The next U.S. CPI print, a 3.4% annual inflation reading with only a 0.1% monthly rise expected, lands just as investors wrestle with a 50/50 market bet on another Fed rate hike. That tug of war keeps cash holders on the sidelines, while short duration floating rate bond funds sit squarely in the spotlight. This article examines how that backdrop touches three ETFs from our screener that appear closely aligned with today’s rates-driven environment.

The ETFs discussed next are just a starting sample, and the full screen surfaced 11 more companies with equally detailed fund stories that are not covered in this article. If you want to go beyond these examples, head straight to the Ultra-Short Duration Corporate Floating-Rate Bond Funds screener to identify, compare, and analyze the ultra short duration corporate floating rate opportunities that best fit your playbook.

Federated Hermes (FHI)

Overview: Federated Hermes is a Pittsburgh based investment manager that runs a wide range of mutual funds, ETFs and separate accounts in equities, fixed income, money markets and alternatives for clients from individuals to large institutions around the world.

Operations: Federated Hermes generates about US$1.9b in revenue from its investment management business, with the majority coming from the United States and the balance from non U.S. clients.

Market Cap: US$4.5b

Federated Hermes catches attention if you are looking for an income focused asset manager that is tightly linked to short duration and cash like products, just as investors weigh the next CPI print and rate move. The company sits on record assets under management of US$912b and manages about US$42.9b in short duration fixed income. It is also pushing into digital money market funds and blockchain based fund record keeping. At the same time, you need to weigh fee pressure, heavy exposure to money market flows and recent insider selling against a high 29.8% ROE and a dividend track record that appeals to income investors. The full story becomes more detailed once you compare these characteristics with cautious earnings forecasts and growing competition in asset management.

Income focused assets, high 29.8% ROE and US$912b in AUM at Federated Hermes may hint at a story investors are only half seeing right now. The 3 key rewards and 2 important warning signs (1 is major!) could reveal what that headline mix might be masking

Build your own income focused shortlist

Federated Hermes and the other two ETFs here are just three examples that surfaced from a single screener run. Use our flexible Screener to combine filters like income profile, balance sheet strength and risk checks into your own watchlist, or start with one of our curated Investing Ideas.

flatexDEGIRO (XTRA:FTK)

Overview: flatexDEGIRO is a Frankfurt based online broker that lets European retail and professional investors trade a wide range of instruments, from stocks and ETFs to funds, crypto and savings plans, while also selling its own banking and IT infrastructure to other financial institutions.

Market Cap: €3.6b

flatexDEGIRO sits at the crossroads of rising retail investing in Europe and the current hunt for conservative yield, which can support trading volumes in ultra short duration fixed income funds and other listed products when rate uncertainty is high. The company reports record assets under custody above €100b and recent half year revenue of €340.1m with €115m in net income, indicating a business that is scaling and keeping margins in focus. At the same time, investors need to weigh funding risk from reliance on external funding, relatively new management and board teams, and the possibility that trading activity cools if volatility fades. How those positives and risks balance out is where the more interesting part of the flatexDEGIRO story begins.

flatexDEGIRO’s record €100b in assets under custody and recent €115m net income suggest a business that might still be underappreciated. Tap the analyst forecasts for flatexDEGIRO to see whether growth and trading activity are quietly decoupling or setting up a twist investors are missing.

Blackstone (BX)

Overview: Blackstone is a global alternative asset manager that raises and invests capital across private equity, real estate, credit and multi asset strategies for institutions and individual investors. It uses large pools of capital to back companies, real estate projects and financing platforms, including newer areas such as AI data centers and energy infrastructure.

Operations: Blackstone generates most of its revenue from Private Equity at about US$6.0b, followed by Real Estate at roughly US$4.0b, Credit & Insurance at about US$3.3b and Multi Asset Investing at around US$1.1b, with additional contributions from unrealized performance revenues and other unallocated items.

Market Cap: US$176.2b

Blackstone is worth a close look if you want exposure to credit and income focused strategies with a link to themes like AI data centers and infrastructure buildouts. The company combines high recent earnings growth, a 30.4% ROE and strong fundraising momentum with a 3.22% dividend yield that may appeal to income oriented investors, even though the dividend is not fully covered by earnings or free cash flow. Heavy use of external debt funding and recent insider selling highlight the risk side of the ledger. With Blackstone now involved in large AI and infrastructure financing alliances and holding significant dry powder, the key consideration is how that mix of growth, leverage and payout policy aligns with your risk tolerance.

Blackstone’s mix of high recent earnings growth, 30.4% ROE and a 3.22% yield hints at a story investors may be only half pricing in. The 2 key rewards and 3 important warning signs (1 is major!) could show whether that income and growth combo is quietly masking a sharper twist.

Seeking Alternatives Before The Crowd

Fresh opportunities can move from quiet to breakout quickly, especially while attention is caught on inflation and rates. Use these curated lists while it matters and aim to get in early.

• Scan for resilient income and cash flow strength using a curated list of solid balance sheet and fundamentals (50 results) before momentum picks up and the crowd starts chasing them.
• Spot early AI momentum where profits already back the story by checking the hand picked 71 profitable AI stocks that aren't just burning cash that could be flying under the radar for now.
• Position ahead of potential grid and electrification upgrades by reviewing the focused 36 power grid technology and infrastructure stocks while valuations and attention are still lagging behind other themes.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.