페더레이티드 허미스(FHI) 2026년 3분기 실적 발표 콜: MDT 자금 유입으로 주식 AUM 증가

주요 요약

• 페더레이티드 허머스(Federated Hermes)는 2026년 3분기 기준 주식 운용자산(AUM)이 사상 최고치인 1,105억 달러를 기록하며 분기를 마감했습니다. 19억 달러의 순유입은 시장 평가액 하락으로 일부 상쇄되었습니다.
• MDT 전략은 총매출 60억 달러, 순매출 32억 달러로 사상 최고치를 기록했습니다. 9개 MDT 펀드 전략 중 7개가 최근 3년 기준 모닝스타(Morningstar) 카테고리 상위 25%에 올랐습니다.
• 채권 자산은 990억 달러로 분기를 마감했습니다. 순매출은 총 7억 달러였으나, 시장 가치 하락으로 자산이 18억 달러 감소했습니다.
• 총 머니마켓 자산은 2분기 대비 270억 달러(4%) 감소했습니다. 경영진은 9월 법인세 납부, 연방준비제도(Fed)의 9월 중순 금리 조정, 대형 주정부 풀의 계절적 유동성 변화를 원인으로 꼽았습니다.
• 3분기 매출은 전분기 대비 460만 달러(1%) 증가한 반면, 영업비용은 1,590만 달러(4%) 감소했는데, 이는 주로 2분기에 FCP 인수 비용 1,120만 달러가 포함되어 있었기 때문입니다.
• 페더레이티드 허머스는 수주했지만 아직 자금이 집행되지 않은 순기관 위탁자산 약 65억 달러를 보유한 채 4분기에 진입했습니다. 경영진은 주로 MDT 중심의 주식 자금 추가 및 사모 시장 자금 유입이 예상되는 채권 환매 규모를 웃돌 것으로 전망합니다.

핵심 재무 데이터

사업 및 영업 실적

주식 및 MDT

MDT가 주요 성장 동력이었습니다. MDT의 주식 및 마켓 뉴트럴(market-neutral) 전략은 총매출 60억 달러, 순매출 32억 달러를 기록했습니다. 하위 자문 위탁을 포함한 기관 일임계좌는 3분기 순매출 15억 달러를 추가했으며, 거의 전액이 MDT 전략에 해당했습니다.

페더레이티드 허머스는 33개 주식 펀드 및 SMA 전략 전반에서 순매출을 기록했습니다. 최근 3년간 모닝스타 데이터를 기준으로 주식 펀드의 56%가 동종 업계 대비 우수한 성과를 냈으며 33%가 해당 카테고리 상위 25%에 올랐습니다. 4분기 시작부터 10월 23일까지의 주식 펀드 및 SMA 합산 순매출은 2억 4,200만 달러에 달했습니다.

경영진은 기관 수요가 올캡 코어(all-cap core), 대형가치주, 소형성장주, 대형코어, 대형성장주 전략 등 전반에 걸쳐 다변화되었다고 말했습니다. MDT ETF 및 집합투자기구(CIT) 상품에서도 순유입이 기록되었습니다.

채권

3분기에는 22개 채권 펀드 및 SMA에서 순매출이 발생했습니다. 주요 상품으로는 스털링 캐시 플러스 펀드(Sterling Cash Plus Fund), 울트라쇼트 채권 펀드(Ultrashort Bond Funds), 토탈리턴 채권 ETF(Total Return Bond ETF), 컨서버티브 마이크로쇼트 펀드(Conservative Microshort Fund), C.W. 헨더슨 단기 지방채 SMA(C.W. Henderson Short-Term Muni SMA) 등이 포함되었습니다.

기관 채권 일임계좌는 반복적으로 대규모 자금 유출입을 보이는 대형 공공 기관의 주도로 9억 2,400만 달러의 순매출을 올렸습니다. 최근 3년간 채권 펀드의 49%가 동종 업계 대비 우수한 성과를 기록했고 21%가 모닝스타 카테고리 상위 25%에 올랐습니다.

10월 23일까지 채권 펀드 및 SMA 합산 순환매액은 20억 달러를 기록했습니다. 여기에는 수십억 달러 규모의 위탁 자산 내에서 더 큰 위험을 감수하기로 결정한 토탈리턴 채권 전략 고객의 17억 달러 환매가 포함되어 있습니다.

머니마켓

머니마켓 펀드 자산은 전분기 대비 3% 감소한 반면, 일임계좌 자산은 8% 감소했습니다. 하위 자문 펀드를 포함한 회사의 추정 머니마켓 뮤추얼펀드 점유율은 2분기 6.7%에서 약 6.6%로 감소했습니다.

경영진은 페더레이티드 허머스가 추가 수익률을 얻기 위해 무리하게 만기를 연장하기보다는 액면가 기준의 일일 유동성 확보에 초점을 유지했다고 밝혔습니다. 회사는 머니마켓 펀드 자산이 이후 10월 28일까지 37억 달러 증가했다고 말했습니다.

실적 발표 전화회의 며칠 전 기준, 총 운용자산은 머니마켓 6,540억 달러, 주식 1,120억 달러, 채권 980억 달러, 대체/사모 시장 230억 달러, 멀티애셋 전략 30억 달러를 포함해 약 8,900억 달러였습니다. 머니마켓 뮤추얼펀드 자산은 4,890억 달러였으며 10월 평균으로도 같은 금액을 유지했습니다.

사모 시장 및 디지털 자산

MDT 마켓 뉴트럴 펀드와 ETF는 합산 1억 8,000만 달러의 순매출을 기록했습니다. 페더레이티드 허머스는 또한 여섯 번째 글로벌 사모펀드(PE) 공동투자 펀드와 선순위 및 전체 대출(whole loans)에 집중하는 신규 유럽 부동산 대출 펀드(European Real Estate Debt Fund)를 마케팅 중이었습니다.

디지털 자산 부문에서 회사는 SEC에 등록되고 FINRA 회원인 브로커-딜러 인프라를 통해 토큰화 증권을 유통하기 위해 프로메테움(Prometheum)과 협력하고 있습니다. 다른 이니셔티브에는 BNY, 골드만, 아착스(Archax), 콘두잇 디지털 홀딩스(Conduit Digital Holdings)가 참여합니다. 경영진은 현재 최우선 과제가 토큰화된 유동성 상품이며, 이러한 노력은 현재 고객의 강력한 수요에 대응하기 위한 것이라기보다 미래 수요에 대비해 인프라를 갖추기 위함이라고 강조했습니다.

경영진 가이던스

• 페더레이티드 허머스는 2026년 전체 실효세율이 25%에서 28% 사이가 될 것으로 추정합니다.
• 경영진은 기관 파이프라인의 주식 위탁자금이 향후 2분기에 걸쳐 집행될 것으로 예상합니다. 회사는 수주 후 아직 자금이 집행되지 않은 순기관 수주액 약 65억 달러를 보유한 채 4분기에 진입했습니다.
• 예상 파이프라인에는 약 70억 달러의 MDT 주식 추가액과 직접 대출, 사모펀드, 무역 금융 전반에 걸친 약 12억 달러의 순사모시장 유입액이 포함됩니다. 예상되는 채권 순환매액은 약 17억 달러입니다.
• CFO는 비즈니스 성장에 따라 4분기 보수 비용이 증가할 것으로 예상합니다. 판매 보수는 주로 머니마켓 자산 규모에 따라 달라질 것이며, 시스템 및 통신 지출은 높은 수준을 유지할 것으로 예상됩니다.
• 경영진은 30%를 상회하는 영업이익률을 강조하며 해당 수준을 유지하는 것이 목표라고 밝혔으나, 2027년 비용 전망치는 제시하지 않았습니다.

리스크 및 관전 포인트

• 시장 평가액 하락으로 주식과 채권 모두에서 3분기 양호한 순매출이 상쇄되었습니다.
• 경쟁사들이 추가 수익률을 얻기 위해 만기를 연장할 때, 페더레이티드 허머스의 보수적인 머니마켓 펀드 유동성 포지셔닝은 일시적인 성과 및 자금 유입 격차를 유발할 수 있습니다.
• 17억 달러의 토탈리턴 채권 환매 및 대형 공공 기관의 반복적인 자금 이동에서 볼 수 있듯이, 대규모 기관 위탁 자산은 상당한 자금 유입이나 환매를 일으킬 수 있습니다.
• 기관 일임계좌 및 하위 자문 위탁은 기존의 40 Act 뮤추얼펀드보다 수수료율이 낮습니다. 경영진은 파이프라인 자금 집행이 혼합 수수료율을 희석시킬 수 있음을 인정했습니다.
• 경영진에 따르면, 토큰화 상품은 실질적인 수요 주도형 성장 동력이라기보다는 인프라 투자 성격에 머물러 있습니다.

애널리스트 Q&A 하이라이트

머니마켓 자금 유입 격차: 경영진은 일부 경쟁사에 비해 3분기 자금 유입이 약했던 이유 중 일부를 추가 수익률을 위해 내부 유동성 및 신용 한도를 넘어 만기를 연장하기를 거부했기 때문으로 돌렸습니다. 경영진은 10월 들어 자금 흐름이 정상화되기 시작했다고 밝혔습니다.

SMA 모멘텀: 회사는 견조한 SMA 매출이 단일 상품이나 채널 이니셔티브보다는 장기적인 MDT 성과, 넓은 유통망, 다변화된 기관 파이프라인 덕분이라고 설명했습니다.

절세형 전략: 경영진은 페더레이티드 허머스가 기존 위탁자산에 추가될 수 있는 절세형 구조와 관련해 고객사들과 협력하고 있음을 확인했습니다. 또한 지속적인 순유입을 기록 중인 기존 롱숏 상품인 MDT 마켓 뉴트럴 전략을 강조했습니다.

채권 수요: 경영진은 투자자들이 수익률 곡선을 따라 완만하게 이동함에 따라 울트라쇼트 및 마이크로쇼트 전략과 같은 단기 듀레이션 상품이 수요를 이끌 것으로 예상하고 있습니다. 또한 추후 발생한 대규모 환매에도 불구하고 토탈리턴 채권 펀드가 3분기 동안 가장 높은 총매출을 기록한 채권 상품이었다고 언급했습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

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.

질의응답

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.