanding),
no par value, unlimited shares authorized
 
$10.46
Offering price per share
 
$10.46
Redemption proceeds per share
 
$10.46
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
15
Statement of Operations
Year Ended August 31, 2022
 
Investment Income:
 
 
Interest
 
$1,481,208
Expenses:
 
 
Investment adviser fee (Note 5)
$270,434
 
Administrative fee (Note 5)
53,797
 
Custodian fees
8,165
 
Transfer agent fees
31,182
 
Directors’/Trustees’ fees (Note 5)
2,148
 
Auditing fees
30,410
 
Legal fees
8,307
 
Other service fees (Notes 2 and 5)
127,004
 
Portfolio accounting fees
110,799
 
Share registration costs
38,564
 
Printing and postage
19,963
 
Miscellaneous (Note 5)
23,128
 
TOTAL EXPENSES
723,901
 
Waiver of investment adviser fee (Note 5)
(242,019)
 
Net expenses
 
481,882
Net investment income
 
999,326
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:
 
 
Net realized gain on investments
 
624,328
Net realized gain on futures contracts
 
6,618
Net change in unrealized appreciation of investments
 
(5,806,022)
Net realized and unrealized loss on investments and futures contracts
 
(5,175,076)
Change in net assets resulting from operations
 
$(4,175,750)
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
16
Statement of Changes in Net Assets
 
Year Ended August 31
2022
2021
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$999,326
$1,419,629
Net realized gain
630,946
121,176
Net change in unrealized appreciation/depreciation
(5,806,022)
(545,952)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
(4,175,750)
994,853
Distributions to Shareholders:
 
 
Class A Shares
(939,304)
(1,560,716)
Institutional Shares
(361,203)
(253,205)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(1,300,507)
(1,813,921)
Share Transactions:
 
 
Proceeds from sale of shares
23,250,144
18,161,152
Net asset value of shares issued to shareholders in payment of
distributions declared
983,180
1,691,787
Cost of shares redeemed
(31,037,061)
(18,037,040)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(6,803,737)
1,815,899
Change in net assets
(12,279,994)
996,831
Net Assets:
 
 
Beginning of period
77,228,995
76,232,164
End of period
$64,949,001
$77,228,995
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Notes to Financial Statements
August 31, 2022
1. ORGANIZATION
Federated Hermes Municipal Securities Income Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of Federated Hermes Michigan Intermediate Municipal Fund (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers two classes of shares: Class A Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Michigan and Michigan municipalities. Interest income from the Fund’s investments may be subject to the federal AMT for individuals.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
◾ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
◾ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
◾ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
◾ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
◾ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
Annual Shareholder Report
18
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
Annual Shareholder Report
19
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income, if any, are declared daily and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver of $242,019 is disclosed in Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares to unaffiliated financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended August 31, 2022, the Fund’s Class A Shares incurred $127,004 of other service fees.
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended August 31, 2022, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of August 31, 2022, tax years 2019 through 2022 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
When-Issued and Delayed-Delivery Transactions
The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ materially from those estimated. The Fund applies investment company accounting and reporting guidance.
Annual Shareholder Report
20
3. SHARES OF BENEFICIAL INTEREST
The following tables summarize share activity: 
Year Ended August 31
2022
2021
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
1,147,335
$12,135,149
840,490
$9,593,743
Shares issued to shareholders in payment of
distributions declared
79,867
871,641
127,060
1,448,392
Shares redeemed
(2,268,964)
(24,995,448)
(1,466,264)
(16,710,943)
NET CHANGE RESULTING FROM
CLASS A SHARE TRANSACTIONS
(1,041,762)
$(11,988,658)
(498,714)
$(5,668,808)
 
Year Ended August 31
2022
2021
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
989,321
$11,114,995
750,794
$8,567,409
Shares issued to shareholders in payment of
distributions declared
10,208
111,539
21,355
243,395
Shares redeemed
(557,955)
(6,041,613)
(116,478)
(1,326,097)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
441,574
$5,184,921
655,671
$7,484,707
NET CHANGE RESULTING FROM
TOTAL FUND SHARE TRANSACTIONS
(600,188)
$(6,803,737)
156,957
$1,815,899
4. FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended August 31, 2022 and 2021, was as follows: 
 
2022
2021
Tax-exempt income
$1,000,305
$1,419,289
Ordinary income1
$17,219
$1,788
Long-term capital gains
$282,983
$392,844
1
For tax purposes, short-term capital gain distributions are considered ordinary income distributions.
As of August 31, 2022, the components of distributable earnings on a tax-basis were as follows: 
Undistributed tax-exempt income
$91
Undistributed ordinary income2
$2,368
Undistributed long-term capital gains
$422,010
Net unrealized depreciation
$(1,118,304)
2
For tax purposes, short-term capital gains are considered ordinary income in determining distributable earnings.
Annual Shareholder Report
21
At August 31, 2022, the cost of investments for federal tax purposes was $66,624,146. The net unrealized depreciation of investments for federal tax purposes was $1,118,304. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $331,793 and net unrealized depreciation from investments for those securities having an excess of cost over value of $1,450,097.
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.40% of the Fund’s average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund for competitive reasons such as to maintain the Fund’s expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the year ended August 31, 2022, the Adviser voluntarily waived $242,019 of its fee.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below: 
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, the annualized fee paid to FAS was 0.080% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
Other Service Fees
For the year ended August 31, 2022, FSSC received $8,545 of the other service fees disclosed in Note 2.
Sales Charges
Front-end sales charges do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment. For the year ended August 31, 2022, FSC did not retain any sales charges.
Annual Shareholder Report
22
Interfund Transactions
During the year ended August 31, 2022, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $25,450,000 and $24,950,000, respectively. Net realized gain (loss) recognized on these transactions was $0.
Expense Limitation
The Adviser and certain of its affiliates (which may include FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 0.77% and 0.52% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) November 1, 2023; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Directors’/Trustees’ and Miscellaneous Fees
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. Investment TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended August 31, 2022, were as follows: 
Purchases
$11,071,200
Sales
$17,333,072
7. CONCENTRATION OF RISK
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at August 31, 2022, 22.8% of the securities in the Portfolio of Investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The largest percentage of investments insured by or supported by (backed) a letter of credit from any one institution or agency, was 14.9% of total investments.
Annual Shareholder Report
23
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 22, 2022. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to (a) the highest, on any day, of (i) the federal funds effective rate, (ii) the published secured overnight financing rate plus an assigned percentage, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of August 31, 2022, the Fund had no outstanding loans. During the year ended August 31, 2022, the Fund did not utilize the LOC.
9. INTERFUND LENDING
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Hermes, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of August 31, 2022, there were no outstanding loans. During the year ended August 31, 2022, the program was not utilized.
10. Indemnifications
Under the Fund’s organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party’s actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
11. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and
Annual Shareholder Report
24
consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may continue for an extended period of time and has resulted in substantial economic volatility. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies, (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
12. SUBSEQUENT EVENT
The Trustees have approved a proposed Agreement and Plan of Reorganization (Reorganization) pursuant to which Federated Hermes Intermediate Municipal Fund, another Federated Hermes Fund, would acquire all or substantially all of the assets of the Fund in complete liquidation and termination of the Fund. Pending submission of proxy materials to and approval by Fund shareholders, the Reorganization is expected to occur in the first quarter of 2023.
13. FEDERATED HERMES TAX INFORMATION (UNAUDITED)
For the year ended August 31, 2022, the amount of long-term capital gain designated by the Fund was $282,983. For the fiscal year ended August 31, 2022, 100% of distributions from net investment income is exempt from federal income tax, other than the federal AMT.
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25
Report of Independent Registered Public Accounting Firm
To The Board of Trustees of Federated HERMES Municipal Securities Income Trust and the Shareholders of Federated HERMES Michigan Intermediate Municipal FUND:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes Michigan Intermediate Municipal Fund (the Fund), a portfolio of Federated Hermes Municipal Securities Income Trust, including the portfolio of investments, as of August 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Annual Shareholder Report
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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2022, by correspondence with custodians and brokers; when replies were not received from brokers, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
 
We have served as the auditor for one or more of Federated Hermes’ investment companies since 2006.
Boston, Massachusetts
October 24, 2022
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27
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2022 to August 31, 2022.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 
 
Beginning
Account Value
3/1/2022
Ending
Account Value
8/31/2022
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$969.10
$3.82
Institutional Shares
$1,000
$970.30
$2.58
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,021.32
$3.92
Institutional Shares
$1,000
$1,022.58
$2.65
1
Expenses are equal to the Fund’s annualized net expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized expense ratios are as follows: 
Class A Shares
0.77%
Institutional Shares
0.52%
Annual Shareholder Report
29
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2021, the Trust comprised four portfolio(s), and the Federated Hermes Fund Family consisted of 33 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400, Option #4.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: August 1990
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
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30
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Director and Vice President, Federated Hermes, Inc.; President,
Director/Trustee and CEO, Federated Advisory Services Company,
Federated Equity Management Company of Pennsylvania, Federated
Global Investment Management Corp., Federated Investment
Counseling, Federated Investment Management Company; President
of some of the Funds in the Federated Hermes Fund Family and
Director, Federated Investors Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Chairman and Director, Southpointe
Distribution Services, Inc. and President, Technology, Federated
Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Director, KLX Energy Services Holdings,
Inc. (oilfield services); former Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
31
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Lead Director, Member of the Audit and Nominating and
Corporate Governance Committees, Haverty Furniture Companies,
Inc.; formerly, Director, Member of Governance and Compensation
Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; Director and Vice Chair, Our Campaign for the Church
Alive!, Inc.; and Director, Saint Francis University.
Annual Shareholder Report
32
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); Director, The Golisano Children’s Museum of Naples,
Florida; and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; formerly, Executive Vice President for Legal Affairs,
General Counsel and Secretary to the Board of Directors, Duquesne
University (Retired).
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Senior Vice President for Legal Affairs, General Counsel and
Secretary to the Board of Directors and Assistant General Counsel and
Director of Risk Management, Duquesne University. Prior to her work
at Duquesne University, Ms. Reilly served as Assistant General
Counsel of Compliance and Enterprise Risk as well as Senior Counsel
of Environment, Health and Safety, PPG Industries. Ms. Reilly currently
serves as a member of the Board of Directors of UPMC
Mercy Hospital.
Annual Shareholder Report
33
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 1999
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
Annual Shareholder Report
34
OFFICERS 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: January 2005
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR
VICE PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
Annual Shareholder Report
35
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
CHIEF INVESTMENT OFFICER
Officer since: February 2010
Principal Occupations: Robert J. Ostrowski joined Federated Hermes,
Inc. in 1987 as an Investment Analyst and became a Portfolio Manager
in 1990. He was named Chief Investment Officer of Federated
Hermes, Inc. taxable fixed-income products in 2004 and also serves as
a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice
President of the Fund’s Adviser in 2009 and served as a Senior Vice
President of the Fund’s Adviser from 1997 to 2009. Mr. Ostrowski has
received the Chartered Financial Analyst designation. He received his
M.S. in Industrial Administration from Carnegie Mellon University.
 
Annual Shareholder Report
36
Evaluation and Approval of Advisory Contract–May 2022
Federated Hermes Michigan Intermediate Municipal Fund (the “Fund”)
At its meetings in May 2022 (the “May Meetings”), the Fund’s Board of Trustees (the “Board”), including those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the “Adviser”) (the “Contract”) for an additional one-year term. The Board’s determination to approve the continuation of the Contract reflects the exercise of its business judgment after considering all of the information and factors believed to be relevant and appropriate on whether to approve the continuation of the existing arrangement. The information, factors and conclusions that formed the basis for the Board’s approval are summarized below.
Information Received and Review Process
At the request of the Independent Trustees, the Fund’s Chief Compliance Officer (the “CCO”) furnished to the Board in advance of its May Meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund’s management fee and in determining to approve the continuation of the Contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer” prior to the elimination of the Senior Officer position in December 2017.
In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board considered information specifically prepared in connection with the approval of the continuation of the Contract that was presented at the May Meetings. In this regard, in the months preceding the May Meetings, the Board requested and reviewed written responses and supporting materials prepared by the Adviser and its affiliates (collectively, “Federated Hermes”) in response to requests posed to Federated Hermes by independent legal counsel on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Trustees deemed
Annual Shareholder Report
37
reasonably necessary to evaluate the Contract, which included detailed information about the Fund and Federated Hermes furnished to the Board at its meetings throughout the year and in between regularly scheduled meetings on particular matters as the need arose.
The Board’s consideration of the Contract included review of materials and information covering the following matters, among others: the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; Federated Hermes’ business and operations; the Adviser’s investment philosophy, personnel and processes; the Fund’s investment objectives and strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate); the Fund’s fees and expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the financial condition of Federated Hermes; the Adviser’s profitability with respect to the Fund; distribution and sales activity for the Fund; and the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser’s cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize “economies of scale” as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fee and expense structures, including a comparison of management fees paid to the adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the adviser for what might be viewed as like services; and (6) the extent of care, conscientiousness and independence with which the fund’s board members perform their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of the adviser’s services and fees. The Board noted that the Securities and Exchange Commission (“SEC”) disclosure requirements
Annual Shareholder Report
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regarding the basis for a fund board’s approval of the fund’s investment advisory contract generally align with the factors listed above. The Board was guided by these factors in its review of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Hermes on matters relating to the oversight of the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the (“Federated Hermes Funds”).
In addition to considering the above-referenced factors, the Board was mindful of the preferences and expectations of Fund shareholders and the potential disruptions of the Fund’s operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew the Contract. In particular, the Board recognized that many shareholders likely have invested in the Fund on the strength of Federated Hermes’ industry standing and reputation and with the expectation that Federated Hermes will have a continuing role in providing advisory services to the Fund. Thus, the Board observed that in the marketplace there are a range of investment options available to the Fund’s shareholders and such shareholders, having had the opportunity to consider other investment options, have effectively selected Federated Hermes by virtue of investing in the Fund.
In determining to approve the continuation of the Contract, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate through the exercise of their reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board’s determination to approve the continuation of the Contract was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Contract. The Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Trustees met separately in executive session with their independent legal counsel and without management present to review the relevant materials and consider their responsibilities under applicable laws. In addition, senior management representatives of Federated Hermes also met with the Independent Trustees and their independent legal counsel to discuss the materials and presentations furnished to the Board at the May Meetings. The Board considered the approval of the Contract for the Fund as part of its consideration of agreements for funds across the family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
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Nature, Extent and Quality of Services
The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of Federated Hermes dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by Federated Hermes. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade operations capabilities, experience and performance track record. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and Federated Hermes’ ability and experience in attracting and retaining qualified personnel to service the Fund. The Board also considered the Adviser’s ability to deliver competitive investment performance for the Fund when compared to the Fund’s Performance Peer Group (as defined below), which was deemed by the Board to be a useful indicator of how the Adviser is executing the Fund’s investment program.
In addition, the Board considered the financial resources and overall reputation of Federated Hermes and its willingness to consider and make investments in personnel, infrastructure, technology, cybersecurity, business continuity planning and operational enhancements that are designed to benefit the Federated Hermes Funds. The Board noted the significant acquisition of Hermes Fund Managers Limited by Federated Hermes, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters. The Board considered Federated Hermes’ oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes’ communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account Federated Hermes’ communications with the Board in light of the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
The Board received and evaluated information regarding Federated Hermes’ regulatory and compliance environment. The Board considered Federated Hermes’ compliance program and compliance history and reports from the CCO about Federated Hermes’ compliance with applicable laws and regulations, including responses to regulatory developments and any compliance or other issues raised by regulatory agencies. The Board also noted Federated Hermes’ support of the Federated Hermes Funds’ compliance control structure and the compliance-related resources devoted by Federated
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Hermes in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including Federated Hermes’ commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ approach to internal audits and risk management with respect to the Federated Hermes Funds and its day-to-day oversight of the Federated Hermes Funds’ compliance with their investment objectives and policies as well as with applicable laws and regulations, noting that regulatory and other developments had over time led to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered the implementation of Federated Hermes’ business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. In addition, the Board noted Federated Hermes’ commitment to maintaining high quality systems and expending substantial resources to prepare for and respond to ongoing changes due to the market, regulatory and control environments in which the Fund and its service providers operate, including changes associated with the pandemic.
The Board considered Federated Hermes’ efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks. The Board considered detailed investment reports on, and the Adviser’s analysis of, the Fund’s performance over different time periods that were provided to the Board throughout the year and in connection with the May Meetings. These reports include, among other items, information on the Fund’s
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gross and net returns, the Fund’s investment performance compared to one or more relevant categories or groups of peer funds and the Fund’s benchmark index, performance attribution information and commentary on the effect of market conditions.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”). The Board noted the CCO’s view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds’ objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
The Fund’s performance fell below the median of the Performance Peer Group for the one-year, three-year and five-year periods ended December 31, 2021. The Board discussed the Fund’s performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser’s overall capabilities to manage the Fund.
Fund Expenses
The Board considered the advisory fee and overall expense structure of the Fund and the comparative fee and expense information that had been provided in connection with the May Meetings. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its evaluation. The Board focused on comparisons with other similar registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered funds are the products most like the Fund, in that they are readily available to Fund
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shareholders as alternative investment vehicles, and they are the type of investment vehicle, in fact, chosen and maintained by the Fund’s shareholders. The Board noted that the range of such other registered funds’ fees and expenses, therefore, appears to be a relevant indicator of what investors have found to be reasonable in the marketplace in which the Fund competes.
The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund’s fee rates relative to its Expense Peer Group. In this regard, the Board noted that the contractual advisory fee rate was below the median of the Expense Peer Group, and the Board was satisfied that the overall expense structure of the Fund remained competitive.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that non-registered fund clients are inherently different products due to the following differences, among others: (i) different types of targeted investors; (ii) different applicable laws and regulations; (iii) different legal structures; (iv) different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; (v) the time spent by portfolio managers and their teams (among other personnel across various departments, including legal, compliance and risk management) in reviewing securities pricing and fund liquidity; (vi) different administrative responsibilities; (vii) different degrees of risk associated with management; and (viii) a variety of different costs. The Board also considered information regarding the differences in the nature of the services required for Federated Hermes to manage its proprietary registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s registered fund, noting the CCO’s view that Federated Hermes generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Hermes Funds than in its role as sub-adviser to an unaffiliated third-party registered fund. The Board noted that the CCO did not consider the fees for providing advisory services to other types of clients to be determinative in judging the appropriateness of the Federated Hermes Funds’ advisory fees.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
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Profitability
The Board received and considered profitability information furnished by Federated Hermes, as requested by the CCO. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made on a fund-by-fund basis, using allocation methodologies specified by the CCO and described to the Board. The Board considered the CCO’s view that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs on a fund-by-fund basis continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable because a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Hermes Fund and may produce unintended consequences. In addition, the Board considered the CCO’s view that the allocation methodologies used by Federated Hermes in estimating profitability for purposes of reporting to the Board in connection with the continuation of the Contract are consistent with the methodologies previously reviewed by an independent consultant. The Board noted that the independent consultant had previously conducted a review of the allocation methodologies and reported that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
The Board also reviewed information compiled by Federated Hermes comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. The Board considered the CCO’s conclusion that, based on such profitability information, Federated Hermes’ profit margins did not appear to be excessive. The Board also considered the CCO’s view that Federated Hermes appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Federated Hermes Funds.
Economies of Scale
The Board received and considered information about the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as: personnel, processes and tools for portfolio management, including the use of market data on which portfolio managers make investment decisions; trading operations; ESG integration and issuer engagement on ESG matters; shareholder services; compliance; business continuity; cybersecurity; internal audit and risk management functions; and technology that supports the provision of investment management services. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared
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with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense reimbursements are another means for potential economies of scale to be shared with shareholders and can provide protection from an increase in expenses if a Federated Hermes Fund’s assets decline. The Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered Federated Hermes’ reductions in contractual management fees for certain Federated Hermes Funds during the prior year, including in response to the CCO’s recommendations in the prior year’s CCO Fee Evaluation Report, which have resulted in benefits being realized by shareholders.
The Board also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to evaluate the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund advisory fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. The Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds’ investment advisory contracts, Federated Hermes’ affiliates also receive fees for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of Federated Hermes’ affiliates provide distribution and shareholder services to the Federated Hermes Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The Board also received and considered information detailing any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
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Conclusions
The Board considered: (i) the CCO’s conclusion that his observations and the information accompanying the CCO Fee Evaluation Report show that the management fee for the Fund is reasonable; and (ii) the CCO’s recommendation that the Board approve the management fee. The Board noted that, under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Contract by the CCO. The CCO also recognized that the Board’s evaluation of the Federated Hermes Funds’ advisory and sub-advisory arrangements is a continuing and ongoing process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its ongoing oversight of the Federated Hermes Funds.
On the basis of the information and factors summarized above, among other information and factors deemed relevant by the Board, and the evaluation thereof, the Board, including the Independent Trustees, unanimously voted to approve the continuation of the Contract. The Board based its determination to approve the Contract on the totality of the circumstances and relevant factors and with a view of past and future long-term considerations. Not all of the factors and considerations identified above were necessarily deemed to be relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes Municipal Securities Income Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes Michigan Intermediate Municipal Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of each Federated Hermes Fund’s investment adviser as the administrator for the Program (the “Administrator”) with respect to that Fund. The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2022, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2021 through March 31, 2022 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind, reverse repurchase agreement transactions, redemptions
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delayed beyond the normal T+1 settlement, but within seven days of the redemption request, and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
◾ confirmation that it was not necessary for the Fund to utilize, and the Fund did not utilize, alternative funding sources during the Period;
◾ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
◾ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
◾ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
◾ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit;
◾ the fact that there were no liquidity events during the Period, that materially affected the Fund’s liquidity risk;
◾ the impact on liquidity and management of liquidity risk caused by extended non-U.S. market closures and confirmation that there were no issues for any of the affected Federated Hermes Funds in meeting shareholder redemptions at any time during these temporary non-U.S. market closures;
◾ circumstances during the Period under which the Administrator convened meetings of the Liquidity Risk Management Committees more frequently than normal to conduct enhanced liquidity risk monitoring, including prior to the Russian invasion of Ukraine.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400, Option #4. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Trust’s Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.
  
 
Federated Hermes Michigan Intermediate Municipal Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 313923302
CUSIP 313923773
G01106-03 (10/22)
© 2022 Federated Hermes, Inc.
 
Annual Shareholder Report
August 31, 2022
 
 
Share Class | Ticker
A | FMOAX
B | FMOBX
C | FMNCX
 
F | FHTFX
Institutional | FMYIX
 
Federated Hermes Municipal High Yield Advantage Fund
Fund Established 1987
A Portfolio of Federated Hermes Municipal Securities Income Trust
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from September 1, 2021 through August 31, 2022. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,
 
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Municipal High Yield Advantage Fund (the “Fund”), based on net asset value for the 12-month reporting period ended August 31, 2022, was -10.60% for Class A Shares, -11.26% for Class B Shares, -11.26% for Class C Shares, -10.49% for Class F Shares and -10.39% for Institutional Shares. The -10.39% total return of the Institutional Shares consisted of 3.04% of tax-exempt dividends and reinvestments and depreciation of -13.43% in the net asset value of the shares.1 The Fund’s broad-based securities market index, the S&P Municipal Bond Index (the “Main Index”),2 had a total return of -8.08% during the reporting period. The total return of the 25% S&P A and Higher/25% BBB/50% High Yield, All 3-Year Plus Sub-Index (the “Blended Index”),3 was -10.04% during the reporting period. The total return of the Morningstar High Yield Muni Funds Average (MHYMFA),4 a peer group average for the Fund, was -11.25% during the reporting period. The Fund’s and the MHYMFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and expenses, which were not reflected in the total return of any index.
During the reporting period, the Fund’s investment strategy focused on: (a) security selection; (b) selection of intermediate- to long-term, tax-exempt municipal bonds that typically yield more than short-term, tax-exempt municipal bonds due to the upward sloping yield curve;5 (c) active adjustment of the Fund’s duration6 (which indicates the portfolio’s sensitivity to changes in interest rates);7 (d) credit quality;8 and (e) allocation of the Fund’s portfolio among securities of similar issuers (referred to as “sectors”). These were the most significant factors affecting the Fund’s performance relative to the Blended Index during the reporting period.
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the Blended Index.
Market OVERVIEW
The emergence of the highest U.S. inflation in over 40 years drove Treasury and Municipal yields sharply higher during the reporting period. The Federal Reserve (the “Fed”) had incorrectly dismissed the rising inflation to transitory factors during much of 2021, keeping their policy rates near zero to support the ongoing expansion of the U.S. economy. While the U.S. economy expanded slowly and the unemployment rate declined from 5.2% to 3.7% over the period, the rate of inflation increased rapidly. The year-over-year change in U.S. Consumer Price Index rose from an elevated 5.3% in August 2021 to a 41-year peak of 9.1% in June 2022. In response, the Fed rapidly refocused on its price stability mandate, tightening monetary policy by raising the upper bound of the federal funds target rate range from 0.25%, where it stood for the first half of the reporting fiscal year, to 2.50% by August 2022. The yield on
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the 10-year U.S. Treasury ended the period at 3.20%, up 188 basis points (bp). Municipal yields increased sharply as well, with 2-, 5-, 10- and 30-year “AAA” municipal yields from Bloomberg Evaluation Services increasing 221 bp, 190 bp, 167 bp and 178 bp, respectively, over the period.
The sharp increase in municipal bond yields depressed prices and produced negative total returns for municipal bond portfolios. Municipal mutual funds experienced heavy net redemptions as investors reacted to the losses. Municipal credit spreads, the yield advantage on mid- and low-quality bonds relative to high-quality bonds, widened somewhat during the second half of the period amid concerns that the inflation shock and the Fed’s rapid monetary tightening will precipitate recession within the coming year. Widening credit spreads increased losses on mid- and lower-quality bonds relative to higher-quality bonds.
SECURITY SELECTION
In a volatile year, individual security selection was an important component of overall return. Individual circumstances such as liquidity, security-specific credit, coupon and other factors all had impacts on Fund performance during the reporting period. Overall, the net impact of individual security selection had a negative impact on the Fund’s return relative to the Blended Index.
YIELD CURVE AND MATURITY
The Fund’s positioning along the yield curve, particularly a concentration of bonds with durations less than two years, contributed to positive performance compared to the Blended Index over the period.
DURATION
As determined at the end of the reporting period, the Fund’s dollar-weighted average duration was 8.1 years, up from 5.0 years at the beginning of the period. Throughout the fiscal year, the Fund’s duration averaged 10% shorter than the duration of the Blended Index. Rates rose significantly during the period, so the Fund’s duration positioning helped its performance relative to the Blended Index.
CREDIT QUALITY
During the reporting period, credit spreads widened, causing higher-rated bonds to outperform and lower-rated bonds9 to lag. While the Fund increased its holdings in “AAA”- and “AA”-rated bonds and decreased its holdings in lower-rated bonds relative to the Blended Index, legacy underweight positions in higher-rated bonds caused the Fund’s performance to underperform relative to the Blended Index.
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SECTOR allocation
During the period, the Fund’s best-performing sectors were Pre-Refunded, Water & Sewer and Incremental Tax bonds. Lagging sectors included Public Power, Local General Obligation and Other Revenue bonds. Overall, the Fund’s sector allocation contributed positively to its performance against the Blended Index.
1
Income may be subject to state taxes, local taxes and the federal alternative minimum tax for individuals (AMT).
2
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Main Index.
3
The Blended Index is being used for comparison purposes because, although it is not the Fund’s broad-based securities market index, the Fund’s investment adviser (the “Adviser”) believes it more closely reflects the market sectors in which the Fund invests. Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index.
4
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Morningstar peer group.
5
The yield curve is a graph showing the comparative yields of securities in a particular class according to maturity. Securities on the long end of the yield curve have longer maturities.
6
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.
7Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices..
8
Credit ratings pertain only to the securities in the portfolio and do not protect Fund shares against market risk.
9
Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the fund’s adviser believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard and Poor’s, Moody’s Investor Services, Inc. and Fitch Rating Service. When ratings vary, the highest rating is used. Credit ratings of “AA” or better are considered to be high credit quality; credit ratings of “A” are considered high or medium/good quality; and credit ratings of “BBB” are considered to be medium/good credit quality, and the lowest category of investment-grade securities; credit ratings of “BB” and below are lower-rated, noninvestment-grade securities or junk bonds; and credit ratings of “CCC” or below are noninvestment-grade securities that have high default risk. Any credit quality breakdown does not give effect to the impact of any credit derivative investments made by the fund. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
Annual Shareholder Report
3
FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in Federated Hermes Municipal High Yield Advantage Fund (the “Fund”) from August 31, 2012 to August 31, 2022, compared to the S&P Municipal Bond Index (Main Index),2 25% S&P A and Higher/25% BBB/50% High Yield, All 3-Year Plus Sub-Index, a custom blended index (Blended Index),3 and the Morningstar High Yield Muni Funds Average (MHYMFA).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
Growth of A $10,000 Investment
Growth of $10,000 as of August 31, 2022
 
◾ The returns shown for Class B Shares include the maximum contingent deferred sales charge of 5.50% as applicable.
◾ Total returns shown for Class F Shares include the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900) and the maximum contingent deferred sales charge of 1.00% as applicable.  
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Total Return table below for the returns of additional classes not shown in the line graph above.
Annual Shareholder Report
4
Average Annual Total Returns for the Period Ended 8/31/2022
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1)  
 
1 Year
5 Years
10 Years
Class A Shares
-14.59%
0.66%
2.59%
Class B Shares
-16.03%
0.46%
2.43%
Class C Shares
-12.13%
0.82%
2.44%
Class F Shares
-12.20%
1.39%
2.95%
Institutional Shares5
-10.39%
1.82%
3.27%
Main Index
-8.08%
1.33%
2.32%
Blended Index
-10.04%
2.77%
3.84%
MHYMFA
-11.25%
1.71%
3.03%
 
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: For Class A Shares, the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550); for Class B Shares, the maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date; for Class C Shares, a 1.00% contingent deferred sales charge would be applied on any redemption less than one year from the purchase date; for Class F Shares, the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900) and a contingent deferred sales charge of 1.00% would be applied on any redemption less than three years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The Main Index, Blended Index and MHYMFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and the average.
2
The Main Index is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to AMT. Eligibility criteria for inclusion in the Main Index include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The Main Index is rebalanced monthly. The Main Index is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. The Main Index is unmanaged, and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
Annual Shareholder Report
5
3
The Blended Index is a custom blended index that represents, by market weighting, 25% of the A-rated and higher component of the Main Index, 25% of the BBB-rated component of the Main Index and 50% of the below investment grade (bonds with ratings of less than BBB-/Baa3) component of the Main Index, all with remaining maturities of three years or more. The Blended Index is not adjusted to reflect sales charges, expenses and other fees that the SEC requires to be reflected in the Fund’s performance. The Blended Index is unmanaged, and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of a $10,000 Investment line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
The Fund’s Institutional Shares commenced operations on June 11, 2013. For the period prior to the commencement of operations of Institutional Shares, the performance information shown is for the Fund’s Class F Shares, adjusted to reflect the expenses of the Fund’s Institutional Shares for each year for which the Fund’s Institutional Shares expenses would have exceeded the actual expenses paid by the Fund’s Class F Shares.
Annual Shareholder Report
6
Portfolio of Investments Summary Table (unaudited)
At August 31, 2022, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Dedicated Tax
17.1%
Primary/Secondary Education
11.8%
Senior Care
9.7%
Hospital
8.7%
Industrial Development Bond/Pollution Control Revenue Bond
8.4%
General Obligation—State
6.6%
Tobacco
6.0%
Pre-Refunded
4.2%
Incremental Tax
4.0%
General Obligation—Local
3.7%
Other2
19.5%
Other Assets and Liabilities—Net3
0.3%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. For securities that have been enhanced by a third-party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. Pre-Refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2
For purposes of this table, sector classifications constitute 80.2% of the Fund’s total net assets. Remaining sectors have been aggregated under the designation “Other.”
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Annual Shareholder Report
7
Portfolio of Investments
August 31, 2022 
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—98.0%
 
 
 
Alabama—1.2%
 
$500,000
1,2
Huntsville, AL Special Care Facilities Financing Authority
(Redstone Village), Retirement Facilities Revenue Bonds
(Series 2011A), (Original Issue Yield: 7.625%), 7.500%, 1/1/2047
$317,500
1,500,000
1,2
Huntsville, AL Special Care Facilities Financing Authority
(Redstone Village), Retirement Facility Revenue Bonds
(Series 2007), (Original Issue Yield: 5.600%), 5.500%, 1/1/2043
952,500
2,000,000
 
Jefferson County, AL Sewer System, Senior Lien Sewer Revenue
Current Interest Warrants (Series 2013-A), (Original Issue Yield:
5.650%), (Assured Guaranty Municipal Corp. INS),
5.500%, 10/1/2053
2,092,918
2,000,000
 
Jefferson County, AL Sewer System, Senior Lien Sewer Revenue
Current Interest Warrants (Series 2013A), (Original Issue Yield:
5.450%), (Assured Guaranty Municipal Corp. INS),
5.250%, 10/1/2048
2,088,527
790,000
3
Tuscaloosa County, AL IDA (Hunt Refining Co.), Gulf Opportunity
Zone Refunding Bonds (Series 2019A), 5.250%, 5/1/2044
720,401
 
 
TOTAL
6,171,846
 
 
Alaska—0.0%
 
1,000,000
1,2
Alaska Industrial Development and Export Authority (Boys & Girls
Home & Family Services, Inc.), Community Provider Revenue
Bonds (Series 2007C), 6.000%, 12/1/2036
20,000
 
 
Arizona—2.3%
 
650,000
3
Arizona State IDA (Basis Schools, Inc. Obligated Group),
Education Revenue Bonds (Series 2017D), 5.000%, 7/1/2051
651,060
500,000
3
Arizona State IDA (Basis Schools, Inc. Obligated Group),
Education Revenue Bonds (Series 2017G), 5.000%, 7/1/2051
500,816
1,000,000
3
Arizona State IDA (Doral Academy of Nevada FMMR), Education
Revenue Bonds (Series 2019A), 5.000%, 7/15/2049
981,095
1,750,000
3
Arizona State IDA (Pinecrest Academy of Nevada), Horizon,
Inspirada and St. Rose Campus Education Revenue Bonds
(Series 2018A), 5.750%, 7/15/2048
1,831,848
1,000,000
 
Maricopa County, AZ, IDA (Commercial Metals Corp.), Exempt
Facilities Revenue Bonds (Series 2022), 4.000%, 10/15/2047
866,820
1,000,000
3
Maricopa County, AZ, IDA (Paradise Schools), Revenue Refunding
Bonds, 5.000%, 7/1/2047
980,416
1,500,000
 
Phoenix, AZ IDA (GreatHearts Academies), Education Facility
Revenue Bonds (Series 2014A), 5.000%, 7/1/2044
1,507,023
1,000,000
 
Phoenix, AZ IDA (GreatHearts Academies), Education Facility
Revenue Bonds (Series 2016A), 5.000%, 7/1/2046
1,004,621
Annual Shareholder Report
8
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Arizona—continued
 
$3,000,000
 
Salt Verde Financial Corp., AZ, Senior Gas Revenue Bonds
(Series 2007), (Original Issue Yield: 5.100%), (Citigroup, Inc.
GTD), 5.000%, 12/1/2037
$3,164,465
430,000
3
Verrado Community Facilities District No. 1, AZ, District GO
Refunding Bonds (Series 2013A), 6.000%, 7/15/2027
433,584
 
 
TOTAL
11,921,748
 
 
Arkansas—0.2%
 
1,250,000
 
Arkansas Development Finance Authority (United States Steel
Corp.), Environmental Improvement Revenue Bonds
(Series 2022), 5.450%, 9/1/2052
1,231,834
 
 
California—6.2%
 
4,445,000
 
California Health Facilities Financing Authority (Cedars-Sinai
Medical Center), Revenue Refunding Bonds (Series 2021A),
5.000%, 8/15/2051
4,810,402
2,000,000
 
California Municipal Finance Authority (LINXS APM Project),
Senior Lien Revenue Bonds (Series 2018A), 5.000%, 6/1/2048
2,027,477
500,000
3
California Public Finance Authority (Kendal at Sonoma), Enso
Village Senior Living Revenue Refunding Bonds (Series 2021A),
5.000%, 11/15/2046
461,705
750,000
3
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2014A), 5.125%, 7/1/2044
757,888
565,000
3
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2015A), 5.000%, 7/1/2045
570,320
500,000
3
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2017A), 5.000%, 7/1/2047
506,111
1,000,000
3
California State School Finance Authority Charter School
Revenue (Bright Star Schools-Obligated Group), Charter School
Revenue Bonds (Series 2017), 5.000%, 6/1/2037
1,011,712
500,000
3
California State School Finance Authority Charter School
Revenue (Rocketship Public Schools), Revenue Bonds
(Series 2017G), 5.000%, 6/1/2047
486,127
1,100,000
3
California State School Finance Authority Charter School
Revenue (Summit Public Schools Obligated Group), (Series 2017),
5.000%, 6/1/2053
1,103,916
1,430,000
 
California State, UT GO Various Purpose Bonds,
4.000%, 4/1/2049
1,403,075
2,250,000
3
California Statewide Communities Development Authority (Loma
Linda University Medical Center), Revenue Bonds (Series 2016A),
5.000%, 12/1/2046
2,190,975
1,555,000
 
Community Facilities District No. 2016 of the County of Orange
(CFD 2016-1 (Village of Esencia)), Special Tax Revenue Bonds
(Series 2016A), 5.000%, 8/15/2046
1,607,231
1,000,000
 
Community Facilities District No. 2017 of the County of Orange
(CFD 2017-1 (Village of Esencia)), Improvement Area No. 1
Special Tax Revenue Bonds (Series 2018A), 5.000%, 8/15/2047
1,044,802
Annual Shareholder Report
9
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
California—continued
 
$500,000
 
Corona-Norco USD Community Facilities District No. 98-1, CA,
2013 Special Tax Refunding Bonds, (United States Treasury PRF
9/1/2023@100), 5.000%, 9/1/2032
$513,183
5,000,000
4
Golden State Tobacco Securitization Corp., CA, Subordinate
Tobacco Settlement Asset-Backed Bonds (Series 2021B-2),
0.000%, 6/1/2066
588,790
95,000
 
Irvine, CA (Irvine, CA Reassessment District No. 13-1), Limited
Obligation Improvement Bonds, 5.000%, 9/2/2028
97,318
365,000
 
Irvine, CA (Irvine, CA Reassessment District No. 13-1), Limited
Obligation Improvement Bonds, 5.000%, 9/2/2029
373,682
180,000
 
Irvine, CA (Irvine, CA Reassessment District No. 13-1), Limited
Obligation Improvement Bonds, 5.000%, 9/2/2030
184,058
1,000,000
 
Irvine, CA Community Facilities District No. 2013-3 (Great Park
Improvement Area No. 1), Special Tax Bonds (Series 2014),
5.000%, 9/1/2049
1,019,539
850,000
 
Los Angeles, CA Department of Airports (Los Angeles
International Airport), Subordinate Revenue Bonds
(Series 2017A), 5.000%, 5/15/2047
875,671
1,500,000
 
Los Angeles, CA Department of Airports (Los Angeles
International Airport), Subordinate Revenue Refunding Bonds
(Series 2021A), 5.000%, 5/15/2051
1,566,277
2,500,000
 
M-S-R Energy Authority, CA, Gas Revenue Bonds (Series 2009A),
(Citigroup, Inc. GTD), 7.000%, 11/1/2034
3,057,869
1,000,000
 
Palomar Health, CA Revenue, (Series 2016), 5.000%, 11/1/2039
1,028,066
1,000,000
 
Roseville, CA Special Tax (Fiddyment Ranch CFD No. 1), Special
Tax Refunding Revenue Bonds (Series 2017), 5.000%, 9/1/2034
1,062,147
1,255,000
 
Roseville, CA Special Tax (Fiddyment Ranch CFD No. 5), Special
Tax Revenue Bonds (Series 2021), 4.000%, 9/1/2050
1,097,176
340,000
3
San Francisco Special Tax District No. 2020-1 (Mission Rock
Facilities and Services), Development Special Tax Bonds
(Series 2021A), 4.000%, 9/1/2051
293,226
500,000
 
San Francisco, CA City & County Redevelopment Financing
Agency (Mission Bay South Redevelopment), Tax Allocation
Refunding Bonds (Series 2016C), (National Public Finance
Guarantee Corporation INS), 5.000%, 8/1/2041
528,048
1,200,000
 
Santa Margarita, CA Water District Community Facilities District
No. 2013-1, Special Tax Bonds (Series 2013), (Original Issue Yield:
5.700%), 5.625%, 9/1/2043
1,218,554
990,000
 
Western Riverside Water & Wastewater Financing Authority, CA,
Local Agency Revenue Refunding Bonds (Series 2016A),
5.000%, 9/1/2044
1,042,822
 
 
TOTAL
32,528,167
 
 
Colorado—7.0%
 
750,000
 
Arista, CO Metropolitan District, Special Revenue Refunding and
Improvement Bonds (Series 2018A), 5.000%, 12/1/2038
747,464
Annual Shareholder Report
10
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Colorado—continued
 
$1,000,000
 
Banning Lewis Ranch Metropolitan District No. 4, LT GO Bonds
(Series 2018A), 5.750%, 12/1/2048
$1,013,031
1,000,000
 
Banning Lewis Ranch Regional Metropolitan District, LT GO
Bonds (Series 2018A), 5.375%, 12/1/2048
1,001,554
1,500,000
 
Base Village Metropolitan District No. 2, LT GO Refunding Bonds
(Series 2016A), 5.750%, 12/1/2046
1,514,835
2,000,000
 
Central Platte Valley, CO Metropolitan District, GO Refunding
Bonds (Series 2013A), (United States Treasury PRF
12/1/2023@100), 5.625%, 12/1/2038
2,075,145
1,250,000
 
Central Platte Valley, CO Metropolitan District, GO Refunding
Bonds (Series 2013A), (United States Treasury PRF
12/1/2023@100), 6.000%, 12/1/2038
1,302,367
500,000
 
Colorado Educational & Cultural Facilities Authority (Aspen View
Academy), Charter School Revenue Bonds (Series 2021),
4.000%, 5/1/2061
384,022
2,000,000
 
Colorado Educational & Cultural Facilities Authority (James Irwin
Educational Foundation), Charter School Revenue Bonds
(Series 2022), 5.000%, 9/1/2062
1,968,292
1,000,000
3
Colorado Educational & Cultural Facilities Authority (Loveland
Classical School), School Improvement Revenue Bonds
(Series 2016), 5.000%, 7/1/2036
987,165
1,625,000
 
Colorado Educational & Cultural Facilities Authority (Skyview
Academy), Charter School Refunding & Improvement Revenue
Bonds (Series 2014), 5.500%, 7/1/2049
1,637,510
1,000,000
 
Colorado Educational & Cultural Facilities Authority (University
Lab School), Charter School Refunding & Improvement Revenue
Bonds (Series 2015), (Original Issue Yield: 5.020%),
5.000%, 12/15/2045
1,012,648
5,000,000
 
Colorado Health Facilities Authority (Advent Health
System/Sunbelt Obligated Group), Hospital Revenue Bonds
(Series 2021A), 4.000%, 11/15/2050
4,660,505
1,500,000
 
Colorado Health Facilities Authority (Christian Living
Communities), Revenue Refunding Bonds (Series 2016),
5.000%, 1/1/2037
1,463,927
1,000,000
 
Colorado State Health Facilities Authority Revenue
(Intermountain Healthcare), Revenue Bonds (Series 2022A),
5.000%, 5/15/2032
1,168,504
2,500,000
 
Colorado State Health Facilities Authority Revenue
(Intermountain Healthcare), Revenue Bonds (Series 2022A),
5.000%, 5/15/2052
2,698,594
500,000
 
Denver, CO Convention Center Hotel Authority, Senior Revenue
Refunding Bonds (Series 2016), 5.000%, 12/1/2040
507,007
1,000,000
3
Denver, CO Health & Hospital Authority, Revenue Refunding
Bonds (Series 2017A), 5.000%, 12/1/2034
1,040,683
750,000
 
Eagle County, CO Air Terminal Corp., Revenue Refunding Bonds
(Series 2011A), 6.000%, 5/1/2027
710,463
Annual Shareholder Report
11
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Colorado—continued
 
$1,170,000
 
Hogback Metropolitan District, CO, LT GO Bonds (Series 2021A),
5.000%, 12/1/2051
$1,042,763
1,500,000
 
Lakes at Centerra Metropolitan District No. 2, LT GO Refunding
and Improvement Bonds (Series 2018A), 5.125%, 12/1/2037
1,492,499
2,500,000
 
North Range, CO Metropolitan District No. 2, LT GO and Special
Revenue Refunding and Improvement Bonds (Series 2017A),
5.750%, 12/1/2047
2,528,352
2,000,000
 
Public Authority for Colorado Energy, Natural Gas Purchase
Revenue Bonds (Series 2008), (Original Issue Yield: 6.630%),
(Bank of America Corp. GTD), 6.250%, 11/15/2028
2,202,988
2,510,000
 
St. Vrain Lakes, CO Metropolitan District No. 2, LT GO Senior
Bonds (Series 2017A), 5.000%, 12/1/2037
2,524,743
1,030,000
 
Tallyn’s Reach Metropolitan District No. 3, CO, LT GO Refunding
& Improvement Bonds (Series 2013), (United States Treasury PRF
12/1/2023@100), 5.125%, 11/1/2038
1,059,212
 
 
TOTAL
36,744,273
 
 
Connecticut—1.3%
 
1,000,000
 
Connecticut Development Authority (Bombardier, Inc.), Airport
Facility Revenue Bonds, 7.950%, 4/1/2026
994,282
1,500,000
 
Connecticut State (Connecticut State Special Transportation
Fund), Special Tax Obligation Bonds Transportation Infrastructure
Purpose (Series 2018B), 5.000%, 10/1/2038
1,646,201
1,000,000
 
Connecticut State (Connecticut State Special Transportation
Fund), Special Tax Obligation Bonds Transportation Infrastructure
Purposes (Series 2020A), 4.000%, 5/1/2039
989,323
1,835,000
3
Mohegan Tribe of Indians of Connecticut Gaming Authority,
Priority Distribution Payment Refunding Bonds (Series 2015C),
(Original Issue Yield: 6.375%), 6.250%, 2/1/2030
1,943,340
1,500,000
 
Steel Point Infrastructure Improvement District, Steelpoint
Harbor Special Obligation Revenue Bonds (Series 2021),
4.000%, 4/1/2051
1,269,057
 
 
TOTAL
6,842,203
 
 
Delaware—1.4%
 
2,000,000
 
Delaware Economic Development Authority (Newark Charter
School, Inc.), Charter School Revenue Bonds (Series 2021),
4.000%, 9/1/2051
1,747,250
3,000,000
 
Delaware Health Facilities Authority (Christiana Care Health
Services), Revenue and Refunding Bonds (Series 2020A),
4.000%, 10/1/2049
2,809,917
3,000,000
3
Millsboro, DE Special Obligations (Plantation Lakes Special
Development District), Special Tax Revenue Refunding Bonds
(Series 2018), (Original Issue Yield: 5.140%), 5.125%, 7/1/2038
3,009,526
 
 
TOTAL
7,566,693
Annual Shareholder Report
12
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
District of Columbia—2.4%
 
$1,000,000
 
District of Columbia (Friendship Public Charter School, Inc.),
Revenue Bonds (Series 2016A), 5.000%, 6/1/2046
$1,007,023
1,000,000
 
District of Columbia (Ingleside at Rock Creek), Project Revenue
Bonds (Series 2017A), (Original Issue Yield: 5.250%),
5.000%, 7/1/2052
908,041
1,030,000
 
District of Columbia (KIPP DC), Revenue Bonds (Series 2013A),
(United States Treasury PRF 7/1/2023@100), 6.000%, 7/1/2043
1,059,580
1,000,000
 
District of Columbia (KIPP DC), Revenue Bonds (Series 2019),
4.000%, 7/1/2039
939,596
1,500,000
 
District of Columbia, UT GO Bonds (Series 2021D),
4.000%, 2/1/2046
1,468,479
1,000,000
 
Metropolitan Washington, DC Airports Authority, Revenue
Refunding Bonds (Series 2017A), 5.000%, 10/1/2047
1,034,716
3,000,000
 
Metropolitan Washington, DC Airports Authority, Revenue
Refunding Bonds (Series 2019A), 5.000%, 10/1/2039
3,161,395
1,700,000
 
Washington Metropolitan Area Transit Authority, Dedicated
Revenue Bonds (Series 2020A), 4.000%, 7/15/2045
1,639,401
1,180,000
 
Washington Metropolitan Area Transit Authority, Dedicated
Revenue Bonds (Series 2020A), 5.000%, 7/15/2045
1,285,639
 
 
TOTAL
12,503,870
 
 
Florida—8.0%
 
1,245,000
 
Alta Lakes, FL Community Development District, Special
Assessment Bonds (Series 2019), 4.625%, 5/1/2049
1,179,727
130,000
 
Arborwood, FL Community Development District, Special
Assessment Revenue Bonds (Series 2014A-1), (Original Issue
Yield: 6.900%), 6.900%, 5/1/2036
129,077
450,000
 
Artisan Lakes East CDD, Capital Improvement Revenue Bonds
(Series 2021-1), 4.000%, 5/1/2051
382,210
550,000
 
Artisan Lakes East CDD, Capital Improvement Revenue Bonds
(Series 2021-2), 4.000%, 5/1/2052
464,715
1,365,000
 
Boggy Branch CDD, FL, Special Assessment Bonds (Series 2021),
4.000%, 5/1/2051
1,158,206
3,000,000
 
Broward County, FL (Broward County, FL Convention Center
Hotel), First Tier Revenue Bonds (Series 2022), (Broward County,
FL GTD), 5.500%, 1/1/2055
3,371,446
3,000,000
1,2,3
Collier County, FL IDA (Arlington of Naples), Continuing Care
Community Revenue Bonds (Series 2013A), (Original Issue Yield:
8.375%), 8.250%, 5/15/2049
1,920,000
1,000,000
3
Florida Development Finance Corp. (Glenridge on Palmer Ranch),
Senior Living Revenue and Refunding Bonds (Series 2021),
5.000%, 6/1/2051
869,838
1,000,000
 
Florida Development Finance Corp. (Mayflower Retirement
Community), Senior Living Revenue Bonds (Series 2021A),
4.000%, 6/1/2055
736,148
Annual Shareholder Report
13
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Florida—continued
 
$1,000,000
 
Florida Development Finance Corp. (Shands Jacksonville Medical
Center, Inc.), UFHealth Revenue Refunding Bonds (Series 2022A),
5.000%, 2/1/2052
$959,352
1,000,000
 
Florida State Mid-Bay Authority, First Senior Lien Revenue Bonds
(Series 2015A), 5.000%, 10/1/2040
1,020,514
1,000,000
 
Harbor Bay, FL Community Development District, Special
Assessment District Area One (Series 2019A-1), (Original Issue
Yield: 4.140%), 4.100%, 5/1/2048
876,921
265,000
 
Lakes of Sarasota CDD, Improvement Revenue Bonds Phase 1
Project (Series 2021A-1), 4.100%, 5/1/2051
229,633
660,000
 
Lakes of Sarasota CDD, Improvement Revenue Bonds Phase 1
Project (Series 2021A-2), (Original Issue Yield: 3.960%),
3.875%, 5/1/2031
618,320
555,000
 
Lakewood Ranch Stewardship District, FL (Indigo Expansion Area
Project), Special Assessment Revenue Bonds (Series 2019),
4.000%, 5/1/2049
475,012
1,000,000
 
Lakewood Ranch Stewardship District, FL (Lakewood Centre
North), Special Assessment Revenue Bonds (Series 2015),
(Original Issue Yield: 4.960%), 4.875%, 5/1/2045
995,563
1,000,000
 
Lakewood Ranch Stewardship District, FL (Lakewood National &
Polo Run), Special Assessment Bonds, (Original Issue Yield:
5.400%), 5.375%, 5/1/2047
1,006,760
750,000
 
Lakewood Ranch Stewardship District, FL (Northeast Sector
Phase-2B), Special Assessment Revenue Bonds (Series 2020),
4.000%, 5/1/2050
639,864
1,000,000
 
Lakewood Ranch Stewardship District, FL (Northeast Sector
Project—Phase 1B), Special Assessment Revenue Bonds
(Series 2018), 5.450%, 5/1/2048
1,008,296
1,180,000
 
Lakewood Ranch Stewardship District, FL (Villages of Lakewood
Ranch South), Special Assessment Revenue Bonds (Series 2016),
(Original Issue Yield: 5.160%), 5.125%, 5/1/2046
1,182,818
1,000,000
 
Lee County, FL IDA (Cypress Cove at Healthpark), Healthcare
Facilities Revenue Bonds (Series 2022A), 5.250%, 10/1/2057
933,425
1,840,000
 
LT Ranch, FL CDD, Capital Improvement Revenue Bonds
(Series 2019), 4.000%, 5/1/2050
1,569,935
745,000
 
Midtown Miami, FL Community Development District, Special
Assessment & Revenue Refunding Bonds (Series 2014A), (Original
Issue Yield: 5.250%), 5.000%, 5/1/2037
746,737
3,000,000
 
Orlando & Orange County Expressway Authority, FL (Central
Florida Expressway Authority), Revenue Bonds (Series 2013),
(United States Treasury PRF 7/1/2023@100), 5.000%, 7/1/2029
3,065,912
2,000,000
3
Polk County, FL IDA (Mineral Development, LLC), Secondary
Phosphate Tailings Recovery Project Revenue Bonds
(Series 2020), 5.875%, 1/1/2033
2,069,491
145,000
1,2
Reunion East Community Development District, FL, Special
Assessment Bonds (Series 2002A-1), 7.375%, 5/1/2033
1
Annual Shareholder Report
14
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Florida—continued
 
$1,125,000
 
River Landing CDD, Capital Improvement Revenue Bonds
(Series 2020A), (Original Issue Yield: 4.360%), 4.350%, 5/1/2051
$1,012,523
900,000
 
Rivers Edge III CDD, Capital Improvement Revenue Bonds
(Series 2021), 4.000%, 5/1/2051
763,653
1,250,000
 
Seminole County, FL IDA (Legacy Pointe at UCF), Retirement
Facilities Revenue Bonds (Series 2019A), 5.750%, 11/15/2054
1,130,210
835,000
 
Southern Grove, FL Community Development District #5, Special
Assessment Bonds (Series 2021), 4.000%, 5/1/2048
718,206
585,000
 
Southern Grove, FL Community Development District #5, Special
Assessment District Revenue Refunding Bonds (Series 2019),
4.000%, 5/1/2043
519,129
500,000
 
St. Johns County, FL IDA (Vicar’s Landing), Senior Living Revenue
Bonds (Series 2021A), 4.000%, 12/15/2050
381,260
495,000
 
Talavera, FL Community Development District, Capital
Improvement Revenue Bonds (Series 2019), 4.350%, 5/1/2040
469,774
770,000
 
Talavera, FL Community Development District, Capital
Improvement Revenue Bonds (Series 2019), 4.500%, 5/1/2050
714,049
900,000
 
Tolomato Community Development District, FL, Special
Assessment Refunding Bonds (Series 2019C), 4.400%, 5/1/2040
860,497
1,000,000
 
Tolomato Community Development District, FL, Special
Assessment Refunding Bonds Subordinate Lien (Series 2019A-2),
4.250%, 5/1/2037
956,046
175,000
 
Tolomato Community Development District, FL, Special
Assessment Revenue Bonds (Series 2015-2), (Original Issue Yield:
6.752%), (Step Coupon 11/1/2024@6.610%), 0.000%, 5/1/2040
140,871
190,000
1,2
Tolomato Community Development District, FL, Special
Assessment Revenue Bonds (Series 2015-3), 6.610%, 5/1/2040
2
1,400,000
 
Tradition CDD No. 9, Special Assessment Community
Infrastructure Bonds (Series 2021), 4.000%, 5/1/2052
1,181,862
980,000
 
Verandah West, FL Community Development District, Capital
Improvement Revenue Refunding Bonds (Series 2013), (Original
Issue Yield: 5.125%), 5.000%, 5/1/2033
981,570
1,500,000
 
Viera Stewardship District (Viera Stewardship District Village 2),
Special Assessment Revenue Bonds (Series 2021),
4.000%, 5/1/2053
1,263,548
2,000,000
 
Willow Walk, FL Community Development District, Special
Assessment Bonds (Series 2015), 5.625%, 5/1/2045
2,020,001
1,355,000
 
Windward at Lakewood Ranch, FL Community Development
District, Capital Improvement Revenue Bonds (Series 2022),
4.250%, 5/1/2052
1,196,779
 
 
TOTAL
41,919,901
 
 
Georgia—0.5%
 
1,000,000
 
Atlanta, GA Water & Wastewater, Revenue Refunding Bonds
(Series 2015), 5.000%, 11/1/2040
1,050,252
Annual Shareholder Report
15
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Georgia—continued
 
$1,010,000
 
Geo. L. Smith II Georgia World Congress Center Authority,
Convention Center Hotel Second Tier Revenue Bonds
(Series 2021B), 5.000%, 1/1/2054
$860,066
500,000
 
Rockdale County, GA Development Authority (Pratt Paper, LLC),
Revenue Refunding Bonds (Series 2018), 4.000%, 1/1/2038
480,003
 
 
TOTAL
2,390,321
 
 
Guam—0.1%
 
500,000
 
Guam Government, Hotel Occupancy Tax Revenue Refunding
Bonds (Series 2021A), 5.000%, 11/1/2040
503,081
 
 
Hawaii—0.2%
 
1,000,000
 
Hawaii State Airports System Revenue, Airports Systems Revenue
Bonds (Series 2018A), 5.000%, 7/1/2048
1,029,838
 
 
Idaho—0.5%
 
3,000,000
 
Idaho Health Facilities Authority (Terraces of Boise), Exchange
Revenue Refunding Bonds (Series 2021A), 4.550%, 10/1/2056
2,287,501
490,000
 
Idaho Health Facilities Authority (Terraces of Boise), Taxable
Exchange Revenue Refunding Bonds (Series 2021B),
8.000%, 10/1/2028
460,003
 
 
TOTAL
2,747,504
 
 
Illinois—10.3%
 
1,000,000
 
Chicago, IL (Chicago, IL Sales Tax), Revenue Refunding Bonds
(Series 2002), (United States Treasury PRF 1/1/2025@100),
5.000%, 1/1/2032
1,055,523
3,300,000
 
Chicago, IL Board of Education, UT GO Dedicated Revenue
Bonds (Series 2017A), (Original Issue Yield: 7.650%),
7.000%, 12/1/2046
3,713,779
1,000,000
 
Chicago, IL Board of Education, UT GO Dedicated Revenue
Refunding Bonds (Series 2018A), 5.000%, 12/1/2030
1,056,930
1,000,000
 
Chicago, IL Board of Education, UT GO Dedicated Revenue
Refunding Bonds (Series 2018A), 5.000%, 12/1/2031
1,048,536
2,750,000
 
Chicago, IL Board of Education, UT GO Dedicated Revenue
Refunding Bonds (Series 2018A), 5.000%, 12/1/2033
2,866,375
1,400,000
 
Chicago, IL Board of Education, UT GO Dedicated Revenue
Refunding Bonds (Series 2018A), 5.000%, 12/1/2034
1,455,583
1,125,000
 
Chicago, IL O’Hare International Airport (TrIPs Obligated Group),
Senior Special Facilities Revenue Bonds (Series 2018),
5.000%, 7/1/2048
1,139,516
1,000,000
 
Chicago, IL O’Hare International Airport, General Airport Senior
Lien Revenue Bonds (Series 2022A), 5.500%, 1/1/2055
1,063,714
385,000
 
Chicago, IL O’Hare International Airport, General Airport Senior
Lien Revenue Refunding Bonds (Series 2016B), 5.000%, 1/1/2041
402,193
4,000,000
 
Chicago, IL Transit Authority, Second Lien Sales Tax Receipts
Revenue Bonds (Series 2022A), 5.000%, 12/1/2057
4,263,970
Annual Shareholder Report
16
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Illinois—continued
 
$2,683,000
 
Chicago, IL, UT GO Exchanged Bonds (Series 2021B),
4.000%, 1/1/2038
$2,482,485
1,333,000
 
Chicago, IL, UT GO Exchanged Bonds (Series 2021B),
4.000%, 1/1/2044
1,177,071
314,000
 
DuPage County, IL (Naperville Campus LLC), Special Tax Bonds
(Series 2006), 5.625%, 3/1/2036
314,119
2,000,000
 
Illinois Finance Authority (Admiral at the Lake), Revenue
Refunding Bonds (Series 2017), (Original Issue Yield: 5.350%),
5.250%, 5/15/2042
1,656,551
1,100,000
 
Illinois Finance Authority (Lutheran Life Communities), Revenue
Bonds (Series 2019A), 5.000%, 11/1/2040
1,025,278
1,250,000
 
Illinois Finance Authority (Noble Network of Charter Schools),
Education Revenue Bonds (Series 2015), 5.000%, 9/1/2032
1,279,163
1,100,000
 
Illinois Finance Authority (Rogers Park Montessori School
Project), Senior Revenue Bonds (Series 2014A), 6.125%, 2/1/2045
1,117,083
3,000,000
 
Illinois State Toll Highway Authority, Toll Highway Senior Revenue
Bonds (Series 2021A), 5.000%, 1/1/2046
3,216,844
8,000,000
 
Illinois State, GO Bonds (Series 2017D), 5.000%, 11/1/2028
8,538,656
2,000,000
 
Illinois State, UT GO Bonds (Series 2013A), 5.000%, 4/1/2035
2,015,770
1,000,000
 
Illinois State, UT GO Bonds (Series 2020C), (Original Issue Yield:
4.340%), 4.000%, 10/1/2041
919,511
1,000,000
 
Illinois State, UT GO Bonds (Series 2022B), 5.500%, 3/1/2047
1,087,060
2,025,000
 
Illinois State, UT GO Bonds (Series June 2013), (Original Issue
Yield: 5.650%), 5.500%, 7/1/2038
2,064,620
1,000,000
 
Illinois State, UT GO Bonds (Series of February 2014), (Original
Issue Yield: 5.040%), 5.000%, 2/1/2039
1,017,163
3,000,000
 
Illinois State, UT GO Refunding Bonds (Series 2018B),
5.000%, 10/1/2030
3,203,439
600,000
 
Illinois State, UT GO Refunding Bonds (Series 2021A),
5.000%, 3/1/2046
622,694
1,000,000
 
Metropolitan Pier & Exposition Authority, IL, McCormick Place
Expansion Project Bonds (Series 2015A), (Original Issue Yield:
5.060%), 5.000%, 6/15/2053
1,012,908
2,000,000
 
Metropolitan Pier & Exposition Authority, IL, McCormick Place
Expansion Project Bonds (Series 2015A), 5.500%, 6/15/2053
2,058,965
2,000,000
4
Metropolitan Pier & Exposition Authority, IL, McCormick Place
Expansion Project Bonds (Series 2017A), (Original Issue Yield:
5.250%), 0.000%, 12/15/2056
331,288
1,000,000
 
Sales Tax Securitization Corp., IL, Sales Tax Revenue Bonds
(Series 2017A), 5.000%, 1/1/2030
1,091,642
 
 
TOTAL
54,298,429
Annual Shareholder Report
17
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Indiana—0.2%
 
$915,000
 
Indiana State Finance Authority (KIPP Indianapolis), Revenue
Bonds (Series 2020A), 5.000%, 7/1/2055
$891,890
 
 
Iowa—0.8%
 
916,872
 
Iowa Finance Authority (Deerfield Retirement Community, Inc.),
Lifespace GTD Senior Living Facility Revenue Refunding Bonds
(Series 2014A), (United States Treasury PRF 11/15/2024@100),
5.400%, 11/15/2046
968,840
1,430,000
 
Iowa Finance Authority (Iowa Fertilizer Co. LLC), Midwestern
Disaster Area Revenue Refunding Bonds (Series 2022),
5.000%, 12/1/2050
1,445,902
475,000
 
Tobacco Settlement Financing Corp., IA, Tobacco Settlement
Asset-Backed Senior Current Interest Bonds
(Series 2021B-1 Class 2), 4.000%, 6/1/2049
449,564
1,060,000
 
Xenia Rural Water District, Water Revenue Refunding Capital
Loan Notes (Series 2016), (United States Treasury PRF
12/1/2026@100), 5.000%, 12/1/2041
1,170,245
 
 
TOTAL
4,034,551
 
 
Kentucky—0.6%
 
375,000
 
Henderson, KY (Pratt Paper, LLC), Exempt Facilities Revenue
Bonds (Series 2022), 4.700%, 1/1/2052
370,271
1,000,000
 
Kentucky Economic Development Finance Authority (Miralea),
Revenue Bonds (Series 2016A), 5.000%, 5/15/2046
880,026
2,000,000
 
Kentucky Economic Development Finance Authority (Miralea),
Revenue Bonds (Series 2016A), 5.000%, 5/15/2051
1,727,576
 
 
TOTAL
2,977,873
 
 
Louisiana—0.9%
 
1,000,000
 
Calcasieu Parish, LA Memorial Hospital Service District (Lake
Charles Memorial Hospital), Hospital Revenue Refunding Bonds
(Series 2019), 5.000%, 12/1/2039
1,021,513
30,000
 
Louisiana Public Facilities Authority (Ochsner Clinic Foundation),
Refunding Revenue Bonds (Series 2016), (United States Treasury
PRF 5/15/2026@100), 5.000%, 5/15/2047
32,467
970,000
 
Louisiana Public Facilities Authority (Ochsner Clinic Foundation),
Refunding Revenue Bonds (Series 2016), 5.000%, 5/15/2047
994,200
1,000,000
 
St. James Parish, LA (NuStar Logistics LP), Revenue Bonds
(Series 2008) TOBs, 6.100%, Mandatory Tender 6/1/2030
1,104,287
1,500,000
 
Tobacco Settlement Financing Corp., LA, Tobacco Settlement
Asset-Backed Refunding Bonds (Series 2013A),
5.250%, 5/15/2035
1,539,742
 
 
TOTAL
4,692,209
 
 
Maine—0.6%
 
1,000,000
 
Maine Health & Higher Educational Facilities Authority (Eastern
Maine Healthcare Systems Obligated Group), Revenue Bonds
(Series 2016A), 5.000%, 7/1/2046
1,014,862
Annual Shareholder Report
18
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Maine—continued
 
$2,000,000
3
Maine State Finance Authority Solid Waste Disposal (Casella
Waste Systems, Inc.), Revenue Bonds (Series 2005R-3),
5.250%, 1/1/2025
$2,032,708
 
 
TOTAL
3,047,570
 
 
Maryland—1.9%
 
955,000
 
Baltimore, MD (East Baltimore Research Park), Special Obligation
Revenue Refunding Bonds (Series 2017A), 5.000%, 9/1/2038
972,295
500,000
 
Baltimore, MD (Harbor Point), Special Obligation Refunding
Bonds (Series 2016), (Original Issue Yield: 5.160%),
5.125%, 6/1/2043
504,499
1,860,000
 
Frederick County, MD (Jefferson Technology Park), Tax Increment
& Special Tax Limited Obligation Refunding Bonds
(Series 2020B), 4.625%, 7/1/2043
1,851,560
1,060,000
 
Maryland State Economic Development Corp. (CONSOL Energy,
Inc.), Port Facilities Refunding Revenue Bonds (Series 2010),
5.750%, 9/1/2025
1,062,657
1,000,000
 
Maryland State Economic Development Corp. (Port Covington
District), Special Obligation Bonds (Series 2020),
4.000%, 9/1/2050
848,847
200,000
 
Maryland State Economic Development Corp. (Ports America
Chesapeake, Inc.), Transportation Facilities Revenue Refunding
Bonds (Series 2017A), 5.000%, 6/1/2032
215,494
450,000
 
Maryland State Economic Development Corp. (Ports America
Chesapeake, Inc.), Transportation Facilities Revenue Refunding
Bonds (Series 2017A), 5.000%, 6/1/2035
480,081
1,000,000
3
Prince Georges County, MD (Westphalia Town Center), Special
Obligation Revenue Bonds (Series 2018), (Original Issue Yield:
5.330%), 5.250%, 7/1/2048
1,007,059
1,000,000
 
Prince Georges County, MD Revenue Authority (Suitland-Naylor
Road Project), Special Obligation Bonds (Series 2016),
5.000%, 7/1/2046
1,017,381
1,000,000
 
Rockville, MD Mayor & City Council Econ Dev Revenue (Ingleside
at King Farm), (Series 2017B), 5.000%, 11/1/2047
936,100
1,000,000
 
Westminster, MD (Lutheran Village at Miller’s Grant, Inc.),
Revenue Bonds (Series 2014A), (Original Issue Yield: 6.300%),
6.250%, 7/1/2044
1,025,040
 
 
TOTAL
9,921,013
 
 
Massachusetts—1.3%
 
2,250,000
 
Commonwealth of Massachusetts, GO Consolidated Loan Bonds
(Series 2020E), 5.000%, 11/1/2050
2,452,158
2,000,000
 
Massachusetts Development Finance Agency (Mass General
Brigham), Revenue Refunding Bonds (Series 2016Q),
5.000%, 7/1/2047
2,091,047
Annual Shareholder Report
19
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Massachusetts—continued
 
$1,000,000
3
Massachusetts Development Finance Agency (Newbridge on the
Charles), Revenue Refunding Bonds (Series 2017),
5.000%, 10/1/2057
$1,046,938
1,000,000
 
Massachusetts Port Authority, Revenue Bonds (Series 2021-E),
5.000%, 7/1/2051
1,053,710
 
 
TOTAL
6,643,853
 
 
Michigan—1.9%
 
1,000,000
 
Detroit, MI, UT GO Bonds (Series 2020), 5.500%, 4/1/2050
1,049,613
1,000,000
 
Michigan State Finance Authority Revenue (Great Lakes, MI
Water Authority Sewage Disposal System), Senior Lien Revenue
Bonds (Series 2014 C-7), (National Public Finance Guarantee
Corporation INS), 5.000%, 7/1/2032
1,035,887
1,000,000
 
Michigan State Finance Authority Revenue (Great Lakes, MI
Water Authority Water Supply System), Senior Lien Revenue
Bonds (Series 2014 D-6), (National Public Finance Guarantee
Corporation INS), 5.000%, 7/1/2036
1,034,620
2,000,000
 
Michigan State Finance Authority Revenue (Public Lighting
Authority), Local Government Loan Program Revenue Bonds
(Series 2014B), 5.000%, 7/1/2044
2,024,057
2,930,000
 
Michigan Tobacco Settlement Finance Authority, Tobacco
Settlement Asset-Backed Senior Current Interest Bonds
(Series 2020A Class 1), 4.000%, 6/1/2049
2,681,977
1,500,000
 
Plymouth, MI Educational Center Charter School, Public School
Academy Revenue Refunding Bonds, Series 2005,
5.625%, 11/1/2035
915,000
1,000,000
 
University of Michigan (The Regents of), General Revenue Bonds
(Series 2015), (United States Treasury PRF 4/1/2026@100),
5.000%, 4/1/2040
1,088,605
 
 
TOTAL
9,829,759
 
 
Minnesota—2.2%
 
750,000
 
Baytown Township, MN (St. Croix Preparatory Academy), Charter
School Lease Revenue Refunding Bonds (Series 2016A),
4.000%, 8/1/2041
645,160
1,100,000
 
Baytown Township, MN (St. Croix Preparatory Academy), Charter
School Lease Revenue Refunding Bonds (Series 2016A),
4.250%, 8/1/2046
946,106
1,700,000
 
Forest Lake, MN (Lakes International Language Academy),
Charter School Lease Revenue Bonds (Series 2014A),
5.750%, 8/1/2044
1,735,435
1,000,000
 
Forest Lake, MN (Lakes International Language Academy),
Charter School Lease Revenue Bonds (Series 2018A),
5.375%, 8/1/2050
1,016,971
3,000,000
3
Minneapolis, MN Charter School Lease Revenue (Twin Cities
International School), (Series 2017A), (Original Issue Yield:
5.150%), 5.000%, 12/1/2047
2,944,901
Annual Shareholder Report
20
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Minnesota—continued
 
$2,000,000
 
St. Cloud, MN Charter School (Stride Academy), Lease Revenue
Bonds (Series 2016A), 5.000%, 4/1/2046
$1,464,622
2,000,000
 
St. Paul and Ramsey County, MN Housing and Redevelopment
Authority (Twin Cities Academy), Charter School Lease Revenue
Bonds (Series 2015A), 5.375%, 7/1/2050
2,024,681
325,000
 
Winona, MN Port Authority (Bluffview Montessori School Project),
Lease Revenue Bonds (Series 2016A), 4.500%, 6/1/2036
284,761
750,000
 
Winona, MN Port Authority (Bluffview Montessori School Project),
Lease Revenue Bonds (Series 2016A), 4.750%, 6/1/2046
633,739
 
 
TOTAL
11,696,376
 
 
Missouri—0.5%
 
400,000
 
Cape Girardeau County, MO IDA (SoutheastHEALTH Obligated
Group), Health Facilities Revenue Bonds (Series 2021),
4.000%, 3/1/2046
338,853
2,000,000
3
Kansas City, MO Redevelopment Authority (Kansas City
Convention Center Headquarters Hotel CID), Revenue Bonds
(Series 2018B), (Original Issue Yield: 5.079%), 5.000%, 2/1/2050
1,615,796
1,000,000
 
Kirkwood, MO IDA (Aberdeen Heights Project), Retirement
Community Revenue Bonds (Series 2017A), 5.250%, 5/15/2050
897,970
 
 
TOTAL
2,852,619
 
 
Montana—0.4%
 
900,000
 
Kalispell, MT Housing and Healthcare Facilities (Immanuel
Lutheran Corp.), Revenue Bonds (Series 2017A),
5.250%, 5/15/2047
862,689
1,425,000
 
Kalispell, MT Housing and Healthcare Facilities (Immanuel
Lutheran Corp.), Revenue Bonds (Series 2017A),
5.250%, 5/15/2052
1,341,320
 
 
TOTAL
2,204,009
 
 
Nebraska—0.5%
 
2,500,000
 
Central Plains Energy Project, NE, Gas Project Revenue Bonds
(Project No. 3) (Series 2017A), (Goldman Sachs Group, Inc. GTD),
5.000%, 9/1/2042
2,632,419
 
 
Nevada—1.4%
 
905,000
3
Director of the State of Nevada Department of Business and
Industry (Doral Academy of Nevada CS), Charter School Revenue
Bonds (Series 2017A), 5.000%, 7/15/2047
891,018
1,000,000
3
Director of the State of Nevada Department of Business and
Industry (Somerset Academy of Las Vegas), Charter School Lease
Revenue Bonds (Series 2018A), 5.000%, 12/15/2048
1,000,224
925,000
 
Las Vegas, NV Special Improvement District No. 812 (Summerlin
Village 24), Local Improvement Bonds (Series 2015),
5.000%, 12/1/2035
942,573
Annual Shareholder Report
21
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Nevada—continued
 
$500,000
 
Las Vegas, NV Special Improvement District No. 812 (Summerlin
Village 25), Local Improvement Bonds (Series 2020),
5.000%, 12/1/2049
$501,638
1,500,000
 
Las Vegas, NV Redevelopment Agency, Tax Increment Revenue
Refunding Bonds (Series 2016), 5.000%, 6/15/2045
1,534,717
775,000
 
Las Vegas, NV Special Improvement District #611 (Sunstone
Phase I and II), Local Improvement Bonds (Series 2020), (Original
Issue Yield: 4.170%), 4.125%, 6/1/2050
680,619
1,225,000
 
Las Vegas, NV Special Improvement District No. 814 (Summerlin
Villages 21 & 24A), Local Improvement Bonds (Series 2019),
4.000%, 6/1/2049
1,075,094
660,000
 
North Las Vegas, NV Special Improvement District No. 64 (Valley
Vista), Local Improvement Bonds (Series 2019), 4.625%, 6/1/2049
636,074
 
 
TOTAL
7,261,957
 
 
New Hampshire—0.1%
 
100,000
 
National Finance Authority, NH (Covanta Energy Corp.), Resource
Recovery Revenue Refunding Bonds (Series 2020B) TOBs,
3.750%, Mandatory Tender 7/2/2040
85,251
1,500,000
1,2,3
New Hampshire Health and Education Facilities Authority
(Hillside Village), Revenue Bonds (Series 20017A), (Original Issue
Yield: 6.375%), 6.125%, 7/1/2052
600,000
 
 
TOTAL
685,251
 
 
New Jersey—3.3%
 
1,280,000
 
New Jersey EDA (New Jersey State), Motor Vehicle Surcharge
Subordinate Revenue Refunding Bonds (Series 2017A),
5.000%, 7/1/2033
1,350,713
180,000
 
New Jersey EDA (New Jersey State), School Facilities
Construction Bonds (Series 2015 WW), (United States Treasury
PRF 6/15/2025@100), 5.250%, 6/15/2040
193,566
3,075,000
 
New Jersey EDA (New Jersey State), School Facilities
Construction Bonds (Series 2015 WW), 5.250%, 6/15/2040
3,174,121
500,000
 
New Jersey EDA (New Jersey State), School Facilities
Construction Refunding Bonds (Series 2018EEE),
5.000%, 6/15/2043
518,737
1,335,000
 
New Jersey EDA (Port Newark Container Terminal LLC), Special
Facilities Revenue and Refunding Bonds (Series 2017),
5.000%, 10/1/2047
1,365,568
1,000,000
 
New Jersey EDA (UMM Energy Partners LLC), Energy Facility
Revenue Bonds (Series 2012A), (Original Issue Yield: 5.190%),
5.125%, 6/15/2043
1,000,713
2,500,000
 
New Jersey EDA (United Airlines, Inc.), Special Facility Revenue
Bonds (Series 1999), 5.250%, 9/15/2029
2,527,667
1,000,000
 
New Jersey State Transportation Trust Fund Authority
(New Jersey State), Transportation System Bonds (Series 2018A),
5.000%, 12/15/2034
1,061,990
Annual Shareholder Report
22
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
New Jersey—continued
 
$750,000
 
New Jersey State, Covid-19 GO Emergency Bonds
(Series 2020A), 4.000%, 6/1/2032
$800,574
500,000
 
South Jersey Port Corp., Subordinate Marine Terminal Revenue
Bonds (Series 2017B), 5.000%, 1/1/2048
504,383
4,610,000
 
Tobacco Settlement Financing Corp., NJ, Tobacco Settlement
Asset-Backed Subordinate Refunding Bonds (Series 2018B),
5.000%, 6/1/2046
4,643,979
 
 
TOTAL
17,142,011
 
 
New Mexico—0.2%
 
1,000,000
 
New Mexico State Hospital Equipment Loan Council (Gerald
Champion Regional Medical Center), Hospital Improvement and
Refunding Revenue Bonds (Series 2012A), (Original Issue Yield:
5.700%), 5.500%, 7/1/2042
1,001,641
 
 
New York—4.6%
 
1,000,000
3
Build NYC Resource Corporation (Albert Einstein School of
Medicine, Inc.), Revenue Bonds (Series 2015), 5.500%, 9/1/2045
1,030,007
5,000,000
4
Glen Cove, NY Local Economic Assistance Corp. (Garvies Point
Public Improvement Project), Capital Appreciation Revenue
Bonds (Series 2016B), (Original Issue Yield: 6.000%),
0.000%, 1/1/2045
1,298,401
1,000,000
3
Monroe County, NY IDC (True North Rochester Preparatory
Charter School), Charter School Revenue Bonds (Series 2020A),
5.000%, 6/1/2059
979,620
1,365,028
 
Nassau County, NY IDA (Amsterdam at Harborside), Continuing
Care Retirement Community Revenue Bonds (Series 2021B),
5.000%, 1/1/2058
796,591
500,000
 
New York City, NY Transitional Finance Authority, Future Tax
Secured Subordinate Bonds (Series 2020C-1), 4.000%, 5/1/2045
474,310
1,000,000
 
New York Counties Tobacco Trust VI, Tobacco Settlement
Pass-Through Bonds (Series 201A-2B), 5.000%, 6/1/2051
979,105
1,000,000
3
New York Liberty Development Corporation (3 World Trade
Center), Revenue Bonds (Series 2014 Class 2),
5.375%, 11/15/2040
1,011,183
1,500,000
 
New York State Dormitory Authority (New York State Personal
Income Tax Revenue Bond Fund), Revenue Refunding Bonds
(Series 2022A), 4.000%, 3/15/2049
1,410,469
1,000,000
 
New York State Power Authority, Revenue Bonds (Series 2020A),
4.000%, 11/15/2060
896,487
3,000,000
 
New York State Thruway Authority—Personal Income Tax
Revenue (New York State Personal Income Tax Revenue Bond
Fund), Revenue Bonds (Series 2022A), 5.000%, 3/15/2039
3,299,122
665,000
 
New York Transportation Development Corporation (American
Airlines, Inc.), Special Facilities Revenue Refunding Bonds
(Series 2021), 3.000%, 8/1/2031
619,147
Annual Shareholder Report
23
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
New York—continued
 
$2,000,000
 
New York Transportation Development Corporation (American
Airlines, Inc.), Special Facility Revenue Refunding Bonds
(Series 2016), 5.000%, 8/1/2026
$2,010,350
455,000
 
New York Transportation Development Corporation (American
Airlines, Inc.), Special Facility Revenue Refunding Bonds
(Series 2016), 5.000%, 8/1/2031
457,355
1,000,000
 
New York Transportation Development Corporation (Delta Air
Lines, Inc.), LaGuardia Airport Terminals Special Facilities
Revenue Bonds (Series 2018), 5.000%, 1/1/2033
1,031,459
1,500,000
 
New York Transportation Development Corporation (Delta Air
Lines, Inc.), LaGuardia Airport Terminals Special Facilities
Revenue Bonds (Series 2020), (Original Issue Yield: 4.550%),
4.375%, 10/1/2045
1,386,003
1,000,000
 
New York Transportation Development Corporation (Empire State
Thruway Partners LLC), Exempt Facility Revenue Bonds
(Series 2021), 4.000%, 4/30/2053
843,500
865,000
 
New York Transportation Development Corporation
(JFK International Air Terminal LLC), Special Facilities Revenue
Bonds (Series 2020A), 4.000%, 12/1/2042
772,623
1,800,000
 
New York Transportation Development Corporation
(JFK International Air Terminal LLC), Special Facilities Revenue
Bonds (Series 2020C), 4.000%, 12/1/2042
1,644,766
1,000,000
 
New York Transportation Development Corporation
(JFK International Air Terminal LLC), Special Facilities Revenue
Bonds (Series 2022), 5.000%, 12/1/2041
1,036,917
1,000,000
 
Niagara Area Development Corporation, NY (Covanta Energy
Corp.), Solid Waste Disposal Facility Revenue Refunding Bonds
(Series 2018A), 4.750%, 11/1/2042
962,260
1,000,000
 
TSASC, Inc. NY, Tobacco Settlement Asset Backed Senior
Refunding Bonds (Series 2017A), 5.000%, 6/1/2041
1,036,593
 
 
TOTAL
23,976,268
 
 
Ohio—4.8%
 
13,700,000
 
Buckeye Tobacco Settlement Financing Authority, OH, Tobacco
Settlement Asset-Backed Refunding Bonds
(Series 2020B-2 Class 2), 5.000%, 6/1/2055
13,028,572
1,000,000
 
Cuyahoga County, OH Hospital Authority (MetroHealth System),
Hospital Revenue Bonds (Series 2017), 5.500%, 2/15/2057
1,035,303
2,000,000
 
Muskingum County, OH (Genesis Healthcare Corp.), Hospital
Facilities Revenue Bonds (Series 2013), (Original Issue Yield:
5.080%), 5.000%, 2/15/2044
1,939,490
1,800,000
3
Ohio Air Quality Development Authority (AMG Vanadium LLC),
Exempt Facilities Revenue Bonds (Series 2019), 5.000%, 7/1/2049
1,698,452
1,000,000
 
Ohio Air Quality Development Authority (Pratt Paper, LLC),
Exempt Facilities Revenue Bonds (Series 2017),
4.500%, 1/15/2048
1,000,888
Annual Shareholder Report
24
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Ohio—continued
 
$1,125,000
 
Ohio State Hospital Revenue (University Hospitals Health System,
Inc.), Hospital Revenue Bonds (Series 2016A), 5.000%, 1/15/2041
$1,167,107
1,000,000
 
Ohio State Hospital Revenue (University Hospitals Health System,
Inc.), Revenue Bonds (Series 2020A), 4.000%, 1/15/2050
918,268
1,000,000
 
Ohio State Treasurer (Portsmouth Gateway Group LLC), Private
Activity Revenue Bonds (Series 2015), 5.000%, 6/30/2053
1,011,084
3,225,000
 
Ohio State, Infrastructure Improvement GO Bonds
(Series 2021A), 5.000%, 3/1/2040
3,634,997
 
 
TOTAL
25,434,161
 
 
Oklahoma—0.9%
 
3,000,000
 
Oklahoma Development Finance Authority (OU Medicine),
Hospital Revenue Bonds (Series 2018B), 5.500%, 8/15/2052
2,842,933
1,750,000
 
Tulsa County, OK Industrial Authority (Montereau, Inc.), Senior
Living Community Revenue Refunding Bonds (Series 2017),
5.250%, 11/15/2045
1,791,408
 
 
TOTAL
4,634,341
 
 
Oregon—0.3%
 
440,000
 
Clackamas County, OR Hospital Facilities Authority (Mary’s
Woods at Marylhurst, Inc.), Senior Living Revenue Bonds
(Series 2018A), 5.000%, 5/15/2038
413,501
635,000
 
Clackamas County, OR Hospital Facilities Authority (Mary’s
Woods at Marylhurst, Inc.), Senior Living Revenue Bonds
(Series 2018A), 5.000%, 5/15/2043
582,768
400,000
 
Clackamas County, OR Hospital Facilities Authority (Mary’s
Woods at Marylhurst, Inc.), Senior Living Revenue Bonds
(Series 2018A), 5.000%, 5/15/2048
358,957
500,000
 
Clackamas County, OR Hospital Facilities Authority (Mary’s
Woods at Marylhurst, Inc.), Senior Living Revenue Bonds
(Series 2018A), 5.000%, 5/15/2052
442,969
 
 
TOTAL
1,798,195
 
 
Pennsylvania—3.3%
 
2,000,000
 
Bucks County, PA IDA (School Lane Charter School),
(Series 2016A), 5.125%, 3/15/2046
2,034,254
500,000
 
Butler County, PA Hospital Authority (Butler Health System),
Hospital Revenue Bonds (Series 2015A), 5.000%, 7/1/2035
511,208
1,200,000
 
Chester County, PA IDA (Avon Grove Charter School), Revenue
Bonds (Series 2017A), 5.000%, 12/15/2047
1,201,420
800,000
 
Chester County, PA IDA (Avon Grove Charter School), Revenue
Bonds (Series 2017A), 5.000%, 12/15/2051
798,360
1,000,000
 
Clairton Municipal Authority, PA, Sewer Revenue Bonds
(Series 2012B), (Original Issue Yield: 5.050%), 5.000%, 12/1/2042
1,002,443
3,000,000
 
Geisinger Authority, PA Health System (Geisinger Health System),
Health System Revenue Bonds (Series 2020A), 5.000%, 4/1/2050
3,124,006
Annual Shareholder Report
25
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$3,000,000
 
Lehigh County, PA General Purpose Authority (Lehigh Valley
Academy Regional Charter School), Charter School Revenue
Bonds (Series 2022), 4.000%, 6/1/2057
$2,510,611
2,000,000
 
Pennsylvania Economic Development Financing Authority
(National Gypsum Co.), Exempt Facilities Refunding Revenue
Bonds (Series 2014), 5.500%, 11/1/2044
2,008,729
1,250,000
 
Pennsylvania Economic Development Financing Authority
(Pennsylvania Rapid Bridge Replacement), Tax-Exempt Private
Activity Revenue Bonds (Series 2015), 5.000%, 12/31/2038
1,279,548
1,205,000
 
Philadelphia, PA Authority for Industrial Development
(New Foundations Charter School), Revenue Bonds (Series 2012),
(United States Treasury PRF 12/15/2022@100),
6.625%, 12/15/2041
1,219,601
725,000
 
Philadelphia, PA Authority for Industrial Development
(PresbyHomes Germantown/Morrisville), Senior Living Revenue
Bonds (Series 2005A), 5.625%, 7/1/2035
740,077
1,000,000
 
Philadelphia, PA Water & Wastewater System, Water and
Wastewater Revenue Bonds (Series 2017A), 5.000%, 10/1/2052
1,066,205
 
 
TOTAL
17,496,462
 
 
Puerto Rico—6.1%
 
1,000,000
 
Commonwealth of Puerto Rico, UT GO Restructured Bonds
(Series 2022A), 4.000%, 7/1/2037
893,190
3,000,000
 
Commonwealth of Puerto Rico, UT GO Restructured Bonds
(Series 2022A), 4.000%, 7/1/2041
2,610,022
4,000,000
1,2
Puerto Rico Electric Power Authority, Power Revenue Bonds
(Series 2010 XX), (Original Issue Yield: 5.400%), 5.250%, 7/1/2040
3,240,000
995,000
1,2
Puerto Rico Electric Power Authority, Power Revenue Bonds
(Series 2012B), (Original Issue Yield: 5.080%), 5.050%, 7/1/2042
803,463
195,000
1,2
Puerto Rico Electric Power Authority, Power Revenue Bonds
(Series 2013A), (Original Issue Yield: 7.070%), 7.000%, 7/1/2040
164,775
2,500,000
1,2
Puerto Rico Electric Power Authority, Power Revenue Bonds
(Series 2013A), (Original Issue Yield: 7.120%), 7.000%, 7/1/2043
2,106,250
310,000
1,2
Puerto Rico Electric Power Authority, Power Revenue Bonds
(Series 2013A), 7.000%, 7/1/2033
261,950
5,000,000
4
Puerto Rico Sales Tax Financing Corp., Restructured Capital
Appreciation Sales Tax Bonds (Series 2019A-1), (Original Issue
Yield: 5.375%), 0.000%, 7/1/2046
1,425,716
11,340,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A), (Original Issue Yield: 5.154%),
5.000%, 7/1/2058
10,972,661
4,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-1), 4.750%, 7/1/2053
3,815,210
6,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-2), 4.784%, 7/1/2058
5,595,611
 
 
TOTAL
31,888,848
Annual Shareholder Report
26
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Rhode Island—0.6%
 
$500,000
 
Rhode Island State Health and Educational Building Corp.
(Lifespan Obligated Group), Hospital Financing Revenue
Refunding Bonds (Series 2016), 5.000%, 5/15/2039
$511,731
2,730,000
 
Tobacco Settlement Financing Corp., RI, Tobacco Settlement
Asset-Backed Bonds (Series 2015B), 5.000%, 6/1/2050
2,774,595
 
 
TOTAL
3,286,326
 
 
South Carolina—0.7%
 
1,000,000
 
Berkeley County, SC (Nexton Improvement District), Assessment
Revenue Bonds (Series 2019), (Original Issue Yield: 4.280%),
4.250%, 11/1/2040
963,657
1,020,000
3
South Carolina Jobs-EDA (Green Charter Schools), Educational
Facilities Revenue Refunding Bonds (Series 2021A),
4.000%, 6/1/2056
777,450
1,000,000
 
South Carolina Jobs-EDA (South Carolina Episcopal Home at Still
Hopes), Residential Care Facilities Revenue Bonds (Series 2017),
5.000%, 4/1/2047
919,127
1,000,000
 
South Carolina Jobs-EDA (South Carolina Episcopal Home at Still
Hopes), Residential Care Facilities Revenue Bonds (Series 2017),
5.000%, 4/1/2052
905,717
 
 
TOTAL
3,565,951
 
 
South Dakota—0.3%
 
1,000,000
 
Sioux Falls, SD Health Facilities Revenue (Dow Rummel Village),
(Series 2017), (Original Issue Yield: 5.050%), 5.000%, 11/1/2042
934,836
1,000,000
 
Sioux Falls, SD Health Facilities Revenue (Dow Rummel Village),
(Series 2017), (Original Issue Yield: 5.200%), 5.125%, 11/1/2047
926,080
 
 
TOTAL
1,860,916
 
 
Tennessee—0.1%
 
1,200,000
 
Blount County, TN Health and Educational Facilities Board
(Asbury, Inc.), Revenue Refunding and Improvement Bonds
(Series 2016A), 5.000%, 1/1/2047
771,814
 
 
Texas—7.2%
 
1,100,000
 
Arlington, TX Higher Education Finance Corp. (Uplift Education),
Revenue Bonds (Series 2016A), 5.000%, 12/1/2046
1,117,960
500,000
 
Austin, TX Airport System, Airport System Revenue Bonds
(Series 2014), 5.000%, 11/15/2044
510,877
250,000
 
Austin, TX Convention Center Enterprises, Inc., Convention
Center Hotel First Tier Revenue Refunding Bonds (Series 2017A),
5.000%, 1/1/2034
255,992
250,000
 
Austin, TX Convention Center Enterprises, Inc., Convention
Center Hotel Second Tier Revenue Refunding Bonds
(Series 2017B), 5.000%, 1/1/2034
244,178
1,000,000
 
Board of Managers, Joint Guadalupe County-City of Seguin, TX,
Hospital Mortgage Revenue Refunding & Improvement Bonds
(Series 2015), (Original Issue Yield: 5.080%), 5.000%, 12/1/2045
982,550
Annual Shareholder Report
27
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Texas—continued
 
$2,000,000
 
Clifton Higher Education Finance Corporation, TX (Idea Public
Schools), 6.000%, 8/15/2043
$2,041,358
500,000
 
Clifton Higher Education Finance Corporation, TX (Idea Public
Schools), Education Revenue Bonds (Series 2012),
5.000%, 8/15/2042
500,383
1,000,000
 
Clifton Higher Education Finance Corporation, TX (Idea Public
Schools), Education Revenue Bonds (Series 2022A), (Texas
Permanent School Fund Guarantee Program GTD),
4.000%, 8/15/2047
925,002
1,000,000
 
Clifton Higher Education Finance Corporation, TX (Idea Public
Schools), Revenue Bonds (Series 2014), (Texas Permanent School
Fund Guarantee Program GTD), 5.000%, 8/15/2039
1,038,712
2,000,000
 
Clifton Higher Education Finance Corporation, TX (Uplift
Education), Revenue Bonds (Series 2015A), 5.000%, 12/1/2050
2,021,139
1,527,000
 
Decatur, TX Hospital Authority (Wise Regional Health System),
Hospital Revenue Bonds (Series 2021C), 4.000%, 9/1/2044
1,278,556
515,000
 
Decatur, TX Hospital Authority (Wise Regional Health System),
Revenue Bonds, (United States Treasury PRF 9/1/2023@100),
6.375%, 9/1/2042
534,533
1,500,000
 
Houston, TX Airport System (United Airlines, Inc.), Airport System
Special Facilities Revenue Bonds (Series 2021 B-1),
4.000%, 7/15/2041
1,352,080
1,500,000
 
Houston, TX Airport System (United Airlines, Inc.), Special
Facilities Revenue & Refunding Bonds (Series 2011), (Original
Issue Yield: 6.875%), 6.625%, 7/15/2038
1,503,469
1,000,000
 
Houston, TX Airport System (United Airlines, Inc.), Special
Facilities Revenue Refunding Bonds (Series 2014), (Original Issue
Yield: 5.150%), 5.000%, 7/1/2029
1,004,268
1,500,000
 
Irving, TX Hospital Authority (Baylor Scott & White Medical
Center, Irving), Hospital Revenue Bonds (Series 2017A),
5.000%, 10/15/2044
1,532,558
2,000,000
 
Lavernia, TX Higher Education Finance Corporation (Meridian
World School), Education Revenue Bonds (Series 2015A),
(United States Treasury PRF 8/15/2024@100), 5.500%, 8/15/2045
2,099,057
1,500,000
3
Mission, TX Economic Development Corporation (Natgasoline),
Senior Lien Revenue Bonds (Series 2018), (Original Issue Yield:
4.716%), 4.625%, 10/1/2031
1,520,821
1,500,000
 
New Hope Cultural Education Facilities Finance Corporation
(Buckingham Senior Living Community), Retirement Facilities
Revenue Exchange Bonds (Series 2021B), 2.000%, 11/15/2061
783,468
2,000,000
3
New Hope Cultural Education Facilities Finance Corporation
(Jubilee Academic Center), Education Revenue Refunding Bonds
(Series 2021), 4.000%, 8/15/2056
1,581,934
2,000,000
 
New Hope Cultural Education Facilities Finance Corporation
(Longhorn Village), Retirement Facilities Revenue Bonds
(Series 2017), 5.000%, 1/1/2042
1,985,172
Annual Shareholder Report
28
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Texas—continued
 
$700,000
 
New Hope Cultural Education Facilities Finance Corporation
(MRC Crestview), Retirement Facility Revenue Bonds
(Series 2016), (United States Treasury PRF 11/15/2024@102),
5.000%, 11/15/2046
$749,279
1,000,000
 
New Hope Cultural Education Facilities Finance Corporation
(MRC Langford), Retirement Facilities Revenue Bonds
(Series 2016A), (Original Issue Yield: 5.530%),
5.500%, 11/15/2052
888,739
600,000
 
North Texas Tollway Authority, First Tier Revenue Refunding
Bonds (Series 2016A), 5.000%, 1/1/2039
631,589
335,000
 
North Texas Tollway Authority, Second Tier Revenue Refunding
Bonds (Series 2021B), 4.000%, 1/1/2041
323,087
2,000,000
 
Red River, TX HFDC (MRC The Crossings), Retirement Facility
Revenue Bonds (Series 2014A), (United States Treasury PRF
11/15/2024@100), 8.000%, 11/15/2049
2,223,796
2,655,000
 
Tarrant County, TX Cultural Education Facilities Finance Corp.
(Buckner Senior Living-Ventana Project), Retirement Facility
Revenue Bonds (Series 2017A), (Original Issue Yield: 6.770%),
6.750%, 11/15/2052
2,739,612
1,500,000
 
Tarrant County, TX Cultural Education Facilities Finance Corp.
(MRC Stevenson Oaks Project), Retirement Facilities Revenue
Bonds (Series 2020A), 6.875%, 11/15/2055
1,483,358
2,000,000
 
Texas Private Activity Bonds Surface Transportation Corporation
(Blueridge Transportation Group, LLC SH 288 Toll Lanes), Senior
Lien Revenue Bonds (Series 2016), 5.000%, 12/31/2050
2,019,191
545,000
 
Texas State Transportation Commission (State Highway 249
System), First Tier Toll Revenue Bonds (Series 2019A),
5.000%, 8/1/2057
553,543
1,500,000
 
Texas Water Development Board, State Revolving Fund Revenue
Bonds (Series 2018), 4.000%, 8/1/2036
1,540,681
 
 
TOTAL
37,966,942
 
 
Utah—0.6%
 
1,000,000
 
Salt Lake City, UT Airport Revenue, Airport Revenue Bonds
(Series 2018A), 5.000%, 7/1/2048
1,027,768
2,000,000
3
Utah State Charter School Finance Authority (Freedom Academy
Foundation), Charter School Revenue Refunding Bonds
(Series 2017), (Original Issue Yield: 5.300%), 5.250%, 6/15/2037
2,031,093
 
 
TOTAL
3,058,861
 
 
Vermont—0.2%
 
1,000,000
3
Vermont EDA (Casella Waste Systems, Inc.), Solid Waste Disposal
Revenue Bonds (Series 2013) TOBs, 4.625%, Mandatory
Tender 4/3/2028
984,267
 
 
Virginia—2.3%
 
1,800,000
 
Chesapeake Bay Bridge & Tunnel District, VA, First Tier General
Resolution Revenue Bonds (Series 2016), 5.000%, 7/1/2051
1,854,669
Annual Shareholder Report
29
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Virginia—continued
 
$1,500,000
3
Embrey Mill Community Development Authority, VA, Special
Assessment Revenue Bonds (Series 2015), (United States Treasury
PRF 3/1/2025@100), 5.600%, 3/1/2045
$1,605,050
2,680,000
 
Fairfax County, VA, UT GO Bonds (Series 2020),
5.000%, 10/1/2039
3,014,687
1,000,000
 
Norfolk, VA Redevelopment and Housing Authority (Harbor’s
Edge), Fort Norfolk Retirement Community Revenue Bond
(Series 2019B), 5.250%, 1/1/2054
922,250
4,250,000
 
Tobacco Settlement Financing Corp., VA, Tobacco Settlement
Asset-Backed Bonds (Series 2007B-1), (Original Issue Yield:
5.120%), 5.000%, 6/1/2047
4,250,062
370,000
 
Virginia Small Business Financing Authority (Covanta Energy
Corp.), Solid Waste Disposal Revenue Bonds (Series 2018) TOBs,
5.000%, Mandatory Tender 7/1/2038
367,974
 
 
TOTAL
12,014,692
 
 
Washington—4.9%
 
2,000,000
 
Energy Northwest, WA, Columbia Generating Station Electric
Revenue Refunding Bonds (Series 2021A), 4.000%, 7/1/2042
1,948,379
1,000,000
 
Port of Seattle, WA IDC (Delta Air Lines, Inc.), Special Facilities
Revenue Refunding Bonds (Series 2012), (Original Issue Yield:
5.310%), 5.000%, 4/1/2030
1,005,935
4,000,000
 
Port of Seattle, WA Revenue, Intermediate Lien Revenue and
Refunding Bonds (Series 2021A), 5.000%, 8/1/2046
4,168,996
10,000,000
 
Seattle, WA Municipal Light & Power, Improvement and
Refunding Revenue Bonds (Series 2018A), 4.000%, 1/1/2047
9,505,083
1,000,000
 
Washington State Health Care Facilities Authority (Virginia Mason
Medical Center), Revenue Bonds (Series 2017),
5.000%, 8/15/2037
1,034,123
1,000,000
3
Washington State Housing Finance Commission (Heron’s Key
Senior Living), Nonprofit Housing Revenue Bonds (Series 2015A),
(Original Issue Yield: 7.050%), 7.000%, 7/1/2050
1,033,961
1,000,000
3
Washington State Housing Finance Commission (Heron’s Key
Senior Living), Nonprofit Housing Revenue Bonds (Series 2015A),
7.000%, 7/1/2045
1,035,280
2,500,000
3
Washington State Housing Finance Commission (Rockwood
Retirement Communities), Nonprofit Housing Revenue &
Refunding Revenue Bonds (Series 2014A), 7.500%, 1/1/2049
2,577,611
3,000,000
 
Washington State, UT GO Bonds (Series 2022), 5.000%, 2/1/2046
3,302,329
 
 
TOTAL
25,611,697
 
 
Wisconsin—2.7%
 
2,800,000
3
Public Finance Authority, WI (American Dream at Meadowlands),
Limited Obligation PILOT Revenue Bonds (Series 2017),
7.000%, 12/1/2050
2,499,068
1,375,000
3
Public Finance Authority, WI (Eno River Academy), Charter
School Revenue Bonds (Series 2020A), 5.000%, 6/15/2054
1,305,752
Annual Shareholder Report
30
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Wisconsin—continued
 
$2,000,000
 
Public Finance Authority, WI (Grand Hyatt San Antonio Hotel),
Grand Hyatt San Antonio Hotel Acquisition Project (Senior Lien
Series 2022A), 5.000%, 2/1/2062
$2,049,239
750,000
 
Public Finance Authority, WI (Mountain Island Charter School),
Education Revenue Refunding Bonds (Series 2017),
5.000%, 7/1/2047
750,303
1,000,000
 
Public Finance Authority, WI (Mountain Island Charter School),
Education Revenue Refunding Bonds (Series 2017),
5.000%, 7/1/2052
996,363
1,000,000
 
Public Finance Authority, WI (National Gypsum Co.), Exempt
Facilities Refunding Revenue Bonds (Series 2016),
4.000%, 8/1/2035
876,084
3,000,000
3
Public Finance Authority, WI (Southminster), Retirement Facilities
First Mortgage Revenue Bonds (Series 2018), 5.000%, 10/1/2048
2,708,983
1,500,000
 
Public Finance Authority, WI Revenue (Fargo-Moorhead
Metropolitan Area Flood Risk Management Project), Senior
Revenue Bonds (Series 2021) Green Bonds, 4.000%, 3/31/2056
1,183,152
800,000
 
Wisconsin Health & Educational Facilities Authority (ProHealth
Care, Inc.), Revenue Refunding Bonds (Series 2015),
5.000%, 8/15/2039
821,139
1,000,000
 
Wisconsin Health & Educational Facilities Authority (St. Camillus
Health System, Inc.), Revenue Bonds (Series 2019A),
5.000%, 11/1/2046
899,030
 
 
TOTAL
14,089,113
 
 
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $541,048,552)
514,373,563
 
5
SHORT-TERM MUNICIPALS—1.7%
 
 
 
Alabama—0.1%
 
100,000
 
Columbia, AL IDB PCRB (Alabama Power Co.), (Series 1998)
Daily VRDNs, 1.160%, 9/1/2022
100,000
275,000
 
Mobile, AL IDB (Alabama Power Co.), (Series 2001-A)
Daily VRDNs, 1.270%, 9/1/2022
275,000
 
 
TOTAL
375,000
 
 
Kentucky—0.1%
 
500,000
 
Louisville & Jefferson County, KY Regional Airport Authority
(UPS Worldwide Forwarding, Inc.), (1999 Series B) Daily VRDNs,
(United Parcel Service, Inc. GTD), 1.230%, 9/1/2022
500,000
 
 
Michigan—0.1%
 
400,000
 
Michigan State Strategic Fund (Henry Ford Museum & Greenfield
Village) Daily VRDNs, (Comerica Bank LOC), 1.130%, 9/1/2022
400,000
Annual Shareholder Report
31
Principal
Amount
 
 
Value
 
5
SHORT-TERM MUNICIPALS—continued
 
 
 
Multi State—1.4%
 
$7,500,000
 
Nuveen Municipal Credit Income Fund, PUTTERs 3a-7
(Series 5039) (VMFP Series C) Daily VRDNs, (JPMorgan Chase
Bank, N.A. LIQ), 1.850%, 9/1/2022
$7,500,000
 
 
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $8,775,000)
8,775,000
 
 
TOTAL INVESTMENT IN SECURITIES—99.7%
(IDENTIFIED COST $549,823,552)6
523,148,563
 
 
OTHER ASSETS AND LIABILITIES - NET—0.3%7
1,487,347
 
 
TOTAL NET ASSETS—100%
$524,635,910
Securities that are subject to the federal alternative minimum tax (AMT) represent 12.9% of the Fund’s portfolio as calculated based upon total market value (unaudited).
1
Security in default.
2
Non-income-producing security.
3
Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or availing of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At August 31, 2022, these restricted securities amounted to $60,840,419, which represented 11.6% of total net assets.
4
Zero coupon bond.
5
Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
6
The cost of investments for federal tax purposes amounts to $549,216,237.
7
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of total net assets at August 31, 2022.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of August 31, 2022, all investments of the Fund utilized Level 2 inputs in valuing the Fund’s assets carried at fair value.
Annual Shareholder Report
32
The following acronym(s) are used throughout this portfolio: 
CDD
—Community Development District
EDA
—Economic Development Authority
GO
—General Obligation
GTD
—Guaranteed
HFDC
—Health Facility Development Corporation
IDA
—Industrial Development Authority
IDB
—Industrial Development Bond
IDC
—Industrial Development Corporation
INS
—Insured
LIQ
—Liquidity Agreement
LOC
—Letter of Credit
LT
—Limited Tax
PCRBs
—Pollution Control Revenue Bonds
PILOT
—Payment in Lieu of Taxes
PRF
—Pre-refunded
PUTTERs
—Puttable Tax-Exempt Receipts
TOBs
—Tender Option Bonds
USD
—Unified School District
UT
—Unlimited Tax
VRDNs
—Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
33
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$9.40
$8.90
$9.30
$8.88
$8.98
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.28
0.31
0.33
0.33
0.34
Net realized and unrealized gain (loss)
(1.26)
0.50
(0.41)
0.43
(0.10)
TOTAL FROM INVESTMENT OPERATIONS
(0.98)
0.81
(0.08)
0.76
0.24
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.28)
(0.31)
(0.32)
(0.34)
(0.34)
Net Asset Value, End of Period
$8.14
$9.40
$8.90
$9.30
$8.88
Total Return2
(10.60)%
9.19%
(0.78)%
8.76%
2.71%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.89%
0.89%
0.89%4
0.89%4
0.90%4
Net investment income
3.16%
3.35%
3.69%
3.77%
3.81%
Expense waiver/reimbursement5
0.16%
0.15%
0.15%
0.16%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$178,383
$224,522
$204,461
$218,050
$222,108
Portfolio turnover6
27%
12%
27%
11%
24%
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.89%, 0.89% and 0.90% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
6
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
34
Financial Highlights–Class B Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$9.38
$8.89
$9.29
$8.87
$8.97
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.21
0.24
0.26
0.27
0.27
Net realized and unrealized gain (loss)
(1.25)
0.49
(0.40)
0.42
(0.11)
TOTAL FROM INVESTMENT OPERATIONS
(1.04)
0.73
(0.14)
0.69
0.16
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.22)
(0.24)
(0.26)
(0.27)
(0.26)
Net Asset Value, End of Period
$8.12
$9.38
$8.89
$9.29
$8.87
Total Return2
(11.26)%
8.29%
(1.51)%
7.96%
1.92%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.64%
1.64%
1.64%4
1.64%4
1.65%4
Net investment income
2.38%
2.63%
2.93%
3.02%
3.05%
Expense waiver/reimbursement5
0.16%
0.15%
0.15%
0.16%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$728
$1,516
$2,744
$4,622
$6,504
Portfolio turnover6
27%
12%
27%
11%
24%
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.64%, 1.64% and 1.65% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
6
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
35
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$9.39
$8.90
$9.29
$8.87
$8.97
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.21
0.24
0.26
0.27
0.27
Net realized and unrealized gain (loss)
(1.25)
0.49
(0.39)
0.42
(0.10)
TOTAL FROM INVESTMENT OPERATIONS
(1.04)
0.73
(0.13)
0.69
0.17
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.22)
(0.24)
(0.26)
(0.27)
(0.27)
Net Asset Value, End of Period
$8.13
$9.39
$8.90
$9.29
$8.87
Total Return2
(11.26)%
8.27%
(1.41)%
7.97%
1.94%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.64%
1.64%
1.64%4
1.64%4
1.65%4
Net investment income
2.41%
2.62%
2.93%
3.01%
3.06%
Expense waiver/reimbursement5
0.16%
0.15%
0.15%
0.16%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$18,017
$25,061
$31,350
$48,130
$50,262
Portfolio turnover6
27%
12%
27%
11%
24%
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.64%, 1.64% and 1.65% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
6
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
36
Financial Highlights–Class F Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$9.39
$8.90
$9.30
$8.88
$8.98
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.28
0.31
0.33
0.33
0.34
Net realized and unrealized gain (loss)
(1.25)
0.49
(0.41)
0.42
(0.10)
TOTAL FROM INVESTMENT OPERATIONS
(0.97)
0.80
(0.08)
0.75
0.24
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.28)
(0.31)
(0.32)
(0.33)
(0.34)
Net Asset Value, End of Period
$8.14
$9.39
$8.90
$9.30
$8.88
Total Return2
(10.49)%
9.08%
(0.77)%
8.76%
2.71%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.89%
0.89%
0.89%4
0.89%4
0.90%4
Net investment income
3.16%
3.35%
3.69%
3.76%
3.81%
Expense waiver/reimbursement5
0.16%
0.15%
0.15%
0.16%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$147,878
$189,045
$182,765
$195,691
$194,464
Portfolio turnover6
27%
12%
27%
11%
24%
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.89%, 0.89% and 0.90% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
6
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
37
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$9.38
$8.89
$9.29
$8.87
$8.97
Income From Investment Operations:
 
 
 
 
 
Net investment income1
0.30
0.33
0.35
0.36
0.36
Net realized and unrealized gain (loss)
(1.26)
0.49
(0.40)
0.42
(0.10)
TOTAL FROM INVESTMENT OPERATIONS
(0.96)
0.82
(0.05)
0.78
0.26
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.30)
(0.33)
(0.35)
(0.36)
(0.36)
Net Asset Value, End of Period
$8.12
$9.38
$8.89
$9.29
$8.87
Total Return2
(10.39)%
9.37%
(0.53)%
9.04%
2.97%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.64%
0.64%
0.64%4
0.64%4
0.65%4
Net investment income
3.41%
3.59%
3.93%
4.01%
4.06%
Expense waiver/reimbursement5
0.16%
0.15%
0.15%
0.16%
0.15%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$179,629
$174,234
$129,832
$155,444
$155,902
Portfolio turnover6
27%
12%
27%
11%
24%
1
Per share numbers have been calculated using the average shares method.
2
Based on net asset value.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.64%, 0.64% and 0.65% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
5
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
6
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
38
Statement of Assets and Liabilities
August 31, 2022
 
Assets:
 
 
Investment in securities, at value (identified cost $549,823,552)
 
$523,148,563
Cash
 
70,286
Income receivable
 
6,858,831
Receivable for shares sold
 
189,124
TOTAL ASSETS
 
530,266,804
Liabilities:
 
 
Payable for investments purchased
$4,361,380
 
Payable for shares redeemed
1,064,408
 
Payable for other service fees (Notes 2 and 5)
72,759
 
Payable for distribution services fee (Note 5)
12,332
 
Payable for investment adviser fee (Note 5)
6,245
 
Payable for administrative fee (Note 5)
2,248
 
Accrued expenses (Note 5)
111,522
 
TOTAL LIABILITIES
 
5,630,894
Net assets for 64,503,115 shares outstanding
 
$524,635,910
Net Assets Consists of:
 
 
Paid-in capital
 
$592,255,335
Total distributable earnings (loss)
 
(67,619,425)
TOTAL NET ASSETS
 
$524,635,910
Annual Shareholder Report
39
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds
Per Share:
 
 
Class A Shares:
 
 
Net asset value per share ($178,383,466 ÷ 21,916,411 shares
outstanding), no par value, unlimited shares authorized
 
$8.14
Offering price per share (100/95.50 of $8.14)
 
$8.52
Redemption proceeds per share
 
$8.14
Class B Shares:
 
 
Net asset value per share ($728,381 ÷ 89,655 shares
outstanding), no par value, unlimited shares authorized
 
$8.12
Offering price per share
 
$8.12
Redemption proceeds per share (94.50/100 of $8.12)
 
$7.67
Class C Shares:
 
 
Net asset value per share ($18,016,719 ÷ 2,216,343 shares
outstanding), no par value, unlimited shares authorized
 
$8.13
Offering price per share
 
$8.13
Redemption proceeds per share (99.00/100 of $8.13)
 
$8.05
Class F Shares:
 
 
Net asset value per share ($147,878,105 ÷ 18,172,070 shares
outstanding), no par value, unlimited shares authorized
 
$8.14
Offering price per share (100/99.00 of $8.14)
 
$8.22
Redemption proceeds per share (99.00/100 of $8.14)
 
$8.06
Institutional Shares:
 
 
Net asset value per share ($179,629,239 ÷ 22,108,636 shares
outstanding), no par value, unlimited shares authorized
 
$8.12
Offering price per share
 
$8.12
Redemption proceeds per share
 
$8.12
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
40
Statement of Operations
Year Ended August 31, 2022
 
Investment Income:
 
 
 
Interest
 
 
$23,243,124
Expenses:
 
 
 
Investment adviser fee (Note 5)
 
$3,438,696
 
Administrative fee (Note 5)
 
453,141
 
Custodian fees
 
23,669
 
Transfer agent fees
 
316,986
 
Directors’/Trustees’ fees (Note 5)
 
5,094
 
Auditing fees
 
35,201
 
Legal fees
 
9,191
 
Distribution services fee (Note 5)
 
175,902
 
Other service fees (Notes 2 and 5)
 
1,002,351
 
Portfolio accounting fees
 
168,031
 
Share registration costs
 
85,583
 
Printing and postage
 
33,577
 
Miscellaneous (Note 5)
 
33,884
 
TOTAL EXPENSES
 
5,781,306
 
Waiver of investment adviser fee (Note 5)
$(907,029)
 
 
Net expenses
 
 
4,874,277
Net investment income
 
 
18,368,847
Realized and Unrealized Gain (Loss) on Investments:
 
 
 
Net realized loss on investments
 
 
(2,915,507)
Net change in unrealized appreciation of investments
 
 
(79,417,295)
Net realized and unrealized gain (loss) on investments
 
 
(82,332,802)
Change in net assets resulting from operations
 
 
$(63,963,955)
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
41
Statement of Changes in Net Assets
 
Year Ended August 31
2022
2021
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$18,368,847
$19,555,415
Net realized gain (loss)
(2,915,507)
2,798,869
Net change in unrealized appreciation/depreciation
(79,417,295)
27,805,753
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
(63,963,955)
50,160,037
Distributions to Shareholders:
 
 
Class A Shares
(6,581,627)
(7,104,670)
Class B Shares
(26,755)
(53,393)
Class C Shares
(549,883)
(740,261)
Class F Shares
(5,534,200)
(6,199,693)
Institutional Shares
(5,882,954)
(5,255,699)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(18,575,419)
(19,353,716)
Share Transactions:
 
 
Proceeds from sale of shares
141,639,561
109,147,112
Net asset value of shares issued to shareholders in payment of
distributions declared
17,668,836
18,265,350
Cost of shares redeemed
(166,512,281)
(94,991,088)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(7,203,884)
32,421,374
Change in net assets
(89,743,258)
63,227,695
Net Assets:
 
 
Beginning of period
614,379,168
551,151,473
End of period
$524,635,910
$614,379,168
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
42
Notes to Financial Statements
August 31, 2022
1. ORGANIZATION
Federated Hermes Municipal Securities Income Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of the Federated Hermes Municipal High Yield Advantage Fund (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers five classes of shares: Class A Shares, Class B Shares, Class C Shares, Class F Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide a high level of current income which is generally exempt from the federal regular income tax. Interest income from the Fund’s investments may be subject to the federal AMT for individuals and state and local taxes.
Class B Shares may be purchased through an exchange from the same share class of another Federated Hermes fund but are closed to new accounts, new investors and new purchases by existing shareholders (excluding reinvestment of dividends and capital gains). Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
◾ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
◾ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
◾ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
◾ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
◾ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is
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normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
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Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income, if any, are declared and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses. The detail of the total fund expense waiver of $907,029 is disclosed in Note 5.
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares, Class B Shares, Class C Shares and Class F Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended August 31, 2022, other service fees for the Fund were as follows: 
 
Other
Service Fees
Incurred
Class A Shares
$513,725
Class B Shares
2,701
Class C Shares
55,933
Class F Shares
429,992
TOTAL
$1,002,351
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended August 31, 2022, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of August 31, 2022, tax years 2019 through 2022 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
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When-Issued and Delayed-Delivery Transactions
The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer’s expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund’s restricted securities, like other securities, are priced in accordance with procedures established by and under the general supervision of the Trustees.
Additional information on restricted securities held at August 31, 2022, is as follows: 
Security
Acquisition
Date
Acquisition
Cost
Value
Arizona State IDA (Basis Schools, Inc. Obligated Group),
Education Revenue Bonds (Series 2017D), 5.000%, 7/1/2051
10/12/2017
$659,436
$651,060
Arizona State IDA (Basis Schools, Inc. Obligated Group),
Education Revenue Bonds (Series 2017G), 5.000%, 7/1/2051
12/15/2017
$511,829
$500,816
Arizona State IDA (Doral Academy of Nevada FMMR),
Education Revenue Bonds (Series 2019A),
5.000%, 7/15/2049
4/3/2019
$1,032,503
$981,095
Arizona State IDA (Pinecrest Academy of Nevada), Horizon,
Inspirada and St. Rose Campus Education Revenue Bonds
(Series 2018A), 5.750%, 7/15/2048
12/14/2018
$1,786,362
$1,831,848
Build NYC Resource Corporation (Albert Einstein School of
Medicine, Inc.), Revenue Bonds (Series 2015),
5.500%, 9/1/2045
1/14/2016
$1,000,000
$1,030,007
California Public Finance Authority (Kendal at Sonoma),
Enso Village Senior Living Revenue Refunding Bonds
(Series 2021A), 5.000%, 11/15/2046
5/27/2021
$526,784
$461,705
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2014A), 5.125%, 7/1/2044
6/13/2014
$750,000
$757,888
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2015A), 5.000%, 7/1/2045
8/27/2015
$573,920
$570,320
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Security
Acquisition
Date
Acquisition
Cost
Value
California School Finance Authority (KIPP LA), School Facility
Revenue Bonds (Series 2017A), 5.000%, 7/1/2047
8/4/2017
$533,061
$506,111
California State School Finance Authority Charter School
Revenue (Bright Star Schools-Obligated Group), Charter
School Revenue Bonds (Series 2017), 5.000%, 6/1/2037
4/20/2020
$1,007,097
$1,011,712
California State School Finance Authority Charter School
Revenue (Rocketship Public Schools), Revenue Bonds
(Series 2017G), 5.000%, 6/1/2047
12/4/2017
$510,790
$486,127
California State School Finance Authority Charter School
Revenue (Summit Public Schools Obligated Group),
(Series 2017), 5.000%, 6/1/2053
10/5/2017
$1,151,322
$1,103,916
California Statewide Communities Development Authority
(Loma Linda University Medical Center), Revenue Bonds
(Series 2016A), 5.000%, 12/1/2046
5/19/2020
$2,257,375
$2,190,975
Collier County, FL IDA (Arlington of Naples), Continuing
Care Community Revenue Bonds (Series 2013A), (Original
Issue Yield: 8.375%), 8.250%, 5/15/2049
12/16/2013
$2,959,735
$1,920,000
Colorado Educational & Cultural Facilities Authority
(Loveland Classical School), School Improvement Revenue
Bonds (Series 2016), 5.000%, 7/1/2036
4/17/2020
$946,760
$987,165
Denver, CO Health & Hospital Authority, Revenue Refunding
Bonds (Series 2017A), 5.000%, 12/1/2034
8/23/2017
$1,060,481
$1,040,683
Director of the State of Nevada Department of Business and
Industry (Doral Academy of Nevada CS), Charter School
Revenue Bonds (Series 2017A), 5.000%, 7/15/2047
8/31/2017
$913,996
$891,018
Director of the State of Nevada Department of Business and
Industry (Somerset Academy of Las Vegas), Charter School
Lease Revenue Bonds (Series 2018A), 5.000%, 12/15/2048
4/6/2018
$1,001,467
$1,000,224
Embrey Mill Community Development Authority, VA, Special
Assessment Revenue Bonds (Series 2015), (United States
Treasury PRF 3/1/2025@100), 5.600%, 3/1/2045
10/22/2015
$1,500,000
$1,605,050
Florida Development Finance Corp. (Glenridge on Palmer
Ranch), Senior Living Revenue and Refunding Bonds
(Series 2021), 5.000%, 6/1/2051
5/13/2021
$1,106,767
$869,838
Kansas City, MO Redevelopment Authority (Kansas City
Convention Center Headquarters Hotel CID), Revenue
Bonds (Series 2018B), (Original Issue Yield: 5.079%),
5.000%, 2/1/2050
1/10/2018
$1,976,636
$1,615,796
Maine State Finance Authority Solid Waste Disposal (Casella
Waste Systems, Inc.), Revenue Bonds (Series 2005R-3),
5.250%, 1/1/2025
1/27/2017
$2,000,000
$2,032,708
Maricopa County, AZ, IDA (Paradise Schools), Revenue
Refunding Bonds, 5.000%, 7/1/2047
10/6/2016
$1,025,163
$980,416
Massachusetts Development Finance Agency (Newbridge on
the Charles), Revenue Refunding Bonds (Series 2017),
5.000%, 10/1/2057
12/7/2017
$1,050,374
$1,046,938
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Security
Acquisition
Date
Acquisition
Cost
Value
Millsboro, DE Special Obligations (Plantation Lakes Special
Development District), Special Tax Revenue Refunding
Bonds (Series 2018), (Original Issue Yield: 5.140%),
5.125%, 7/1/2038
5/22/2020
$2,862,438
$3,009,526
Minneapolis, MN Charter School Lease Revenue (Twin Cities
International School), (Series 2017A), (Original Issue Yield:
5.150%), 5.000%, 12/1/2047
12/8/2017
$2,934,103
$2,944,901
Mission, TX Economic Development Corporation
(Natgasoline), Senior Lien Revenue Bonds (Series 2018),
(Original Issue Yield: 4.716%), 4.625%, 10/1/2031
10/30/2018
$1,489,964
$1,520,821
Mohegan Tribe of Indians of Connecticut Gaming Authority,
Priority Distribution Payment Refunding Bonds
(Series 2015C), (Original Issue Yield: 6.375%),
6.250%, 2/1/2030
11/25/2015
$1,821,529
$1,943,340
Monroe County, NY IDC (True North Rochester Preparatory
Charter School), Charter School Revenue Bonds
(Series 2020A), 5.000%, 6/1/2059
7/9/2020
$1,107,055
$979,620
New Hampshire Health and Education Facilities Authority
(Hillside Village), Revenue Bonds (Series 20017A),
(Original Issue Yield: 6.375%), 6.125%, 7/1/2052
6/8/2017
$1,450,172
$600,000
New Hope Cultural Education Facilities Finance Corporation
(Jubilee Academic Center), Education Revenue Refunding
Bonds (Series 2021), 4.000%, 8/15/2056
12/10/2021
$2,177,226
$1,581,934
New York Liberty Development Corporation (3 World Trade
Center), Revenue Bonds (Series 2014 Class 2),
5.375%, 11/15/2040
10/29/2014
$1,000,000
$1,011,183
Ohio Air Quality Development Authority (AMG Vanadium
LLC), Exempt Facilities Revenue Bonds (Series 2019),
5.000%, 7/1/2049
6/27/2019
$1,876,042
$1,698,452
Polk County, FL IDA (Mineral Development, LLC), Secondary
Phosphate Tailings Recovery Project Revenue Bonds
(Series 2020), 5.875%, 1/1/2033
10/23/2020
$2,000,000
$2,069,491
Prince Georges County, MD (Westphalia Town Center),
Special Obligation Revenue Bonds (Series 2018),
(Original Issue Yield: 5.330%), 5.250%, 7/1/2048
11/16/2018
$988,795
$1,007,059
Public Finance Authority, WI (American Dream at
Meadowlands), Limited Obligation PILOT Revenue Bonds
(Series 2017), 7.000%, 12/1/2050
6/22/2017
$2,845,788
$2,499,068
Public Finance Authority, WI (Eno River Academy), Charter
School Revenue Bonds (Series 2020A), 5.000%, 6/15/2054
6/12/2020
$1,404,313
$1,305,752
Public Finance Authority, WI (Southminster), Retirement
Facilities First Mortgage Revenue Bonds (Series 2018),
5.000%, 10/1/2048
4/6/2020
$2,733,300
$2,708,983
San Francisco Special Tax District No. 2020-1 (Mission Rock
Facilities and Services), Development Special Tax Bonds
(Series 2021A), 4.000%, 9/1/2051
5/7/2021
$373,599
$293,226
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Security
Acquisition
Date
Acquisition
Cost
Value
South Carolina Jobs-EDA (Green Charter Schools),
Educational Facilities Revenue Refunding Bonds
(Series 2021A), 4.000%, 6/1/2056
7/30/2021
$1,061,410
$777,450
Tuscaloosa County, AL IDA (Hunt Refining Co.), Gulf
Opportunity Zone Refunding Bonds (Series 2019A),
5.250%, 5/1/2044
4/17/2019
$790,000
$720,401
Utah State Charter School Finance Authority (Freedom
Academy Foundation), Charter School Revenue Refunding
Bonds (Series 2017), (Original Issue Yield: 5.300%),
5.250%, 6/15/2037
4/27/2020
$1,865,999
$2,031,093
Vermont EDA (Casella Waste Systems, Inc.), Solid Waste
Disposal Revenue Bonds (Series 2013) TOBs, 4.625%,
Mandatory Tender 4/3/2028
3/28/2018
$1,000,000
$984,267
Verrado Community Facilities District No. 1, AZ, District GO
Refunding Bonds (Series 2013A), 6.000%, 7/15/2027
7/3/2013
$431,982
$433,584
Washington State Housing Finance Commission (Heron’s Key
Senior Living), Nonprofit Housing Revenue Bonds
(Series 2015A), (Original Issue Yield: 7.050%),
7.000%, 7/1/2050
7/22/2015
$993,846
$1,033,961
Washington State Housing Finance Commission (Heron’s Key
Senior Living), Nonprofit Housing Revenue Bonds
(Series 2015A), 7.000%, 7/1/2045
7/22/2015
$1,003,767
$1,035,280
Washington State Housing Finance Commission (Rockwood
Retirement Communities), Nonprofit Housing Revenue &
Refunding Revenue Bonds (Series 2014A), 7.500%, 1/1/2049
1/31/2014
$2,500,000
$2,577,611
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ materially from those estimated. The Fund applies investment company accounting and reporting guidance.
3. SHARES OF BENEFICIAL INTEREST
The following tables summarize share activity: 
Year Ended August 31
2022
2021
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
2,405,984
$21,416,895
3,782,558
$34,853,277
Shares issued to shareholders in payment of
distributions declared
695,169
6,146,216
719,306
6,576,868
Shares redeemed
(5,082,228)
(44,103,087)
(3,565,462)
(32,820,882)
NET CHANGE RESULTING FROM
CLASS A SHARE TRANSACTIONS
(1,981,075)
$(16,539,976)
936,402
$8,609,263
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Year Ended August 31
2022
2021
Class B Shares:
Shares
Amount
Shares
Amount
Shares sold
57
$503
1,365
$12,535
Shares issued to shareholders in payment of
distributions declared
2,664
23,695
5,257
47,833
Shares redeemed
(74,700)
(660,346)
(153,517)
(1,398,266)
NET CHANGE RESULTING FROM
CLASS B SHARE TRANSACTIONS
(71,979)
$(636,148)
(146,895)
$(1,337,898)
 
Year Ended August 31
2022
2021
Class C Shares:
Shares
Amount
Shares
Amount
Shares sold
379,619
$3,396,520
596,877
$5,487,417
Shares issued to shareholders in payment of
distributions declared
61,815
546,301
79,657
726,086
Shares redeemed
(895,366)
(7,797,708)
(1,530,274)
(14,050,850)
NET CHANGE RESULTING FROM
CLASS C SHARE TRANSACTIONS
(453,932)
$(3,854,887)
(853,740)
$(7,837,347)
 
Year Ended August 31
2022
2021
Class F Shares:
Shares
Amount
Shares
Amount
Shares sold
892,888
$7,812,091
1,136,329
$10,446,206
Shares issued to shareholders in payment of
distributions declared
591,804
5,229,555
637,865
5,829,331
Shares redeemed
(3,436,655)
(29,422,978)
(2,176,973)
(20,003,779)
NET CHANGE RESULTING FROM
CLASS F SHARE TRANSACTIONS
(1,951,963)
$(16,381,332)
(402,779)
$(3,728,242)
 
Year Ended August 31
2022
2021
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
12,699,199
$109,013,552
6,339,014
$58,347,677
Shares issued to shareholders in payment of
distributions declared
649,045
5,723,069
556,500
5,085,232
Shares redeemed
(9,815,095)
(84,528,162)
(2,922,568)
(26,717,311)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
3,533,149
$30,208,459
3,972,946
$36,715,598
NET CHANGE RESULTING FROM
TOTAL FUND SHARE TRANSACTIONS
(925,800)
$(7,203,884)
3,505,934
$32,421,374
4. FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended August 31, 2022 and 2021, was as follows: 
 
2022
2021
Tax-exempt income
$18,534,246
$19,200,533
Ordinary income
$41,173
$153,183
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50
As of August 31, 2022, the components of distributable earnings on a tax basis were as follows: 
Undistributed tax-exempt income
$590,209
Net unrealized depreciation
$(26,810,174)
Capital loss carryforwards
$(41,399,460)
The difference between book-basis and tax-basis net unrealized depreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities and open defaulted bonds.
At August 31, 2022, the cost of investments for federal tax purposes was $549,216,237. The net unrealized depreciation of investments for federal tax purposes was $26,067,674. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $9,913,611 and net unrealized depreciation from investments for those securities having an excess of cost over value of $35,981,285.
At August 31, 2022, the Fund had a capital loss carryforward of $41,399,460 which will reduce the Fund’s taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, thereby reducing the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, these net capital losses retain their character as either short-term or long-term, and do not expire.
The following schedule summarizes the Fund’s capital loss carryforwards: 
Short-Term
Long-Term
Total
$14,956,210
$26,443,250
$41,399,460
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.60% of the Fund’s average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee for competitive reasons such as to maintain the Fund’s expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the year ended August 31, 2022, the Adviser voluntarily waived $907,029 of its fee.
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Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below: 
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, the annualized fee paid to FAS was 0.079% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund’s Class A Shares, Class B Shares, Class C Shares and Class F Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC: 
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class B Shares
0.75%
Class C Shares
0.75%
Class F Shares
0.05%
Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, distribution services fees for the Fund were as follows: 
 
Distribution
Services Fee
Incurred
Class B Shares
$8,103
Class C Shares
167,799
TOTAL
$175,902
For the year ended August 31, 2022, FSC retained $32,488 of fees paid by the Fund. When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended August 31, 2022, the Fund’s Class A Shares and Class F Shares did not incur a distribution services fee; however, each may begin to incur this fee upon approval by the Trustees.
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Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended August 31, 2022, FSC retained $11,916 in sales charges from the sale of Class A Shares. FSC also retained $8,204, $773, $3,176 and $26,490 of CDSC relating to redemptions of Class A Shares, Class B Shares, Class C Shares and Class F Shares, respectively.
Other Service Fees
For the year ended August 31, 2022, FSSC received $18,733 of the other service fees disclosed in Note 2.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses, and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class B Shares, Class C Shares, Class F Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 0.89%, 1.64%, 1.64%, 0.89% and 0.64% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) November 1, 2023; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Interfund Transactions
During the year ended August 31, 2022, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $83,575,000 and $109,365,000, respectively. Net realized gain (loss) recognized on these transactions was $0.
Directors’/Trustees’ and Miscellaneous Fees
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
Annual Shareholder Report
53
6. Investment TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended August 31, 2022, were as follows: 
Purchases
$149,376,619
Sales
$152,408,309
7. CONCENTRATION OF RISK
The Fund has 52.4% of its portfolio invested in lower rated and comparable quality unrated high-yield securities. Investments in higher yield securities may be subject to a greater degree of credit risk and the risk tends to be more sensitive to economic conditions than higher rated securities. The risk of loss due to default by the issuer may be significantly higher for the holders of high yielding securities because such securities are generally unsecured and often subordinated to other creditors of the issuer.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 22, 2022. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to (a) the highest, on any day, of (i) the federal funds effective rate, (ii) the published secured overnight financing rate plus an assigned percentage, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of August 31, 2022, the Fund had no outstanding loans. During the year ended August 31, 2022, the Fund did not utilize the LOC.
9. INTERFUND LENDING
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Hermes, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of August 31, 2022, there were no outstanding loans. During the year ended August 31, 2022, the program was not utilized.
Annual Shareholder Report
54
10. Indemnifications
Under the Fund’s organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party’s actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
11. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may continue for an extended period of time and has resulted in substantial economic volatility. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies, (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
12. FEDERAL TAX INFORMATION (UNAUDITED)
For the fiscal year ended August 31, 2022, 99.78% of distributions from net investment income is exempt from federal income tax, other than the federal AMT.
Annual Shareholder Report
55
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Federated Hermes Municipal Securities Income Trust and the Shareholders of Federated Hermes Municipal High Yield Advantage Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of the Federated Hermes Municipal High Yield Advantage Fund (the “Fund”), a portfolio of Federated Hermes Municipal Securities Income Trust, including the portfolio of investments, as of August 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Annual Shareholder Report
56
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2022, by correspondence with custodians and brokers; when replies were not received from brokers, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
 
We have served as the auditor for one or more of Federated Hermes’ investment companies since 2006.
Boston, Massachusetts
October 24, 2022
Annual Shareholder Report
57
Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2022 to August 31, 2022.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Annual Shareholder Report
58
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 
 
Beginning
Account Value
3/1/2022
Ending
Account Value
8/31/2022
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$919.80
$4.31
Class B Shares
$1,000
$916.40
$7.92
Class C Shares
$1,000
$916.40
$7.92
Class F Shares
$1,000
$920.90
$4.31
Institutional Shares
$1,000
$920.90
$3.10
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,020.72
$4.53
Class B Shares
$1,000
$1,016.94
$8.34
Class C Shares
$1,000
$1,016.94
$8.34
Class F Shares
$1,000
$1,020.72
$4.53
Institutional Shares
$1,000
$1,021.98
$3.26
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: 
Class A Shares
0.89%
Class B Shares
1.64%
Class C Shares
1.64%
Class F Shares
0.89%
Institutional Shares
0.64%
Annual Shareholder Report
59
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2021, the Trust comprised four portfolio(s), and the Federated Hermes Fund Family consisted of 33 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400, Option #4.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: August 1990
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
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60
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Director and Vice President, Federated Hermes, Inc.; President,
Director/Trustee and CEO, Federated Advisory Services Company,
Federated Equity Management Company of Pennsylvania, Federated
Global Investment Management Corp., Federated Investment
Counseling, Federated Investment Management Company; President
of some of the Funds in the Federated Hermes Fund Family and
Director, Federated Investors Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Chairman and Director, Southpointe
Distribution Services, Inc. and President, Technology, Federated
Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Director, KLX Energy Services Holdings,
Inc. (oilfield services); former Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
61
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Lead Director, Member of the Audit and Nominating and
Corporate Governance Committees, Haverty Furniture Companies,
Inc.; formerly, Director, Member of Governance and Compensation
Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; Director and Vice Chair, Our Campaign for the Church
Alive!, Inc.; and Director, Saint Francis University.
Annual Shareholder Report
62
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); Director, The Golisano Children’s Museum of Naples,
Florida; and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; formerly, Executive Vice President for Legal Affairs,
General Counsel and Secretary to the Board of Directors, Duquesne
University (Retired).
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Senior Vice President for Legal Affairs, General Counsel and
Secretary to the Board of Directors and Assistant General Counsel and
Director of Risk Management, Duquesne University. Prior to her work
at Duquesne University, Ms. Reilly served as Assistant General
Counsel of Compliance and Enterprise Risk as well as Senior Counsel
of Environment, Health and Safety, PPG Industries. Ms. Reilly currently
serves as a member of the Board of Directors of UPMC
Mercy Hospital.
Annual Shareholder Report
63
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 1999
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
Annual Shareholder Report
64
OFFICERS 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: January 2005
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR
VICE PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
Annual Shareholder Report
65
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
Chief Investment Officer
Officer since: February 2010
Principal Occupations: Robert J. Ostrowski joined Federated Hermes,
Inc. in 1987 as an Investment Analyst and became a Portfolio Manager
in 1990. He was named Chief Investment Officer of Federated
Hermes’ taxable fixed-income products in 2004 and also serves as a
Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice
President of the Fund’s Adviser in 2009 and served as a Senior Vice
President of the Fund’s Adviser from 1997 to 2009. Mr. Ostrowski has
received the Chartered Financial Analyst designation. He received his
M.S. in Industrial Administration from Carnegie Mellon University.
 
Annual Shareholder Report
66
Evaluation and Approval of Advisory Contract–May 2022
Federated Hermes Municipal High Yield Advantage Fund (the “Fund”)
At its meetings in May 2022 (the “May Meetings”), the Fund’s Board of Trustees (the “Board”), including those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the “Adviser”) (the “Contract”) for an additional one-year term. The Board’s determination to approve the continuation of the Contract reflects the exercise of its business judgment after considering all of the information and factors believed to be relevant and appropriate on whether to approve the continuation of the existing arrangement. The information, factors and conclusions that formed the basis for the Board’s approval are summarized below.
Information Received and Review Process
At the request of the Independent Trustees, the Fund’s Chief Compliance Officer (the “CCO”) furnished to the Board in advance of its May Meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund’s management fee and in determining to approve the continuation of the Contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer” prior to the elimination of the Senior Officer position in December 2017.
In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board considered information specifically prepared in connection with the approval of the continuation of the Contract that was presented at the May Meetings. In this regard, in the months preceding the May Meetings, the Board requested and reviewed written responses and supporting materials prepared by the Adviser and its affiliates (collectively, “Federated Hermes”) in response to requests posed to Federated Hermes by independent legal counsel on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Trustees deemed
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reasonably necessary to evaluate the Contract, which included detailed information about the Fund and Federated Hermes furnished to the Board at its meetings throughout the year and in between regularly scheduled meetings on particular matters as the need arose.
The Board’s consideration of the Contract included review of materials and information covering the following matters, among others: the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; Federated Hermes’ business and operations; the Adviser’s investment philosophy, personnel and processes; the Fund’s investment objectives and strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate); the Fund’s fees and expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the financial condition of Federated Hermes; the Adviser’s profitability with respect to the Fund; distribution and sales activity for the Fund; and the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser’s cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize “economies of scale” as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fee and expense structures, including a comparison of management fees paid to the adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the adviser for what might be viewed as like services; and (6) the extent of care, conscientiousness and independence with which the fund’s board members perform their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of the adviser’s services and fees. The Board noted that the Securities and Exchange Commission (“SEC”) disclosure requirements
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regarding the basis for a fund board’s approval of the fund’s investment advisory contract generally align with the factors listed above. The Board was guided by these factors in its review of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Hermes on matters relating to the oversight of the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the (“Federated Hermes Funds”).
In addition to considering the above-referenced factors, the Board was mindful of the preferences and expectations of Fund shareholders and the potential disruptions of the Fund’s operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew the Contract. In particular, the Board recognized that many shareholders likely have invested in the Fund on the strength of Federated Hermes’ industry standing and reputation and with the expectation that Federated Hermes will have a continuing role in providing advisory services to the Fund. Thus, the Board observed that in the marketplace there are a range of investment options available to the Fund’s shareholders and such shareholders, having had the opportunity to consider other investment options, have effectively selected Federated Hermes by virtue of investing in the Fund.
In determining to approve the continuation of the Contract, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate through the exercise of their reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board’s determination to approve the continuation of the Contract was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Contract. The Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Trustees met separately in executive session with their independent legal counsel and without management present to review the relevant materials and consider their responsibilities under applicable laws. In addition, senior management representatives of Federated Hermes also met with the Independent Trustees and their independent legal counsel to discuss the materials and presentations furnished to the Board at the May Meetings. The Board considered the approval of the Contract for the Fund as part of its consideration of agreements for funds across the family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
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Nature, Extent and Quality of Services
The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of Federated Hermes dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by Federated Hermes. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade operations capabilities, experience and performance track record. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and Federated Hermes’ ability and experience in attracting and retaining qualified personnel to service the Fund. The Board also considered the Adviser’s ability to deliver competitive investment performance for the Fund when compared to the Fund’s Performance Peer Group (as defined below), which was deemed by the Board to be a useful indicator of how the Adviser is executing the Fund’s investment program.
In addition, the Board considered the financial resources and overall reputation of Federated Hermes and its willingness to consider and make investments in personnel, infrastructure, technology, cybersecurity, business continuity planning and operational enhancements that are designed to benefit the Federated Hermes Funds. The Board noted the significant acquisition of Hermes Fund Managers Limited by Federated Hermes, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters. The Board considered Federated Hermes’ oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes’ communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account Federated Hermes’ communications with the Board in light of the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
The Board received and evaluated information regarding Federated Hermes’ regulatory and compliance environment. The Board considered Federated Hermes’ compliance program and compliance history and reports from the CCO about Federated Hermes’ compliance with applicable laws and regulations, including responses to regulatory developments and any compliance or other issues raised by regulatory agencies. The Board also noted Federated Hermes’ support of the Federated Hermes Funds’ compliance control structure and the compliance-related resources devoted by Federated
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Hermes in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including Federated Hermes’ commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ approach to internal audits and risk management with respect to the Federated Hermes Funds and its day-to-day oversight of the Federated Hermes Funds’ compliance with their investment objectives and policies as well as with applicable laws and regulations, noting that regulatory and other developments had over time led to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered the implementation of Federated Hermes’ business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. In addition, the Board noted Federated Hermes’ commitment to maintaining high quality systems and expending substantial resources to prepare for and respond to ongoing changes due to the market, regulatory and control environments in which the Fund and its service providers operate, including changes associated with the pandemic.
The Board considered Federated Hermes’ efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks. The Board considered detailed investment reports on, and the Adviser’s analysis of, the Fund’s performance over different time periods that were provided to the Board throughout the year and in connection with the May Meetings. These reports include, among other items, information on the Fund’s
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gross and net returns, the Fund’s investment performance compared to one or more relevant categories or groups of peer funds and the Fund’s benchmark index, performance attribution information and commentary on the effect of market conditions.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”). The Board noted the CCO’s view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds’ objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
For the periods ended December 31, 2021, the Fund’s performance for the one-year and three-year periods was above the median of the Performance Peer Group, and the Fund’s performance was at the median of the Performance Peer Group for the five-year period. The Board discussed the Fund’s performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser’s overall capabilities to manage the Fund.
Fund Expenses
The Board considered the advisory fee and overall expense structure of the Fund and the comparative fee and expense information that had been provided in connection with the May Meetings. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its evaluation. The Board focused on comparisons with other similar registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered funds
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are the products most like the Fund, in that they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle, in fact, chosen and maintained by the Fund’s shareholders. The Board noted that the range of such other registered funds’ fees and expenses, therefore, appears to be a relevant indicator of what investors have found to be reasonable in the marketplace in which the Fund competes.
The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund’s fee rates relative to its Expense Peer Group. In this regard, the Board noted that the contractual advisory fee rate was above the median of the Expense Peer Group, but the Board noted the applicable waivers and reimbursements, and that the overall expense structure of the Fund remained competitive in the context of other factors considered by the Board.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that non-registered fund clients are inherently different products due to the following differences, among others: (i) different types of targeted investors; (ii) different applicable laws and regulations; (iii) different legal structures; (iv) different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; (v) the time spent by portfolio managers and their teams (among other personnel across various departments, including legal, compliance and risk management) in reviewing securities pricing and fund liquidity; (vi) different administrative responsibilities; (vii) different degrees of risk associated with management; and (viii) a variety of different costs. The Board also considered information regarding the differences in the nature of the services required for Federated Hermes to manage its proprietary registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s registered fund, noting the CCO’s view that Federated Hermes generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Hermes Funds than in its role as sub-adviser to an unaffiliated third-party registered fund. The Board noted that the CCO did not consider the fees for providing advisory services to other types of clients to be determinative in judging the appropriateness of the Federated Hermes Funds’ advisory fees.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
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Profitability
The Board received and considered profitability information furnished by Federated Hermes, as requested by the CCO. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made on a fund-by-fund basis, using allocation methodologies specified by the CCO and described to the Board. The Board considered the CCO’s view that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs on a fund-by-fund basis continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable because a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Hermes Fund and may produce unintended consequences. In addition, the Board considered the CCO’s view that the allocation methodologies used by Federated Hermes in estimating profitability for purposes of reporting to the Board in connection with the continuation of the Contract are consistent with the methodologies previously reviewed by an independent consultant. The Board noted that the independent consultant had previously conducted a review of the allocation methodologies and reported that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
The Board also reviewed information compiled by Federated Hermes comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. The Board considered the CCO’s conclusion that, based on such profitability information, Federated Hermes’ profit margins did not appear to be excessive. The Board also considered the CCO’s view that Federated Hermes appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Federated Hermes Funds.
Economies of Scale
The Board received and considered information about the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as: personnel, processes and tools for portfolio management, including the use of market data on which portfolio managers make investment decisions; trading operations; ESG integration and issuer engagement on ESG matters; shareholder services; compliance; business continuity; cybersecurity; internal audit and risk management functions; and technology that supports the provision of investment management services. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared
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with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense reimbursements are another means for potential economies of scale to be shared with shareholders and can provide protection from an increase in expenses if a Federated Hermes Fund’s assets decline. The Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered Federated Hermes’ reductions in contractual management fees for certain Federated Hermes Funds during the prior year, including in response to the CCO’s recommendations in the prior year’s CCO Fee Evaluation Report, which have resulted in benefits being realized by shareholders.
The Board also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to evaluate the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund advisory fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. The Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds’ investment advisory contracts, Federated Hermes’ affiliates also receive fees for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of Federated Hermes’ affiliates provide distribution and shareholder services to the Federated Hermes Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The Board also received and considered information detailing any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
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Conclusions
The Board considered: (i) the CCO’s conclusion that his observations and the information accompanying the CCO Fee Evaluation Report show that the management fee for the Fund is reasonable; and (ii) the CCO’s recommendation that the Board approve the management fee. The Board noted that, under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Contract by the CCO. The CCO also recognized that the Board’s evaluation of the Federated Hermes Funds’ advisory and sub-advisory arrangements is a continuing and ongoing process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its ongoing oversight of the Federated Hermes Funds.
On the basis of the information and factors summarized above, among other information and factors deemed relevant by the Board, and the evaluation thereof, the Board, including the Independent Trustees, unanimously voted to approve the continuation of the Contract. The Board based its determination to approve the Contract on the totality of the circumstances and relevant factors and with a view of past and future long-term considerations. Not all of the factors and considerations identified above were necessarily deemed to be relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes Municipal Securities Income Trust (the Trust) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes Municipal High Yield Advantage Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of each Federated Hermes Fund’s investment adviser as the administrator for the Program (the “Administrator”) with respect to that Fund. The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2022, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2021 through March 31, 2022 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind, reverse repurchase agreement transactions, redemptions
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delayed beyond the normal T+1 settlement, but within seven days of the redemption request, and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
◾ confirmation that it was not necessary for the Fund to utilize, and the Fund did not utilize, alternative funding sources during the Period;
◾ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
◾ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
◾ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
◾ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit;
◾ the fact that there were no liquidity events during the Period, that materially affected the Fund’s liquidity risk;
◾ the impact on liquidity and management of liquidity risk caused by extended non-U.S. market closures and confirmation that there were no issues for any of the affected Federated Hermes Funds in meeting shareholder redemptions at any time during these temporary non-U.S. market closures;
◾ circumstances during the Period under which the Administrator convened meetings of the Liquidity Risk Management Committees more frequently than normal to conduct enhanced liquidity risk monitoring, including prior to the Russian invasion of Ukraine.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400, Option #4. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund’s Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.
  
 
Federated Hermes Municipal High Yield Advantage Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 313923864
CUSIP 313923856
CUSIP 313923849
CUSIP 313923831
CUSIP 313923815
G01091-01 (10/22)
© 2022 Federated Hermes, Inc.
 
Annual Shareholder Report
August 31, 2022
 
 
Share Class | Ticker
A | OMIAX
F | OMIFX
Institutional | OMIIX
 
Federated Hermes Ohio Municipal Income Fund
Fund Established 1990
A Portfolio of Federated Hermes Municipal Securities Income Trust
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from September 1, 2021 through August 31, 2022. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,
 
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Ohio Municipal Income Fund (the “Fund”), based on net asset value for the 12-month reporting period ended August 31, 2022, was -8.22% for Class A Shares, -8.44% for Class F Shares and -8.07% for Institutional Shares. The -8.07% total return of the Institutional Shares for the reporting period consisted of 2.18% of tax-exempt dividends and reinvestments and price depreciation of -10.25% in the net asset value of the shares.1 The total return of the S&P Municipal Bond Ohio Index (the “OH Index”),2 the Fund’s broad-based securities market index, was -8.41% during the same period. The total return for the S&P Municipal Bond OH, Investment Grade Index (OHIG),3 a secondary index for the Fund, was -7.95%, and the total return of the Morningstar Muni Ohio Funds Average (MMOFA),4 a peer group average for the Fund, was -9.07% during the same period. The Fund’s and the MMOFA’s total return for the most recently completed fiscal year reflected actual cash flows, transaction costs and expenses, which were not reflected in the total return of the OH Index and OHIG.
During the reporting period, the most significant factors affecting the Fund’s performance relative to the OHIG were (a) security selection; (b) the sensitivity of the portfolio to changing interest rates, including portfolio duration and the allocation of securities across the municipal yield curve (the level of interest rates across maturities);5,6,7 (c) the credit quality of portfolio securities;8 (d) the allocation of the Fund’s portfolio among securities of similar issuers (referred to as “sectors”).
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the OHIG.
MARKET overview
The emergence of the highest U.S. inflation in over 40 years drove Treasury and Municipal yields sharply higher during the reporting period. The Federal Reserve (the “Fed”) had incorrectly dismissed the rising inflation to transitory factors during much of 2021, keeping their policy rates near zero to support the ongoing expansion of the U.S. economy. While the U.S. economy expanded slowly and the unemployment rate declined from 5.2% to 3.7% over the reporting period, the rate of inflation increased rapidly. The year-over-year change in the U.S. Consumer Price Index rose from an elevated 5.3% in August 2021 to a 41-year peak of 9.1% in June 2022. In response, the Fed rapidly refocused on its price stability mandate, tightening monetary policy by raising the upper bound of the federal funds target rate from 0.25%, where it stood for the first half of the reporting period, to 2.50% by August 2022. The
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yield on the 10-year U.S. Treasury ended the reporting period at 3.20%, up 188 basis points (bp). Municipal yields increased sharply as well, with 2-, 5-, 10- and 30-year “AAA” municipal yields from Bloomberg Evaluation Services increasing 221 bp, 190 bp, 167 bp and 178 bp, respectively, over the period.
The sharp increase in municipal bond yields depressed prices and produced negative total returns for municipal bond portfolios. Municipal mutual funds experienced heavy net redemptions as investors reacted to the losses. Municipal credit spreads, the yield advantage on mid- and low-quality bonds relative to high-quality bonds, widened somewhat during the second half of the period amid concerns that the inflation shock and the Fed’s rapid monetary tightening would precipitate recession within the coming year. Widening credit spreads increased losses on mid- and lower-quality bonds relative to higher-quality bonds.
The total return of OHIG for the period of -7.95% was generally comparable to the -8.08% total return of the national S&P Municipal Bond Index (SPMBI)9 for the period. The credit ratings of the State of Ohio held stable in the high grade (“AA+” or higher) quality ranges during the period. Moody’s, S&P and Fitch ratings were “Aa1”/”AA+”/”AAA”, respectively, at period end. These ratings are above average for U.S. States at each ratings agency, largely reflecting Ohio’s strong budgetary and financial management, sound reserve levels and affordable fixed costs associated with below-average long-term debt, pension and retiree healthcare (OPEB) liabilities relative to other U.S. States.
SECURITY SELECTION
Individual security selection contributed significantly to positive performance relative to the OHIG during the reporting period, as the Fund’s relative total return was stronger than could be explained by duration, yield curve, sector allocation and credit quality characteristics. For example, the Fund’s significant weighting in bonds with 5% coupons or higher contributed to favorable relative return. Higher coupon bonds faced less risk of pricing below par and less risk of extending duration as yields increased compared to lower coupon bonds.
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2
DURATION and Yield Curve
Active management of fund duration contributed favorably to the Fund’s performance relative to the OHIG over the period. The Fund maintained a portfolio duration below that of the OHIG to varying degrees through the reporting period, decreasing the Fund’s relative sensitivity to sharply rising municipal bond yields and providing significant positive contribution to relative return. However, the allocation of portfolio holdings along the municipal yield curve detracted somewhat from relative performance.
credit QUALITY
The allocation of the Fund’s portfolio across the credit quality spectrum modestly detracted from the Fund’s performance relative to the OHIG during the reporting period. The Fund’s underweight position in “BBB”-rated securities was a positive contributor, however an overweight position to “A”-rated securities and a moderate weighting in out-of-index below-investment-grade securities10 detracted from relative performance as the late-period widening of credit spreads depressed returns. Underweight exposure to “AA”- and higher-rated bonds also detracted from relative performance as such securities outperformed.
SECTOR allocation
The Fund’s sector allocation had a net negative impact on relative performance during the period. Overweight exposure to underperforming Dedicated Tax, Industrial Revenue, Hospital and Senior Care sectors and underweight exposure to outperforming Utility bonds accounted for most of the negative impact of sector allocation. Overweight exposure to outperforming Pre-refunded, Local GO and Toll Road securities provided a partial, favorable contribution.
Annual Shareholder Report
3
1
Income may be subject to the alternative minimum tax for individuals (AMT).
2
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the OH Index.
3
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the OHIG. The Fund’s secondary index is being used for comparison purposes because, while it is not the Fund’s broad-based securities market index, the Fund’s investment adviser (the “Adviser”) believes it more closely reflects the securities in which the Fund invests.
4
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Morningstar peer group.
5
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.
6
Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
7
The yield curve is a graph showing the comparative yields of securities in a particular class according to maturity. Securities on the long-end of the yield curve have longer maturities.
8
Credit ratings pertain only to the securities in the portfolio and do not protect Fund shares against market risk.
9
The SPMBI is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the AMT. Eligibility criteria for inclusion in the SPMBI include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The SPMBI is rebalanced monthly. The SPMBI is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. Unlike the Fund, the SPMBI is unmanaged and is not affected by cash flows. It is not possible to invest directly in this index.
10
Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the Fund’s Adviser believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard and Poor’s, Moody’s Investor Services, Inc. and Fitch Rating Service. When ratings vary, the highest rating is used. Credit ratings of “AA” or better are considered to be high credit quality; credit ratings of “A” are considered high or medium/good quality; and credit ratings of “BBB” are considered to be medium/good credit quality, and the lowest category of investment-grade securities; credit ratings of “BB” and below are lower-rated, noninvestment-grade securities or junk bonds; and credit ratings of “CCC” or below are noninvestment-grade securities that have high default risk. Any credit quality breakdown does not give effect to the impact of any credit derivative investments made by the Fund. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
Annual Shareholder Report
4
FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in Federated Hermes Ohio Municipal Income Fund (the “Fund”) from August 31, 2012 to August 31, 2022, compared to the S&P Municipal Bond Ohio Index (OH Index),2 the S&P Municipal Bond OH, Investment Grade Index (OHIG)3 and Morningstar Muni Ohio Funds Average (MMOFA).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
GROWTH OF A $10,000 INVESTMENT
Growth of $10,000 as of August 31, 2022
 
◾ Total returns shown for Class A Shares include the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550)
◾ Total returns shown for Class F Shares include the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900), and maximum contingent deferred sales charge of 1.00% as applicable.
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses.
Annual Shareholder Report
5
Average Annual Total Returns for the Period Ended 8/31/2022
(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
-12.34%
-0.15%
1.26%
Class F Shares
-10.27%
0.42%
1.46%
Institutional Shares5
-8.07%
0.88%
1.78%
OH Index
-8.41%
1.79%
2.99%
OHIG
-7.95%
1.20%
2.36%
MMOFA
-9.07%
0.81%
1.80%
 
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: for Class A Shares, the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550); for Class F Shares, the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900); and the maximum contingent deferred sales charge is 1.00% on any redemption less than four years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The OH Index, OHIG and MMOFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.
2
The OH Index consists of bonds in the S&P Municipal Bond Index (Main Index) that have been issued by the state of Ohio or local governments or state or local government entities within Ohio. The Main Index is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the AMT. Eligibility criteria for inclusion in the Main Index include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The Main Index is rebalanced monthly. The Ohio Index is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. The OH Index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
Annual Shareholder Report
6
3
The OHIG represents the portion of the OH Index composed solely of bonds that are rated at least “BBB-/Baa3” or higher. The OHIG is not adjusted to reflect sales charges, expenses and other fees that the SEC requires to be reflected in the Fund’s performance. The OHIG is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of a $10,000 investment line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
The Fund’s Institutional Shares commenced operations on April 28, 2020. For the period prior to the commencement of operations of Institutional Shares, the performance information shown for the Fund’s Institutional Shares is for the Class F Shares. The performance of the Class F Shares has not been adjusted to reflect the expenses of the Institutional Shares, since the Institutional Shares have a lower expense ratio than the expense ratio of Class F Shares. The performance of Class F has been adjusted to reflect the absence of sales charges and to remove any voluntary waiver of Fund expenses related to Class F Shares that may have occurred during the periods prior to commencement of operations of the Institutional Shares.
Annual Shareholder Report
7
Portfolio of Investments Summary Table (unaudited)
At August 31, 2022, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
Hospital
18.3%
General Obligation—Local
14.2%
Higher Education
10.3%
General Obligation—State
8.2%
Pre-Refunded
7.5%
General Obligation- State Appropriation
7.3%
Dedicated Tax
7.1%
Toll Road
6.6%
Water & Sewer
5.5%
Public Power
4.3%
Other2
9.8%
Other Assets and Liabilities—Net3
0.9%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. For securities that have been enhanced by a third-party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. Pre-refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2
For purposes of this table, sector classifications constitute 89.3% of the Fund’s total net assets. Remaining sectors have been aggregated under the designation “Other.”
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Annual Shareholder Report
8
Portfolio of Investments
August 31, 2022 
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—98.3%
 
 
 
Ohio—96.4%
 
$1,000,000
 
Akron, Bath & Copley, OH Joint Township Hospital District
(Children’s Hospital Medical Center, Akron), Hospital Refunding
Revenue Bonds (Series 2002A), (Original Issue Yield: 4.120%),
4.000%, 11/15/2042
$942,639
325,000
 
Akron, Bath & Copley, OH Joint Township Hospital District
(Children’s Hospital Medical Center, Akron), Hospital Refunding
Revenue Bonds (Series 2002A), 5.000%, 11/15/2038
356,340
1,000,000
 
Akron, Bath & Copley, OH Joint Township Hospital District
(Summa Health System), Hospital Facilities Revenue Bonds
(Series 2016), 5.250%, 11/15/2041
1,030,116
900,000
 
Allen County, OH (Bon Secours Mercy Health), Hospital Facilities
Revenue Refunding Bonds, 4.000%, 8/1/2047
859,915
1,000,000
 
Allen County, OH (Bon Secours Mercy Health), Hospital Facilities
Revenue Refunding Bonds, 5.000%, 11/1/2043
1,025,123
1,000,000
 
American Municipal Power-Ohio, Inc. (American Municipal Power,
Prairie State Energy Campus Project), Refunding Revenue Bonds
(Series 2015A), 5.000%, 2/15/2042
1,019,461
2,250,000
 
American Municipal Power-Ohio, Inc. (American Municipal Power,
Prairie State Energy Campus Project), Revenue Bonds
(Series 2015A), 5.000%, 2/15/2029
2,317,959
1,000,000
 
American Municipal Power-Ohio, Inc. (AMP—Combined
Hydroelectric Projects), Revenue Refunding Bonds
(Series 2020A), 5.000%, 2/15/2029
1,130,169
750,000
 
American Municipal Power-Ohio, Inc. (AMP Fremont Energy),
Revenue Refunding Bonds (Series 2021A), 5.000%, 2/15/2034
845,533
2,000,000
 
Bowling Green State University, OH, General Receipts Bonds
(Series 2016A), 5.000%, 6/1/2044
2,071,987
2,000,000
 
Buckeye Tobacco Settlement Financing Authority, OH, Tobacco
Settlement Asset-Backed Refunding Bonds
(Series 2020B-2 Class 2), 5.000%, 6/1/2055
1,901,981
2,000,000
 
Butler County, OH Hospital Facilities Authority (UC Health),
Revenue Bonds (Series 2016), 5.000%, 11/15/2045
2,058,700
3,000,000
 
Cincinnati, OH Water System, Revenue Bonds (Series 2015A),
(United States Treasury PRF 12/1/2025@100), 5.000%, 12/1/2040
3,243,220
1,255,000
 
Cleveland Heights & University Heights, OH City School District,
School Improvement UT GO Bonds (Series 2014), (United States
Treasury PRF 6/1/2023@100), 5.000%, 12/1/2051
1,279,919
250,000
 
Cleveland, OH (Cleveland, OH Water), Water Revenue Bonds
(Series 2020FF), 5.000%, 1/1/2033
282,995
1,000,000
 
Cleveland, OH Income Tax (Cleveland, OH), Subordinate Lien
Income Tax Public Facilities Improvements Refunding Bonds
(Series 2017B), 5.000%, 10/1/2030
1,112,543
Annual Shareholder Report
9
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Ohio—continued
 
$1,000,000
 
Cleveland, OH Municipal School District, School Improvement UT
GO Bonds (Series 2015A), (Ohio School District Credit
Enhancement GTD), 5.000%, 12/1/2033
$1,011,287
1,000,000
 
Cleveland, OH, Various Purpose GO Bonds (Series 2022A),
5.000%, 12/1/2051
1,091,871
2,000,000
 
Columbus, OH City School District, School Facilities Construction
& Improvement UT GO Bonds (Series 2017), 5.000%, 12/1/2047
2,132,125
1,000,000
 
Columbus, OH Sewer System, Revenue Refunding Bonds
(Series 2014), 5.000%, 6/1/2031
1,050,247
2,270,000
 
Columbus, OH, UT GO Bonds (Series 2021A), 5.000%, 4/1/2039
2,528,785
1,875,000
 
Columbus, OH, UT GO Various Purpose Bonds (Series 2022A),
5.000%, 4/1/2034
2,190,068
250,000
 
Columbus, OH, UT GO Various Purpose Bonds (Series 2022A),
5.000%, 4/1/2038
283,964
1,270,000
 
Cuyahoga County, OH Hospital Authority (MetroHealth System),
Hospital Revenue Bonds (Series 2017), 5.500%, 2/15/2057
1,314,835
1,405,000
 
Cuyahoga County, OH Sales Tax, Ballpark Improvement Sales Tax
Revenue Bonds (Series 2022A), 4.000%, 1/1/2034
1,465,163
1,000,000
 
Cuyahoga County, OH, Certificates of Participation Convention
Hotel Project (Series 2014), 5.000%, 12/1/2036
1,024,556
2,000,000
 
Fairfield County, OH, LT GO Bonds (Series 2015),
4.000%, 12/1/2040
2,002,558
1,000,000
 
Franklin County, OH (Trinity Healthcare Credit Group), Revenue
Bonds (Series 2017), 4.000%, 12/1/2046
933,488
2,000,000
 
Franklin County, OH (Trinity Healthcare Credit Group), Revenue
Bonds (Series 2017A), 5.000%, 12/1/2047
2,111,856
1,000,000
 
Franklin County, OH Convention Facilities Authority (Greater
Columbus Convention Center Hotel), Hotel Project Revenue
Bonds (Series 2019), 5.000%, 12/1/2044
1,005,587
2,000,000
 
Franklin County, OH Convention Facilities Authority, Tax & Lease
Revenue Anticipation & Refunding Bonds (Series 2014), (United
States Treasury PRF 12/1/2024@100), 5.000%, 12/1/2035
2,113,964
1,000,000
 
Franklin County, OH Health Care Facilities (Friendship Village of
Dublin, OH, Inc.), Refunding & Improvement Bonds (Series 2014),
5.000%, 11/15/2044
1,015,340
1,000,000
 
Franklin County, OH Hospital Facility Authority (Nationwide
Children’s Hospital), Hospital Improvement Revenue Bonds
(Series 2017A), 5.000%, 11/1/2029
1,105,698
1,000,000
 
Franklin County, OH Hospital Facility Authority (OhioHealth
Corp.), Hospital Facilities Revenue Bonds (Series 2015),
5.000%, 5/15/2040
1,032,808
3,015,000
 
Franklin County, OH Sales Tax Revenue, Various Purpose Sales
Tax Revenue Bonds (Series 2018), 5.000%, 6/1/2048
3,270,860
Annual Shareholder Report
10
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Ohio—continued
 
$2,000,000
 
Hamilton County, OH (Cincinnati Children’s Hospital Medical
Center), Hospital Facilities Revenue Bonds (Series 2019CC),
5.000%, 11/15/2041
$2,279,367
500,000
 
Hamilton County, OH (Life Enriching Communities), Healthcare
Improvement and Refunding Revenue Bonds (Series 2016),
5.000%, 1/1/2036
496,603
500,000
 
Hamilton County, OH (Life Enriching Communities), Healthcare
Improvement and Refunding Revenue Bonds (Series 2016),
5.000%, 1/1/2051
476,683
2,000,000
 
Hamilton County, OH Convention Facilities Authority, Convention
Facilities Authority Revenue & Refunding Bonds (Series 2014),
5.000%, 12/1/2032
2,044,765
1,075,000
 
Hamilton County, OH, LT GO Improvement and Refunding Bonds
(Series 2017A), 5.000%, 12/1/2033
1,179,819
1,000,000
 
Hamilton County, OH, LT GO Refunding Bonds (Series 2017A),
5.000%, 12/1/2037
1,088,883
1,000,000
 
Kent State University, OH, General Receipts Bonds
(Series 2020A), 5.000%, 5/1/2050
1,069,250
1,000,000
 
Miami County, OH Hospital Facility (Kettering Health Network
Obligated Group), Hospital Facilities Revenue Refunding and
Improvement Bonds (Series 2019), 5.000%, 8/1/2049
1,035,507
1,000,000
 
Middleburg Heights, OH (Southwest General Health Center),
Hospital Facilities Improvement and Revenue Refunding Bonds
(Series 2020A), 4.000%, 8/1/2047
904,673
1,000,000
 
Montgomery County, OH Hospital Authority (Kettering Health
Network Obligated Group), Hospital Facilities Improvement and
Refunding Revenue Bonds (Series 2021), 4.000%, 8/1/2051
918,924
1,200,000
1
Ohio Air Quality Development Authority (AMG Vanadium LLC),
Exempt Facilities Revenue Bonds (Series 2019), 5.000%, 7/1/2049
1,132,301
500,000
 
Ohio Air Quality Development Authority (Pratt Paper, LLC),
Exempt Facilities Revenue Bonds (Series 2017),
4.250%, 1/15/2038
499,419
500,000
 
Ohio Air Quality Development Authority (Pratt Paper, LLC),
Exempt Facilities Revenue Bonds (Series 2017),
4.500%, 1/15/2048
500,444
435,000
 
Ohio HFA, Residential Mortgage Revenue Bonds (Series 2019A),
(GNMA Collateralized Home Mortgage Program COL),
4.000%, 3/1/2049
424,980
1,000,000
 
Ohio State (Judson Obligated Group), Healthcare Facility
Revenue Bonds (Series 2020A), 5.000%, 12/1/2050
998,420
1,000,000
 
Ohio State Air Quality Development Authority (American Electric
Power Co., Inc.), Air Quality Revenue Bonds (Series 2007B) TOBs,
2.500%, Mandatory Tender 10/1/2029
907,639
200,000
 
Ohio State Higher Educational Facility Commission (Ashtabula
County Medical Center), Healthcare Facility Revenue Bonds
(Series 2022), 5.250%, 1/1/2052
209,710
Annual Shareholder Report
11
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Ohio—continued
 
$1,000,000
 
Ohio State Higher Educational Facility Commission (Case
Western Reserve University, OH), Revenue Refunding Bonds
(Series 2016), 5.000%, 12/1/2040
$1,062,801
1,500,000
 
Ohio State Higher Educational Facility Commission (Cleveland
Clinic), Revenue Bonds (Series 2019B), 4.000%, 1/1/2042
1,460,038
1,000,000
 
Ohio State Higher Educational Facility Commission (Denison
University), Revenue Bonds (Series 2019), 5.000%, 11/1/2044
1,076,339
2,000,000
 
Ohio State Higher Educational Facility Commission (Kenyon
College, OH), Higher Educational Facility Revenue Bonds
(Series 2015), 5.000%, 7/1/2041
2,044,606
1,000,000
 
Ohio State Higher Educational Facility Commission (University of
Dayton), Revenue Bonds (Series 2022A), (Original Issue Yield:
4.240%), 4.000%, 2/1/2052
878,552
500,000
 
Ohio State Higher Educational Facility Commission (University of
Dayton), Revenue Bonds (Series 2022A), 5.000%, 2/1/2052
531,093
345,000
 
Ohio State Higher Educational Facility Commission (Xavier
University), Higher Educational Facility Revenue Bonds
(Series 2020), 4.000%, 5/1/2037
326,966
1,025,000
 
Ohio State Higher Educational Facility Commission (Xavier
University), Higher Educational Facility Revenue Bonds
(Series 2020), 4.000%, 5/1/2039
956,873
2,000,000
 
Ohio State Hospital Revenue (University Hospitals Health System,
Inc.), Hospital Revenue Bonds (Series 2016A), 5.000%, 1/15/2046
2,062,314
3,325,000
 
Ohio State Treasurer (Portsmouth Gateway Group LLC), Private
Activity Revenue Bonds (Series 2015), 5.000%, 12/31/2039
3,387,464
350,000
 
Ohio State Turnpike & Infrastructure Commission, Revenue
Refunding Bonds (Series 2017A), 5.000%, 2/15/2028
386,178
2,000,000
 
Ohio State Turnpike & Infrastructure Commission, Senior Lien
Revenue Bonds (Series 2021A), 5.000%, 2/15/2046
2,194,696
1,400,000
 
Ohio State Turnpike & Infrastructure Commission, Senior Lien
Revenue Bonds (Series 2021A), 5.000%, 2/15/2051
1,530,739
1,000,000
 
Ohio State Turnpike & Infrastructure Commission, Turnpike Junior
Lien Revenue Bonds (Series 2013A-1), (Original Issue Yield:
5.050%), (United States Treasury PRF 2/15/2023@100),
5.000%, 2/15/2048
1,010,914
685,000
 
Ohio State Turnpike & Infrastructure Commission, Turnpike
Revenue Refunding Bonds (Series 1998A), (National Re Holdings
Corp. INS), 5.500%, 2/15/2024
705,088
500,000
 
Ohio State University, General Receipts Bonds (Series 2021A),
4.000%, 12/1/2048
482,403
2,000,000
 
Ohio State Water Development Authority Pollution Control
Facilities (Ohio State Water Development Authority), Loan Fund
Revenue Bonds (Series 2017A), 5.000%, 12/1/2030
2,210,782
1,000,000
 
Ohio State Water Development Authority, Water Development
Revenue Bonds (Fresh Water Series 2016B), 5.000%, 6/1/2037
1,079,226
Annual Shareholder Report
12
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Ohio—continued
 
$1,000,000
 
Ohio State, Capital Facilities Lease Appropriation Bonds Adult
Correctional Building Fund Project (Series 2019B),
5.000%, 10/1/2032
$1,176,409
2,000,000
 
Ohio State, Capital Facilities Lease Appropriation Bonds Parks
and Recreation Improvement Fund Projects (Series 2016C),
5.000%, 12/1/2031
2,175,939
3,000,000
 
Ohio State, Capital Facilities Lease-Appropriation Bonds
(Series 2016A), 5.000%, 2/1/2030
3,228,540
750,000
 
Ohio State, Capital Facilities Lease-Appropriation Bonds Adult
Correctional Building Fund (Series 2017A), 5.000%, 10/1/2034
819,807
1,460,000
 
Ohio State, Capital Facilities Lease-Appropriation Bonds Adult
Correctional Building Fund (Series 2017A), 5.000%, 10/1/2035
1,590,145
1,835,000
 
Ohio State, Common Schools UT GO Bonds (Series 2019A),
5.000%, 6/15/2033
2,068,736
1,475,000
 
Ohio State, Common Schools UT GO Bonds (Series 2021A),
4.000%, 6/15/2037
1,512,477
3,000,000
 
Ohio State, Higher Education UT GO Bonds (Series 2015C),
5.000%, 11/1/2033
3,163,151
1,000,000
 
Ohio State, Higher Education UT GO Bonds (Series 2019A),
(United States Treasury PRF 5/1/2027@100), 5.000%, 5/1/2039
1,113,456
3,000,000
 
Ohio State, Higher Education UT GO Bonds (Series 2019A),
5.000%, 5/1/2035
3,256,139
1,500,000
 
Olentangy, OH Local School District, UT GO Refunding Bonds
(Series 2016), 5.000%, 12/1/2030
1,608,001
470,000
 
River Valley, OH Local School District, UT GO School Facilities
Bonds, (School District Credit Program GTD), 5.250%, 11/1/2023
484,182
1,135,000
 
Shaker Heights, OH, UT GO Bonds, 4.000%, 12/1/2052
1,124,470
500,000
 
Switzerland, OH Local School District, UT GO School
Improvement Refunding Bonds, (United States Treasury PRF
6/1/2023@100), 5.000%, 12/1/2027
509,740
1,000,000
 
Toledo, OH Water System, Revenue Bonds (Series 2020),
5.000%, 11/15/2033
1,140,801
1,000,000
 
Toledo, OH Water System, Revenue Improvement and Refunding
Bonds (Series 2013), 5.000%, 11/15/2032
1,018,415
1,000,000
 
University of Akron, OH, General Receipts Bonds (Series 2016A),
5.000%, 1/1/2036
1,063,837
1,000,000
 
University of Cincinnati, OH, General Receipts Bonds
(Series 2014C), 5.000%, 6/1/2041
1,026,442
760,000
 
Winton Woods, OH School District, UT GO Classroom Facilities
Refunding Bonds (Series 2022), (Build America Mutual Assurance
INS), 4.000%, 11/1/2049
731,584
 
 
TOTAL
118,530,390
Annual Shareholder Report
13
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Puerto Rico—1.6%
 
$2,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A), (Original Issue Yield: 5.154%),
5.000%, 7/1/2058
$1,935,213
 
 
Virgin Islands—0.3%
 
345,000
 
Matching Fund Special Purpose Securitization Corporation, VI,
Matching Fund Securitization Bonds (Series 2022A),
5.000%, 10/1/2039
357,315
 
 
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $125,598,574)
120,822,918
 
2
SHORT-TERM MUNICIPALS—0.8%
 
 
 
Ohio—0.8%
 
750,000
 
Allen County, OH (Bon Secours Mercy Health), (Series 2010C)
Daily VRDNs, (BMO Harris Bank, N.A. LOC), 1.120%, 9/1/2022
750,000
150,000
 
Ohio State Higher Educational Facility Commission (Cleveland
Clinic), (Series 2008 B-4) Daily VRDNs, (Barclays Bank plc LIQ),
1.080%, 9/1/2022
150,000
 
 
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $900,000)
900,000
 
 
TOTAL INVESTMENT IN SECURITIES—99.1%
(IDENTIFIED COST $126,498,574)3
121,722,918
 
 
OTHER ASSETS AND LIABILITIES - NET—0.9%4
1,166,611
 
 
TOTAL NET ASSETS—100%
$122,889,529
Securities that are subject to the federal alternative minimum tax (AMT) represent 4.5% of the Fund’s portfolio as calculated based upon total market value.
1
Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or availing of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At August 31, 2022, these restricted securities amounted to $1,132,301, which represented 0.9% of total net assets.
2
Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
3
The cost of investments for federal tax purposes amounts to $126,489,575.
4
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of total net assets at August 31, 2022.
Annual Shareholder Report
14
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of August 31, 2022, all investments of the Fund utilized Level 2 inputs in valuing the Fund’s assets carried at fair value.
The following acronym(s) are used throughout this portfolio: 
COL
—Collateralized
GNMA
—Government National Mortgage Association
GO
—General Obligation
GTD
—Guaranteed
HFA
—Housing Finance Authority
INS
—Insured
LIQ
—Liquidity Agreement
LOC
—Letter of Credit
LT
—Limited Tax
PRF
—Pre-refunded
TOBs
—Tender Option Bonds
UT
—Unlimited Tax
VRDNs
—Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
15
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$11.50
$11.40
$11.44
$10.95
$11.23
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.27
0.25
0.26
0.30
0.32
Net realized and unrealized gain (loss)
(1.21)
0.09
(0.02)
0.49
(0.29)
TOTAL FROM INVESTMENT OPERATIONS
(0.94)
0.34
0.24
0.79
0.03
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.23)
(0.24)
(0.26)
(0.30)
(0.31)
Distributions from net realized gain
(0.01)
—
(0.02)
—
—
TOTAL DISTRIBUTIONS
(0.24)
(0.24)
(0.28)
(0.30)
(0.31)
Net Asset Value, End of Period
$10.32
$11.50
$11.40
$11.44
$10.95
Total Return1
(8.22)%
2.99%
2.17%
7.32%
0.27%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses2
0.77%
0.77%
0.77%3
0.77%3
0.77%3
Net investment income
2.09%
2.08%
2.27%
2.67%
2.81%
Expense waiver/reimbursement4
0.19%
0.19%
0.19%
0.19%
0.17%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$22,235
$44,097
$58,253
$57,065
$53,438
Portfolio turnover5
17%
5%
8%
15%
9%
1
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
2
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
3
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.77%, 0.77% and 0.77% for the years ended August 31, 2020, 2019 and 2018, after taking into account these expense reductions.
4
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
5
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
16
Financial Highlights–Class F Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$11.51
$11.40
$11.44
$10.95
$11.23
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.21
0.22
0.24
0.28
0.29
Net realized and unrealized gain (loss)
(1.18)
0.11
(0.02)
0.49
(0.28)
TOTAL FROM INVESTMENT OPERATIONS
(0.97)
0.33
0.22
0.77
0.01
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.21)
(0.22)
(0.24)
(0.28)
(0.29)
Distributions from net realized gain
(0.01)
—
(0.02)
—
—
TOTAL DISTRIBUTIONS
(0.22)
(0.22)
(0.26)
(0.28)
(0.29)
Net Asset Value, End of Period
$10.32
$11.51
$11.40
$11.44
$10.95
Total Return1
(8.44)%
2.93%
2.01%
7.15%
0.12%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses2
0.92%
0.92%
0.92%3
0.92%3
0.92%3
Net investment income
1.94%
1.93%
2.12%
2.53%
2.66%
Expense waiver/reimbursement4
0.44%
0.44%
0.44%
0.44%
0.42%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$58,194
$74,669
$81,508
$87,597
$92,665
Portfolio turnover5
17%
5%
8%
15%
9%
1
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
2
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
3
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.92%, 0.92% and 0.92% for the years ended August 31, 2020, 2019 and 2018, after taking into account these expense reductions.
4
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
5
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
20201
Net Asset Value, Beginning of Period
$11.51
$11.40
$11.06
Income From Investment Operations:
 
 
 
Net investment income
0.26
0.26
0.08
Net realized and unrealized gain (loss)
(1.18)
0.11
0.35
TOTAL FROM INVESTMENT OPERATIONS
(0.92)
0.37
0.43
Less Distributions:
 
 
 
Distributions from net investment income
(0.26)
(0.26)
(0.09)
Distributions from net realized gain
(0.01)
—
—
TOTAL DISTRIBUTIONS
(0.27)
(0.26)
(0.09)
Net Asset Value, End of Period
$10.32
$11.51
$11.40
Total Return2
(8.07)%
3.32%
3.90%
Ratios to Average Net Assets:
 
 
 
Net expenses3
0.52%
0.52%
0.52%4,5
Net investment income
2.34%
2.32%
2.40%4
Expense waiver/reimbursement6
0.19%
0.19%
0.24%4
Supplemental Data:
 
 
 
Net assets, end of period (000 omitted)
$42,461
$37,120
$6,652
Portfolio turnover7
17%
5%
8%8
1
Reflects operations for the period from April 28, 2020 (date of initial investment) to August 31, 2020.
2
Based on net asset value. Total returns for periods of less than one year are not annualized.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
Computed on an annualized basis.
5
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.52% for the period ended August 31, 2020, after taking into account this expense reduction.
6
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
7
Securities that mature are considered sales for purposes of this calculation.
8
Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the fiscal year ended August 31, 2020.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
18
Statement of Assets and Liabilities
August 31, 2022
 
Assets:
 
 
Investment in securities, at value (identified cost $126,498,574)
 
$121,722,918
Cash
 
33,773
Income receivable
 
1,285,039
Receivable for shares sold
 
61,919
TOTAL ASSETS
 
123,103,649
Liabilities:
 
 
Payable for shares redeemed
$123,478
 
Payable for portfolio accounting fees
38,890
 
Payable for share registration costs
19,445
 
Payable for other service fees (Notes 2 and 5)
17,557
 
Payable for distribution services fee (Note 5)
7,636
 
Payable for investment adviser fee (Note 5)
599
 
Payable for administrative fee (Note 5)
541
 
Accrued expenses (Note 5)
5,974
 
TOTAL LIABILITIES
 
214,120
Net assets for 11,907,141 shares outstanding
 
$122,889,529
Net Assets Consists of:
 
 
Paid-in capital
 
$128,599,371
Total distributable earnings (loss)
 
(5,709,842)
TOTAL NET ASSETS
 
$122,889,529
Annual Shareholder Report
19
Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
 
Class A Shares:
 
 
Net asset value per share ($22,234,963 ÷ 2,154,778 shares outstanding),
no par value, unlimited shares authorized
 
$10.32
Offering price per share (100/95.50 of $10.32)
 
$10.81
Redemption proceeds per share
 
$10.32
Class F Shares:
 
 
Net asset value per share ($58,194,040 ÷ 5,637,851 shares outstanding),
no par value, unlimited shares authorized
 
$10.32
Offering price per share (100/99.00 of $10.32)
 
$10.42
Redemption proceeds per share (99.00/100 of $10.32)
 
$10.22
Institutional Shares:
 
 
Net asset value per share ($42,460,526 ÷ 4,114,512 shares outstanding),
no par value, unlimited shares authorized
 
$10.32
Offering price per share
 
$10.32
Redemption proceeds per share
 
$10.32
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
20
Statement of Operations
Year Ended August 31, 2022
 
Investment Income:
 
 
 
Interest
 
 
$4,098,603
Expenses:
 
 
 
Investment adviser fee (Note 5)
 
$571,842
 
Administrative fee (Note 5)
 
113,040
 
Custodian fees
 
11,326
 
Transfer agent fees
 
71,845
 
Directors’/Trustees’ fees (Note 5)
 
2,589
 
Auditing fees
 
30,410
 
Legal fees
 
8,307
 
Distribution services fee (Note 5)
 
269,075
 
Other service fees (Notes 2 and 5)
 
231,249
 
Portfolio accounting fees
 
117,728
 
Share registration costs
 
47,955
 
Printing and postage
 
24,188
 
Miscellaneous (Note 5)
 
25,224
 
TOTAL EXPENSES
 
1,524,778
 
Waivers:
 
 
 
Waiver of investment adviser fee (Note 5)
$(274,055)
 
 
Waiver of other operating expenses (Note 5)
(167,994)
 
 
TOTAL WAIVERS
 
(442,049)
 
Net expenses
 
 
1,082,729
Net investment income
 
 
3,015,874
Realized and Unrealized Gain (Loss) on Investments
and Futures Contracts:
 
 
 
Net realized loss on investments
 
 
(1,104,950)
Net realized gain on futures contracts
 
 
85,201
Net change in unrealized appreciation of investments
 
 
(14,374,409)
Net change in unrealized depreciation of futures contracts
 
 
4,695
Net realized and unrealized gain (loss) on investments and
futures contracts
 
 
(15,389,463)
Change in net assets resulting from operations
 
 
$(12,373,589)
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
21
Statement of Changes in Net Assets
 
Year Ended August 31
2022
2021
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$3,015,874
$3,114,185
Net realized gain (loss)
(1,019,749)
220,968
Net change in unrealized appreciation/depreciation
(14,369,714)
1,120,206
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
(12,373,589)
4,455,359
Distributions to Shareholders:
 
 
Class A Shares
(552,543)
(899,418)
Class F Shares
(1,400,409)
(1,499,989)
Institutional Shares
(1,266,437)
(709,696)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(3,219,389)
(3,109,103)
Share Transactions:
 
 
Proceeds from sale of shares
31,918,130
44,199,335
Net asset value of shares issued to shareholders in payment of
distributions declared
2,100,853
2,566,478
Cost of shares redeemed
(51,422,496)
(38,639,340)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(17,403,513)
8,126,473
Change in net assets
(32,996,491)
9,472,729
Net Assets:
 
 
Beginning of period
155,886,020
146,413,291
End of period
$122,889,529
$155,886,020
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
22
Notes to Financial Statements
August 31, 2022
1. ORGANIZATION
Federated Hermes Municipal Securities Income Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of the Federated Hermes Ohio Municipal Income Fund (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers three classes of shares: Class A Shares, Class F Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide current income exempt from federal regular income tax (federal regular income tax does not include the federal alternative minimum tax (AMT)) and the personal income taxes imposed by the State of Ohio and Ohio municipalities. Interest income from the Fund’s investments may be subject to the federal AMT for individuals.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
◾ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
◾ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
◾ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
◾ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
◾ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information
Annual Shareholder Report
23
furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income, if any, are declared and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net
Annual Shareholder Report
24
assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waivers of $442,049 is disclosed in various locations in Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares and Class F Shares to unaffiliated financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended August 31, 2022, other service fees for the Fund were as follows: 
 
Other Service
Fees Incurred
Class A Shares
$63,255
Class F Shares
167,994
TOTAL
$231,249
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended August 31, 2022, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of August 31, 2022, tax years 2019 through 2022 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
When-Issued and Delayed-Delivery Transactions
The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer’s expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted
Annual Shareholder Report
25
securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund’s restricted securities, like other securities, are priced in accordance with procedures established by and under the general supervision of the Trustees.
Additional information on restricted securities held at August 31, 2022, is as follows: 
Security
Acquisition
Date
Acquisition
Cost
Market
Value
Ohio Air Quality Development Authority (AMG Vanadium
LLC), Exempt Facilities Revenue Bonds (Series 2019),
5.000%, 7/1/2049
6/27/2019
$1,250,695
$1,132,301
Futures Contracts
The Fund purchases and sells financial futures contracts to manage duration risk and yield curve risk. Upon entering into a financial futures contract with a broker, the Fund is required to deposit with a broker, either U.S. government securities or a specified amount of cash, which is shown as due from broker in the Statement of Assets and Liabilities. Futures contracts are valued daily and unrealized gains or losses are recorded in a “variation margin” account. The Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. There is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearing house, as counterparty to all exchange traded futures contracts, guarantees the futures contracts against default.
At August 31, 2022, the Fund had no outstanding futures contracts.
The average notional value of long and short futures contracts held by the Fund throughout the period was $276,544 and $557,344, respectively. This is based on amounts held as of each month end throughout the fiscal period.
Annual Shareholder Report
26
Additional Disclosure Related to Derivative Instruments
The Effect of Derivative Instruments on the Statement of Operations for the Year Ended August 31, 2022 
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$85,201
 
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$4,695
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ materially from those estimated. The Fund applies investment company accounting and reporting guidance.
3. SHARES OF BENEFICIAL INTEREST
The following tables summarize share activity: 
Year Ended August 31
2022
2021
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
472,579
$5,211,841
947,848
$10,855,861
Shares issued to shareholders in payment of
distributions declared
50,245
547,960
42,399
485,594
Shares redeemed
(2,200,936)
(24,906,469)
(2,266,464)
(25,789,993)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
(1,678,112)
$(19,146,668)
(1,276,217)
$(14,448,538)
 
Year Ended August 31
2022
2021
Class F Shares:
Shares
Amount
Shares
Amount
Shares sold
65,755
$720,839
59,150
$677,021
Shares issued to shareholders in payment of
distributions declared
121,617
1,328,567
125,591
1,438,867
Shares redeemed
(1,037,865)
(11,235,840)
(843,313)
(9,675,619)
NET CHANGE RESULTING FROM CLASS F
SHARE TRANSACTIONS
(850,493)
$(9,186,434)
(658,572)
$(7,559,731)
Annual Shareholder Report
27
 
Year Ended August 31
2022
2021
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
2,294,482
$25,985,450
2,863,558
$32,666,453
Shares issued to shareholders in payment of
distributions declared
20,562
224,326
56,034
642,017
Shares redeemed
(1,426,618)
(15,280,187)
(277,024)
(3,173,728)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
888,426
$10,929,589
2,642,568
$30,134,742
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(1,640,179)
$(17,403,513)
707,779
$8,126,473
4. FEDERAL TAX INFORMATION
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended August 31, 2022 and 2021, was as follows: 
 
2022
2021
Ordinary income1
$31,863
$—
Tax-exempt income
$3,019,038
$3,109,103
Long-term capital gains
$168,488
$—
1
For tax purposes, short-term capital gain distributions are considered ordinary income distributions.
As of August 31, 2022, the components of distributable earnings on a tax-basis were as follows: 
Undistributed tax-exempt income
$122,237
Net unrealized depreciation
$(4,766,657)
Capital loss deferral
$(1,065,422)
The difference between book-basis and tax-basis net unrealized depreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities.
At August 31, 2022, the cost of investments for federal tax purposes was $126,489,575. The net unrealized depreciation of investments for federal tax purposes was $4,766,657. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $224,399 and net unrealized depreciation from investments for those securities having an excess of cost over value of $4,991,056.
Under current tax rules, capital losses on securities transactions realized after October 31 may be deferred, in whole or in part, and treated as occurring on the first day of the following fiscal year. As of August 31, 2022, for federal income tax purposes, post-October losses of $1,065,422 were deferred to September 1, 2022.
Annual Shareholder Report
28
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.40% of the Fund’s average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund for competitive reasons such as to maintain the Fund’s expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the year ended August 31, 2022, the Adviser voluntarily waived $274,055 of its fee.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below: 
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, the annualized fee paid to FAS was 0.079% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund’s Class A Shares and Class F Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC: 
 
Percentage of Average Daily
Net Assets of Class
Class A Shares
0.05%
Class F Shares
0.40%
Annual Shareholder Report
29
Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, distribution services fees for the Fund were as follows: 
 
Distribution
Services Fees
Incurred
Distribution
Services Fees
Waived
Class F Shares
$269,075
$(167,994)
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended August 31, 2022, FSC retained $101,081 of fees paid by the Fund. For the year ended August 31, 2022, the Fund’s Class A shares did not incur a distribution services fee; however it may begin to incur this fee upon approval of the Trustees.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended August 31, 2022, FSC retained $5,643 in sales charges from the sale of Class A Shares. FSC also retained $1,346 and $8,794 of CDSC relating to redemptions of Class A Shares and Class F Shares, respectively.
Other Service Fees
For the year ended August 31, 2022, FSSC received $1,484 of the other service fees disclosed in Note 2.
Interfund Transactions
During the year ended August 31, 2022, the Fund engaged in purchase and sales transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sales transactions complied with Rule 17a-7 under the Act and amounted to $41,890,000 and $44,090,000, respectively. Net realized gain (loss) recognized on these transactions was $0.
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses, and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares, Class F Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 0.77%, 0.92% and 0.52% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) November 1, 2023; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Annual Shareholder Report
30
Directors’/Trustees’ and Miscellaneous Fees
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors’/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. Investment TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended August 31, 2022, were as follows: 
Purchases
$23,994,779
Sales
$36,793,289
7. CONCENTRATION OF RISK
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at August 31, 2022, 3.0% of the securities in the Portfolio of Investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 22, 2022. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to (a) the highest, on any day, of (i) the federal funds effective rate, (ii) the published secured overnight financing rate plus an assigned percentage, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of August 31, 2022, the Fund had no outstanding loans. During the year ended August 31, 2022, the Fund did not utilize the LOC.
Annual Shareholder Report
31
9. INTERFUND LENDING
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Hermes, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of August 31, 2022, there were no outstanding loans. During the year ended August 31, 2022, the program was not utilized.
10. Indemnifications
Under the Fund’s organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party’s actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
11. OTHER MATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may continue for an extended period of time and has resulted in substantial economic volatility. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies (including certain Fund service providers and issuers of the Fund’s investments), and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
12. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended August 31, 2022, the amount of long-term capital gains designated by the Fund was $168,488. For the fiscal year ended August 31, 2022, 100% of distributions from net investment income is exempt from federal income tax, other than the federal AMT.
Annual Shareholder Report
32
Report of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES OF federated Hermes municipal securities income trust and THE shareholders of federated Hermes ohio municipal income FUND:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of Federated Hermes Ohio Municipal Income Fund (the Fund), a portfolio of Federated Hermes Municipal Securities Income Trust, including the portfolio of investments, as of August 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
Annual Shareholder Report
33
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2022, by correspondence with custodians. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
 
We have served as the auditor for one or more of Federated Hermes’ investment companies since 2006.
Boston, Massachusetts
October 24, 2022
Annual Shareholder Report
34
Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2022 to August 31, 2022.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Annual Shareholder Report
35
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 
 
Beginning
Account Value
3/1/2022
Ending
Account Value
8/31/2022
Expenses Paid
During Period1
Actual:
 
 
 
Class A Shares
$1,000
$943.60
$3.77
Class F Shares
$1,000
$942.10
$4.50
Institutional Shares
$1,000
$944.80
$2.55
Hypothetical (assuming a 5% return
before expenses):
 
 
 
Class A Shares
$1,000
$1,021.32
$3.92
Class F Shares
$1,000
$1,020.57
$4.69
Institutional Shares
$1,000
$1,022.58
$2.65
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: 
Class A Shares
0.77%
Class F Shares
0.92%
Institutional Shares
0.52%
Annual Shareholder Report
36
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2021, the Trust comprised four portfolio(s), and the Federated Hermes Fund Family consisted of 33 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400, Option #4.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: August 1990
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
Annual Shareholder Report
37
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Director and Vice President, Federated Hermes, Inc.; President,
Director/Trustee and CEO, Federated Advisory Services Company,
Federated Equity Management Company of Pennsylvania, Federated
Global Investment Management Corp., Federated Investment
Counseling, Federated Investment Management Company; President
of some of the Funds in the Federated Hermes Fund Family and
Director, Federated Investors Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Chairman and Director, Southpointe
Distribution Services, Inc. and President, Technology, Federated
Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Director, KLX Energy Services Holdings,
Inc. (oilfield services); former Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
38
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Lead Director, Member of the Audit and Nominating and
Corporate Governance Committees, Haverty Furniture Companies,
Inc.; formerly, Director, Member of Governance and Compensation
Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; Director and Vice Chair, Our Campaign for the Church
Alive!, Inc.; and Director, Saint Francis University.
Annual Shareholder Report
39
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); Director, The Golisano Children’s Museum of Naples,
Florida; and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; formerly, Executive Vice President for Legal Affairs,
General Counsel and Secretary to the Board of Directors, Duquesne
University (Retired).
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Senior Vice President for Legal Affairs, General Counsel and
Secretary to the Board of Directors and Assistant General Counsel and
Director of Risk Management, Duquesne University. Prior to her work
at Duquesne University, Ms. Reilly served as Assistant General
Counsel of Compliance and Enterprise Risk as well as Senior Counsel
of Environment, Health and Safety, PPG Industries. Ms. Reilly currently
serves as a member of the Board of Directors of UPMC
Mercy Hospital.
Annual Shareholder Report
40
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 1999
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
Annual Shareholder Report
41
OFFICERS 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: January 2005
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR VICE
PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
Annual Shareholder Report
42
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
CHIEF INVESTMENT OFFICER
Officer since: February 2010
Principal Occupations: Robert J. Ostrowski joined Federated Hermes,
Inc. in 1987 as an Investment Analyst and became a Portfolio Manager
in 1990. He was named Chief Investment Officer of Federated
Hermes, Inc. taxable fixed-income products in 2004 and also serves as
a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice
President of the Fund’s Adviser in 2009 and served as a Senior Vice
President of the Fund’s Adviser from 1997 to 2009. Mr. Ostrowski has
received the Chartered Financial Analyst designation. He received his
M.S. in Industrial Administration from Carnegie Mellon University.
 
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43
Evaluation and Approval of Advisory Contract–May 2022
Federated Hermes Ohio Municipal Income Fund (the “Fund”)
At its meetings in May 2022 (the “May Meetings”), the Fund’s Board of Trustees (the “Board”), including those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the “Adviser”) (the “Contract”) for an additional one-year term. The Board’s determination to approve the continuation of the Contract reflects the exercise of its business judgment after considering all of the information and factors believed to be relevant and appropriate on whether to approve the continuation of the existing arrangement. The information, factors and conclusions that formed the basis for the Board’s approval are summarized below.
Information Received and Review Process
At the request of the Independent Trustees, the Fund’s Chief Compliance Officer (the “CCO”) furnished to the Board in advance of its May Meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund’s management fee and in determining to approve the continuation of the Contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer” prior to the elimination of the Senior Officer position in December 2017.
In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board considered information specifically prepared in connection with the approval of the continuation of the Contract that was presented at the May Meetings. In this regard, in the months preceding the May Meetings, the Board requested and reviewed written responses and supporting materials prepared by the Adviser and its affiliates (collectively, “Federated Hermes”) in response to requests posed to Federated Hermes by independent legal counsel on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Trustees deemed
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44
reasonably necessary to evaluate the Contract, which included detailed information about the Fund and Federated Hermes furnished to the Board at its meetings throughout the year and in between regularly scheduled meetings on particular matters as the need arose.
The Board’s consideration of the Contract included review of materials and information covering the following matters, among others: the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; Federated Hermes’ business and operations; the Adviser’s investment philosophy, personnel and processes; the Fund’s investment objectives and strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate); the Fund’s fees and expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the financial condition of Federated Hermes; the Adviser’s profitability with respect to the Fund; distribution and sales activity for the Fund; and the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser’s cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize “economies of scale” as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fee and expense structures, including a comparison of management fees paid to the adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the adviser for what might be viewed as like services; and (6) the extent of care, conscientiousness and independence with which the fund’s board members perform their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of the adviser’s services and fees. The Board noted that the Securities and Exchange Commission (“SEC”) disclosure requirements
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45
regarding the basis for a fund board’s approval of the fund’s investment advisory contract generally align with the factors listed above. The Board was guided by these factors in its review of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Hermes on matters relating to the oversight of the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the (“Federated Hermes Funds”).
In addition to considering the above-referenced factors, the Board was mindful of the preferences and expectations of Fund shareholders and the potential disruptions of the Fund’s operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew the Contract. In particular, the Board recognized that many shareholders likely have invested in the Fund on the strength of Federated Hermes’ industry standing and reputation and with the expectation that Federated Hermes will have a continuing role in providing advisory services to the Fund. Thus, the Board observed that in the marketplace there are a range of investment options available to the Fund’s shareholders and such shareholders, having had the opportunity to consider other investment options, have effectively selected Federated Hermes by virtue of investing in the Fund.
In determining to approve the continuation of the Contract, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate through the exercise of their reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board’s determination to approve the continuation of the Contract was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Contract. The Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Trustees met separately in executive session with their independent legal counsel and without management present to review the relevant materials and consider their responsibilities under applicable laws. In addition, senior management representatives of Federated Hermes also met with the Independent Trustees and their independent legal counsel to discuss the materials and presentations furnished to the Board at the May Meetings. The Board considered the approval of the Contract for the Fund as part of its consideration of agreements for funds across the family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
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46
Nature, Extent and Quality of Services
The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of Federated Hermes dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by Federated Hermes. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade operations capabilities, experience and performance track record. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and Federated Hermes’ ability and experience in attracting and retaining qualified personnel to service the Fund. The Board also considered the Adviser’s ability to deliver competitive investment performance for the Fund when compared to the Fund’s Performance Peer Group (as defined below), which was deemed by the Board to be a useful indicator of how the Adviser is executing the Fund’s investment program.
In addition, the Board considered the financial resources and overall reputation of Federated Hermes and its willingness to consider and make investments in personnel, infrastructure, technology, cybersecurity, business continuity planning and operational enhancements that are designed to benefit the Federated Hermes Funds. The Board noted the significant acquisition of Hermes Fund Managers Limited by Federated Hermes, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters. The Board considered Federated Hermes’ oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes’ communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account Federated Hermes’ communications with the Board in light of the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
The Board received and evaluated information regarding Federated Hermes’ regulatory and compliance environment. The Board considered Federated Hermes’ compliance program and compliance history and reports from the CCO about Federated Hermes’ compliance with applicable laws and regulations, including responses to regulatory developments and any compliance or other issues raised by regulatory agencies. The Board also noted Federated Hermes’ support of the Federated Hermes Funds’ compliance control structure and the compliance-related resources devoted by Federated
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Hermes in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including Federated Hermes’ commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ approach to internal audits and risk management with respect to the Federated Hermes Funds and its day-to-day oversight of the Federated Hermes Funds’ compliance with their investment objectives and policies as well as with applicable laws and regulations, noting that regulatory and other developments had over time led to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered the implementation of Federated Hermes’ business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. In addition, the Board noted Federated Hermes’ commitment to maintaining high quality systems and expending substantial resources to prepare for and respond to ongoing changes due to the market, regulatory and control environments in which the Fund and its service providers operate, including changes associated with the pandemic.
The Board considered Federated Hermes’ efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks. The Board considered detailed investment reports on, and the Adviser’s analysis of, the Fund’s performance over different time periods that were provided to the Board throughout the year and in connection with the May Meetings. These reports include, among other items, information on the Fund’s
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48
gross and net returns, the Fund’s investment performance compared to one or more relevant categories or groups of peer funds and the Fund’s benchmark index, performance attribution information and commentary on the effect of market conditions.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”). The Board noted the CCO’s view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds’ objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
For the periods ended December 31, 2021, the Fund’s performance for the one-year period was above the median of the Performance Peer Group, and the Fund’s performance fell below the median of the Performance Peer Group for the three-year and five-year periods. The Board discussed the Fund’s performance with the Adviser, and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser’s overall capabilities to manage the Fund.
Fund Expenses
The Board considered the advisory fee and overall expense structure of the Fund and the comparative fee and expense information that had been provided in connection with the May Meetings. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its evaluation. The Board focused on comparisons with other similar registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered funds
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are the products most like the Fund, in that they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle, in fact, chosen and maintained by the Fund’s shareholders. The Board noted that the range of such other registered funds’ fees and expenses, therefore, appears to be a relevant indicator of what investors have found to be reasonable in the marketplace in which the Fund competes.
The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund’s fee rates relative to its Expense Peer Group. In this regard, the Board noted that the contractual advisory fee rate was below the median of the Expense Peer Group, and the Board was satisfied that the overall expense structure of the Fund remained competitive.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that non-registered fund clients are inherently different products due to the following differences, among others: (i) different types of targeted investors; (ii) different applicable laws and regulations; (iii) different legal structures; (iv) different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; (v) the time spent by portfolio managers and their teams (among other personnel across various departments, including legal, compliance and risk management) in reviewing securities pricing and fund liquidity; (vi) different administrative responsibilities; (vii) different degrees of risk associated with management; and (viii) a variety of different costs. The Board also considered information regarding the differences in the nature of the services required for Federated Hermes to manage its proprietary registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s registered fund, noting the CCO’s view that Federated Hermes generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Hermes Funds than in its role as sub-adviser to an unaffiliated third-party registered fund. The Board noted that the CCO did not consider the fees for providing advisory services to other types of clients to be determinative in judging the appropriateness of the Federated Hermes Funds’ advisory fees.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
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Profitability
The Board received and considered profitability information furnished by Federated Hermes, as requested by the CCO. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made on a fund-by-fund basis, using allocation methodologies specified by the CCO and described to the Board. The Board considered the CCO’s view that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs on a fund-by-fund basis continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable because a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Hermes Fund and may produce unintended consequences. In addition, the Board considered the CCO’s view that the allocation methodologies used by Federated Hermes in estimating profitability for purposes of reporting to the Board in connection with the continuation of the Contract are consistent with the methodologies previously reviewed by an independent consultant. The Board noted that the independent consultant had previously conducted a review of the allocation methodologies and reported that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
The Board also reviewed information compiled by Federated Hermes comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. The Board considered the CCO’s conclusion that, based on such profitability information, Federated Hermes’ profit margins did not appear to be excessive. The Board also considered the CCO’s view that Federated Hermes appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Federated Hermes Funds.
Economies of Scale
The Board received and considered information about the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as: personnel, processes and tools for portfolio management, including the use of market data on which portfolio managers make investment decisions; trading operations; ESG integration and issuer engagement on ESG matters; shareholder services; compliance; business continuity; cybersecurity; internal audit and risk management functions; and technology that supports the provision of investment management services. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared
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with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense reimbursements are another means for potential economies of scale to be shared with shareholders and can provide protection from an increase in expenses if a Federated Hermes Fund’s assets decline. The Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered Federated Hermes’ reductions in contractual management fees for certain Federated Hermes Funds during the prior year, including in response to the CCO’s recommendations in the prior year’s CCO Fee Evaluation Report, which have resulted in benefits being realized by shareholders.
The Board also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to evaluate the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund advisory fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. The Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds’ investment advisory contracts, Federated Hermes’ affiliates also receive fees for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of Federated Hermes’ affiliates provide distribution and shareholder services to the Federated Hermes Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The Board also received and considered information detailing any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
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Conclusions
The Board considered: (i) the CCO’s conclusion that his observations and the information accompanying the CCO Fee Evaluation Report show that the management fee for the Fund is reasonable; and (ii) the CCO’s recommendation that the Board approve the management fee. The Board noted that, under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Contract by the CCO. The CCO also recognized that the Board’s evaluation of the Federated Hermes Funds’ advisory and sub-advisory arrangements is a continuing and ongoing process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its ongoing oversight of the Federated Hermes Funds.
On the basis of the information and factors summarized above, among other information and factors deemed relevant by the Board, and the evaluation thereof, the Board, including the Independent Trustees, unanimously voted to approve the continuation of the Contract. The Board based its determination to approve the Contract on the totality of the circumstances and relevant factors and with a view of past and future long-term considerations. Not all of the factors and considerations identified above were necessarily deemed to be relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes Municipal Securities Income Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes Ohio Municipal Income Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of each Federated Hermes Fund’s investment adviser as the administrator for the Program (the “Administrator”) with respect to that Fund. The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2022, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2021 through March 31, 2022 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind, reverse repurchase agreement transactions, redemptions
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delayed beyond the normal T+1 settlement, but within seven days of the redemption request, and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
◾ confirmation that it was not necessary for the Fund to utilize, and the Fund did not utilize, alternative funding sources during the Period;
◾ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
◾ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
◾ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
◾ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit;
◾ the fact that there were no liquidity events during the Period, that materially affected the Fund’s liquidity risk;
◾ the impact on liquidity and management of liquidity risk caused by extended non-U.S. market closures and confirmation that there were no issues for any of the affected Federated Hermes Funds in meeting shareholder redemptions at any time during these temporary non-U.S. market closures;
◾ circumstances during the Period under which the Administrator convened meetings of the Liquidity Risk Management Committees more frequently than normal to conduct enhanced liquidity risk monitoring, including prior to the Russian invasion of Ukraine.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
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Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400, Option #4. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
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Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund’s Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.
  
 
Federated Hermes Ohio Municipal Income Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 313923823
CUSIP 313923609
CUSIP 313923765
28994 (10/22)
© 2022 Federated Hermes, Inc.
 
Annual Shareholder Report
August 31, 2022
 
 
Share Class | Ticker
A | PAMFX
Institutional | PAMIX
 
 
Federated Hermes Pennsylvania Municipal Income Fund
Fund Established 1990
A Portfolio of Federated Hermes Municipal Securities Income Trust
Dear Valued Shareholder,
We are pleased to present the Annual Shareholder Report for your fund covering the period from September 1, 2021 through August 31, 2022. This report includes Management’s Discussion of Fund Performance, a complete listing of your fund’s holdings, performance information and financial statements along with other important fund information.
As a global leader in active, responsible investment management, Federated Hermes is guided by our conviction that responsible investing is the best way to create wealth over the long term. The company provides capabilities across a wide range of asset classes to investors around the world.
In addition, FederatedInvestors.com offers quick and easy access to valuable resources that include timely fund updates, economic and market insights from our investment strategists and financial planning tools. You can also access many of those insights by following us on Twitter (@FederatedHermes) and LinkedIn.
Thank you for investing with us. We hope you find this information useful and look forward to keeping you informed.
Sincerely,
 
J. Christopher Donahue, President
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
Management’s Discussion of Fund Performance (unaudited)
The total return of Federated Hermes Pennsylvania Municipal Income Fund (the “Fund”), based on net asset value for the 12-month reporting period ended August 31, 2022, was -8.63% for Class A Shares and -8.42% for Institutional Shares. The -8.42% total return of the Institutional Shares consisted of 2.27% of tax-exempt dividends and reinvestments and price depreciation of -10.69% in the net asset value of the shares.1 The total return of the S&P Municipal Bond Pennsylvania Index (PA Index),2 the Fund’s broad-based securities market index, was -8.27% during the same period. The total return of the S&P Municipal Bond PA, Investment Grade Index (PAIG),3 a secondary index for the Fund, was -8.17%. The total return of the Morningstar Muni Pennsylvania Funds Average (MMPFA),4 a peer group average for the Fund, was -9.45% during the same reporting period. The Fund’s and the MMPFA’s total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and expenses, which were not reflected in the total return of the PA Index or PAIG.
During the reporting period, the most significant factors affecting the Fund’s performance relative to the PAIG were (a) the sensitivity of the portfolio to changing interest rates, including portfolio duration and the allocation of securities across the municipal yield curve (the level of interest rates across maturities);5,6,7 (b) security selection; (c) the credit quality of portfolio securities;8 and (d) the allocation of the Fund’s portfolio among securities of similar issuers (referred to as “sectors”).
The following discussion will focus on the performance of the Fund’s Institutional Shares relative to the PAIG.
MARKET overview
The emergence of the highest U.S. inflation in more than 40 years drove Treasury and Municipal yields sharply higher during the reporting period. The Federal Reserve (the “Fed”) had incorrectly dismissed the rising inflation to transitory factors during much of 2021, keeping their policy rates near zero to support the ongoing expansion of the U.S. economy. While the U.S. economy expanded slowly and the unemployment rate declined from 5.2% to 3.7% over the fiscal year, the rate of inflation increased rapidly. The year-over-year change in the U.S. Consumer Price Index rose from an elevated 5.3% in August 2021 to a 41-year peak of 9.1% in June 2022. In response, the Fed rapidly refocused on its price stability mandate, tightening monetary policy by raising the upper bound of the federal funds target rate range from 0.25%, where it stood for the first half of the period, to 2.50% by August 2022. The yield on the 10-year U.S. Treasury ended the period at 3.20%, up 188 basis
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1
points (bp). Municipal yields increased sharply as well, with 2-, 5-, 10- and 30-year “AAA” municipal yields from Bloomberg Evaluation Services increasing 221 bp, 190 bp, 167 bp and 178 bp, respectively, over the period.
The sharp increase in municipal bond yields depressed prices and produced negative total returns for municipal bond portfolios. Municipal mutual funds experienced heavy net redemptions as investors reacted to the losses. Municipal credit spreads, the yield advantage on mid- and low-quality bonds relative to high-quality bonds, widened somewhat during the second half of the period amid concerns that the inflation shock and the Fed’s rapid monetary tightening would precipitate recession within the coming year. Widening credit spreads increased losses on mid- and lower-quality bonds relative to higher-quality bonds.
The total return of PAIG for the reporting period of -8.17% was generally comparable to the -8.08% total return of the national S&P Municipal Bond Index (SPMBI)9 for the period. The credit ratings of the Commonwealth of Pennsylvania held stable in the high-grade (“AA-” or higher) or mid-grade (“A”-rated) quality ranges during the period. Moody’s, S&P and Fitch ratings were “AA3”/“A+”/“AA-,” respectively, at fiscal year-end. These ratings are each below-average for U.S. states at each ratings agency, largely reflecting Pennsylvania’s above-average debt burden, below-average pension funding, below national-trend rate of growth and slim liquidity reserves relative to other U.S. states.
DURATION and Yield Curve
Active management of duration contributed favorably to the Fund’s performance relative to the PAIG during the reporting period. The Fund maintained a portfolio duration below that of the PAIG to varying degrees through the reporting period, decreasing the Fund’s relative sensitivity to sharply rising municipal bond yields and providing significant positive contribution to relative return. However, the allocation of portfolio holdings along the municipal yield curve detracted somewhat from relative performance.
SECURITY SELECTION
Individual security selection contributed to performance relative to the PAIG over the period as the Fund’s relative total return was stronger than could be explained by duration, yield curve, sector allocation and credit quality characteristics. For example, the Fund’s significant weighting in bonds with 5% coupons or higher contributed to favorable relative return. Higher coupon bonds faced less risk of pricing below par and less risk of extending duration as yields increased compared to lower coupon bonds.
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credit QUALITY
The allocation of the Fund’s portfolio across the credit quality spectrum modestly detracted from Fund return relative to the PAIG during the period. The Fund’s overweight position in “BBB”-rated securities and moderate weighting in out-of-index below-investment-grade securities10 detracted from relative performance as the late-period widening of credit spreads depressed returns. Underweight exposure to “AA”-rated bonds also detracted from relative performance as such securities outperformed. Positive contributions from overweight allocations to “AAA”-rated bonds or equivalents offered a partially offsetting positive effect on relative return.
Sector allocation
The Fund’s sector allocation had a net negative impact on relative performance during the reporting period. Overweight exposure to underperforming Hospital and Senior Care sectors and underweight exposure to outperforming Tax-supported bonds accounted for most of the negative impact of sector allocation. Overweight exposure to outperforming Pre-refunded securities and Industrial revenue bonds provided a partial, favorable contribution.
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1
Income may be subject to the alternative minimum tax for individuals (AMT).
2
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the PA Index.
3
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the PAIG. The Fund’s secondary index is being used for comparison purposes because, while it is not the Fund’s broad-based securities market index, the Fund’s investment adviser (“Adviser”) believes it more closely reflects the securities in which the Fund invests.
4
Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Morningstar peer group.
5
Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
6
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations. For purposes of this Management’s Discussion of Fund Performance, duration is determined using a third-party analytical system.
7
The yield curve is a graph showing the comparative yields of securities in a particular class according to maturity. Securities on the long end of the yield curve have longer maturities.
8
Credit ratings pertain only to the securities in the portfolio and do not protect Fund shares against market risk.
9
The SPMBI is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the AMT. Eligibility criteria for inclusion in the SPMBI include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or a local government or a state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The SPMBI is rebalanced monthly. The SPMBI is unmanaged, and it is not possible to invest directly in an index.
10
Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the Fund’s Adviser believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard and Poor’s, Moody’s Investor Services, Inc. and Fitch Rating Service. When ratings vary, the highest rating is used. Credit ratings of “AA” or better are considered to be high credit quality; credit ratings of “A” are considered high or medium/good quality; and credit ratings of “BBB” are considered to be medium/good credit quality, and the lowest category of investment-grade securities; credit ratings of “BB” and below are lower-rated, noninvestment-grade securities or junk bonds; and credit ratings of “CCC” or below are noninvestment-grade securities that have high default risk. Any credit quality breakdown does not give effect to the impact of any credit derivative investments made by the Fund. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default.
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FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT
The graph below illustrates the hypothetical investment of $10,0001 in Federated Hermes Pennsylvania Municipal Income Fund (the “Fund”) from August 31, 2012 to August 31, 2022, compared to the S&P Municipal Bond Pennsylvania Index (PA Index),2 S&P Municipal Bond PA, Investment Grade Index (PAIG)3 and the Morningstar Muni Pennsylvania Funds Average (MMPFA).4 The Average Annual Total Return table below shows returns for each class averaged over the stated periods.
GROWTH OF A $10,000 INVESTMENT
Growth of $10,000 as of August 31, 2022
 
◾ Total returns shown for Class A Shares include the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550).
The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses.  
Average Annual Total Returns for the Period Ended 8/31/2022
(returns reflect all applicable sales charges as specified below in footnote #1) 
 
1 Year
5 Years
10 Years
Class A Shares
-12.75%
0.02%
1.43%
Institutional Shares5
-8.42%
1.06%
1.96%
PA Index
-8.27%
1.49%
2.53%
PAIG
-8.17%
1.42%
2.41%
MMPFA
-9.45%
0.96%
1.85%
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Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. 
1
Represents a hypothetical investment of $10,000 in the Fund after deducting the applicable sales charges: For Class A Shares, the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The PA Index, PAIG and MMPFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.
2
The PA Index consists of bonds in the S&P Municipal Bond Index (“Main Index”) that have been issued by the Commonwealth of Pennsylvania or local governments or state or local government entities within Pennsylvania. The Main Index is a broad, comprehensive, market value-weighted index composed of approximately 55,000 bond issues that are exempt from U.S. federal income taxes or subject to the AMT. Eligibility criteria for inclusion in the Main Index include, but are not limited to: the bond issuer must be a state (including the Commonwealth of Puerto Rico and U.S. territories) or local government or state or local government entity where interest on the bond is exempt from U.S. federal income taxes or subject to the AMT; the bond must be held by a mutual fund for which Standard & Poor’s Securities Evaluations, Inc. provides prices; it must be denominated in U.S. dollars and have a minimum par amount of $2 million; and the bond must have a minimum term to maturity and/or call date greater than or equal to one calendar month. The Main Index is rebalanced monthly. The PA Index is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund’s performance. The PA Index is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
3
The PAIG represents the portion of the PA Index composed solely of bonds that are rated at least “BBB-/Baa3” or higher. The PAIG is not adjusted to reflect sales charges, expenses and other fees that the SEC requires to be reflected in the Fund’s performance. The PAIG is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
4
Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of a $10,000 Investment line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
5
The Fund’s Institutional Shares commenced operations on April 28, 2020. For the period prior to the commencement of operations of Institutional Shares, the performance information shown for the Fund’s Institutional Shares is for the Class A Shares. The performance of the Class A Shares has not been adjusted to reflect the expenses of the Institutional Shares, since the Institutional Shares have a lower expense ratio than the expense ratio of Class A Shares. The performance of Class A has been adjusted to reflect the absence of sales charges and to remove any voluntary waiver of Fund expenses related to Class A Shares that may have occurred during the periods prior to commencement of operations of the Institutional Shares.
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Portfolio of Investments Summary Table (unaudited)
At August 31, 2022, the Fund’s sector composition1 was as follows: 
Sector Composition
Percentage of
Total Net Assets
General Obligation—Local
16.2%
Hospital
15.5%
Toll Road
10.6%
Higher Education
10.3%
Water & Sewer
9.6%
Refunded
8.5%
Senior Care
5.5%
Dedicated Tax
4.7%
Airport
4.6%
General Obligation—State
4.3%
Other2
9.1%
Other Assets and Liabilities—Net3
1.1%
TOTAL
100%
1
Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. For securities that have been enhanced by a third-party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund’s Adviser. Pre-refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2
For purposes of this table, sector classifications constitute 89.8% of the Fund’s total net assets. Remaining sectors have been aggregated under the designation “Other.”
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
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Portfolio of Investments
August 31, 2022 
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—97.7%
 
 
 
Pennsylvania—95.3%
 
$1,000,000
 
Allegheny County, PA Airport Authority (Pittsburgh International
Airport), Airport Revenue Bonds (Series 2021A),
4.000%, 1/1/2040
$947,049
1,000,000
 
Allegheny County, PA Airport Authority (Pittsburgh International
Airport), Airport Revenue Bonds (Series 2021A),
5.000%, 1/1/2051
1,029,248
1,000,000
 
Allegheny County, PA Airport Authority (Pittsburgh International
Airport), Airport Revenue Bonds (Series 2021A),
5.000%, 1/1/2056
1,022,966
2,000,000
 
Allegheny County, PA Hospital Development Authority
(Allegheny Health Network Obligated Group), Revenue Bonds
(Series 2018A), 5.000%, 4/1/2047
2,055,486
860,000
1
Allegheny County, PA Hospital Development Authority (UPMC
Health System), Revenue Bonds (Series 2017D-2) FRNs, 2.490%
(SIFMA 7-day +0.700%), Mandatory Tender 5/15/2027
858,223
1,000,000
 
Allegheny County, PA Port Authority, Special Revenue
Transportation Refunding Bonds (Series 2020), 5.000%, 3/1/2029
1,132,758
1,000,000
 
Allegheny County, PA Sanitation Authority, Sewer Revenue
Bonds (Series 2015), 5.000%, 12/1/2040
1,050,660
2,000,000
 
Allegheny County, PA Sanitation Authority, Sewer Revenue
Bonds (Series 2015), 5.000%, 12/1/2045
2,092,530
1,000,000
 
Allegheny County, PA, UT GO Bonds (Series C-77),
5.000%, 11/1/2043
1,089,562
2,000,000
 
Allegheny County, PA, UT GO Refunding Bonds (Series C-76),
5.000%, 11/1/2041
2,162,126
2,000,000
 
Bethlehem, PA Authority (Bethlehem, PA), Guaranteed Water
Revenue Bonds (Series 2014), (Build America Mutual Assurance
INS), 5.000%, 11/15/2030
2,010,948
1,450,000
 
Bucks County, PA IDA (Pennswood Village), Revenue Bonds
(Series 2018A), 5.000%, 10/1/2037
1,512,635
1,000,000
 
Canon McMillan, PA School District, General Obligation Bonds
(Series 2017), (Assured Guaranty Municipal Corp.
INS)/(Pennsylvania School District Intercept Program GTD),
5.000%, 12/1/2041
1,067,083
1,000,000
 
Capital Region Water, PA, Water Revenue Refunding Bonds
(Series 2018), 5.000%, 7/15/2032
1,116,699
500,000
 
Centre County, PA Hospital Authority (Mount Nittany Medical
Center), Hospital Revenue Bonds (Series 2016A), (United States
Treasury PRF 11/15/2025@100), 5.000%, 11/15/2046
539,212
500,000
 
Centre County, PA Hospital Authority (Mount Nittany Medical
Center), Hospital Revenue Bonds (Series 2018A),
5.000%, 11/15/2042
515,841
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Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$500,000
 
Centre County, PA, UT GO Bonds (Series 2022),
5.000%, 7/1/2035
$556,814
1,000,000
 
Chartiers Valley, PA School District, UT GO Bonds (Series 2015B),
(United States Treasury PRF 4/15/2025@100),
5.000%, 10/15/2040
1,066,056
1,000,000
 
Chester County, PA HEFA (Main Line Health Systems),
Revenue Bonds (Series 2017A), 5.000%, 10/1/2052
1,037,003
1,250,000
 
Chester County, PA IDA (Avon Grove Charter School),
Revenue Bonds (Series 2017A), (Original Issue Yield: 4.820%),
4.750%, 12/15/2037
1,246,062
2,000,000
 
Clairton Municipal Authority, PA, Sewer Revenue Bonds
(Series 2012B), 5.000%, 12/1/2037
2,006,396
3,000,000
 
Commonwealth Financing Authority of PA (Commonwealth of
Pennsylvania), Tobacco Master Settlement Payment Revenue
Bonds (Series 2018), (Original Issue Yield: 4.035%), (Assured
Guaranty Municipal Corp. INS), 4.000%, 6/1/2039
3,028,133
2,000,000
 
Commonwealth of Pennsylvania, UT GO Bonds (2nd Series 2016),
5.000%, 9/15/2026
2,192,734
2,000,000
 
Commonwealth of Pennsylvania, UT GO Refunding Bonds
(Series 2019), 5.000%, 7/15/2027
2,223,504
1,000,000
 
Commonwealth of Pennsylvania, UT GO Refunding Bonds
(Series 2019), 5.000%, 7/15/2029
1,144,165
90,000
 
Cumberland County, PA Municipal Authority (Diakon Lutheran
Social Ministries), Revenue Bonds (Series 2015), (United States
Treasury PRF 1/1/2025@100), 5.000%, 1/1/2038
95,312
365,000
 
Cumberland County, PA Municipal Authority (Diakon Lutheran
Social Ministries), Revenue Bonds (Series 2015), (United States
Treasury PRF 1/1/2025@100), 5.000%, 1/1/2038
386,543
450,000
 
Cumberland County, PA Municipal Authority (Diakon Lutheran
Social Ministries), Revenue Bonds (Series 2015),
5.000%, 1/1/2038
459,291
1,000,000
 
Cumberland County, PA Municipal Authority (Dickinson College),
Revenue Bonds (Series 2016), 5.000%, 5/1/2030
1,071,999
2,000,000
 
Cumberland County, PA Municipal Authority (Penn State Health
Obligated Group), Revenue Bonds (Series 2019),
4.000%, 11/1/2044
1,862,398
1,700,000
 
Delaware County, PA Authority (Haverford College),
Revenue Bonds (Series 2017A), 5.000%, 10/1/2042
1,818,725
1,000,000
 
Delaware County, PA Authority (Villanova University),
Revenue Bonds (Series 2015), 5.000%, 8/1/2045
1,036,515
1,250,000
 
Delaware County, PA Regional Water Quality Control Authority,
Sewer Revenue Bonds (Series 2015), 5.000%, 5/1/2040
1,303,922
1,750,000
 
Delaware River Joint Toll Bridge Commission, Revenue Bonds
(Series 2017), 5.000%, 7/1/2042
1,871,889
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Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$1,130,000
 
Delaware River Port Authority, Revenue Bonds (Series 2018A),
5.000%, 1/1/2033
$1,243,519
250,000
 
Delaware River Port Authority, Revenue Bonds (Series 2018A),
5.000%, 1/1/2038
266,703
200,000
 
Delaware River Port Authority, Revenue Bonds (Series 2018A),
5.000%, 1/1/2039
211,928
500,000
 
Delaware River Port Authority, Revenue Bonds (Series 2018A),
5.000%, 1/1/2040
525,954
1,000,000
 
DuBois Hospital Authority (Penn Highlands Healthcare),
Hospital Revenue Bonds (Series 2020), 4.000%, 7/15/2050
898,793
1,000,000
 
DuBois Hospital Authority (Penn Highlands Healthcare),
Hospital Revenue Bonds (Series 2021), 4.000%, 7/15/2051
895,978
1,000,000
 
Erie, PA Water Authority, Water Revenue Bonds (Series 2016),
(United States Treasury PRF 12/1/2026@100), 5.000%, 12/1/2043
1,104,004
2,260,000
 
Geisinger Authority, PA Health System (Geisinger Health System),
Revenue Bonds (Series 2014A), 5.000%, 6/1/2041
2,313,975
1,500,000
 
Great Valley School District, PA, GO Bonds (Series 2022),
(Pennsylvania School District Intercept Program GTD),
4.000%, 9/1/2040
1,513,607
1,000,000
 
Greater Johnstown, PA Water Authority, Sewer Revenue Bonds
(Series 2020), (Assured Guaranty Municipal Corp. GTD),
4.000%, 8/15/2048
964,726
785,000
 
Lancaster County, PA Hospital Authority (Masonic Villages),
Health Center Revenue Bonds (Series 2015), 5.000%, 11/1/2035
810,184
500,000
 
Lancaster County, PA Hospital Authority (St. Anne’s Retirement
Community, Inc.), Revenue Bonds (Series 2020),
5.000%, 3/1/2050
449,137
1,000,000
 
Lancaster County, PA Solid Waste Management Authority,
Guaranteed Authority Bonds (Series 2013B), (Dauphin County, PA
GTD), 5.000%, 12/15/2033
1,030,720
1,000,000
 
Lancaster, PA IDA (Landis Homes Retirement Community),
Health Center Revenue Refunding Bonds (Series 2021),
4.000%, 7/1/2051
828,192
1,000,000
 
Lancaster, PA, UT GO Bonds (Series 2018), (Build America Mutual
Assurance INS), 4.000%, 11/1/2043
985,215
1,000,000
 
Lehigh County, PA General Purpose Authority (Lehigh Valley
Academy Regional Charter School), Charter School Revenue
Bonds (Series 2022), 4.000%, 6/1/2052
860,732
500,000
 
Luzerne County, PA IDA (Luzerne County, PA), Guaranteed Lease
Revenue Bonds (Series 2017), (Assured Guaranty Municipal Corp.
INS), 5.000%, 12/15/2022
503,520
1,000,000
 
Luzerne County, PA, UT GO Guaranteed Bonds (Series 2017A),
(Assured Guaranty Municipal Corp. INS), 5.000%, 12/15/2029
1,113,783
1,260,000
 
Monroe County, PA, UT GO Bonds (Series 2021A),
4.000%, 7/15/2036
1,275,461
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Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$1,500,000
 
Montgomery County, PA Higher Education & Health Authority
Hospital (Thomas Jefferson University), Revenue Refunding
Bonds (Series 2019), 4.000%, 9/1/2049
$1,400,660
1,000,000
 
Montgomery County, PA IDA (ACTS Retirement Life
Communities, Inc.), Retirement Communities Revenue Bonds
(Series 2020C), 5.000%, 11/15/2045
1,050,009
2,000,000
 
Montgomery County, PA, UT GO Bonds (Series 2019A),
5.000%, 7/1/2039
2,212,012
1,000,000
 
Montgomery County, PA, UT GO Bonds (Series 2022),
5.000%, 7/1/2033
1,175,665
1,000,000
 
Mount Lebanon, PA Hospital Authority (St. Clair Memorial
Hospital), Hospital Revenue Bonds (Series 2018),
5.000%, 7/1/2038
1,056,734
750,000
 
Northampton County, PA General Purpose Authority (Lafayette
College), College Refunding and Revenue Bonds (Series 2017),
5.000%, 11/1/2047
800,403
1,000,000
 
Northampton County, PA General Purpose Authority (St. Luke’s
University Health Network), Hospital Revenue Bonds
(Series 2018A), (Original Issue Yield: 4.090%), 4.000%, 8/15/2048
893,993
1,000,000
 
Pennsylvania Economic Development Financing Authority
(Amtrak), Exempt Facilities Revenue Bonds (Series 2012A),
5.000%, 11/1/2041
1,000,849
1,000,000
 
Pennsylvania Economic Development Financing Authority
(National Gypsum Co.), Exempt Facilities Refunding Revenue
Bonds (Series 2014), 5.500%, 11/1/2044
1,004,365
2,000,000
 
Pennsylvania Economic Development Financing Authority
(Pennsylvania Rapid Bridge Replacement), Tax-Exempt Private
Activity Revenue Bonds (Series 2015), 5.000%, 6/30/2042
2,035,925
2,200,000
 
Pennsylvania Economic Development Financing Authority
(Presbyterian Homes Obligated Group), Revenue Refunding
Bonds (Series 2021), 4.000%, 7/1/2046
1,960,231
1,500,000
 
Pennsylvania Economic Development Financing Authority (UPMC
Health System), Revenue Bonds (Series 2014A), 5.000%, 2/1/2045
1,534,861
2,000,000
 
Pennsylvania Economic Development Financing Authority, Junior
Guaranteed Parking Revenue Bonds (Series 2013B-1), (Dauphin
County, PA GTD), 6.000%, 7/1/2053
2,059,971
1,950,000
 
Pennsylvania State Higher Education Facilities Authority
(University of Pennsylvania Health System), Revenue Bonds
(Series 2017A), 5.000%, 8/15/2042
2,061,710
500,000
 
Pennsylvania State Higher Education Facilities Authority
(University of Pennsylvania), Revenue Bonds (Series 2017A),
5.000%, 8/15/2046
535,334
1,000,000
 
Pennsylvania State Turnpike Commission, Turnpike Revenue
Bonds (Series 2015B), 5.000%, 12/1/2045
1,034,768
2,000,000
 
Pennsylvania State Turnpike Commission, Turnpike Revenue
Bonds (Series 2018A), 5.000%, 12/1/2048
2,113,685
Annual Shareholder Report
11
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$1,000,000
 
Pennsylvania State Turnpike Commission, Turnpike Revenue
Bonds (Series 2019A), 5.000%, 12/1/2044
$1,061,914
1,000,000
 
Pennsylvania State Turnpike Commission, Turnpike Subordinate
Revenue Bonds (Series 2019A), (Assured Guaranty Municipal
Corp. GTD), 4.000%, 12/1/2049
975,935
2,500,000
 
Pennsylvania State Turnpike Commission, Turnpike Subordinate
Revenue Bonds (Series 2021A), 4.000%, 12/1/2046
2,324,676
1,970,000
 
Pennsylvania State University, Revenue Bonds (Series 2017A),
5.000%, 9/1/2037
2,144,079
1,000,000
 
Pennsylvania State University, Revenue Bonds (Series 2018),
5.000%, 9/1/2035
1,104,031
1,000,000
 
Philadelphia, PA Airport System, Airport Revenue Refunding
Bonds (Series 2020A), 4.000%, 7/1/2040
961,550
2,000,000
 
Philadelphia, PA Airport System, Refunding Revenue Bonds
(Series 2017B), 5.000%, 7/1/2047
2,040,021
1,040,000
 
Philadelphia, PA Authority for Industrial Development (Children’s
Hospital of Philadelphia), Hospital Revenue Bonds (Series 2014A),
(United States Treasury PRF 7/1/2024@100), 5.000%, 7/1/2042
1,087,748
1,210,000
 
Philadelphia, PA Authority for Industrial Development
(New Foundations Charter School), Revenue Bonds (Series 2012),
(United States Treasury PRF 12/15/2022@100),
6.625%, 12/15/2041
1,224,661
1,295,000
 
Philadelphia, PA Authority for Industrial Development
(PresbyHomes Germantown/Morrisville), Senior Living Revenue
Bonds (Series 2005A), 5.625%, 7/1/2035
1,321,931
1,000,000
 
Philadelphia, PA Gas Works, 1998 General Ordinance-Fifteenth
Series Revenue Refunding Bonds, 5.000%, 8/1/2042
1,041,808
1,000,000
 
Philadelphia, PA School District, LT GO Bonds (Series 2018B),
(Pennsylvania School District Intercept Program GTD),
5.000%, 9/1/2043
1,051,903
1,000,000
 
Philadelphia, PA Water & Wastewater System, Revenue Bonds
(Series 2019B), 5.000%, 11/1/2049
1,075,720
1,010,000
 
Philadelphia, PA Water & Wastewater System, Revenue Bonds
(Series 2020A), 5.000%, 11/1/2040
1,102,421
500,000
 
Philadelphia, PA, GO Bonds (Series 2019B), 5.000%, 2/1/2038
540,851
1,000,000
 
Philadelphia, PA, GO Bonds (Series 2021A), 5.000%, 5/1/2034
1,111,469
1,000,000
 
Philadelphia, PA, UT GO Bonds (Series 2017A), 5.000%, 8/1/2033
1,079,033
1,000,000
 
Pittsburgh & Allegheny County, PA Sports & Exhibition Authority,
Hotel Room Excise Tax Revenue Refunding Bonds (2022A),
(Assured Guaranty Municipal Corp. INS), 5.000%, 2/1/2035
1,124,120
655,000
 
Pittsburgh & Allegheny County, PA Sports & Exhibition Authority,
Parking System Revenue Bonds (Series 2017),
5.000%, 12/15/2037
717,607
Annual Shareholder Report
12
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Pennsylvania—continued
 
$390,000
 
Pittsburgh, PA Public Parking Authority, Parking System Revenue
Refunding Bonds (Series 2015A), (United States Treasury PRF
6/1/2025@100), 5.000%, 12/1/2025
$415,883
610,000
 
Pittsburgh, PA Public Parking Authority, Parking System Revenue
Refunding Bonds (Series 2015A), 5.000%, 12/1/2025
641,348
1,500,000
 
Pittsburgh, PA Water & Sewer Authority, Water and Sewer
System First Lien Revenue Bonds (Series 2019A), (Assured
Guaranty Municipal Corp. INS), 5.000%, 9/1/2044
1,643,816
1,000,000
 
Pittsburgh, PA, UT GO Bonds (Series 2012B), (United States
Treasury PRF 9/1/2022@100), 5.000%, 9/1/2026
1,000,000
1,000,000
 
Scranton, PA School District, GO Bonds (Series 2017E), (Build
America Mutual Assurance INS), 5.000%, 12/1/2035
1,083,527
1,750,000
 
St. Mary Hospital Authority, PA (Trinity Healthcare Credit Group),
Revenue Refunding Bonds (Remarket 1/9/18),
5.000%, 11/15/2028
1,946,179
1,000,000
 
Swarthmore Borough Authority, PA (Swarthmore College),
Revenue Bonds (Series 2018), 5.000%, 9/15/2048
1,085,909
1,000,000
 
Union County, PA Higher Educational Facilities Financing
Authority (Bucknell University), University Revenue Bonds
(Series 2015B), 5.000%, 4/1/2032
1,047,440
1,000,000
 
West View, PA Municipal Authority Water Revenue,
Revenue Bonds (Series 2014), (United States Treasury PRF
11/15/2024@100), 5.000%, 11/15/2039
1,054,800
1,685,000
 
Wilkes-Barre, PA Finance Authority (University of Scranton),
Revenue Bonds (Series 2015A), 5.000%, 11/1/2033
1,756,726
825,000
 
Wilkes-Barre, PA Finance Authority (University of Scranton),
Revenue Bonds (Series 2015A), 5.000%, 11/1/2034
856,824
1,895,000
 
York County, PA, UT GO Bonds (Series 2013), (United States
Treasury PRF 6/1/2023@100), 5.000%, 6/1/2037
1,932,627
 
 
TOTAL
123,894,350
 
 
Puerto Rico—1.8%
 
1,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A), (Original Issue Yield: 5.154%),
5.000%, 7/1/2058
967,607
500,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-1), 4.750%, 7/1/2053
476,901
1,000,000
 
Puerto Rico Sales Tax Financing Corp., Restructured Sales Tax
Bonds (Series 2019A-2), 4.784%, 7/1/2058
932,602
 
 
TOTAL
2,377,110
Annual Shareholder Report
13
Principal
Amount
 
 
Value
 
 
MUNICIPAL BONDS—continued
 
 
 
Virgin Islands—0.6%
 
$750,000
 
Matching Fund Special Purpose Securitization Corporation, VI,
Matching Fund Securitization Bonds (Series 2022A),
5.000%, 10/1/2032
$789,166
 
 
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $131,899,439)
127,060,626
 
1
SHORT-TERM MUNICIPALS—1.2%
 
 
 
Pennsylvania—1.2%
 
500,000
 
Delaware County, PA IDA (United Parcel Service, Inc.),
(Series 2015) Daily VRDNs, (United Parcel Service, Inc. GTD),
1.220%, 9/1/2022
500,000
400,000
 
Philadelphia, PA, (Series 2009B) Weekly VRDNs, (Barclays Bank
PLC LOC), 1.660%, 9/1/2022
400,000
750,000
 
Southcentral PA, General Authority (Wellspan Health Obligated
Group), (Series 2019E) Daily VRDNs, (U.S. Bank, N.A. LIQ),
1.150%, 9/1/2022
750,000
 
 
TOTAL SHORT-TERM MUNICIPALS
(IDENTIFIED COST $1,650,000)
1,650,000
 
 
TOTAL INVESTMENT IN SECURITIES—98.9%
(IDENTIFIED COST $133,549,439)2
128,710,626
 
 
OTHER ASSETS AND LIABILITIES - NET—1.1%3
1,374,971
 
 
TOTAL NET ASSETS—100%
$130,085,597
Securities that are subject to the federal alternative minimum tax (AMT) represent 7.6% of the Fund’s portfolio as calculated based upon total market value (unaudited).
1
Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
2
Also represents cost of investments for federal tax purposes.
3
Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of total net assets at August 31, 2022.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
Annual Shareholder Report
14
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of August 31, 2022, all investments of the Fund utilized Level 2 inputs in valuing the Fund’s assets carried at fair value.
The following acronym(s) are used throughout this portfolio: 
FRNs
—Floating Rate Notes
GO
—General Obligation
GTD
—Guaranteed
HEFA
—Health and Education Facilities Authority
IDA
—Industrial Development Authority
INS
—Insured
LIQ
—Liquidity Agreement
LOC
—Letter of Credit
LT
—Limited Tax
PRF
—Pre-refunded
SIFMA
—Securities Industry and Financial Markets Association
UT
—Unlimited Tax
VRDNs
—Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
15
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period) 
Year Ended August 31
2022
2021
2020
2019
2018
Net Asset Value, Beginning of Period
$11.22
$11.08
$11.19
$10.69
$10.96
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.24
0.25
0.27
0.31
0.32
Net realized and unrealized gain (loss)
(1.20)
0.14
(0.03)
0.51
(0.27)
TOTAL FROM INVESTMENT OPERATIONS
(0.96)
0.39
0.24
0.82
0.05
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.24)
(0.24)
(0.27)
(0.31)
(0.32)
Distributions from net realized gain
(0.03)
(0.01)
(0.08)
(0.01)
—
TOTAL DISTRIBUTIONS
(0.27)
(0.25)
(0.35)
(0.32)
(0.32)
Net Asset Value, End of Period
$9.99
$11.22
$11.08
$11.19
$10.69
Total Return1
(8.63)%
3.60%
2.21%
7.85%
0.51%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses2
0.76%
0.76%
0.76%3
0.76%3
0.76%3
Net investment income
2.28%
2.27%
2.46%
2.85%
2.98%
Expense waiver/reimbursement4
0.19%
0.17%
0.18%
0.17%
0.14%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$116,884
$150,106
$155,137
$159,471
$163,819
Portfolio turnover5
16%
11%
8%
16%
21%
1
Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
2
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
3
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.76%, 0.76% and 0.76% for the years ended August 31, 2020, 2019 and 2018, respectively, after taking into account these expense reductions.
4
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
5
Securities that mature are considered sales for purposes of this calculation.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
16
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period) 
 
Year Ended August 31,
Period
Ended
8/31/20201
 
2022
2021
Net Asset Value, Beginning of Period
 $11.22
$11.08
$10.73
Income From Investment Operations:
 
 
 
Net investment income
0.27
0.28
0.09
Net realized and unrealized gain (loss)
(1.20)
0.14
0.36
TOTAL FROM INVESTMENT OPERATIONS
(0.93)
0.42
0.45
Less Distributions:
 
 
 
Distributions from net investment income
(0.27)
(0.27)
(0.10)
Distributions from net realized gain
(0.03)
(0.01)
—
TOTAL DISTRIBUTIONS
(0.30)
(0.28)
(0.10)
Net Asset Value, End of Period
$9.99
$11.22
$11.08
Total Return2
(8.42)%
3.83%
4.15%
Ratios to Average Net Assets:
 
 
 
Net expenses3
0.53%
0.53%
0.53%4,5
Net investment income
2.53%
2.49%
2.60%4
Expense waiver/reimbursement6
0.17%
0.15%
0.20%4
Supplemental Data:
 
 
 
Net assets, end of period (000 omitted)
$13,202
$10,033
$1,847
Portfolio turnover7
16%
11%
8%8
1
Reflects operations for the period from April 28, 2020 (commencement of operations) to August 31, 2020.
2
Based on net asset value. Total returns for periods of less than one year are not annualized.
3
Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
Computed on an annualized basis.
5
The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.53% for the period ended August 31, 2020, after taking into account this expense reduction.
6
This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
7
Securities that mature are considered sales for purposes of this calculation.
8
Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the fiscal year ended August 31, 2020.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
17
Statement of Assets and Liabilities
August 31, 2022
 
Assets:
 
 
Investment in securities, at value (identified cost $133,549,439)
 
$128,710,626
Cash
 
35,306
Income receivable
 
1,538,449
Receivable for shares sold
 
910
TOTAL ASSETS
 
130,285,291
Liabilities:
 
 
Payable for shares redeemed
$106,496
 
Payable for portfolio accounting fees
41,085
 
Payable for other service fees (Notes 2 and 5)
27,004
 
Payable for share registration costs
15,457
 
Payable for investment adviser fee (Note 5)
706
 
Payable for administrative fee (Note 5)
585
 
Accrued expenses (Note 5)
8,361
 
TOTAL LIABILITIES
 
199,694
Net assets for 13,018,265 shares outstanding
 
$130,085,597
Net Assets Consists of:
 
 
Paid-in capital
 
$135,892,202
Total distributable earnings (loss)
 
(5,806,605)
TOTAL NET ASSETS
 
$130,085,597
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
 
 
Class A Shares:
 
 
Net asset value per share ($116,883,777 ÷ 11,696,456 shares
outstanding), no par value, unlimited shares authorized
 
$9.99
Offering price per share (100/95.50 of $9.99)
 
$10.46
Redemption proceeds per share
 
$9.99
Institutional Shares:
 
 
Net asset value per share ($13,201,820 ÷ 1,321,809 shares outstanding),
no par value, unlimited shares authorized
 
$9.99
Offering price per share
 
$9.99
Redemption proceeds per share
 
$9.99
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
18
Statement of Operations
Year Ended August 31, 2022
 
Investment Income:
 
 
 
Interest
 
 
$4,486,684
Expenses:
 
 
 
Investment adviser fee (Note 5)
 
$589,360
 
Administrative fee (Note 5)
 
116,544
 
Custodian fees
 
11,310
 
Transfer agent fees
 
74,853
 
Directors’/Trustees’ fees (Note 5)
 
2,609
 
Auditing fees
 
30,410
 
Legal fees
 
8,407
 
Other service fees (Notes 2 and 5)
 
337,867
 
Portfolio accounting fees
 
116,333
 
Share registration costs
 
37,689
 
Printing and postage
 
25,509
 
Miscellaneous (Note 5)
 
24,800
 
TOTAL EXPENSES
 
1,375,691
 
Waiver and Reimbursement:
 
 
 
Waiver of investment adviser fee (Note 5)
$(249,703)
 
 
Reimbursement of other operating expenses
(Notes 2 and 5)
(25,449)
 
 
TOTAL WAIVER AND REIMBURSEMENT
 
(275,152)
 
Net expenses
 
 
1,100,539
Net investment income
 
 
3,386,145
Realized and Unrealized Gain (Loss) on Investments
and Futures Contracts:
 
 
 
Net realized loss on investments
 
 
(888,237)
Net realized gain on futures contracts
 
 
15,022
Net change in unrealized appreciation of investments
 
 
(15,787,072)
Net change in unrealized depreciation of futures contracts
 
 
4,695
Net realized and unrealized gain (loss) on investments and
futures contracts
 
 
(16,655,592)
Change in net assets resulting from operations
 
 
$(13,269,447)
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
19
Statement of Changes in Net Assets
 
Year Ended August 31
2022
2021
Increase (Decrease) in Net Assets
 
 
Operations:
 
 
Net investment income
$3,386,145
$3,633,841
Net realized gain (loss)
(873,215)
191,378
Net change in unrealized appreciation/depreciation
(15,782,377)
1,801,287
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
(13,269,447)
5,626,506
Distributions to Shareholders:
 
 
Class A Shares
(3,494,988)
(3,453,257)
Institutional Shares
(323,954)
(190,731)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS
(3,818,942)
(3,643,988)
Share Transactions:
 
 
Proceeds from sale of shares
12,923,188
18,627,762
Net asset value of shares issued to shareholders in payment of
distributions declared
2,781,018
2,677,450
Cost of shares redeemed
(28,669,405)
(20,132,084)
CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS
(12,965,199)
1,173,128
Change in net assets
(30,053,588)
3,155,646
Net Assets:
 
 
Beginning of period
160,139,185
156,983,539
End of period
$130,085,597
$160,139,185
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report
20
Notes to Financial Statements
August 31, 2022
1. ORGANIZATION
Federated Hermes Municipal Securities Income Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of Federated Hermes Pennsylvania Municipal Income Fund (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers two classes of shares: Class A and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide current income exempt from federal regular income tax (federal regular income tax does not include the federal alternative minimum tax (AMT)) and the personal income taxes imposed by the State of Pennsylvania and Pennsylvania municipalities. Interest income from the Fund’s investments may be subject to the federal AMT for individuals.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
◾ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund’s Board of Trustees (the “Trustees”).
◾ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
◾ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
◾ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs, or NAV per share practical expedient, as applicable.
◾ For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer’s financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information
Annual Shareholder Report
21
furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value obtained could be materially different.
Fair Valuation Procedures
The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (the “Adviser”) and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services’ policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income, if any, are declared and paid monthly. Amortization/accretion of premium and discount is included in investment income. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net
Annual Shareholder Report
22
assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursement of $275,152 is disclosed in various locations in this Note 2 and Note 5. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Other Service Fees
The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund’s Class A Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended August 31, 2022, other service fees for the Fund were as follows: 
 
Other
Service Fees
Incurred
Other
Service Fees
Reimbursed
Class A Shares
$337,867
$(25,449)
Federal Taxes
It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended August 31, 2022, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of August 31, 2022, tax years 2019 through 2022 remain subject to examination by the Fund’s major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.
When-Issued and Delayed-Delivery Transactions
The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer’s expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted
Annual Shareholder Report
23
securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund’s restricted securities, like other securities, are priced in accordance with procedures established by and under the general supervision of the Trustees.
Futures Contracts
The Fund purchases and sells financial futures contracts to manage duration and yield curve risks. Upon entering into a financial futures contract with a broker, the Fund is required to deposit with a broker, either U.S. government securities or a specified amount of cash, which is shown as due from broker in the Statement of Assets and Liabilities. Futures contracts are valued daily and unrealized gains or losses are recorded in a “variation margin” account. The Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. There is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange’s clearing house, as counterparty to all exchange traded futures contracts, guarantees the futures contracts against default.
At August 31, 2022, the Fund had no outstanding futures contracts.
The average notional value of short futures contracts held by the Fund throughout the period was $704,684. This is based on amounts held as of each month end throughout the fiscal period.
Additional Disclosure Related to Derivative Instruments
The Effect of Derivative Instruments on the Statement of Operations for the Year Ended August 31, 2022 
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$15,022
 
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
 
Futures
Contracts
Interest rate contracts
$4,695
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ materially from those estimated. The Fund applies investment company accounting and reporting guidance.
Annual Shareholder Report
24
3. SHARES OF BENEFICIAL INTEREST
The following tables summarize share activity: 
Year Ended August 31
2022
2021
Class A Shares:
Shares
Amount
Shares
Amount
Shares sold
557,906
$5,957,192
847,834
$9,468,877
Shares issued to shareholders in payment of
distributions declared
247,867
2,635,953
232,709
2,595,452
Shares redeemed
(2,486,593)
(26,075,229)
(1,702,693)
(18,982,268)
NET CHANGE RESULTING FROM CLASS A
SHARE TRANSACTIONS
(1,680,820)
$(17,482,084)
(622,150)
$(6,917,939)
 
Year Ended August 31
2022
2021
Institutional Shares:
Shares
Amount
Shares
Amount
Shares sold
660,811
$6,965,996
823,743
$9,158,885
Shares issued to shareholders in payment of
distributions declared
13,772
145,065
7,349
81,998
Shares redeemed
(247,316)
(2,594,176)
(103,263)
(1,149,816)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS
427,267
$4,516,885
727,829
$8,091,067
NET CHANGE RESULTING FROM TOTAL
FUND SHARE TRANSACTIONS
(1,253,553)
$(12,965,199)
105,679
$1,173,128
4. FEDERAL TAX INFORMATION
The accounting treatment of certain items in accordance with income tax regulations may differ from the accounting treatment in accordance with GAAP which may result in permanent differences. In the case of the Fund, such differences result from an overdistribution necessary to meet excise distribution.
For the year ended August 31, 2022, permanent differences identified and reclassified among the components of net assets were as follows: 
Increase (Decrease)
Paid-In Capital
Total Distributable
Earnings (Loss)
$(156,989)
$156,989
Net investment income (loss), net realized gains (losses) and net assets were not affected by the reclassification.
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25
The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended August 31, 2022 and 2021, was as follows: 
 
2022
2021
Tax-exempt income
$3,526,966
$3,493,020
Ordinary income1
$35,715
$91,194
Long-term capital gains
$256,261
$59,774
1
For tax purposes, short-term capital gain distributions are considered ordinary income distributions.
As of August 31, 2022, the components of distributable earnings on a tax-basis were as follows: 
Net unrealized depreciation
$(4,838,813)
Capital loss deferral
$(967,792)
At August 31, 2022, the cost of investments for federal tax purposes was $133,549,439. The net unrealized depreciation of investments for federal tax purposes was $4,838,813. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $435,280 and net unrealized depreciation from investments for those securities having an excess of cost over value of $5,274,093.
Under current tax rules, capital losses on securities transactions realized after October 31 may be deferred, in whole or in part, and treated as occurring on the first day of the following fiscal year. As of August 31, 2022, for federal income tax purposes, post-October losses of $967,792 were deferred to September 1, 2022.
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.40% of the Fund’s average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund for competitive reasons such as to maintain the Fund’s expense ratio, or as and when appropriate, to maintain positive or zero net yields. For the year ended August 31, 2022, the Adviser voluntarily waived $249,703 of its fee.
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26
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below: 
Administrative Fee
Average Daily Net Assets
of the Investment Complex
0.100%
on assets up to $50 billion
0.075%
on assets over $50 billion
Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended August 31, 2022, the annualized fee paid to FAS was 0.079% of average daily net assets of the Fund.
In addition, FAS may charge certain out-of-pocket expenses to the Fund.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund’s Class A Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at 0.05% of average daily net assets annually to compensate FSC. Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee.
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended August 31, 2022, the Fund’s Class A Shares did not incur a distribution services fee; however it may begin to incur this fee upon approval of the Trustees.
Other Service Fees
For the year ended August 31, 2022, FSSC received $25,390 and reimbursed $25,449 of other service fees disclosed in Note 2.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended August 31, 2022, FSC retained $4,329 in sales charges from the sale of Class A Shares. FSC also retained $3,739 of CDSC relating to redemptions of Class A Shares.
Interfund Transactions
During the year ended August 31, 2022, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $35,300,000 and $37,400,00, respectively. Net realized gain (loss) recognized on these transactions was $0.
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27
Expense Limitation
The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund’s Class A Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 0.76% and 0.53% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) November 1, 2023; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Directors’/Trustees’ and Miscellaneous Fees
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors/Trustees’ fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.
6. Investment TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended August 31, 2022, were as follows: 
Purchases
$22,277,371
Sales
$33,068,936
7. CONCENTRATION OF RISK
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at August 31, 2022, 16.4% of the securities in the Portfolio of Investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies.
8. LINE OF CREDIT
The Fund participates with certain other Federated Hermes Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement dated June 22, 2022. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per
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28
annum equal to (a) the highest, on any day, of (i) the federal funds effective rate, (ii) the published secured overnight financing rate plus an assigned percentage, and (iii) 0.0%, plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of August 31, 2022, the Fund had no outstanding loans. During the year ended August 31, 2022, the Fund did not utilize the LOC.
9. INTERFUND LENDING
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Hermes, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of August 31, 2022, there were no outstanding loans. During the year ended August 31, 2022, the program was not utilized.
10. Indemnifications
Under the Fund’s organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund (other than liabilities arising out of their willful misfeasance, bad faith, gross negligence or reckless disregard of their duties to the Fund). In addition, in the normal course of business, the Fund provides certain indemnifications under arrangements with third parties. Typically, obligations to indemnify a third party arise in the context of an arrangement entered into by the Fund under which the Fund agrees to indemnify such third party for certain liabilities arising out of actions taken pursuant to the arrangement, provided the third party’s actions are not deemed to have breached an agreed-upon standard of care (such as willful misfeasance, bad faith, gross negligence or reckless disregard of their duties under the contract). The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet arisen. The Fund does not anticipate any material claims or losses pursuant to these arrangements at this time, and accordingly expects the risk of loss to be remote.
11. OTHER mATTERS
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally. As of the date of the issuance of these financial statements, this coronavirus has resulted in closing borders, enhanced health screenings, disruptions to healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may continue for an extended period of time and has resulted in substantial economic volatility. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies, (including certain Fund service providers and issuers of the Fund’s investments) and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund's performance.
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12. FEDERAL TAX INFORMATION (UNAUDITED)
For the year ended August 31, 2022, the amount of long-term capital gains designated by the Fund was $256,261.
For the fiscal year ended August 31, 2022, 100% of distributions from net investment income is exempt from federal income tax, other than the federal AMT.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Federated Hermes Municipal Securities INCOME Trust and the Shareholders of Federated Hermes Pennsylvania Municipal Income Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of the Federated Hermes Pennsylvania Municipal Income Fund (the “Fund’’), a portfolio of Federated Hermes Municipal Securities Income Trust, including the portfolio of investments, as of August 31, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the “financial statements’’) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of August 31, 2022, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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31
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of August 31, 2022, by correspondence with custodians. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
 
We have served as the auditor for one or more of Federated Hermes’ investment companies since 2006.
Boston, Massachusetts
October 24, 2022
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32
Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2022 to August 31, 2022.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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33
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. 
 
Beginning
Account Value
3/1/2022
Ending
Account Value
8/31/2022
Expenses Paid
During Period1
Actual:
Class A Shares
$1,000
$938.20
$3.71
Institutional Shares
$1,000
$940.20
$2.59
Hypothetical (assuming a 5% return before expenses):
Class A Shares
$1,000
$1,021.37
$3.87
Institutional Shares
$1,000
$1,022.53
$2.70
1
Expenses are equal to the Fund’s annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: 
Class A Shares
0.76%
Institutional Shares
0.53%
Annual Shareholder Report
34
Board of Trustees and Trust Officers
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2021, the Trust comprised four portfolio(s), and the Federated Hermes Fund Family consisted of 33 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Fund Family and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400, Option #4.
Interested TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: August 1990
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of the Funds in the Federated Hermes Fund Family; President,
Chief Executive Officer and Director, Federated Hermes, Inc.;
Chairman and Trustee, Federated Investment Management Company;
Trustee, Federated Investment Counseling; Chairman and Director,
Federated Global Investment Management Corp.; Chairman and
Trustee, Federated Equity Management Company of Pennsylvania;
Trustee, Federated Shareholder Services Company; Director,
Federated Services Company.
Previous Positions: President, Federated Investment Counseling;
President and Chief Executive Officer, Federated Investment
Management Company, Federated Global Investment Management
Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.
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35
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of
certain of the Funds in the Federated Hermes Fund Family; Director or
Trustee of certain of the Funds in the Federated Hermes Fund Family;
Director and Vice President, Federated Hermes, Inc.; President,
Director/Trustee and CEO, Federated Advisory Services Company,
Federated Equity Management Company of Pennsylvania, Federated
Global Investment Management Corp., Federated Investment
Counseling, Federated Investment Management Company; President
of some of the Funds in the Federated Hermes Fund Family and
Director, Federated Investors Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of
Federated Investment Counseling; President and CEO of Passport
Research, Ltd.; Director, Edgewood Securities Corp.; Director,
Federated Services Company; Chairman and Director, Southpointe
Distribution Services, Inc. and President, Technology, Federated
Services Company.
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
INDEPENDENT TRUSTEES Background 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee, and Chair of the Board
of Directors or Trustees, of the Federated Hermes Fund Family;
formerly, Chairman and CEO, The Collins Group, Inc. (a private equity
firm) (Retired).
Other Directorships Held: Director, KLX Energy Services Holdings,
Inc. (oilfield services); former Director of KLX Corp. (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins
Group, Inc. (a private equity firm) and as a Director of KLX Corp.
Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins
previously served as Director and Audit Committee Member, Bank of
America Corp.; Director, FleetBoston Financial Corp.; and Director,
Beth Israel Deaconess Medical Center (Harvard University
Affiliate Hospital).
Annual Shareholder Report
36
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough
Birth Date: February 28, 1955
Trustee
Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit
Committee of the Federated Hermes Fund Family; formerly, Vice
Chair, Ernst & Young LLP (public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Lead Director, Member of the Audit and Nominating and
Corporate Governance Committees, Haverty Furniture Companies,
Inc.; formerly, Director, Member of Governance and Compensation
Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business
management and directorship positions throughout his career.
Mr. Hough most recently held the position of Americas Vice Chair of
Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough
serves on the President’s Cabinet and Business School Board of
Visitors for the University of Alabama. Mr. Hough previously served on
the Business School Board of Visitors for Wake Forest University, and
he previously served as an Executive Committee member of the
United States Golf Association.
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee
Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Adjunct Professor Emerita of Law, Duquesne University
School of Law; formerly, Dean of the Duquesne University School of
Law and Professor of Law and Interim Dean of the Duquesne
University School of Law; formerly, Associate General Secretary and
Director, Office of Church Relations, Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and
business roles and directorship positions throughout her career. Judge
Lally-Green previously held the position of Dean of the School of Law
of Duquesne University (as well as Interim Dean). Judge Lally-Green
previously served as a member of the Superior Court of Pennsylvania
and as a Professor of Law, Duquesne University School of Law. Judge
Lally-Green was appointed by the Supreme Court of Pennsylvania to
serve on the Supreme Court’s Board of Continuing Judicial Education
and the Supreme Court’s Appellate Court Procedural Rules
Committee. Judge Lally-Green also currently holds the positions on
not for profit or for profit boards of directors as follows: Director
and Chair, UPMC Mercy Hospital; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director,
Catholic Charities, Pittsburgh; and Director CNX Resources
Corporation (formerly known as CONSOL Energy Inc.). Judge
Lally-Green has held the positions of: Director, Auberle; Director,
Epilepsy Foundation of Western and Central Pennsylvania; Director,
Ireland Institute of Pittsburgh; Director, Saint Thomas More Society;
Director and Chair, Catholic High Schools of the Diocese of
Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
St. Vincent College; Director and Chair, North Catholic High
School, Inc.; Director and Vice Chair, Our Campaign for the Church
Alive!, Inc.; and Director, Saint Francis University.
Annual Shareholder Report
37
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee
Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Sole Proprietor, Navigator Management Company
(investment and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund
and financial management roles and directorship positions throughout
his career. Mr. O’Neill serves as Director, Medicines for Humanity.
Mr. O’Neill previously served as Chief Executive Officer and President,
Managing Director and Chief Investment Officer, Fleet Investment
Advisors; President and Chief Executive Officer, Aeltus Investment
Management, Inc.; General Partner, Hellman, Jordan Management
Co., Boston, MA; Chief Investment Officer, The Putnam Companies,
Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director
and Consultant, EZE Castle Software (investment order management
software); Director, The Golisano Children’s Museum of Naples,
Florida; and Director, Midway Pacific (lumber).
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving:
November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; formerly, Executive Vice President for Legal Affairs,
General Counsel and Secretary to the Board of Directors, Duquesne
University (Retired).
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served
as Senior Vice President for Legal Affairs, General Counsel and
Secretary to the Board of Directors and Assistant General Counsel and
Director of Risk Management, Duquesne University. Prior to her work
at Duquesne University, Ms. Reilly served as Assistant General
Counsel of Compliance and Enterprise Risk as well as Senior Counsel
of Environment, Health and Safety, PPG Industries. Ms. Reilly currently
serves as a member of the Board of Directors of UPMC
Mercy Hospital.
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38
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held, Previous Position(s) and Qualifications
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and
Executive Vice President and Chief Legal Officer, CONSOL Energy Inc.
(now split into two separate publicly traded companies known as
CONSOL Energy Inc. and CNX Resources Corp.).
Other Directorships Held: None.
Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor
and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously
served as Chairman of the Board, Epilepsy Foundation of Western
Pennsylvania and Chairman of the Board, World Affairs Council of
Pittsburgh. Mr. Richey previously served as Chief Legal Officer and
Executive Vice President, CONSOL Energy Inc. and CNX Gas
Company; and Board Member, Ethics Counsel and Shareholder,
Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh
Birth Date:
November 28, 1957
Trustee
Indefinite Term
Began serving: June 1999
Principal Occupations: Director or Trustee of the Federated Hermes
Fund Family; President and Director, Heat Wagon, Inc. (manufacturer
of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a division of Manufacturers
Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management
roles and directorship positions throughout his career. Mr. Walsh
previously served as Vice President, Walsh & Kelly, Inc.
(paving contractors).
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39
OFFICERS 
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
TREASURER
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the
Federated Hermes Fund Family; Senior Vice President, Federated
Administrative Services; Financial and Operations Principal for
Federated Securities Corp.; and Assistant Treasurer, Federated
Investors Trust Company. Ms. Hensler has received the Certified
Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice
President and Assistant Treasurer, Federated Investors Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services, Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services Company, Federated
Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp., Federated Investment Counseling,
Federated Investment Management Company, Passport Research,
Ltd., and Federated MDTA, LLC; Financial and Operations Principal for
Federated Securities Corp., Edgewood Services, Inc. and Southpointe
Distribution Services, Inc.
Peter J. Germain
Birth Date:
September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: January 2005
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary
and Executive Vice President of the Federated Hermes Fund Family.
He is General Counsel, Chief Legal Officer, Secretary and Executive
Vice President, Federated Hermes, Inc.; Trustee and Senior Vice
President, Federated Investors Management Company; Trustee and
President, Federated Administrative Services; Director and President,
Federated Administrative Services, Inc.; Director and Vice President,
Federated Securities Corp.; Director and Secretary, Federated Private
Asset Management, Inc.; Secretary, Federated Shareholder Services
Company; and Secretary, Retirement Plan Service Company of
America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.
Previous Positions: Deputy General Counsel, Special Counsel,
Managing Director of Mutual Fund Services, Federated Hermes, Inc.;
Senior Vice President, Federated Services Company; and Senior
Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE
OFFICER AND SENIOR
VICE PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance
Officer of the Federated Hermes Fund Family; Vice President and
Chief Compliance Officer of Federated Hermes, Inc. and Chief
Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined
Federated Hermes, Inc. in October 2011. He holds FINRA licenses
under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of
Compliance Operating Officer, Federated Hermes, Inc. Prior to joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions of Senior
Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
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40
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years
and Previous Position(s)
Robert J. Ostrowski
Birth Date: April 26, 1963
Chief Investment Officer
Officer since: February 2010
Principal Occupations: Robert J. Ostrowski joined Federated Hermes,
Inc. in 1987 as an Investment Analyst and became a Portfolio Manager
in 1990. He was named Chief Investment Officer of Federated
Hermes’ taxable fixed-income products in 2004 and also serves as a
Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice
President of the Fund’s Adviser in 2009 and served as a Senior Vice
President of the Fund’s Adviser from 1997 to 2009. Mr. Ostrowski has
received the Chartered Financial Analyst designation. He received his
M.S. in Industrial Administration from Carnegie Mellon University.
 
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41
Evaluation and Approval of Advisory Contract–May 2022
Federated Hermes Pennsylvania Municipal Income Fund (the “Fund”)
At its meetings in May 2022 (the “May Meetings”), the Fund’s Board of Trustees (the “Board”), including those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Investment Management Company (the “Adviser”) (the “Contract”) for an additional one-year term. The Board’s determination to approve the continuation of the Contract reflects the exercise of its business judgment after considering all of the information and factors believed to be relevant and appropriate on whether to approve the continuation of the existing arrangement. The information, factors and conclusions that formed the basis for the Board’s approval are summarized below.
Information Received and Review Process
At the request of the Independent Trustees, the Fund’s Chief Compliance Officer (the “CCO”) furnished to the Board in advance of its May Meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO’s independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund’s management fee and in determining to approve the continuation of the Contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer” prior to the elimination of the Senior Officer position in December 2017.
In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board considered information specifically prepared in connection with the approval of the continuation of the Contract that was presented at the May Meetings. In this regard, in the months preceding the May Meetings, the Board requested and reviewed written responses and supporting materials prepared by the Adviser and its affiliates (collectively, “Federated Hermes”) in response to requests posed to Federated Hermes by independent legal counsel on behalf of the Independent Trustees encompassing a wide variety of topics, including those summarized below. The Board also considered such additional matters as the Independent Trustees deemed
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reasonably necessary to evaluate the Contract, which included detailed information about the Fund and Federated Hermes furnished to the Board at its meetings throughout the year and in between regularly scheduled meetings on particular matters as the need arose.
The Board’s consideration of the Contract included review of materials and information covering the following matters, among others: the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates; Federated Hermes’ business and operations; the Adviser’s investment philosophy, personnel and processes; the Fund’s investment objectives and strategies; the Fund’s short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, and relative to the Fund’s particular investment program and a group of its peer funds and/or its benchmark, as appropriate); the Fund’s fees and expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to a group of its peer funds), with due regard for contractual or voluntary expense limitations (if any); the financial condition of Federated Hermes; the Adviser’s profitability with respect to the Fund; distribution and sales activity for the Fund; and the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any).
The Board also considered judicial decisions concerning allegedly excessive investment advisory fees charged to other registered funds in determining to approve the Contract. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser’s fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by the adviser to the fund and its shareholders, including the performance of the fund, its benchmark and comparable funds; (2) the adviser’s cost of providing the services and the profitability to the adviser of providing advisory services to the fund; (3) the extent to which the adviser may realize “economies of scale” as the fund grows larger and, if such economies of scale exist, whether they have been appropriately shared with the fund and its shareholders or the family of funds; (4) any “fall-out” benefits that accrue to the adviser because of its relationship with the fund, including research services received from brokers that execute fund trades and any fees paid to affiliates of the adviser for services rendered to the fund; (5) comparative fee and expense structures, including a comparison of management fees paid to the adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the adviser for what might be viewed as like services; and (6) the extent of care, conscientiousness and independence with which the fund’s board members perform their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of the adviser’s services and fees. The Board noted that the Securities and Exchange Commission (“SEC”) disclosure requirements
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regarding the basis for a fund board’s approval of the fund’s investment advisory contract generally align with the factors listed above. The Board was guided by these factors in its review of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Hermes on matters relating to the oversight of the other funds advised by Federated Hermes (each, a “Federated Hermes Fund” and, collectively, the (“Federated Hermes Funds”).
In addition to considering the above-referenced factors, the Board was mindful of the preferences and expectations of Fund shareholders and the potential disruptions of the Fund’s operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew the Contract. In particular, the Board recognized that many shareholders likely have invested in the Fund on the strength of Federated Hermes’ industry standing and reputation and with the expectation that Federated Hermes will have a continuing role in providing advisory services to the Fund. Thus, the Board observed that in the marketplace there are a range of investment options available to the Fund’s shareholders and such shareholders, having had the opportunity to consider other investment options, have effectively selected Federated Hermes by virtue of investing in the Fund.
In determining to approve the continuation of the Contract, the members of the Board reviewed and evaluated information and factors they believed to be relevant and appropriate through the exercise of their reasonable business judgment. While individual members of the Board may have weighed certain factors differently, the Board’s determination to approve the continuation of the Contract was based on a comprehensive consideration of all information provided to the Board throughout the year and specifically with respect to the continuation of the Contract. The Board recognized that its evaluation process is evolutionary and that the factors considered and emphasis placed on relevant factors may change in recognition of changing circumstances in the registered fund marketplace. The Independent Trustees were assisted throughout the evaluation process by independent legal counsel. In connection with their deliberations at the May Meetings, the Independent Trustees met separately in executive session with their independent legal counsel and without management present to review the relevant materials and consider their responsibilities under applicable laws. In addition, senior management representatives of Federated Hermes also met with the Independent Trustees and their independent legal counsel to discuss the materials and presentations furnished to the Board at the May Meetings. The Board considered the approval of the Contract for the Fund as part of its consideration of agreements for funds across the family of Federated Hermes Funds, but its approvals were made on a fund-by-fund basis.
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Nature, Extent and Quality of Services
The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of Federated Hermes dedicated to the Fund. In this regard, the Board evaluated, among other things, the terms of the Contract and the range of services provided to the Fund by Federated Hermes. The Board considered the Adviser’s personnel, investment philosophy and process, investment research capabilities and resources, trade operations capabilities, experience and performance track record. The Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and Federated Hermes’ ability and experience in attracting and retaining qualified personnel to service the Fund. The Board also considered the Adviser’s ability to deliver competitive investment performance for the Fund when compared to the Fund’s Performance Peer Group (as defined below), which was deemed by the Board to be a useful indicator of how the Adviser is executing the Fund’s investment program.
In addition, the Board considered the financial resources and overall reputation of Federated Hermes and its willingness to consider and make investments in personnel, infrastructure, technology, cybersecurity, business continuity planning and operational enhancements that are designed to benefit the Federated Hermes Funds. The Board noted the significant acquisition of Hermes Fund Managers Limited by Federated Hermes, which has deepened the organization’s investment management expertise and capabilities and expanded the investment process for all of the Federated Hermes Funds to have access to analytical resources related to environmental, social and governance (“ESG”) factors and issuer engagement on ESG matters. The Board considered Federated Hermes’ oversight of the securities lending program for the Federated Hermes Funds that engage in securities lending and noted the income earned by the Federated Hermes Funds that participate in such program. In addition, the Board considered the quality of Federated Hermes’ communications with the Board and responsiveness to Board inquiries and requests made from time to time with respect to the Fund and other Federated Hermes Funds. In this regard, the Board took into account Federated Hermes’ communications with the Board in light of the pandemic. The Board also considered that Federated Hermes is responsible for providing the Federated Hermes Funds’ officers.
The Board received and evaluated information regarding Federated Hermes’ regulatory and compliance environment. The Board considered Federated Hermes’ compliance program and compliance history and reports from the CCO about Federated Hermes’ compliance with applicable laws and regulations, including responses to regulatory developments and any compliance or other issues raised by regulatory agencies. The Board also noted Federated Hermes’ support of the Federated Hermes Funds’ compliance control structure and the compliance-related resources devoted by Federated
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Hermes in support of the Fund’s obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, including Federated Hermes’ commitment to respond to rulemaking and other regulatory initiatives of the SEC. The Board considered Federated Hermes’ approach to internal audits and risk management with respect to the Federated Hermes Funds and its day-to-day oversight of the Federated Hermes Funds’ compliance with their investment objectives and policies as well as with applicable laws and regulations, noting that regulatory and other developments had over time led to an increase in the scope of Federated Hermes’ oversight in this regard, including in connection with the designation of the Federated Hermes Funds’ investment advisers as the administrators of the Federated Hermes Funds’ liquidity risk management program.
The Board also considered the implementation of Federated Hermes’ business continuity plans and recognized steps taken by Federated Hermes to continue to provide the same nature, extent and quality of services to the Federated Hermes Funds during the pandemic. In addition, the Board noted Federated Hermes’ commitment to maintaining high quality systems and expending substantial resources to prepare for and respond to ongoing changes due to the market, regulatory and control environments in which the Fund and its service providers operate, including changes associated with the pandemic.
The Board considered Federated Hermes’ efforts to provide shareholders in the Federated Hermes Funds with a comprehensive array of funds with different investment objectives, policies and strategies. The Board considered the expenses that Federated Hermes had incurred, as well as the entrepreneurial and other risks assumed by Federated Hermes, in sponsoring and providing on-going services to new funds to expand these opportunities for shareholders. The Board noted the benefits to shareholders of being part of the family of Federated Hermes Funds, which include the general right to exchange investments between the same class of shares without the incurrence of additional sales charges.
Based on these considerations, the Board concluded that it was satisfied with the nature, extent and quality of the services provided by the Adviser to the Fund.
Fund Investment Performance
The Board considered the investment performance of the Fund. In evaluating the Fund’s investment performance, the Board considered performance results in light of the Fund’s investment objective, strategies and risks. The Board considered detailed investment reports on, and the Adviser’s analysis of, the Fund’s performance over different time periods that were provided to the Board throughout the year and in connection with the May Meetings. These reports include, among other items, information on the Fund’s
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gross and net returns, the Fund’s investment performance compared to one or more relevant categories or groups of peer funds and the Fund’s benchmark index, performance attribution information and commentary on the effect of market conditions.
The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. (the “Morningstar”), an independent fund ranking organization (the “Performance Peer Group”). The Board noted the CCO’s view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds’ objectives or investment management techniques, or the costs to implement the funds, even within the same Performance Peer Group.
For the periods ended December 31, 2021, the Fund’s performance for the three-year period was above the median of the Performance Peer Group, and the Fund’s performance fell below the median of the Performance Peer Group for the one-year and five-year periods. The Board discussed the Fund’s performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.
Based on these considerations, the Board concluded that it had continued confidence in the Adviser’s overall capabilities to manage the Fund.
Fund Expenses
The Board considered the advisory fee and overall expense structure of the Fund and the comparative fee and expense information that had been provided in connection with the May Meetings. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund’s total expense ratio (i.e., gross and net advisory fees, administrative fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated Hermes from the category of peer funds selected by Morningstar (the “Expense Peer Group”). The Board received a description of the methodology used to select the Expense Peer Group from the overall Morningstar category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall Morningstar category.
While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board noted that it found the use of such comparisons to be relevant to its evaluation. The Board focused on comparisons with other similar registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant. The Board considered that other registered funds
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are the products most like the Fund, in that they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle, in fact, chosen and maintained by the Fund’s shareholders. The Board noted that the range of such other registered funds’ fees and expenses, therefore, appears to be a relevant indicator of what investors have found to be reasonable in the marketplace in which the Fund competes.
The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund’s fee rates relative to its Expense Peer Group. In this regard, the Board noted that the contractual advisory fee rate was below the median of the Expense Peer Group, and the Board was satisfied that the overall expense structure of the Fund remained competitive.
The Board also received and considered information about the fees charged by Federated Hermes for providing advisory services to other types of clients with investment strategies similar to those of the Federated Hermes Funds, including non-registered fund clients (such as institutional separate accounts) and third-party unaffiliated registered funds for which the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO’s conclusion that non-registered fund clients are inherently different products due to the following differences, among others: (i) different types of targeted investors; (ii) different applicable laws and regulations; (iii) different legal structures; (iv) different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; (v) the time spent by portfolio managers and their teams (among other personnel across various departments, including legal, compliance and risk management) in reviewing securities pricing and fund liquidity; (vi) different administrative responsibilities; (vii) different degrees of risk associated with management; and (viii) a variety of different costs. The Board also considered information regarding the differences in the nature of the services required for Federated Hermes to manage its proprietary registered fund business versus managing a discrete pool of assets as a sub-adviser to another institution’s registered fund, noting the CCO’s view that Federated Hermes generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Hermes Funds than in its role as sub-adviser to an unaffiliated third-party registered fund. The Board noted that the CCO did not consider the fees for providing advisory services to other types of clients to be determinative in judging the appropriateness of the Federated Hermes Funds’ advisory fees.
Based on these considerations, the Board concluded that the fees and total operating expenses of the Fund, in conjunction with other matters considered, are reasonable in light of the services provided.
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Profitability
The Board received and considered profitability information furnished by Federated Hermes, as requested by the CCO. Such profitability information included revenues reported on a fund-by-fund basis and estimates of the allocation of expenses made on a fund-by-fund basis, using allocation methodologies specified by the CCO and described to the Board. The Board considered the CCO’s view that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs on a fund-by-fund basis continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable because a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Hermes Fund and may produce unintended consequences. In addition, the Board considered the CCO’s view that the allocation methodologies used by Federated Hermes in estimating profitability for purposes of reporting to the Board in connection with the continuation of the Contract are consistent with the methodologies previously reviewed by an independent consultant. The Board noted that the independent consultant had previously conducted a review of the allocation methodologies and reported that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable.
The Board also reviewed information compiled by Federated Hermes comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. The Board considered the CCO’s conclusion that, based on such profitability information, Federated Hermes’ profit margins did not appear to be excessive. The Board also considered the CCO’s view that Federated Hermes appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Federated Hermes Funds.
Economies of Scale
The Board received and considered information about the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated Hermes has made significant and long-term investments in areas that support all of the Federated Hermes Funds, such as: personnel, processes and tools for portfolio management, including the use of market data on which portfolio managers make investment decisions; trading operations; ESG integration and issuer engagement on ESG matters; shareholder services; compliance; business continuity; cybersecurity; internal audit and risk management functions; and technology that supports the provision of investment management services. The Board noted that Federated Hermes’ investments in these areas are extensive and are designed to provide enhanced services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared
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with the family of Federated Hermes Funds as a whole. In addition, the Board considered that fee waivers and expense reimbursements are another means for potential economies of scale to be shared with shareholders and can provide protection from an increase in expenses if a Federated Hermes Fund’s assets decline. The Board considered that, in order for the Federated Hermes Funds to remain competitive in the marketplace, Federated Hermes has frequently waived fees and/or reimbursed expenses for the Federated Hermes Funds and has disclosed to shareholders and/or reported to the Board its intention to do so (or continue to do so) in the future. The Board also considered Federated Hermes’ reductions in contractual management fees for certain Federated Hermes Funds during the prior year, including in response to the CCO’s recommendations in the prior year’s CCO Fee Evaluation Report, which have resulted in benefits being realized by shareholders.
The Board also considered reports on adviser-paid fees (commonly referred to as “revenue sharing”) that were provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes and the CCO believe that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to evaluate the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which is compounded by the lack of any uniform methodology or pattern with respect to structuring fund advisory fees with breakpoints that serve to reduce the fees as a fund attains a certain size.
Other Benefits
The Board considered information regarding the compensation and other ancillary (or “fall-out”) benefits that Federated Hermes derived from its relationships with the Federated Hermes Funds. The Board noted that, in addition to receiving advisory fees under the Federated Hermes Funds’ investment advisory contracts, Federated Hermes’ affiliates also receive fees for providing other services to the Federated Hermes Funds under separate contracts (e.g., for serving as the Federated Hermes Funds’ administrator and distributor). In this regard, the Board considered that certain of Federated Hermes’ affiliates provide distribution and shareholder services to the Federated Hermes Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The Board also received and considered information detailing any indirect benefit that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.
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Conclusions
The Board considered: (i) the CCO’s conclusion that his observations and the information accompanying the CCO Fee Evaluation Report show that the management fee for the Fund is reasonable; and (ii) the CCO’s recommendation that the Board approve the management fee. The Board noted that, under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Contract by the CCO. The CCO also recognized that the Board’s evaluation of the Federated Hermes Funds’ advisory and sub-advisory arrangements is a continuing and ongoing process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its ongoing oversight of the Federated Hermes Funds.
On the basis of the information and factors summarized above, among other information and factors deemed relevant by the Board, and the evaluation thereof, the Board, including the Independent Trustees, unanimously voted to approve the continuation of the Contract. The Board based its determination to approve the Contract on the totality of the circumstances and relevant factors and with a view of past and future long-term considerations. Not all of the factors and considerations identified above were necessarily deemed to be relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were deemed to be relevant, the Board’s determination to approve the continuation of the Contract reflects its view that Federated Hermes’ performance and actions provided a satisfactory basis to support the determination to approve the continuation of the existing arrangement.
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Liquidity Risk Management Program–
Annual Evaluation of Adequacy and Effectiveness
In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”), Federated Hermes Municipal Securities Income Trust (the “Trust”) has adopted and implemented a liquidity risk management program (the “Program”) for Federated Hermes Pennsylvania Municipal Income Fund (the “Fund” and, collectively with the other non-money market open-end funds advised by Federated Hermes, the “Federated Hermes Funds”). The Program seeks to assess and manage the Fund’s liquidity risk. “Liquidity risk” is defined under the Liquidity Rule as the risk that the Fund is unable to meet redemption requests without significantly diluting remaining investors’ interests in the Fund. The Board of Trustees of the Trust (the “Board”) has approved the designation of each Federated Hermes Fund’s investment adviser as the administrator for the Program (the “Administrator”) with respect to that Fund. The Administrator, in turn, has delegated day-to-day responsibility for the administration of the Program to multiple Liquidity Risk Management Committees, which are comprised of representatives from certain divisions within Federated Hermes.
The Program is comprised of various components designed to support the assessment and/or management of liquidity risk, including: (1) the periodic assessment (no less frequently than annually) of certain factors that influence the Fund’s liquidity risk; (2) the periodic classification (no less frequently than monthly) of the Fund’s investments into one of four liquidity categories that reflect an estimate of their liquidity under current market conditions; (3) a 15% limit on the acquisition of “illiquid investments” (as defined under the Liquidity Rule); (4) to the extent a Fund does not invest primarily in “highly liquid investments” (as defined under the Liquidity Rule), the determination of a minimum percentage of the Fund’s assets that generally will be invested in highly liquid investments (an “HLIM”); (5) if a Fund has established an HLIM, the periodic review (no less frequently than annually) of the HLIM and the adoption of policies and procedures for responding to a shortfall of the Fund’s highly liquid investments below its HLIM; and (6) periodic reporting to the Board.
At its meetings in May 2022, the Board received and reviewed a written report (the “Report”) from the Federated Hermes Funds’ Chief Compliance Officer and Chief Risk Officer, on behalf of the Administrator, concerning the operation of the Program for the period from April 1, 2021 through March 31, 2022 (the “Period”). The Report addressed the operation of the Program and assessed its adequacy and effectiveness, including, where applicable, the operation of any HLIM established for a Federated Hermes Fund and each Federated Hermes Fund’s access to other available funding sources such as the Federated Hermes Funds’ interfund lending facility, redemptions in-kind, reverse repurchase agreement transactions, redemptions
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delayed beyond the normal T+1 settlement, but within seven days of the redemption request, and committed lines of credit. There were no material changes to the Program during the Period. The Report summarized the operation of the Program and the information and factors considered by the Administrator in assessing whether the Program has been adequately and effectively implemented with respect to the Federated Hermes Funds. Such information and factors included, among other things:
◾ confirmation that it was not necessary for the Fund to utilize, and the Fund did not utilize, alternative funding sources during the Period;
◾ the periodic classifications of the Fund’s investments into one of four liquidity categories and the methodologies and inputs used to classify the investments, including the Fund’s reasonably anticipated trade size;
◾ the analysis received from a third-party liquidity assessment vendor that is taken into account in the process of determining the liquidity classifications of the Fund’s investments and the results of an evaluation of the services performed by the vendor in support of this process;
◾ the fact that the Fund invested primarily in highly liquid investments during the Period and, therefore, was not required to establish, and has not established, an HLIM and the procedures for monitoring the status of the Fund as investing primarily in highly liquid investments;
◾ the fact that the Fund invested no more than 15% of its assets in illiquid investments during the Period and the procedures for monitoring this limit;
◾ the fact that there were no liquidity events during the Period, that materially affected the Fund’s liquidity risk;
◾ the impact on liquidity and management of liquidity risk caused by extended non-U.S. market closures and confirmation that there were no issues for any of the affected Federated Hermes Funds in meeting shareholder redemptions at any time during these temporary non-U.S. market closures;
◾ circumstances during the Period under which the Administrator convened meetings of the Liquidity Risk Management Committees more frequently than normal to conduct enhanced liquidity risk monitoring, including prior to the Russian invasion of Ukraine.
Based on this review, the Administrator concluded that the Program is operating effectively to assess and manage the Fund’s liquidity risk, and that the Program has been and continues to be adequately and effectively implemented to monitor and, as applicable, respond to the Fund’s liquidity developments.
Annual Shareholder Report
53
Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund’s portfolio is available, without charge and upon request, by calling 1-800-341-7400, Option #4. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Quarterly Portfolio Schedule
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
Annual Shareholder Report
54
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund’s Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.
  
 
Federated Hermes Pennsylvania Municipal Income Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 313923708
CUSIP 313923757
28995 (10/22)
© 2022 Federated Hermes, Inc.
 

 

 

  Item 2. Code of Ethics

 

(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.

(c) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.

(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.

(e) Not Applicable

(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3. Audit Committee Financial Expert

The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item:  G. Thomas Hough and Thomas M. O'Neill. 

  Item 4. Principal Accountant Fees and Services

 

(a)       Audit Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2022 – $132,750

Fiscal year ended 2021 - $126,430

(b)       Audit-Related Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2022 - $0

Fiscal year ended 2021 - $0

 

Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(c)        Tax Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2022 - $0

Fiscal year ended 2021 - $0

Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(d)       All Other Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2022 - $0

Fiscal year ended 2021 - $0

Amount requiring approval of the registrant’s Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(e)(1) Audit Committee Policies regarding Pre-approval of Services.

The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.

Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate to management its responsibilities to pre-approve services performed by the independent auditor.

The Audit Committee has delegated pre-approval authority to its chairman (the “Chairman”) for services that do not exceed a specified dollar threshold. The Chairman or Chief Audit Executive will report any such pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.

AUDIT SERVICES

The annual audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee will approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.

In addition to the annual audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other audit services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain audit services; with limited exception, all other audit services must be specifically pre-approved by the Audit Committee.

AUDIT-RELATED SERVICES

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the RIC’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of audit-related services does not impair the independence of the auditor, and has pre-approved certain audit-related services; all other audit-related services must be specifically pre-approved by the Audit Committee.

TAX SERVICES

The Audit Committee believes that the independent auditor can provide tax services to the RIC such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain tax services; with limited exception, all tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.

ALL OTHER SERVICES

With respect to the provision of permissible services other than audit, review or attest services the pre-approval requirement is waived if:

  (1) With respect to such services rendered to the Funds, the aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the audit client to its accountant during the fiscal year in which the services are provided; and,

 

  (2) With respect to such services rendered to the Fund’s investment adviser ( the “Adviser”)and any entity controlling, controlled by to under common control with the Adviser such as affiliated non-U.S. and U.S. funds not under the Audit Committee’s purview and which do not fall within a category of service which has been determined by the Audit Committee not to have a direct impact on the operations or financial reporting of the RIC, the aggregate amount of all services provided constitutes no more than five percent of the total amount of revenues paid to the RIC’s auditor by the RIC, its Adviser and any entity controlling, controlled by, or under common control with the Adviser during the fiscal year in which the services are provided; and

 

  (3) Such services were not recognized by the issuer or RIC at the time of the engagement to be non-audit services; and

 

  (4) Such services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Audit Committee.

 

The Audit Committee may grant general pre-approval to those permissible non-audit services which qualify for pre-approval and which it believes are routine and recurring services, and would not impair the independence of the auditor.

The Securities and Exchange Commission’s (the “SEC”) rules and relevant guidance should be consulted to determine the precise definitions of these services and applicability of exceptions to certain of the prohibitions.

PRE-APPROVAL FEE LEVELS

Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.

PROCEDURES

Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by the Fund’s Principal Accounting Officer and/or the Chief Audit Executive of Federated Hermes, Inc., only after those individuals have determined that the request or application is consistent with the SEC’s rules on auditor independence.

(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

4(b)

Fiscal year ended 2022 – 0%

Fiscal year ended 2021 - 0%

Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(c)

Fiscal year ended 2022 – 0%

Fiscal year ended 2021 – 0%

Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(d)

Fiscal year ended 2022 – 0%

Fiscal year ended 2021 – 0%

Percentage of services provided to the registrant’s Adviser and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

  (f) NA

 

  (g) Non-Audit Fees billed to the registrant, the registrant’s Adviser, and certain entities controlling, controlled by or under common control with the Adviser:

 

Fiscal year ended 2022 - $18,526

Fiscal year ended 2021 - $13,659

  (h) The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s Adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

 

  Item 5. Audit Committee of Listed Registrants

 

Not Applicable

 

  Item 6. Schedule of Investments

 

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.

 

(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.

 

  Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

 

Not Applicable

 

  Item 8. Portfolio Managers of Closed-End Management Investment Companies

 

Not Applicable

 

  Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

 

Not Applicable

 

  Item 10. Submission of Matters to a Vote of Security Holders

 

No Changes to Report

 

  Item 11. Controls and Procedures

 

(a) The registrant’s President and Treasurer have concluded that the

registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

  Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

 

Not Applicable

 

  Item 13. Exhibits

 

(a)(1) Code of Ethics- Not Applicable to this Report.

 

(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.

 

(a)(3) Not Applicable.

 

(b) Certifications pursuant to 18 U.S.C. Section 1350.

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Registrant Federated Hermes Municipal Securities Income Trust

 

By /S/ Lori A. Hensler

 

Lori A. Hensler, Principal Financial Officer

 

Date October 24, 2022

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By /S/ J. Christopher Donahue

 

J. Christopher Donahue, Principal Executive Officer

 

Date October 24, 2022

 

 

By /S/ Lori A. Hensler

 

Lori A. Hensler, Principal Financial Officer

 

Date October 24, 2022