Federated Hermes (FHI) Ergebniskonferenz Q3 2026: MDT-Zuflüsse steigern Aktien-AUM

Wichtigste Erkenntnisse

• Federated Hermes schloss das 3. Quartal 2026 mit einem Rekordniveau beim verwalteten Aktienvermögen von 110,5 Milliarden US-Dollar ab. Positive Nettozuflüsse von 1,9 Milliarden US-Dollar wurden teilweise durch niedrigere Marktbewertungen ausgeglichen.
• MDT-Strategien erzielten mit 6 Milliarden US-Dollar beim Bruttoabsatz und 3,2 Milliarden US-Dollar beim Nettoabsatz Rekordwerte. Sieben von neun MDT-Fondsstrategien platzierten sich über die vergangenen drei Jahre im obersten Quartil ihrer jeweiligen Morningstar-Kategorie.
• Das Rentenvermögen lag zum Quartalsende bei 99 Milliarden US-Dollar. Der Nettoabsatz belief sich auf 700 Millionen US-Dollar, allerdings verringerten gesunkene Marktwerte das Vermögen um 1,8 Milliarden US-Dollar.
• Das gesamte Geldmarktvermögen ging gegenüber dem 2. Quartal um 27 Milliarden US-Dollar bzw. 4 % zurück. Das Management führte den Rückgang auf Körperschaftsteuerzahlungen im September, den Zinsschritt der Federal Reserve Mitte September und saisonale Liquiditätsverschiebungen in großen staatlichen Pools zurück.
• Der Umsatz im 3. Quartal stieg im Vergleich zum Vorquartal um 4,6 Millionen US-Dollar bzw. 1 %, während die Betriebsausgaben um 15,9 Millionen US-Dollar oder 4 % sanken, was im Wesentlichen darauf zurückzuführen ist, dass im 2. Quartal Akquisitionskosten für FCP in Höhe von 11,2 Millionen US-Dollar enthalten waren.
• Federated Hermes ging mit gewonnenen, aber noch nicht dotierten netto institutionellen Mandaten von rund 6,5 Milliarden US-Dollar in das 4. Quartal. Das Management rechnet damit, dass die Zuwächse bei Aktien (hauptsächlich MDT) und die Zuflüsse in Privatmärkte die erwarteten Abflüsse im Anleihenbereich übersteigen werden.

Finanzielle Kerndaten

Geschäfts- und operative Entwicklung

Aktien und MDT

MDT war der Hauptwachstumstreiber. Die Aktien- und marktneutralen Strategien von MDT verzeichneten Bruttozuflüsse von 6 Milliarden US-Dollar und Nettozuflüsse von 3,2 Milliarden US-Dollar. Institutionelle Einzelmandate (einschließlich Sub-Advisory-Mandaten) trugen im 3. Quartal 1,5 Milliarden US-Dollar zum Nettoabsatz bei, fast ausschließlich in MDT-Strategien.

Federated Hermes verzeichnete bei 33 Aktienfonds- und SMA-Strategien einen positiven Nettoabsatz. Auf Basis von Morningstar-Daten für die vergangenen drei Jahre schnitten 56 % der Aktienfonds besser ab als ihre Vergleichsgruppe und 33 % gehörten zum obersten Quartil ihrer Kategorie. Der kumulierte Nettoabsatz von Aktienfonds und SMAs erreichte vom Beginn des 4. Quartals bis zum 23. Oktober 242 Millionen US-Dollar.

Laut Management war die institutionelle Nachfrage über All-Cap Core-, Large-Cap Value-, Small-Cap Growth-, Large-Cap Core- und Large-Cap Growth-Strategien hinweg breit gefächert. Auch MDT ETFs und Collective-Investment-Trust-Produkte verzeichneten Nettozuflüsse.

Renten

Zweiundzwanzig Rentenfonds und SMAs erzielten im 3. Quartal einen positiven Nettoabsatz. Zu den führenden Produkten gehörten der Sterling Cash Plus Fund, Ultrashort Bond Funds, der Total Return Bond ETF, der Conservative Microshort Fund und der C.W. Henderson Short-Term Muni SMA.

Institutionelle Renten-Einzelmandate generierten Nettozuflüsse von 924 Millionen US-Dollar, getrieben durch eine große öffentliche Einrichtung mit wiederkehrenden bedeutenden Ein- und Auszahlungen. Über die vergangenen drei Jahre übertrafen 49 % der Rentenfonds ihre Vergleichsgruppe und 21 % platzierten sich im obersten Quartil ihrer Morningstar-Kategorie.

Bei Rentenfonds und SMAs wurden zusammen bis zum 23. Oktober Nettoabflüsse von 2 Milliarden US-Dollar verzeichnet. Darin enthalten war eine Rückgabe in Höhe von 1,7 Milliarden US-Dollar durch einen Kunden der Total-Return-Bond-Strategie, der beschlossen hatte, innerhalb eines mehrere Milliarden US-Dollar schweren Mandats mehr Risiko einzugehen.

Geldmärkte

Das Vermögen in Geldmarktfonds ging im Vergleich zum Vorquartal um 3 % zurück, während das Vermögen in Einzelmandaten um 8 % fiel. Der geschätzte Marktanteil des Unternehmens bei Geldmarktfonds (einschließlich Sub-Advisory-Fonds) verringerte sich von 6,7 % im 2. Quartal auf etwa 6,6 %.

Das Management erklärte, dass Federated Hermes den Schwerpunkt weiterhin auf tägliche Liquidität zum Nennwert legte, anstatt Restlaufzeiten über den eigenen Komfortbereich hinaus zu verlängern, um zusätzliche Rendite zu erzielen. Das Unternehmen teilte mit, dass sein Geldmarktfondsvermögen bis zum 28. Oktober in der Folge um 3,7 Milliarden US-Dollar gestiegen sei.

Wenige Tage vor der Konferenz lag das verwaltete Gesamtvermögen bei rund 890 Milliarden US-Dollar, darunter 654 Milliarden US-Dollar in Geldmärkten, 112 Milliarden US-Dollar in Aktien, 98 Milliarden US-Dollar in Rentenwerten, 23 Milliarden US-Dollar in Alternativen/Privatmärkten und 3 Milliarden US-Dollar in Multi-Asset-Strategien. Das Vermögen in Geldmarktpublikumsfonds belief sich auf 489 Milliarden US-Dollar und entsprach im Oktober im Durchschnitt demselben Betrag.

Privatmärkte und digitale Vermögenswerte

Der MDT Market Neutral Fund und der entsprechende ETF generierten zusammen Nettozuflüsse von 180 Millionen US-Dollar. Federated Hermes vermarktete zudem seinen sechsten globalen Private-Equity-Koinvestitionsfonds und einen neuen European Real Estate Debt Fund mit Schwerpunkt auf vorrangigen und Ganzkrediten (Senior and Whole Loans).

Im Bereich der digitalen Vermögenswerte arbeitet das Unternehmen mit Prometheum zusammen, um tokenisierte Wertpapiere über seine SEC-registrierte und FINRA-zugehörige Broker-Dealer-Infrastruktur zu vertreiben. Weitere Initiativen betreffen BNY, Goldman, Archax und Conduit Digital Holdings. Das Management betonte, dass die derzeitige Priorität auf tokenisierten Liquiditätsprodukten liege und diese Bemühungen darauf abzielen, die Infrastruktur für die künftige Nachfrage vorzubereiten, anstatt auf eine derzeit starke Kundennachfrage zu reagieren.

Prognose des Managements

• Federated Hermes schätzt die effektive Steuerquote für das Gesamtjahr 2026 auf 25 % bis 28 %.
• Das Management rechnet damit, dass Aktienmandate aus der institutionellen Pipeline in den nächsten beiden Quartalen dotiert werden. Das Unternehmen ging mit noch nicht dotierten netto institutionellen Neugeschäftsgewinnen von rund 6,5 Milliarden US-Dollar in das 4. Quartal.
• Die erwartete Pipeline umfasst etwa 7 Milliarden US-Dollar an MDT-Aktienzuwächsen und rund 1,2 Milliarden US-Dollar an Nettozuflüssen in Privatmärkte in den Bereichen Direct Lending, Private Equity und Handelsfinanzierung. Die erwarteten Nettoabflüsse im Rentenbereich liegen bei etwa 1,7 Milliarden US-Dollar.
• Der CFO rechnet damit, dass die Personalaufwendungen im 4. Quartal im Zuge des Geschäftswachstums steigen werden. Die Vertriebsaufwendungen werden in erster Linie vom Stand des Geldmarktvermögens abhängen, während die Ausgaben für Systeme und Kommunikation voraussichtlich auf einem erhöhten Niveau bleiben werden.
• Das Management hob eine operative Marge von über 30 % hervor und nannte als Ziel, dieses Niveau zu halten, gab jedoch keine Ausgabenprognose für 2027 ab.

Risiken und zu beobachtende Bereiche

• Niedrigere Marktbewertungen machten den positiven Nettoabsatz im 3. Quartal sowohl bei Aktien als auch bei Festverzinslichen zunichte.
• Die konservative Liquiditätspositionierung von Federated Hermes bei Geldmarktfonds kann zu vorübergehenden Performance- und Mittelaufnahmelücken führen, wenn Konkurrenten die Laufzeiten verlängern, um zusätzliche Rendite zu erzielen.
• Große institutionelle Mandate können erhebliche Zu- oder Abflüsse verursachen, wie die Rückgabe von 1,7 Milliarden US-Dollar im Total Return Bond Fund und die wiederkehrenden Bewegungen einer großen öffentlichen Einrichtung zeigen.
• Institutionelle Einzelmandate und Sub-Advisory-Mandate weisen niedrigere Gebührensätze auf als traditionelle Publikumsfonds nach dem US-Investment Company Act von 1940 (40 Act). Das Management räumte ein, dass die Dotierung der Pipeline die durchschnittliche Gebührenquote verwässern könnte.
• Tokenisierte Produkte bleiben laut Management eher eine Infrastrukturinvestition als ein wesentlicher nachfragegetriebener Wachstumstreiber.

Höhepunkte der Fragerunde mit Analysten

Mittelzuflusslücke im Geldmarkt: Das Management führte die im Vergleich zu einigen Wettbewerbern schwächeren Zuflüsse im 3. Quartal teilweise darauf zurück, dass es sich weigerte, Laufzeiten über interne Liquiditäts- und Kreditlimite hinaus zu verlängern, um zusätzliche Rendite zu erzielen. Im Oktober hätten sich die Mittelflüsse jedoch wieder zu normalisieren begonnen.

SMA-Dynamik: Das Unternehmen führte die starken SMA-Verkäufe auf die langfristige MDT-Performance, den breiten Vertrieb und eine diversifizierte institutionelle Pipeline zurück und nicht auf eine einzelne Produkt- oder Vertriebskanalinitiative.

Steueroptimierte Strategien: Das Management bestätigte, dass Federated Hermes mit Unternehmen an steueroptimierten Strukturen arbeitet, die bestehenden Mandaten hinzugefügt werden könnten. Zudem hob es die marktneutrale MDT-Strategie als bestehendes Long-Short-Angebot mit kontinuierlichen Nettozuflüssen hervor.

Nachfrage im Rentenbereich: Das Management rechnet damit, dass Produkte mit kürzerer Duration wie Ultrashort- und Microshort-Strategien die Nachfrage anführen werden, da sich Anleger moderat entlang der Renditekurve bewegen. Zudem wurde darauf hingewiesen, dass der Total Return Bond Fund im 3. Quartal trotz der anschließenden großen Rückgabe das Rentenprodukt mit dem höchsten Bruttoabsatz blieb.

Vollständiges Transkript der Ergebnis-Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Greetings, and welcome to the Federated Hermes Third Quarter 2026 Analyst Call and Webcast.

[Operator Instructions] And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Ray Hanley, President, Federated Investors Management Company. Sir, the floor is yours.

Raymond Hanley

Thank you, and welcome to our call. Leading today's call will be Chris Donahue, CEO and President of Federated Hermes; and Tom Donahue, Chief Financial Officer. Joining us for the Q&A are Saker Nusseibeh, who is the CEO of Federated Hermes Limited; and Debbie Cunningham, the Chief Investment Officer for Money Markets.

During today's call, we may make forward-looking statements, and we want to note that Federated Hermes' actual results may be materially different than the results implied by such statements. Please review the risk disclosures in our SEC filings. No assurance can be given as to future results, and Federated Hermes assumes no duty to update any of these forward-looking statements.

Chris?

John Donahue

Thanks, Ray. Good morning, all. I will review Federated Hermes' business performance. Tom will comment on our financial results. We ended the third quarter with record equity assets under management of $110.5 billion, up $949 million from Q2 as positive net inflows of $1.9 billion were partially offset by lower market valuations. Equity sales results were led by MDT fundamental quant strategies. MDT equity and market-neutral strategies had a record $6 billion in gross sales and $3.2 billion in net sales in the third quarter.

Now looking at fund performance rankings at the end of Q3, 7 of 9 MDT fund strategies were in the top performance quartile of their Morningstar categories for the trailing 3 years. We had net sales in 33 equity fund and SMA strategies during Q3, including a variety of MDT offerings. Institutional separate accounts, including sub-advisory mandates, added $1.5 billion in Q3 net sales, nearly all in MDT strategies.

Now looking at our equity fund performance at the end of the third quarter and using Morningstar data once again for the trailing 3 years, 56% of our equity funds were beating peers and 33% were in the top quartile of their category. Now for the fourth quarter through October 23, combined equity funds and SMAs had net sales of $242 million.

Now turning to fixed income. Assets ended Q3 at $99 billion. Net positive sales of $700 million were offset by a decrease of $1.8 billion due to lower market values. We had 22 fixed income funds and SMAs with net sales in the third quarter, led by the Sterling Cash Plus Fund, our Ultrashort Bond Funds, Total Return Bond ETF, Conservative Microshort Fund and the C.W. Henderson Short-Term Muni SMA. Fixed income institutional separate accounts had Q3 net sales of $924 million, driven by a large public entity that has regular sizable inflows and outflows. Regarding performance at the end of the third quarter and using Morningstar data for the trailing 3 years, 49% of our fixed income funds were beating peers and 21% were in the top quartile of their category.

For Q4 through October 23, combined fixed income funds and SMAs had net redemptions of $2 billion, which includes $1.7 billion in redemptions from a client in the total return bond strategy, who went in the direction of taking additional risk for this part of their multibillion-dollar mandate. On September 30, this fund, Total Return Bond Fund, ranked in the top third of its category for the trailing 10 years, 66th percentile for 3 years, top 28% for 1 year and top 18% for the trailing 3 months.

Now in the alternative/private markets category, assets were up slightly, reaching $21.7 billion. The MDT Market Neutral Fund and ETF combined for $180 million net sales. We are in the market with the global private equity co-invest fund, the sixth vintage of our PEC series and the European Real Estate Debt Fund, a new pooled European debt fund that will invest in senior and whole loans. Across our long-term investment platform, we began the fourth quarter with about $6.5 billion in net institutional wins yet to fund into both funds and separate accounts. Equity strategies are expected to have net sales of about $7 billion in MDT additions. Approximately $1.2 billion on a net basis is expected to come into private markets, including direct lending, private equity and trade finance. Fixed income is expected to have net redemptions of about $1.7 billion, which includes the aforementioned redemption in the multi-sector field.

Moving on to money markets. Total money market assets decreased by $27 billion or 4% from the second quarter as funds decreased by $13.6 billion or 3% and separate accounts decreased by about $13.4 billion or 8%. Money market fund assets were impacted by the mid-September increase in interest rates by the Fed and by September's corporate tax payments. Money market separate account assets were impacted by the liquidity levels of large state pools that we manage and typically peak with tax collections at the end of the year through April before decreasing in Q2 and Q3. Our estimate of money market mutual fund market share, including sub-advised funds, was about 6.6% at the end of Q3, down from 6.7% at the end of Q2.

Turning to digital assets. We continue active collaboration with financial institutions and technology providers to explore digital distribution. Our focus is liquidity, where our efforts are designed to enhance flexibility and accessibility while preserving the core structure and utility of money market funds. During the third quarter, our arrangement with Prometheum Inc. was announced. We are working with Prometheum, a market infrastructure provider for crypto assets, to expand the reach of tokenized securities through their SEC-registered, FINRA-member broker-dealer market infrastructure. Prometheum will make our tokenized products available to broker-dealers and RIAs through its correspondent clearing platform.

This follows the launch of our Money Market Management Digital Treasury Fund, which is expected to support both traditional and on-chain distribution. We have also selectively engaged with regulated digital asset intermediaries, including participation in the BNY, Goldman domestic initiative involving mirrored tokenization. Also the Archax initiative to offer tokenized access to a UCITS money fund in the U.K., our arrangement with Conduit Digital Holdings to support the launch of Conduit's tokenized money market fund in the APAC region with the Conduit fund investing in one of our offshore money market funds. We are engaged in digital asset development discussions with other intermediaries as well.

Now looking at recent asset totals that was a few days ago, managed assets were approximately $890 billion, including $654 billion in money markets, $112 billion in equities, $98 billion in fixed income, $23 billion in alternative/private markets and $3 billion in multi-asset. Money market mutual fund assets were $489 billion. Money market fund assets have ranged from $485 to $493 billion during October with average asset levels of $489 billion.

Tom?

Thomas Donahue

Thanks, Chris. For Q3 compared to the prior quarter, total revenue increased $4.6 million or 1%. Equity asset growth added $8 million of revenues and an additional day added $5.3 million of revenues. These increases were partially offset by lower Q3 money market average assets resulting in $4 million of lower revenues. In addition, Q2 included a $2.9 million gain on the sale of a renewable energy property by Rivington, and the U.K. real estate business had a $2 million real estate development fee for a project that did not advance into construction.

Total Q3 carried interest and performance fees were $726,000 compared to $1.4 million in the prior quarter. Approximately $428,000 of the Q3 fees were offset by compensation expense. Q3 operating expenses decreased by $15.9 million or 4% from the prior quarter due mainly to Q2 included approximately $11.2 million in transaction costs from the FCP acquisition in certain line items, also approximately $3.3 million of lower compensation and related expense, lower advertising and promotional activity, intangible asset expense decreased $1.5 million, primarily due to most of the intangible assets from the Hermes acquisition being fully amortized.

These expense decreases were partially offset by a withholding tax-related expense of $1.9 million recorded in the other expense line item. $1.7 million expense for an adjustment to the FCP contingent payment, also recorded in the other expense line item. The Q3 effective tax rate was 27.1%. We estimate the full year tax rate to be in the 25% to 28% range for 2026. At the end of Q3, cash and investments were $580 million. Cash and investments, excluding the portion attributable to noncontrolling interest, were $483 million.

Oli, we would like to open the call up for questions now.

Operator

[Operator Instructions] Our first question is coming from Patrick Davitt with Autonomous Research.

Fragen und Antworten

Patrick Davitt

On the money fund flows, I understand that 3Q is always a seasonally weaker fund flow quarter for you, but there was a pretty big gap with many of your largest competitors like BlackRock had big inflows, JPMorgan had big inflows, Invesco had big inflows. So I'd like to get a little bit more color on what you think explains that big gap with some of those big competitors? And to what extent you're seeing more pricing competition, people trying to compete more aggressively on fees?

John Donahue

Patrick, I'll go first, and then we'll have Debbie give you the report from the field. So overall, there's nothing new about people periodically doing things either with fees or with portfolio construction that cause intermediate short-term alterations in the flows. And that's what was going on in this past quarter. And if you look at it over the 50-year period that we've been involved in this, this is like a routine deal.

Debbie will give you more details.

Deborah Cunningham

Thanks, Chris. So Patrick, as you know, we manage our money funds with a bias to daily liquidity at par. And as part of that process, on a daily basis, we identify maturity restrictions for different security types that we use as well as for each of the approved issuers from our database that we use. And these restrictions, for the most part, are based on liquidity in the marketplace for those different security types for those different issuers as they go out the curve, in addition to our own internal credit rating, which ranges from 1 to 5 for the various issuers. And this process really involves all 3 members of our team. It's our portfolio managers that are looking at the structure of the fund. It's our analysts that are reviewing the issuers, and it's the traders that are looking at the security types and the selections on a daily basis.

And what we've determined is that historically, and in this particular case, we haven't been willing to extend our maturities beyond what I would traditionally call our comfort zone just because there's maybe some inordinate value and pursue that incremental yield out the curve. While in our minds, that would mean sacrificing some of that true daily liquidity. So it's basically a performance issue based on our choice of what I'll call the most liquid and highly rated sectors in the marketplace at this time.

The other thing that I would note is that the FOMC did move rates in September, and we, as well as others, were lagging the direct market, but that's across the board.

John Donahue

And to elaborate on that, so basically, we've caught up. And if you look at the recent stats for October 28, our money market fund assets are up $3.7 billion so far. And if you look at some of those other competitors you mentioned, some of their assets have walked out the door a little bit on them. So things are coming back to normal.

Patrick Davitt

Okay. Interesting. My follow-up is on expenses. Good control again in 3Q, which is nice to see. Could you maybe expand on how sustainable that is, what you're seeing heading into 4Q? And if you have any early view on how things are tracking in '27?

Thomas Donahue

I don't have a comment on '27, except you see our margin, which we are happy to see that go over 30%, maintaining that. And we've had a long-term goal of trying to get to the industry, but that's a longer process. I expect comp here in the fourth quarter to go up as we continue to grow. Distribution will follow primarily how the money market assets go. And we're still spending some more in the systems and communications line item. And the rest of them, I don't see big changes for next quarter. Another is lots of other things that go lots of different ways, which we don't really forecast that.

Operator

Our next question, sorry, is coming from Bill Katz with TD Cowen.

Robin Holby

This is Robin Holby on for Bill Katz. Could you speak to the success you saw in the SMA side of the business during the quarter in equity and fixed income? Is there anything specific you've done in those channels that's resonating with investors, and that might have driven the acceleration there?

John Donahue

That's a case of successfully repeating the sounding joy, standard blocking and tackling, making the calls and doing it for a long time. If you look at the long-term records, especially in the MDT field, you see consistent outperformance with their methodologies. And especially in the SMAs, it takes a little longer to make the sales, and it takes a little longer for redemption as well. So there was no magic. There was no silver bullet. It is just the power of a large distribution force with good long-term records that makes that happen.

Raymond Hanley

Rob, we commented on the performance, which is obviously outstanding, especially long term for the MDT strategies. And I would just emphasize that the success we've had in the institutional accounts is diversified within several of the SMA strategies. So we've had nice wins and good pipeline composition from a variety of those strategies, all-cap core, large-cap value, small-cap growth, large-cap core, large-cap growth. And so even in a quarter where with some equity market choppiness, which reflected itself in lower mutual fund flows, we were able to have strong inflows and strong pipeline by the strength of the institutional part of the business. So I would also note that our MDT ETF and CIT products also had net inflows.

Robin Holby

Great. That's helpful. And for a follow-up, we thought the Prometheum announcement was an interesting development. Aside from your current digital products, where do you see this going? Does this accelerate the tokenization of some of your other non-tokenized funds, for example, MDT?

John Donahue

I don't think it actually accelerates anything. It is just steady as we go in exploring this new field. As I've said to this audience before, the clients aren't beating down the doors to get these products. This is really getting the infrastructure ready for tomorrow. No different than a lot of other examples of where the infrastructure has to change for the future. And so we are excited about our deal with Prometheum, with BNY, with Archax and with Conduit, all of them, but it's hard to say, "Oh, this accelerates other things." We are focused, as I said in my remarks, on the liquidity portion, and I would say the other securities are behind that from our point of view, but we'll be ready for that as well.

Operator

Next question is coming from Michael Cho with JPMorgan.

Y. Cho

I just wanted to touch on the money funds discussion that we were having before. I mean you shared the AUM data, which is very helpful. But I was actually wondering how the relative revenue capture share might compare to some of the stats you provide on the AUM share? And if there's any bifurcation between the 2 that you might envision and any implications you might be able to help us frame there? I know you gave some discussion on the yields and performance, which makes sense, but also thinking about how the revenue share might compare relative to those statistics?

John Donahue

So you're touching on something that we don't have great information on, which is market share of revenue. And this has been one of Chris' crusades for a long time that to an owner operator, that's a very important statistic. But we can't get it. So we don't know. So we only do it by inference. But it's what's behind the curtain in not doing the things that others do to periodically jump their yield, jump a bunch of assets and then get back to regular.

And I'll let Ray comment on the specifics of our revenue picture as much as we know.

Raymond Hanley

Yes. And I would just echo that, Chris. We can't really do comparable revenue. I would stress that -- we have a lot of different pricing options across our money market franchise, reflecting our reach in the different portions of the intermediary channels, but a lot of the attention, of course, are in the most institutional products, which tend to have a lower fee rate. Among the products that are more geared to retail applications, which for us is not direct retail, it's still through intermediaries, but to the end client of the intermediary, we have tended to traditionally do better if you bifurcate the asset market share in that retail channel, which would be a positive influence to the blended fee rate overall for money markets.

Y. Cho

Great. If I could just switch gears to MDT. You've had quite a bit of success there, and you continue to make progress across a number of different channels. Just broadly from an industry perspective, there's been a lot made about tax-aware long-short products, the demand and the penetration that's having in terms of those products in market. I was wondering, given the success you've had with MDT, is tax-aware long-short is something you are or you may consider in the future just given the demand appetite there in the market today?

John Donahue

Yes. We are working with various firms on those types of products that basically get added to by the adviser or put on top of the existing mandates. And I can't get into the details on any of those. But yes, we're looking at that. But as soon as you say tax-aware, I think C.W. Henderson. I know that wasn't your question, but that's on the muni side and on managing the gains and the tax situation. And that was what I mentioned in my remarks is doing quite well. Overall, the message is that tax-aware is very important. But what we tell everybody is don't let taxes drive the truck. Underneath that, you've got to have good projects that are heading in the right direction for you and not just having taxes control the outcome.

Raymond Hanley

And I would just add to that, the MDT market-neutral strategy is a long-short strategy, and we've done well with that in terms of both performance and picking up consistent net inflows.

Operator

Our next question is coming from John Dunn with Evercore ISI.

John Dunn

Maybe just a little more on the institutional pipeline. Can you talk about any client concentrations? How quickly do you think mandates will fund and maybe the impact on the firm-wide fee rate? And then on the other end, any chunky redemptions you wanted to call out that you might see on the horizon?

John Donahue

Well, I'm going to let Ray give you those details. But first of all, we're going to stop and cheer on the number of $6.5 billion, one of the highest pipelines we've had.

Ray?

Raymond Hanley

Sure. When we're talking about funding, John, the equity portion we expect to fund over the next 2 quarters. And that, as I mentioned, coming from several directions. There are some large sub-advised mandates in there as well as some more regular institutional separate accounts. As you know, the fee rates on each of those kind of applications would be less than what we would realize in regular 40 Act mutual funds. We are, nonetheless, of course, happy to add as much of this as we can even if it would have the impact of diluting the blended fee rate.

John Dunn

Got it. And then maybe just on fixed income, given where we are with rates and where they're going, could you kind of frame where you expect demand for your suite to go from here? And which products do you think are going to catch a bid?

John Donahue

It's going to be on the short end is going to drive the truck, but we're never going to really be behind on Total Return Bond Fund, which was basically our highest gross selling product during the third quarter. So -- but the answer specifically your question will be on the short side. And we have a beautiful array of products with Ultrashort, Microshort, et cetera, for people who are wanting to step out the yield curve just a little bit.

Operator

Ladies and gentlemen, we have reached the end of our question-and-answer session. So I would like to turn the call back over to Mr. Hanley for closing remarks.

Raymond Hanley

Thank you. That concludes our call, and thank you for joining us today.

Operator

Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.