# EDGAR Filing Document

**Accession Number:** 0000912577
**File Stem:** 0001623632-26-000341
**Filing Date:** 2026-2
**Character Count:** 789530
**Document Hash:** fee4b379c50ae3f706cb2a4acf44b33a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001623632-26-000341.hdr.sgml**: 20260226

**ACCESSION NUMBER**: 0001623632-26-000341

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 43

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260226

**DATE AS OF CHANGE**: 20260226

**EFFECTIVENESS DATE**: 20260226

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FEDERATED HERMES INSURANCE SERIES
- **CENTRAL INDEX KEY:** 0000912577

**ORGANIZATION NAME:**
- **EIN:** 256425525
- **STATE OF INCORPORATION:** MA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-08042
- **FILM NUMBER:** 26682137

**BUSINESS ADDRESS:**
- **STREET 1:** 4000 ERICSSON DRIVE
- **CITY:** WARRENDALE
- **STATE:** PA
- **ZIP:** 15086-7561
- **BUSINESS PHONE:** 8003417400

**MAIL ADDRESS:**
- **STREET 1:** 4000 ERICSSON DRIVE
- **CITY:** WARRENDALE
- **STATE:** PA
- **ZIP:** 15086-7561

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FEDERATED INSURANCE SERIES
- **DATE OF NAME CHANGE:** 19960328

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** INSURANCE MANAGEMENT SERIES
- **DATE OF NAME CHANGE:** 19930924

## Series and Classes Contracts Data

### Federated Hermes Government Money Fund II (Series ID: S000009743)

| Class ID   | Class Name     | Ticker Symbol   |
|:---|:---|:---|
| C000026768 | Service Shares |  |

### Federated Hermes Quality Bond Fund II (Series ID: S000009744)

| Class ID   | Class Name     | Ticker Symbol   |
|:---|:---|:---|
| C000026769 | Primary Shares |  |
| C000026770 | Service Shares |  |

### Federated Hermes Managed Volatility Fund II (Series ID: S000009746)

| Class ID   | Class Name     | Ticker Symbol   |
|:---|:---|:---|
| C000026773 | Primary Shares |  |
| C000199834 | Service Shares |  |

### Federated Hermes Fund for U.S. Government Securities II (Series ID: S000009748)

| Class ID   | Class Name                                              | Ticker Symbol   |
|:---|:---|:---|
| C000026775 | Federated Hermes Fund for U.S. Government Securities II |  |

### Federated Hermes High Income Bond Fund II (Series ID: S000009749)

| Class ID   | Class Name     | Ticker Symbol   |
|:---|:---|:---|
| C000026776 | Primary Shares |  |
| C000026777 | Service Shares |  |

### Federated Hermes Kaufmann Fund II (Series ID: S000009751)

| Class ID   | Class Name     | Ticker Symbol   |
|:---|:---|:---|
| C000026779 | Primary Shares |  |
| C000026780 | Service Shares |  |

?xml version='1.0' encoding='ASCII'? Consolidated ssr-output-EDGAR XBRL File

**United States Securities and Exchange Commission Washington, D.C. 20549**

**Form N-CSR Certified Shareholder Report of Registered Management Investment Companies**

<u>811-8042</u> (Investment Company Act File Number)

**<u>Federated Hermes Insurance Series</u>** (Exact Name of Registrant as Specified in Charter)

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 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: <u>2025-12-31</u>

Date of Reporting Period: <u>2025-12-31</u>

**Item 1.** **Reports to Stockholders**

![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Federated Hermes Government Money Fund II

# Service Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Government Money Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Service Shares | $64 | 0.63% |

---

## Key Fund Statistics
* Net Assets$74,904,931

* Number of Investments80

* Total Advisory Fees Paid$50,141

## Fund Holdings

### **Top Security Types (% of Net Assets)**![Group By Sector Chart](ie274814e6fa408ef16f9bcf6.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| U.S. Government Agency Securities | 15.2% |
| U.S. Treasury Securities | 25.4% |
| Repurchase Agreements | 59.0% |

---

### **Effective Maturity Schedule** (% of Net Assets)
![Group By Maturity Chart](i287676a71f06a733e9732d54.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| 181 Days or More | 7.4% |
| 91-180 Days | 5.0% |
| 31-90 Days | 7.8% |
| 8-30 Days | 4.9% |
| 1-7 Days | 74.5% |

---

#### Annual Shareholder Report
Federated Hermes Government Money Fund II

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916504

G00842-01-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Fund for U.S. Government Securities II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Fund for U.S. Government Securities II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

#### This report describes planned changes made to the Fund since the beginning of the reporting period.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Fund Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Federated Hermes Fund for U.S. Government Securities II | $81 | 0.78% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the blended index consisting of a 67%/33% blend of the Bloomberg US Mortgage Backed Securities Index and the Bloomberg US Government Bond Index (the "Blended Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide current income by investing primarily in a diversified portfolio of U.S. government and government agency securities and mortgage-backed securities.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Sector allocation was the largest positive contributor to performance relative to the Blended Index as an overweight allocation to residential mortgage-backed securities (MBS) which posted positive excess return, as well as exposure to commercial MBS, proved beneficial due to incremental income and tighter spreads.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Interest rate strategy made a small, positive contribution to relative performance as above Blended Index effective duration proved beneficial as rates fell across most of the yield curve. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund used derivatives as a tool to assist in managing Fund duration and yield curve exposure. The principal derivatives the Fund used for these purposes were U.S. Treasury futures contracts. For the reporting period, the use of futures contracts positively contributed to Fund performance relative to the Blended Index.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Security selection acted as a drag on relative Fund performance.

#### Annual Shareholder Report
Federated Hermes Fund for U.S. Government Securities II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](ic7624d5421e8dcc5d4a1e7af.jpg)

---

| | | | |
|:---|:---|:---|:---|
| | **Federated Hermes Fund for U.S. Government Securities II** | **Bloomberg US Aggregate Bond Index** | **67% Bloomberg US Mortgage Backed Securities/ 33% Bloomberg US Government Bond** |
| **12/31/2015** | $10000 | $10000 | $10000 |
| **12/31/2016** | $10161 | $10265 | $10147 |
| **12/31/2017** | $10356 | $10628 | $10392 |
| **12/31/2018** | $10403 | $10630 | $10492 |
| **12/31/2019** | $11017 | $11556 | $11176 |
| **12/31/2020** | $11591 | $12424 | $11758 |
| **12/31/2021** | $11354 | $12232 | $11588 |
| **12/31/2022** | $9929 | $10641 | $10201 |
| **12/31/2023** | $10345 | $11229 | $10685 |
| **12/31/2024** | $10405 | $11369 | $10793 |
| **12/31/2025** | $11113 | $12199 | $11638 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Federated Hermes Fund for U.S. Government Securities II** | 6.80% | (0.84)% | 1.06% |
| **Bloomberg US Aggregate Bond Index** | 7.30% | (0.36)% | 2.01% |
| **67% Bloomberg US Mortgage Backed Securities/ 33% Bloomberg US Government Bond** | 7.83% | (0.21)% | 1.53% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$69,611,634

* Number of Investments167

* Portfolio Turnover57%

* Portfolio Turnover (excluding purchases and sales from dollar-roll transactions)25%

* Total Advisory Fees Paid$253,199

#### Annual Shareholder Report
Federated Hermes Fund for U.S. Government Securities II

## Fund Holdings

### **Top Security Types (% of Net Assets)**![Group By Sector Chart](i9d9c4dc6526d89e0442b119a.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Asset-Backed Securities | 1.0% |
| Cash Equivalents | 1.4% |
| Non-Agency Mortgage-Backed Securities | 2.5% |
| U.S. Government Agency Commericial Mortgage-Backed Securities | 4.9% |
| U.S. Government Agency Securities | 10.8% |
| U.S. Treasury Securities | 13.6% |
| U.S. Government Agency Mortgage-Backed Securities | 65.1% |

---

## Material Fund Changes
Following is a summary of material changes planned for the Fund since the beginning of the reporting period. For more complete and current information, you may review the Fund's disclosure documents on its webpage at FederatedHermes.com/us/FundInformation or upon request at 1-800-341-7400, Option 4, or by contacting your financial advisor.

&nbsp;&nbsp;&nbsp;&nbsp; Effective April 3, 2026, Todd A. Abraham, CFA, will retire from the Fund's Adviser and will no longer serve as a portfolio manager of the Fund.

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916207

G00846-01-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes High Income Bond Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Primary Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes High Income Bond Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Primary Shares | $84 | 0.81% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Bloomberg US Corporate High Yield 2% Issuer Capped Index (the "Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide high current income by investing primarily in a professionally managed, diversified portfolio of fixed-income securities.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund was positively impacted by strong security selection in the Packaging, Midstream, Technology, Building Materials, Chemicals, Consumer Products and Retailers industry sectors. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Specific Fund holdings that positively impacted performance relative to the Index included: Foundation Building Materials, Trivium Packaging Finance, Beach Acquisition Bidco, Gray Media and Ardagh Metal Packaging Finance.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's underweight allocation to the strong performing Media & Entertainment and Wireless Telecommunications industry sectors detracted from overall performance during the period. Additionally, the Fund's overweight allocations to the poor performing Packaging and Technology industry sectors were also detractors from relative performance during the period. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's performance was negatively impacted by security selection in the Cable & Satellite industry sector. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Specific Fund holdings that negatively impacted performance relative to the Index included: Warnermedia Holdings, Condor Merger Sub, Dish DBS Corporation, Central Parent and Organon Finance.

#### Annual Shareholder Report
Federated Hermes High Income Bond Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](ibe28249b8c2c6b7c54abe23c.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Primary Shares** | **Bloomberg US Aggregate Bond Index** | **Bloomberg US Corporate High Yield 2% Issuer Capped Index** | **Lipper Variable Underlying High Yield Funds Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $11482 | $10265 | $11713 | $11321 |
| **12/31/2017** | $12279 | $10628 | $12592 | $12052 |
| **12/31/2018** | $11875 | $10630 | $12329 | $11746 |
| **12/31/2019** | $13602 | $11556 | $14095 | $13299 |
| **12/31/2020** | $14362 | $12424 | $15088 | $13975 |
| **12/31/2021** | $15059 | $12232 | $15882 | $14657 |
| **12/31/2022** | $13285 | $10641 | $14106 | $13294 |
| **12/31/2023** | $14974 | $11229 | $16002 | $14894 |
| **12/31/2024** | $15913 | $11369 | $17313 | $16022 |
| **12/31/2025** | $17222 | $12199 | $18806 | $17270 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Primary Shares** | 8.23% | 3.70% | 5.59% |
| **Bloomberg US Aggregate Bond Index** | 7.30% | (0.36)% | 2.01% |
| **Bloomberg US Corporate High Yield 2% Issuer Capped Index** | 8.62% | 4.50% | 6.52% |
| **Lipper Variable Underlying High Yield Funds Average** | 7.79% | 4.30% | 5.61% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$81,761,873

* Number of Investments401

* Portfolio Turnover28%

* Total Advisory Fees Paid$574,989

#### Annual Shareholder Report
Federated Hermes High Income Bond Fund II

## Fund Holdings

### Top Index Classifications (% of Net Assets)
![Group By Sector Chart](i74d10c450d15cdbf51f7c681.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Packaging | 3.3% |
| Building Materials | 3.9% |
| Independent Energy | 4.1% |
| Gaming | 4.2% |
| Chemicals | 4.2% |
| Health Care | 4.5% |
| Cable Satellite | 5.0% |
| Midstream | 5.5% |
| Insurance - P&C | 8.7% |
| Technology | 13.6% |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916306

G00844-01-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes High Income Bond Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Service Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes High Income Bond Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Service Shares | $110 | 1.06% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Bloomberg US Corporate High Yield 2% Issuer Capped Index (the "Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide high current income by investing primarily in a professionally managed, diversified portfolio of fixed-income securities.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund was positively impacted by strong security selection in the Packaging, Midstream, Technology, Building Materials, Chemicals, Consumer Products and Retailers industry sectors. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Specific Fund holdings that positively impacted performance relative to the Index included: Foundation Building Materials, Trivium Packaging Finance, Beach Acquisition Bidco, Gray Media and Ardagh Metal Packaging Finance.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's underweight allocation to the strong performing Media & Entertainment and Wireless Telecommunications industry sectors detracted from overall performance during the period. Additionally, the Fund's overweight allocations to the poor performing Packaging and Technology industry sectors were also detractors from relative performance during the period. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's performance was negatively impacted by security selection in the Cable & Satellite industry sector. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Specific Fund holdings that negatively impacted performance relative to the Index included: Warnermedia Holdings, Condor Merger Sub, Dish DBS Corporation, Central Parent and Organon Finance.

#### Annual Shareholder Report
Federated Hermes High Income Bond Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](i40b698e9acfd71a1cd529eb3.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Service Shares** | **Bloomberg US Aggregate Bond Index** | **Bloomberg US Corporate High Yield 2% Issuer Capped Index** | **Lipper Variable Underlying High Yield Funds Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $11453 | $10265 | $11713 | $11321 |
| **12/31/2017** | $12204 | $10628 | $12592 | $12052 |
| **12/31/2018** | $11786 | $10630 | $12329 | $11746 |
| **12/31/2019** | $13451 | $11556 | $14095 | $13299 |
| **12/31/2020** | $14185 | $12424 | $15088 | $13975 |
| **12/31/2021** | $14816 | $12232 | $15882 | $14657 |
| **12/31/2022** | $13050 | $10641 | $14106 | $13294 |
| **12/31/2023** | $14677 | $11229 | $16002 | $14894 |
| **12/31/2024** | $15536 | $11369 | $17313 | $16022 |
| **12/31/2025** | $16807 | $12199 | $18806 | $17270 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Service Shares** | 8.18% | 3.45% | 5.33% |
| **Bloomberg US Aggregate Bond Index** | 7.30% | (0.36)% | 2.01% |
| **Bloomberg US Corporate High Yield 2% Issuer Capped Index** | 8.62% | 4.50% | 6.52% |
| **Lipper Variable Underlying High Yield Funds Average** | 7.79% | 4.30% | 5.61% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$81,761,873

* Number of Investments401

* Portfolio Turnover28%

* Total Advisory Fees Paid$574,989

#### Annual Shareholder Report
Federated Hermes High Income Bond Fund II

## Fund Holdings

### Top Index Classifications (% of Net Assets)
![Group By Sector Chart](i74d10c450d15cdbf51f7c681.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Packaging | 3.3% |
| Building Materials | 3.9% |
| Independent Energy | 4.1% |
| Gaming | 4.2% |
| Chemicals | 4.2% |
| Health Care | 4.5% |
| Cable Satellite | 5.0% |
| Midstream | 5.5% |
| Insurance - P&C | 8.7% |
| Technology | 13.6% |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916843

G00844-01-B (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Kaufmann Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Primary Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Kaufmann Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

#### This report describes planned changes made to the Fund since the beginning of the reporting period.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Primary Shares | $163 | 1.54% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Russell Midcap Growth Index to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Russell 3000 Index, which represents approximately 98% of investable U.S. equities by market capitalization. The Fund seeks to provide capital appreciation by investing principally in common stocks of small- and medium-sized companies that are traded on national securities exchanges, the NASDAQ stock market and on the over-the-counter market.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)By sector, allocation to the Health Care and Materials sectors positively affected Fund relative performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Top individual Fund holdings that contributed positively to performance included GE Vernova, Agnico Eagle Mines Ltd., Gardant Health, Inc., GE Aerospace, Quanta Services and Comfort Systems.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Industrials and Health Care sectors also led to outperformance through positive stock selection during the reporting period.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The allocation to the Technology sector detracted from Fund relative performance. The Fund was underweight the sector during the reporting period as the Artificial Intelligence trend boosted sector returns. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)By sector, stock selection in Financials detracted from Fund relative performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)A top individual Fund holding that detracted from performance was Blue Owl Capital.

#### Annual Shareholder Report
Federated Hermes Kaufmann Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](ibe6aa05db3ca15dc4a52ab62.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Primary Shares** | **Russell 3000<sup>®</sup> Index** | **Russell Midcap<sup>®</sup> Growth Index** | **Morningstar US Insurance Mid-Cap Growth Funds Category Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $10366 | $11274 | $10733 | $10475 |
| **12/31/2017** | $13303 | $13656 | $13445 | $13179 |
| **12/31/2018** | $13814 | $12940 | $12806 | $12647 |
| **12/31/2019** | $18486 | $16954 | $17348 | $16994 |
| **12/31/2020** | $23809 | $20495 | $23522 | $23546 |
| **12/31/2021** | $24406 | $25754 | $26516 | $25952 |
| **12/31/2022** | $17062 | $20808 | $19431 | $17755 |
| **12/31/2023** | $19661 | $26209 | $24457 | $21413 |
| **12/31/2024** | $23013 | $32448 | $29863 | $24982 |
| **12/31/2025** | $25665 | $38012 | $32448 | $26490 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Primary Shares** | 11.52% | 1.51% | 9.88% |
| **Russell 3000<sup>®</sup> Index** | 17.15% | 13.15% | 14.28% |
| **Russell Midcap<sup>®</sup> Growth Index** | 8.66% | 6.65% | 12.49% |
| **Morningstar US Insurance Mid-Cap Growth Funds Category Average** | 6.25% | 3.41% | 10.80% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$104,488,904

* Number of Investments135

* Portfolio Turnover25%

* Total Advisory Fees Paid$1,697,322

#### Annual Shareholder Report
Federated Hermes Kaufmann Fund II

## Fund Holdings

### **Top Sectors (% of Net Assets)**![Group By Sector Chart](i7f6db4ba39415213507c2fe7.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Communication Services | 1.7% |
| Utilities | 2.1% |
| Consumer Staples | 2.5% |
| Real Estate | 2.5% |
| Materials | 3.8% |
| Financials | 7.0% |
| Consumer Discretionary | 10.6% |
| Industrials | 20.0% |
| Information Technology | 22.5% |
| Health Care | 25.0% |

---

## Material Fund Changes
Following is a summary of material changes planned for the Fund since the beginning of the reporting period. For more complete and current information, you may review the Fund's disclosure documents on its webpage at FederatedHermes.com/us/FundInformation or upon request at 1-800-341-7400, Option 4, or by contacting your financial advisor.

&nbsp;&nbsp;&nbsp;&nbsp; Effective July 1, 2026, Hans P. Utsch will retire from the Fund's Adviser and will no longer serve as a portfolio manager of the Fund. The other members of the portfolio management team will continue to manage the Fund.

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916827

28136-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Kaufmann Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Service Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Kaufmann Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

#### This report describes planned changes made to the Fund since the beginning of the reporting period.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Service Shares | $189 | 1.79% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Russell Midcap Growth Index to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Russell 3000 Index, which represents approximately 98% of investable U.S. equities by market capitalization. The Fund seeks to provide capital appreciation by investing principally in common stocks of small- and medium-sized companies that are traded on national securities exchanges, the NASDAQ stock market and on the over-the-counter market.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)By sector, allocation to the Health Care and Materials sectors positively affected Fund relative performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Top individual Fund holdings that contributed positively to performance included GE Vernova, Agnico Eagle Mines Ltd., Gardant Health, Inc., GE Aerospace, Quanta Services and Comfort Systems.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Industrials and Health Care sectors also led to outperformance through positive stock selection during the reporting period.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The allocation to the Technology sector detracted from Fund relative performance. The Fund was underweight the sector during the reporting period as the Artificial Intelligence trend boosted sector returns. 

* ![Bullet](ibecea1413c3977136e9087e4.jpg)By sector, stock selection in Financials detracted from Fund relative performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)A top individual Fund holding that detracted from performance was Blue Owl Capital.

#### Annual Shareholder Report
Federated Hermes Kaufmann Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](i9f0652b5fe3dae310859b9f8.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Service Shares** | **Russell 3000<sup>®</sup> Index** | **Russell Midcap<sup>®</sup> Growth Index** | **Morningstar US Insurance Mid-Cap Growth Funds Category Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $10342 | $11274 | $10733 | $10475 |
| **12/31/2017** | $13234 | $13656 | $13445 | $13179 |
| **12/31/2018** | $13707 | $12940 | $12806 | $12647 |
| **12/31/2019** | $18302 | $16954 | $17348 | $16994 |
| **12/31/2020** | $23515 | $20495 | $23522 | $23546 |
| **12/31/2021** | $24047 | $25754 | $26516 | $25952 |
| **12/31/2022** | $16771 | $20808 | $19431 | $17755 |
| **12/31/2023** | $19275 | $26209 | $24457 | $21413 |
| **12/31/2024** | $22495 | $32448 | $29863 | $24982 |
| **12/31/2025** | $25029 | $38012 | $32448 | $26490 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Service Shares** | 11.26% | 1.26% | 9.61% |
| **Russell 3000<sup>®</sup> Index** | 17.15% | 13.15% | 14.28% |
| **Russell Midcap<sup>®</sup> Growth Index** | 8.66% | 6.65% | 12.49% |
| **Morningstar US Insurance Mid-Cap Growth Funds Category Average** | 6.25% | 3.41% | 10.80% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$104,488,904

* Number of Investments135

* Portfolio Turnover25%

* Total Advisory Fees Paid$1,697,322

#### Annual Shareholder Report
Federated Hermes Kaufmann Fund II

## Fund Holdings

### **Top Sectors (% of Net Assets)**![Group By Sector Chart](i7f6db4ba39415213507c2fe7.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Communication Services | 1.7% |
| Utilities | 2.1% |
| Consumer Staples | 2.5% |
| Real Estate | 2.5% |
| Materials | 3.8% |
| Financials | 7.0% |
| Consumer Discretionary | 10.6% |
| Industrials | 20.0% |
| Information Technology | 22.5% |
| Health Care | 25.0% |

---

## Material Fund Changes
Following is a summary of material changes planned for the Fund since the beginning of the reporting period. For more complete and current information, you may review the Fund's disclosure documents on its webpage at FederatedHermes.com/us/FundInformation or upon request at 1-800-341-7400, Option 4, or by contacting your financial advisor.

&nbsp;&nbsp;&nbsp;&nbsp; Effective July 1, 2026, Hans P. Utsch will retire from the Fund's Adviser and will no longer serve as a portfolio manager of the Fund. The other members of the portfolio management team will continue to manage the Fund.

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916777

28136-B (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Managed Volatility Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Primary Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Managed Volatility Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Primary Shares | $98 | 0.95% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to a 60%/40% custom blend of the Bloomberg US Aggregate Bond Index and the Russell 1000 Value Index (the "Blended Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the S&P 500 Index (the "S&P 500") which tracks the stock performance of 500 of the largest companies listed on stock exchanges in the U.S. The Fund seeks to achieve high current income and moderate capital appreciation by investing in both equity and fixed-income securities that have high income potential.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Equity security selection was the largest positive contributor to Fund relative performance. The sectors with the most positive impact were Health Care, Industrials, Financials and Consumer Discretionary.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Fixed income sector allocation was a positive contributor to Fund relative performance. Out of index allocations to trade finance loans, high yield bonds, and emerging markets bonds were the main drivers.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's holdings in S&P 500 futures were the largest detractor to Fund relative performance. The Fund had its highest weight in the S&P 500 futures when the market declined in the second quarter of 2025. To reduce the Fund's realized volatility back toward the target 8% to 12% level, the Fund had a significantly lower weight in S&P 500 futures as stocks recovered for the remainder of the calendar year.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Equity options detracted from Fund relative performance. This was primarily driven by the Fund's long S&P 500 put option positions losing value as the equity market moved significantly higher in the reporting period.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Short 10-Year Treasury Note futures positions (which gain when 10-year U.S. government interest rates move higher) detracted from Fund relative performance as long term interest rates in the U.S. declined during 2025.

Federated Hermes Managed Volatility Fund II

#### Annual Shareholder Report

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](ia1056151ea62d384bec81a21.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Primary Shares** | **S&P 500 Index** | **60% Bloomberg US Aggregate Bond/ 40% Russell 1000 Value** | **Morningstar US Insurance Tactical Allocation Funds Category Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $10769 | $11196 | $10850 | $10731 |
| **12/31/2017** | $12719 | $13640 | $11667 | $12144 |
| **12/31/2018** | $11639 | $13042 | $11304 | $11414 |
| **12/31/2019** | $13993 | $17149 | $13095 | $13378 |
| **12/31/2020** | $14124 | $20304 | $13954 | $14409 |
| **12/31/2021** | $16738 | $26132 | $15162 | $16004 |
| **12/31/2022** | $14436 | $21399 | $13560 | $13576 |
| **12/31/2023** | $15689 | $27025 | $14644 | $15269 |
| **12/31/2024** | $18130 | $33786 | $15590 | $17021 |
| **12/31/2025** | $19386 | $39827 | $17266 | $18945 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Primary Shares** | 6.93% | 6.54% | 6.84% |
| **S&P 500 Index** | 17.88% | 14.43% | 14.82% |
| **60% Bloomberg US Aggregate Bond/ 40% Russell 1000 Value** | 10.76% | 4.35% | 5.61% |
| **Morningstar US Insurance Tactical Allocation Funds Category Average** | 12.44% | 5.70% | 6.64% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$177,743,354

* Number of Investments645

* Portfolio Turnover60%

* Total Advisory Fees Paid$1,084,573

Federated Hermes Managed Volatility Fund II

#### Annual Shareholder Report

## Fund Holdings

### Top Security Types (% of Net Assets)<sup>**Footnote Reference 1**</sup>
![Group By Sector Chart](i24d057280a14a0ba415567de.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Federated Hermes Short-Intermediate Government Fund, Institutional Shares | 0.0%<sup>Footnote Reference\*</sup> |
| Foreign Governments/Agencies | 0.1% |
| Bank Loan Core Fund | 0.6% |
| Emerging Markets Core Fund | 1.0% |
| Federated Hermes High Income Bond Fund II, Class P | 1.6% |
| Cash Equivalents | 2.0% |
| International Equity Securities | 2.2% |
| Project and Trade Finance Core Fund | 3.9% |
| Domestic Equity Securities | 40.0% |
| Domestic Fixed-Income Securities | 48.2% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| Footnote<sup>1</sup> | Reflects the pro rata portfolio composition of underlying affiliated investment companies (other than an affiliated money market fund) in which the Fund invested greater than 10% of its net assets as of the date specified above. Accordingly, the percentages of net assets shown in the table will differ from those presented on the Portfolio of Investments. |
| Footnote<sup>\*</sup> | Represents less than 0.1%. |

---

### **Top Sectors - Equity (% of Equity Securities)**![Group By Maturity Chart](i5a30a594dcbc32b4a42a6a92.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Materials | 3.6% |
| Real Estate | 3.7% |
| Utilities | 4.0% |
| Energy | 6.2% |
| Consumer Staples | 7.0% |
| Consumer Discretionary | 7.4% |
| Communication Services | 8.0% |
| Information Technology | 12.2% |
| Industrials | 12.7% |
| Health Care | 12.9% |
| Financials | 22.3% |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916108

G00845-01-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Managed Volatility Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Service Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Managed Volatility Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Service Shares | $124 | 1.20% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to a 60%/40% custom blend of the Bloomberg US Aggregate Bond Index and the Russell 1000 Value Index (the "Blended Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the S&P 500 Index (the "S&P 500") which tracks the stock performance of 500 of the largest companies listed on stock exchanges in the U.S. The Fund seeks to achieve high current income and moderate capital appreciation by investing in both equity and fixed-income securities that have high income potential.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Equity security selection was the largest positive contributor to Fund relative performance. The sectors with the most positive impact were Health Care, Industrials, Financials and Consumer Discretionary.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Fixed income sector allocation was a positive contributor to Fund relative performance. Out of index allocations to trade finance loans, high yield bonds, and emerging markets bonds were the main drivers.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The Fund's holdings in S&P 500 futures were the largest detractor to Fund relative performance. The Fund had its highest weight in the S&P 500 futures when the market declined in the second quarter of 2025. To reduce the Fund's realized volatility back toward the target 8% to 12% level, the Fund had a significantly lower weight in S&P 500 futures as stocks recovered for the remainder of the calendar year.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Equity options detracted from Fund relative performance. This was primarily driven by the Fund's long S&P 500 put option positions losing value as the equity market moved significantly higher in the reporting period.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Short 10-Year Treasury Note futures positions (which gain when 10-year U.S. government interest rates move higher) detracted from Fund relative performance as long term interest rates in the U.S. declined during 2025.

Federated Hermes Managed Volatility Fund II

#### Annual Shareholder Report

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](i0e8f0dd8f65d39b0a70cd959.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Service Shares** | **S&P 500 Index** | **60% Bloomberg US Aggregate Bond/ 40% Russell 1000 Value** | **Morningstar US Insurance Tactical Allocation Funds Category Average** |
| **12/31/2015** | $10000 | $10000 | $10000 | $10000 |
| **12/31/2016** | $10769 | $11196 | $10850 | $10731 |
| **12/31/2017** | $12719 | $13640 | $11667 | $12144 |
| **12/31/2018** | $11627 | $13042 | $11304 | $11414 |
| **12/31/2019** | $13942 | $17149 | $13095 | $13378 |
| **12/31/2020** | $14041 | $20304 | $13954 | $14409 |
| **12/31/2021** | $16604 | $26132 | $15162 | $16004 |
| **12/31/2022** | $14280 | $21399 | $13560 | $13576 |
| **12/31/2023** | $15470 | $27025 | $14644 | $15269 |
| **12/31/2024** | $17853 | $33786 | $15590 | $17021 |
| **12/31/2025** | $19019 | $39827 | $17266 | $18945 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Service Shares** | 6.53% | 6.26% | 6.64% |
| **S&P 500 Index** | 17.88% | 14.43% | 14.82% |
| **60% Bloomberg US Aggregate Bond/ 40% Russell 1000 Value** | 10.76% | 4.35% | 5.61% |
| **Morningstar US Insurance Tactical Allocation Funds Category Average** | 12.44% | 5.70% | 6.64% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$177,743,354

* Number of Investments645

* Portfolio Turnover60%

* Total Advisory Fees Paid$1,084,573

Federated Hermes Managed Volatility Fund II

#### Annual Shareholder Report

## Fund Holdings

### Top Security Types (% of Net Assets)<sup>**Footnote Reference 1**</sup>
![Group By Sector Chart](i24d057280a14a0ba415567de.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Federated Hermes Short-Intermediate Government Fund, Institutional Shares | 0.0%<sup>Footnote Reference\*</sup> |
| Foreign Governments/Agencies | 0.1% |
| Bank Loan Core Fund | 0.6% |
| Emerging Markets Core Fund | 1.0% |
| Federated Hermes High Income Bond Fund II, Class P | 1.6% |
| Cash Equivalents | 2.0% |
| International Equity Securities | 2.2% |
| Project and Trade Finance Core Fund | 3.9% |
| Domestic Equity Securities | 40.0% |
| Domestic Fixed-Income Securities | 48.2% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| Footnote<sup>1</sup> | Reflects the pro rata portfolio composition of underlying affiliated investment companies (other than an affiliated money market fund) in which the Fund invested greater than 10% of its net assets as of the date specified above. Accordingly, the percentages of net assets shown in the table will differ from those presented on the Portfolio of Investments. |
| Footnote<sup>\*</sup> | Represents less than 0.1%. |

---

### **Top Sectors - Equity (% of Equity Securities)**![Group By Maturity Chart](i5a30a594dcbc32b4a42a6a92.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Materials | 3.6% |
| Real Estate | 3.7% |
| Utilities | 4.0% |
| Energy | 6.2% |
| Consumer Staples | 7.0% |
| Consumer Discretionary | 7.4% |
| Communication Services | 8.0% |
| Information Technology | 12.2% |
| Industrials | 12.7% |
| Health Care | 12.9% |
| Financials | 22.3% |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916744

G00845-01-B (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Quality Bond Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Primary Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Quality Bond Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Primary Shares | $77 | 0.74% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Bloomberg US Intermediate Credit Index (the "Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide current income by investing in a diversified portfolio of investment-grade, fixed-income securities.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Sector underweight positions relative to the Index in Government Guarantee, Local Authority and Supranational sectors contributed to positive Sector performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The use of derivatives, primarily U.S. Treasury futures to adjust duration and yield curve positioning, was a contributor to relative performance.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Individual security positioning in the Fund relative to the Index resulted in security selection underperformance. Security selection was the largest driver of negative Fund performance relative to the Index during the period. Individual holdings with the greatest negative contribution to relative Fund performance were U.S. Treasuries, Capital One, Warner Brothers and Bank of America. Top detracting positions relative to the Index included both over-and-underweighted securities.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Yield curve positioning was a detractor from relative Fund performance. The Fund had underweight allocations to longer duration securities and overweight allocations to the middle (or belly) portion of the yield curve. Longer duration securities had greater total returns than those in the belly.

#### Annual Shareholder Report
Federated Hermes Quality Bond Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](i2a3a28609412ffd814230d1a.jpg)

---

| | | | |
|:---|:---|:---|:---|
| | **Primary Shares** | **Bloomberg US Aggregate Bond Index** | **Bloomberg US Intermediate Credit Index** |
| **12/31/2015** | $10000 | $10000 | $10000 |
| **12/31/2016** | $10382 | $10265 | $10368 |
| **12/31/2017** | $10801 | $10628 | $10748 |
| **12/31/2018** | $10737 | $10630 | $10749 |
| **12/31/2019** | $11751 | $11556 | $11773 |
| **12/31/2020** | $12705 | $12424 | $12607 |
| **12/31/2021** | $12528 | $12232 | $12478 |
| **12/31/2022** | $11366 | $10641 | $11342 |
| **12/31/2023** | $12063 | $11229 | $12129 |
| **12/31/2024** | $12532 | $11369 | $12616 |
| **12/31/2025** | $13420 | $12199 | $13609 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Primary Shares** | 7.08% | 1.10% | 2.99% |
| **Bloomberg US Aggregate Bond Index** | 7.30% | (0.36)% | 2.01% |
| **Bloomberg US Intermediate Credit Index** | 7.88% | 1.54% | 3.13% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$133,318,135

* Number of Investments377

* Portfolio Turnover19%

* Total Advisory Fees Paid$678,248

#### Annual Shareholder Report
Federated Hermes Quality Bond Fund II

## Fund Holdings

### **Top Security Types (% of Net Assets)**![Group By Sector Chart](i3a0a995572d7307c160a5ec8.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Mortgage-Backed Securities | 0.0%<sup>Footnote Reference\*</sup> |
| Securities Lending Collateral | 0.7% |
| U.S. Treasury Securities | 1.0% |
| Repurchase Agreements | 2.5% |
| Corporate Bonds | 95.4% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| Footnote<sup>\*</sup> | Represents less than 0.1%. |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916884

G00433-14-A (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

# Federated Hermes Quality Bond Fund II
![Image](i3cb3d0e6d21c3cb66e131641.jpg)

# Service Shares

#### Annual Shareholder Report - December 31, 2025

## A Portfolio of Federated Hermes Insurance Series
This annual shareholder report contains important information about the Federated Hermes Quality Bond Fund II (the "Fund") for the period of January 1, 2025 to December 31, 2025. You can find additional information at FederatedHermes.com/us/FundInformation. You can also request this information by contacting us at 1-800-341-7400, Option 4, or your financial advisor.

## What were the Fund costs for the last year?
(based on a hypothetical $10,000 investment)

---

| | | |
|:---|:---|:---|
| **Class Name** | **Costs of a $10,000 investment** | **Costs paid as a percentage of a $10,000 investment** |
| Service Shares | $102 | 0.99% |

---

## Management's Discussion of Fund Performance
The following discussion compares the performance of the Fund to the Bloomberg US Intermediate Credit Index (the "Index") to show how the Fund's performance compares to the returns of similar investments for the reporting period. See the Average Annual Total Returns table below for the returns of the Fund and related indexes, including the Bloomberg US Aggregate Bond Index, which represents the overall U.S. fixed-income market. The Fund seeks to provide current income by investing in a diversified portfolio of investment-grade, fixed-income securities.

**Top Contributors to Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Sector underweight positions relative to the Index in Government Guarantee, Local Authority and Supranational sectors contributed to positive Sector performance.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)The use of derivatives, primarily U.S. Treasury futures to adjust duration and yield curve positioning, was a contributor to relative performance.

**Top Detractors from Performance**

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Individual security positioning in the Fund relative to the Index resulted in security selection underperformance. Security selection was the largest driver of negative Fund performance relative to the Index during the period. Individual holdings with the greatest negative contribution to relative Fund performance were U.S. Treasuries, Capital One, Warner Brothers and Bank of America. Top detracting positions relative to the Index included both over-and-underweighted securities.

* ![Bullet](ibecea1413c3977136e9087e4.jpg)Yield curve positioning was a detractor from relative Fund performance. The Fund had underweight allocations to longer duration securities and overweight allocations to the middle (or belly) portion of the yield curve. Longer duration securities had greater total returns than those in the belly.

#### Annual Shareholder Report
Federated Hermes Quality Bond Fund II

## Fund Performance
**Keep in mind that the Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.**

Cumulative Performance: 12/31/2015 to 12/31/2025

### Total Return Based on $10,000 Investment
![Growth of 10K Chart](i1d57059c0218460420b2af89.jpg)

---

| | | | |
|:---|:---|:---|:---|
| | **Service Shares** | **Bloomberg US Aggregate Bond Index** | **Bloomberg US Intermediate Credit Index** |
| **12/31/2015** | $10000 | $10000 | $10000 |
| **12/31/2016** | $10353 | $10265 | $10368 |
| **12/31/2017** | $10741 | $10628 | $10748 |
| **12/31/2018** | $10657 | $10630 | $10749 |
| **12/31/2019** | $11634 | $11556 | $11773 |
| **12/31/2020** | $12549 | $12424 | $12607 |
| **12/31/2021** | $12340 | $12232 | $12478 |
| **12/31/2022** | $11173 | $10641 | $11342 |
| **12/31/2023** | $11827 | $11229 | $12129 |
| **12/31/2024** | $12255 | $11369 | $12616 |
| **12/31/2025** | $13090 | $12199 | $13609 |

---

## Average Annual Total Returns

---

| | | | |
|:---|:---|:---|:---|
| **Fund/Index** | **1 Year** | **5 Years** | **10 Years** |
| **Service Shares** | 6.82% | 0.85% | 2.73% |
| **Bloomberg US Aggregate Bond Index** | 7.30% | (0.36)% | 2.01% |
| **Bloomberg US Intermediate Credit Index** | 7.88% | 1.54% | 3.13% |

---

Visit FederatedHermes.com/us/FundInformation and click on the link to your fund and share class for more recent performance information.

## Key Fund Statistics
* Net Assets$133,318,135

* Number of Investments377

* Portfolio Turnover19%

* Total Advisory Fees Paid$678,248

#### Annual Shareholder Report
Federated Hermes Quality Bond Fund II

## Fund Holdings

### **Top Security Types (% of Net Assets)**![Group By Sector Chart](i3a0a995572d7307c160a5ec8.jpg)

---

| | |
|:---|:---|
| **Value** | **Value** |
| Mortgage-Backed Securities | 0.0%<sup>Footnote Reference\*</sup> |
| Securities Lending Collateral | 0.7% |
| U.S. Treasury Securities | 1.0% |
| Repurchase Agreements | 2.5% |
| Corporate Bonds | 95.4% |

---

---

| | |
|:---|:---|
| Footnote | Description |
| Footnote<sup>\*</sup> | Represents less than 0.1%. |

---

## Additional Information about the Fund
Additional information is available on the Fund's website at FederatedHermes.com/us/FundInformation, including its:

• prospectus • financial information • holdings • proxy voting information

CUSIP 313916785

G00433-14-B (02/26)

Federated Securities Corp., Distributor

<u>FederatedHermes.com/us</u>

&nbsp;&nbsp;&nbsp;&nbsp;© 2026 Federated Hermes, Inc.

**Item 2.** **Code of Ethics**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 3: John G. Carson, Thomas M. O'Neill and John S. Walsh.

**Item 4.** **Principal Accountant Fees and Services**

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

Fiscal year ended 2025 – $217,291

Fiscal year ended 2024 – $208,934

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

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $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.

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

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $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.

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

Fiscal year ended 2025 - $0

Fiscal year ended 2024 - $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. The Audit Committee is required to pre-concur with independence conclusions made by the independent auditor regarding non-audit services to be provided by the independent auditor to the Funds, the Funds Board of Directors, or any entity that is controlled directly or indirectly by the Funds. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval(and pre-concurrence for non-audit services) 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/pre-concurrence 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/pre-concurrence decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval/pre-concurrence 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/pre-concurred certain tax services; with limited exception, all tax services involving large and complex transactions must be specifically pre-approved/pre-concurred 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/pre-concurrence requirement is waived if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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/pre-concurrence 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/concurrence 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 2025 – 0%

Fiscal year ended 2024 - 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 2025 – 0%

Fiscal year ended 2024 – 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 2025 – 0%

Fiscal year ended 2024 – 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NA

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 2025 - $391,304

Fiscal year ended 2024 - $4,682

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;&nbsp; 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Not Applicable

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Not Applicable

**Item 5.** **Audit Committee of Listed Registrants**

Not Applicable

**Item 6.** **Schedule of Investments**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The registrant's Schedule of Investments is included as part of the Financial Statements filed under Item 7 of this form.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Not Applicable

**Item 7.** **Financial Statements and Financial Highlights for Open-End Management Companies**

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](img79d3bc3d1.gif)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Share Class** | **Service**  |

---

------

Federated Hermes Government Money Fund II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_daf9c355-c758-4ec9-bc38-c34a53c50247_1) | [1](#xx_daf9c355-c758-4ec9-bc38-c34a53c50247_1)  |
| [Financial Highlights](#xx_9fc15c2a-bf3e-4d51-a38b-011e84f3dc78_1) | [4](#xx_9fc15c2a-bf3e-4d51-a38b-011e84f3dc78_1)  |
| [Statement of Assets and Liabilities](#xx_52664e82-472b-45ec-965c-92a457303e70_1) | [5](#xx_52664e82-472b-45ec-965c-92a457303e70_1)  |
| [Statement of Operations](#xx_52664e82-472b-45ec-965c-92a457303e70_2) | [6](#xx_52664e82-472b-45ec-965c-92a457303e70_2)  |
| [Statement of Changes in Net Assets](#xx_52664e82-472b-45ec-965c-92a457303e70_3) | [7](#xx_52664e82-472b-45ec-965c-92a457303e70_3)  |
| [Notes to Financial Statements](#xx_67fa5492-e6f4-4a0c-a063-e8230216d49a_1) | [8](#xx_67fa5492-e6f4-4a0c-a063-e8230216d49a_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_8ebb8fe0-4607-4216-8dc6-53fe79d7671a_1) | [12](#xx_8ebb8fe0-4607-4216-8dc6-53fe79d7671a_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_3b8e2f20-5ca9-43d0-94eb-b466d1f89fbb_1) | [13](#xx_3b8e2f20-5ca9-43d0-94eb-b466d1f89fbb_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Principal** <br>**Amount**<br>|  | **Value** |
|  | GOVERNMENT AGENCIES—15.2% |  |
| $100000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.755% (SOFR +0.045%), 1/1/2026 | &nbsp;&nbsp; $100000 |
| 25000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.765% (SOFR +0.055%), 1/1/2026 | &nbsp;&nbsp; 25000 |
| 435000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.790% (SOFR +0.080%), 1/1/2026 | &nbsp;&nbsp; 434933 |
| 225000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.800% (SOFR +0.090%), 1/1/2026 | &nbsp;&nbsp; 225000 |
| 250000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.805% (SOFR +0.095%), 1/1/2026 | &nbsp;&nbsp; 250000 |
| 100000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.810% (SOFR +0.100%), 1/1/2026 | &nbsp;&nbsp; 100000 |
| 250000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.815% (SOFR +0.105%), 1/1/2026 | &nbsp;&nbsp; 250000 |
| 325000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.820% (SOFR +0.110%), 1/1/2026 | &nbsp;&nbsp; 325000 |
| 200000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.825% (SOFR +0.115%), 1/1/2026 | &nbsp;&nbsp; 200000 |
| 200000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.830% (SOFR +0.120%), 1/1/2026 | &nbsp;&nbsp; 200000 |
| 175000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.835% (SOFR +0.125%), 1/1/2026 | &nbsp;&nbsp; 175000 |
| 750000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.840% (SOFR +0.130%), 1/1/2026 | &nbsp;&nbsp; 750000 |
| 150000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.845% (SOFR +0.085%), 1/7/2026 | &nbsp;&nbsp; 150000 |
| 100000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.845% (SOFR +0.135%), 1/1/2026 | &nbsp;&nbsp; 100000 |
| 150000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.850% (SOFR +0.140%), 1/1/2026 | &nbsp;&nbsp; 150000 |
| 350000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.855% (SOFR +0.145%), 1/1/2026 | &nbsp;&nbsp; 350000 |
| 750000<br><sup>1</sup> <br>| Federal Farm Credit System Floating Rate Notes, 3.860% (SOFR +0.150%), 1/1/2026 | &nbsp;&nbsp; 750000 |
| 1150000<br><sup>2</sup> <br>| Federal Home Loan Bank System Discount Notes, 3.744% - 4.100%, 1/2/2026 - 3/27/2026 | &nbsp;&nbsp; 1146864 |
| 300000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.710% (SOFR +0.000%), 1/1/2026 | &nbsp;&nbsp; 300000 |
| 500000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.735% (SOFR +0.025%), 1/1/2026 | &nbsp;&nbsp; 500000 |
| 750000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.745% (SOFR +0.035%), 1/1/2026 | &nbsp;&nbsp; 750000 |
| 250000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.785% (SOFR +0.075%), 1/1/2026 | &nbsp;&nbsp; 250000 |
| 100000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.810% (SOFR +0.100%), 1/1/2026 | &nbsp;&nbsp; 100000 |
| 150000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.830% (SOFR +0.120%), 1/1/2026 | &nbsp;&nbsp; 150000 |
| 100000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.845% (SOFR +0.135%), 1/1/2026 | &nbsp;&nbsp; 100000 |
| 200000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.855% (SOFR +0.145%), 1/1/2026 | &nbsp;&nbsp; 200000 |
| 150000<br><sup>1</sup> <br>| Federal Home Loan Bank System Floating Rate Notes, 3.890% (SOFR +0.180%), 1/1/2026 | &nbsp;&nbsp; 150000 |
| 1850000 | Federal Home Loan Bank System, 3.500% - 4.000%, 2/5/2026 - 1/4/2027 | &nbsp;&nbsp; 1848808 |
| 200000<br><sup>1</sup> <br>| Federal Home Loan Mortgage Corp. Floating Rate Notes, 3.805% (SOFR +0.095%), 1/1/2026 | &nbsp;&nbsp; 200000 |
| 250000<br><sup>1</sup> <br>| Federal Home Loan Mortgage Corp. Floating Rate Notes, 3.840% (SOFR +0.130%), 1/1/2026 | &nbsp;&nbsp; 250000 |
| 150000<br><sup>1</sup> <br>| Federal Home Loan Mortgage Corp. Floating Rate Notes, 3.850% (SOFR +0.140%), 1/1/2026 | &nbsp;&nbsp; 150000 |
| 300000<br><sup>1</sup> <br>| Federal National Mortgage Association Floating Rate Notes, 3.790% (SOFR +0.080%), 1/2/2026 | &nbsp;&nbsp; 300000 |
| 300000<br><sup>1</sup> <br>| Federal National Mortgage Association Floating Rate Notes, 3.850% (SOFR +0.140%), 1/1/2026 | &nbsp;&nbsp; 300000 |
| 150000<br><sup>1</sup> <br>| Federal National Mortgage Association Floating Rate Notes, 3.970% (SOFR +0.260%), 1/1/2026 | &nbsp;&nbsp; 150312 |
|  | TOTAL GOVERNMENT AGENCIES | &nbsp;&nbsp; 11380917 |
|  | U.S. TREASURIES—25.4% |  |
| <sup>2</sup> <br>| **U.S. Treasury Bills—19.7%** |  |
| 250000 | United States Treasury Bills, 3.380%, 12/24/2026 | &nbsp;&nbsp; 241620 |
| 750000 | United States Treasury Bills, 3.540%, 10/1/2026 | &nbsp;&nbsp; 729866 |
| 750000 | United States Treasury Bills, 3.685%, 4/16/2026 | &nbsp;&nbsp; 741939 |
| 350000 | United States Treasury Bills, 3.695%, 4/9/2026 | &nbsp;&nbsp; 346479 |
| 750000 | United States Treasury Bills, 3.705%, 3/3/2026 | &nbsp;&nbsp; 745292 |
| 300000 | United States Treasury Bills, 3.705%, 3/26/2026 | &nbsp;&nbsp; 297406 |
| 750000 | United States Treasury Bills, 3.725%, 3/5/2026 | &nbsp;&nbsp; 745111 |
| 440000 | United States Treasury Bills, 3.770%, 3/10/2026 | &nbsp;&nbsp; 436867 |
| 450000 | United States Treasury Bills, 3.785%, 2/3/2026 | &nbsp;&nbsp; 448439 |
| 750000 | United States Treasury Bills, 3.810%, 2/17/2026 | &nbsp;&nbsp; 746269 |
| 700000 | United States Treasury Bills, 3.925%, 7/9/2026 | &nbsp;&nbsp; 685576 |
| 400000 | United States Treasury Bills, 3.940%, 6/11/2026 | &nbsp;&nbsp; 392952 |
| 100000 | United States Treasury Bills, 4.050%, 2/19/2026 | &nbsp;&nbsp; 99449 |
| 700000 | United States Treasury Bills, 4.120%, 1/29/2026 | &nbsp;&nbsp; 697757 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br>|  | **Value** |
|  | U.S. TREASURIES—continued |  |
| <sup>2</sup> <br>| **U.S. Treasury Bills—continued** |  |
| $1100000 | United States Treasury Bills, 3.460% - 3.470%, 11/27/2026 | &nbsp;&nbsp; $1065080 |
| 2050000 | United States Treasury Bills, 3.690% - 3.960%, 5/14/2026 | &nbsp;&nbsp; 2020847 |
| 1550000 | United States Treasury Bills, 3.715% - 3.945%, 3/19/2026 | &nbsp;&nbsp; 1537290 |
| 1200000 | United States Treasury Bills, 3.845% - 4.125%, 1/15/2026 | &nbsp;&nbsp; 1198119 |
| 1600000 | United States Treasury Bills, 4.025% - 4.115%, 1/22/2026 | &nbsp;&nbsp; 1596201 |
|  | TOTAL | &nbsp;&nbsp; 14772559 |
|  | **U.S. Treasury Notes—5.7%** |  |
| 1000000<br><sup>1</sup> <br>| United States Treasury Floating Rate Notes, 3.700% (91-day T-Bill +0.098%), 1/6/2026 | &nbsp;&nbsp; 999911 |
| 1000000<br><sup>1</sup> <br>| United States Treasury Floating Rate Notes, 3.762% (91-day T-Bill +0.160%), 1/6/2026 | &nbsp;&nbsp; 1000118 |
| 500000<br><sup>1</sup> <br>| United States Treasury Floating Rate Notes, 3.807% (91-day T-Bill +0.205%), 1/6/2026 | &nbsp;&nbsp; 500254 |
| 200000 | United States Treasury Notes, 0.625%, 7/31/2026 | &nbsp;&nbsp; 196241 |
| 100000 | United States Treasury Notes, 0.750%, 4/30/2026 | &nbsp;&nbsp; 98948 |
| 150000 | United States Treasury Notes, 0.750%, 5/31/2026 | &nbsp;&nbsp; 148033 |
| 200000 | United States Treasury Notes, 1.125%, 10/31/2026 | &nbsp;&nbsp; 195799 |
| 150000 | United States Treasury Notes, 3.500%, 9/30/2026 | &nbsp;&nbsp; 149804 |
| 200000 | United States Treasury Notes, 3.750%, 8/31/2026 | &nbsp;&nbsp; 199510 |
| 200000 | United States Treasury Notes, 4.250%, 11/30/2026 | &nbsp;&nbsp; 201129 |
| 200000 | United States Treasury Notes, 4.625%, 6/30/2026 | &nbsp;&nbsp; 200468 |
| 350000 | United States Treasury Notes, 4.625%, 9/15/2026 | &nbsp;&nbsp; 352126 |
|  | TOTAL | &nbsp;&nbsp; 4242341 |
|  | TOTAL U.S. TREASURIES | &nbsp;&nbsp; 19014900 |
|  | REPURCHASE AGREEMENTS—59.0% |  |
| 12000000 | Interest in $250,000,000 joint repurchase agreement 3.83%, dated 12/31/2025 under which ABN Amro Bank N.V., <br> Netherlands will repurchase securities provided as collateral for $250,053,194 on 1/2/2026. The securities provided as <br> collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury <br> securities with various maturities to 12/1/2055 and the market value of those underlying securities was $255,442,703.<br>| &nbsp;&nbsp; 12000000 |
| 8926000 | Interest in $500,000,000 joint repurchase agreement 3.82%, dated 12/31/2025 under which Bank of Nova Scotia will <br> repurchase securities provided as collateral for $500,106,111 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities and a U.S. Treasury security with <br> various maturities to 8/1/2055 and the market value of those underlying securities was $510,108,240.<br>| &nbsp;&nbsp; 8926000 |
| 2000000 | Interest in $4,800,000,000 joint repurchase agreement 3.72%, dated 12/30/2025 under which Wells Fargo Securities LLC will <br> repurchase securities provided as collateral for $4,803,472,000 on 1/6/2026. The securities provided as collateral at the end <br> of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 6/15/2068 and the market value of those underlying securities was $4,929,807,970.<br>| &nbsp;&nbsp; 2000000 |
| 12000000 | Interest in $1,880,000,000 joint repurchase agreement 3.83%, dated 12/31/2025 under which Wells Fargo Securities LLC will <br> repurchase securities provided as collateral for $1,880,400,022 on 1/2/2026. The securities provided as collateral at the end <br> of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 2/28/2030 and <br> the market value of those underlying securities was $1,918,008,080.<br>| &nbsp;&nbsp; 12000000 |
| 500000 | Interest in $1,800,000,000 joint repurchase agreement 3.75%, dated 12/11/2025 under which Natixis Financial Products LLC <br> will repurchase securities provided as collateral for $1,804,125,000 on 1/2/2026. The securities provided as collateral at the <br> end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury securities with <br> various maturities to 5/20/2071 and the market value of those underlying securities was $1,840,319,983.<br>| &nbsp;&nbsp; 500000 |
| 500000 | Interest in $970,000,000 joint repurchase agreement 3.72%, dated 12/12/2025 under which Barclays Bank PLC will repurchase <br> securities provided as collateral for $972,505,833 on 1/9/2026. The securities provided as collateral at the end of the period <br> held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 5/15/2067 and <br> the market value of those underlying securities was $994,060,308.<br>| &nbsp;&nbsp; 500000 |
| 250000 | Interest in $730,000,000 joint repurchase agreement 3.74%, dated 12/24/2025 under which Bank of Montreal will repurchase <br> securities provided as collateral for $731,137,583 on 1/15/2026. The securities provided as collateral at the end of the period <br> held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 1/1/2056 and the <br> market value of those underlying securities was $745,296,202.<br>| &nbsp;&nbsp; 250000 |
| 500000 | Interest in $875,000,000 joint repurchase agreement 3.83%, dated 12/3/2025 under which Bank of Montreal will repurchase <br> securities provided as collateral for $878,165,069 on 1/7/2026. The securities provided as collateral at the end of the period <br> held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 5/20/2055 and <br> the market value of those underlying securities was $904,030,608.<br>| &nbsp;&nbsp; 500000 |
| 500000 | Interest in $900,000,000 joint repurchase agreement 3.84%, dated 12/5/2025 under which Bank of Montreal will repurchase <br> securities provided as collateral for $902,976,000 on 1/5/2026. The securities provided as collateral at the end of the period <br> held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 12/20/2055 and <br> the market value of those underlying securities was $929,768,641.<br>| &nbsp;&nbsp; 500000 |
| 1500000 | Interest in $4,000,000,000 joint repurchase agreement 3.85%, dated 10/27/2025 under which Royal Bank of Canada, New <br> York Branch will repurchase securities provided as collateral for $4,040,638,889 on 1/30/2026. The securities provided as <br> collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury <br> securities with various maturities to 8/20/2065 and the market value of those underlying securities was $4,136,862,479.<br>| &nbsp;&nbsp; 1500000 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br>|  | **Value** |
|  | REPURCHASE AGREEMENTS—continued |  |
| $1000000 | Interest in $1,900,000,000 joint repurchase agreement 3.74%, dated 12/8/2025 under which Barclays Bank PLC will <br> repurchase securities provided as collateral for $1,905,921,667 on 1/8/2026. The securities provided as collateral at the end <br> of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 3/15/2068 and the market value of those underlying securities was $1,951,425,157.<br>| &nbsp;&nbsp; $1000000 |
| 2000000 | Interest in $2,000,000,000 joint repurchase agreement 3.88%, dated 10/21/2025 under which Royal Bank of Canada, New <br> York Branch will repurchase securities provided as collateral for $2,021,771,111 on 1/30/2026. The securities provided as <br> collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury <br> securities with various maturities to 12/20/2055 and the market value of those underlying securities was $2,065,004,976.<br>| &nbsp;&nbsp; 2000000 |
| 500000 | Interest in $2,000,000,000 joint repurchase agreement 3.90%, dated 11/10/2025 under which Royal Bank of Canada, New <br> York Branch will repurchase securities provided as collateral for $2,015,383,333 on 1/20/2026. The securities provided as <br> collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury <br> securities with various maturities to 1/1/2056 and the market value of those underlying securities was $2,057,521,503.<br>| &nbsp;&nbsp; 500000 |
| 1000000 | Interest in $2,000,000,000 joint repurchase agreement 4.08%, dated 9/2/2025 under which Royal Bank of Canada, New York <br> Branch will repurchase securities provided as collateral for $2,031,733,333 on 1/20/2026. The securities provided as collateral <br> at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various <br> maturities to 9/1/2057 and the market value of those underlying securities was $2,075,582,875.<br>| &nbsp;&nbsp; 1000000 |
| 1000000 | Interest in $500,000,000 joint repurchase agreement 3.78%, dated 12/31/2025 under which Societe Generale, New York will <br> repurchase securities provided as collateral for $500,367,500 on 1/7/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 9/1/2055 and the market value of those underlying securities was $510,128,106.<br>| &nbsp;&nbsp; 1000000 |
|  | TOTAL REPURCHASE AGREEMENTS | &nbsp;&nbsp; 44176000 |
|  | TOTAL INVESTMENT IN SECURITIES—99.6% <br>(AT AMORTIZED COST)<sup>3</sup> <br>| &nbsp;&nbsp; 74571817 |
|  | OTHER ASSETS AND LIABILITIES - NET—0.4%<sup>4</sup> <br>| &nbsp;&nbsp; 333114 |
|  | NET ASSETS—100% | &nbsp;&nbsp; $74904931 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Floating/variable note with current rate and current maturity or next reset date shown. |
| 2 | Discount rate(s) at time of purchase. |
| 3 | Also represents cost of investments for federal tax purposes. |
| 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 net assets at December 31, 2025.

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.

In valuing the Fund's assets as of December 31, 2025, all investments of the Fund are valued at amortized cost, which is a methodology utilizing Level 2 inputs.

The following acronym(s) are used throughout this portfolio: <br> SOFR —Secured Overnight Financing Rate

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**3**

------

Financial Highlights–Service Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.037 | 0.046 | 0.044 | 0.011 | 0.000<sup>2</sup> <br>|
| Net realized gain (loss) | 0.000<sup>2</sup> <br>| 0.000<sup>2</sup> <br>| &nbsp;&nbsp; — | 0.001 | &nbsp;&nbsp; (0.000)<sup>2</sup> <br>|
| Total From Investment Operations | 0.037 | 0.046 | 0.044 | 0.012 | 0.000<sup>2</sup> <br>|
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.037) | &nbsp;&nbsp; (0.046) | &nbsp;&nbsp; (0.044) | &nbsp;&nbsp; (0.012) | &nbsp;&nbsp; (0.000)<sup>2</sup> <br>|
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** | &nbsp;&nbsp; **$1.00** |
| **Total Return**<sup>3</sup> <br>| &nbsp;&nbsp; 3.73% | &nbsp;&nbsp; 4.67% | &nbsp;&nbsp; 4.52% | &nbsp;&nbsp; 1.16% | &nbsp;&nbsp; 0.00%<sup>4</sup> <br>|
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>5</sup> <br>| &nbsp;&nbsp; 0.63% | &nbsp;&nbsp; 0.66% | &nbsp;&nbsp; 0.63% | &nbsp;&nbsp; 0.48% | &nbsp;&nbsp; 0.07% |
| Net investment income | &nbsp;&nbsp; 3.67% | &nbsp;&nbsp; 4.58% | &nbsp;&nbsp; 4.43% | &nbsp;&nbsp; 1.14% | &nbsp;&nbsp; 0.00%<sup>4</sup> <br>|
| Expense waiver/reimbursement<sup>6</sup> <br>| &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.07% | &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.24% | &nbsp;&nbsp; 0.66% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $74905 | &nbsp;&nbsp; $80180 | &nbsp;&nbsp; $80914 | &nbsp;&nbsp; $80514 | &nbsp;&nbsp; $81245 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Represents less than $0.001. |
| 3 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 4 | Represents less than 0.01%. |
| 5 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 6 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. Amount does not reflect expense waiver/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**4**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in repurchase agreements | &nbsp;&nbsp; $44176000 |
| Investment in securities | &nbsp;&nbsp; 30395817 |
| Total investment in securities, at amortized cost and fair value | &nbsp;&nbsp; 74571817 |
| Income receivable | &nbsp;&nbsp; 137927 |
| Receivable for shares sold | &nbsp;&nbsp; 415033 |
| Total Assets | &nbsp;&nbsp; 75124777 |
| **Liabilities:** |  |
| Payable for investments purchased | &nbsp;&nbsp; 150000 |
| Payable for shares redeemed | &nbsp;&nbsp; 10867 |
| Payable to bank | &nbsp;&nbsp; 730 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 117 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 157 |
| Payable for legal fees | &nbsp;&nbsp; 13239 |
| Payable for portfolio accounting fees | &nbsp;&nbsp; 15665 |
| Payable for other service fees (Notes 2 and 5) | &nbsp;&nbsp; 15701 |
| Payable for printing and postage | &nbsp;&nbsp; 13234 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 136 |
| Total Liabilities | &nbsp;&nbsp; 219846 |
| Net assets for 74,904,308 shares outstanding | &nbsp;&nbsp; $74904931 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $74903857 |
| Total distributable earnings (loss) | &nbsp;&nbsp; 1074 |
| Net Assets | &nbsp;&nbsp; $74904931 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| **Service Shares:** |  |
| $74,904,931 ÷ 74,904,308 shares outstanding, no par value, unlimited shares authorized | $1.00 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**5**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Interest | &nbsp;&nbsp; $3320389 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 115633 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 61438 |
| Custodian fees | &nbsp;&nbsp; 15956 |
| Transfer agent fees | &nbsp;&nbsp; 4250 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 1753 |
| Auditing fees | &nbsp;&nbsp; 28791 |
| Legal fees | &nbsp;&nbsp; 13348 |
| Portfolio accounting fees | &nbsp;&nbsp; 65996 |
| Other service fees (Notes 2 and 5) | &nbsp;&nbsp; 191096 |
| Printing and postage | &nbsp;&nbsp; 51362 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 3680 |
| TOTAL EXPENSES | &nbsp;&nbsp; 553303 |
| Waiver of investment adviser fee (Note 5) | &nbsp;&nbsp; (65492) |
| Net expenses | &nbsp;&nbsp; 487811 |
| Net investment income | &nbsp;&nbsp; 2832578 |
| Net realized gain on investments | &nbsp;&nbsp; 1062 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $2833640 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**6**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment income | &nbsp;&nbsp; $2832578 | &nbsp;&nbsp; $3678287 |
| Net realized gain (loss) | &nbsp;&nbsp; 1062 | &nbsp;&nbsp; 299 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 2833640 | &nbsp;&nbsp; 3678586 |
| **Distributions to Shareholders:** |  |  |
| Service Shares | &nbsp;&nbsp; (2832948) | &nbsp;&nbsp; (3678232) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 18149054 | &nbsp;&nbsp; 25020261 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 2832944 | &nbsp;&nbsp; 3678229 |
| Cost of shares redeemed | &nbsp;&nbsp; (26257546) | &nbsp;&nbsp; (29433254) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (5275548) | &nbsp;&nbsp; (734764) |
| Change in net assets | &nbsp;&nbsp; (5274856) | &nbsp;&nbsp; (734410) |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 80179787 | &nbsp;&nbsp; 80914197 |
| End of period | &nbsp;&nbsp; $74904931 | &nbsp;&nbsp; $80179787 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**7**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes Government Money Fund II (the "Fund"), a 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 one class of shares: Service Shares. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is to provide current income consistent with stability of principal and liquidity.

The Fund operates as a government money market fund. As a government money market fund, the Fund: (1) invests at least 99.5% of its total assets in: (i) cash; (ii) securities issued or guaranteed by the United States or certain U.S. government agencies or instrumentalities; and/or (iii) repurchase agreements that are collateralized fully; and (2) generally continues to use amortized cost to value its portfolio securities and transact at a stable $1.00 net asset value (NAV).

**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** 

Securities are valued at amortized cost. The amortized cost method of valuation generally prescribes that an investment is valued at its acquisition cost as adjusted daily for amortization of premium or accretion of discount to the specified redemption value on the nearest call, demand or maturity date, as appropriate. If amortized cost is determined not to approximate fair value, the value of the portfolio securities will be 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.

Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated Federated Investment Management Company (the "Adviser") as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.

The Adviser, acting through its valuation committee ("Valuation Committee"), is responsible for determining the fair value of investments. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value of securities and oversees the comparison of amortized cost to market-based value. The Valuation Committee is also authorized to use pricing services to provide fair value evaluations of the current value of certain investments for purposes of monitoring the relationship of market-based value and amortized cost. 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 and assumptions), 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 Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review any changes made to the procedures.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Annual Financial Statements and Additional Information

**8**

------

Repurchase agreements are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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. In addition, distributions of capital gains, if any, are declared and paid at least annually. Amortization/accretion of premium and discount is included in investment income. The detail of the total fund expense waiver of $65,492 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 Service Shares to unaffiliated financial intermediaries for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily reimburse the Fund for other service fees.

For the year ended December 31, 2025, other service fees for the Fund were as follows:

---

| | |
|:---|:---|
|  | **Other Service** <br>**Fees Incurred**<br>|
| Service Shares | &nbsp;&nbsp; $191096 |

---

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 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.

**3. SHARES OF BENEFICIAL INTEREST** 

The following table summarizes share activity:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** <br>**12/31/2025**<br>| **Year Ended** <br>**12/31/2024**<br>|
| Shares sold | &nbsp;&nbsp; 18149054 | &nbsp;&nbsp; 25020261 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 2832944 | &nbsp;&nbsp; 3678229 |
| Shares redeemed | &nbsp;&nbsp; (26257546) | &nbsp;&nbsp; (29433254) |
| NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (5275548) | &nbsp;&nbsp; (734764) |

---

**4. FEDERAL TAX INFORMATION** 

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income<sup>1</sup> <br>| &nbsp;&nbsp; $2832948 | &nbsp;&nbsp; $3678232 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

Annual Financial Statements and Additional Information

**9**

------

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income<sup>1</sup> <br>| &nbsp;&nbsp; $1063 |
| Undistributed long-term capital gains | &nbsp;&nbsp; $11 |
| TOTAL | &nbsp;&nbsp; $1074 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 For tax purposes, short-term capital gains are considered ordinary income in determining distributable earnings.

**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 0.15% of the Fund's average daily net assets. Prior to September 1, 2024, the Fund's gross investment advisory fee was 0.20% 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 December 31, 2025, the Adviser voluntarily waived $65,492 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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 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 December 31, 2025, 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.

**Expense Limitation** 

Due to the possibility of changes in market conditions and other factors, there can be no assurance that the level of waivers/reimbursement/reduction of Fund expenses reflected in the financial highlights will be maintained in the future. However, the Adviser and certain of its affiliates (which may include FAS and FSC) 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, if any) paid by the Fund's Service Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.63% (the "Fee Limit"), up to but not including the later of (the "Termination Date"): (a) May 1, 2026; 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 approval 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. 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**7. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from

Annual Financial Statements and Additional Information

**10**

------

operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**8. 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.

**9. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the year ended December 31, 2025, 99.9% of total ordinary income distributions qualified as business interest income for purposes of 163(j) and the regulations thereunder. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.

Annual Financial Statements and Additional Information

**11**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes Government Money Fund II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes Government Money Fund II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian 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.

![](kpmgsig.jpg)

We have served as the auditor of one or more Federated Hermes' investment companies since 2006.

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**12**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes Government Money Fund II (the "Fund")**

At its meetings in May 2025 (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, as amended (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 such information deemed necessary to evaluate the terms of the Contract and 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.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 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.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation 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").

Annual Financial Statements and Additional Information

**13**

------

In addition, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace, 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

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 full 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Adviser, including the execution of portfolio transactions and the selection of brokers for those transactions. In addition, the Board noted that the Fund is a money market mutual fund that operates in accordance with the limitations set forth in Rule 2a-7 under the Investment Company Act of 1940, as amended. In this connection, the Board considered the expertise of the Adviser in managing money market funds, its extensive experience with the requirements of Rule 2a-7 and its commitment to managing the Fund in accordance with these requirements. 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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, 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

Annual Financial Statements and Additional Information

**14**

------

led, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard. 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.

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.

**<u>Fund Investment Performance</u>**

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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes' explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by iMoneyNet, an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement 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 also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

The Board considered that the Fund's performance fell below the median of the Performance Peer Group for the one-year period ended December 31, 2024. 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. The Board also considered the relatively tight dispersion of performance data with respect to the Fund and its Peer Group.

Based on these considerations, the Board concluded that it had continued confidence in the Adviser's overall capabilities to manage the Fund.

**<u>Fund Expenses</u>**

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, 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 overall category of peer funds selected by iMoneyNet (the "Expense Peer Group"). The Board received a description of the methodology used to select the Expense Peer Group from the overall iMoneyNet category. The Board also reviewed comparative information regarding the fees and expenses of the broader group of funds in the overall iMoneyNet category.

While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other 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 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.

Annual Financial Statements and Additional Information

**15**

------

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 contractual advisory fee rate and other expenses 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. In considering the Fund's expenses, the Board noted that the Adviser recommended, and the Board approved, a contractual advisory fee reduction of 5 basis points for the Fund, effective August 15, 2024.

The Board also received and considered information about the nature and extent of services offered and fees charged by Federated Hermes 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 statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and may cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems

Annual Financial Statements and Additional Information

**16**

------

capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**17**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes Government Money Fund II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916504

G00842-01 (2/26)© 2026 Federated Hermes, Inc.

------

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](img36f0ead31.gif)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Share Class** | **Primary**  | **Service**  |

---

------

Federated Hermes High Income Bond Fund II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_87a2aa41-1de5-4807-b282-965890c3c7b7_1) | [1](#xx_87a2aa41-1de5-4807-b282-965890c3c7b7_1)  |
| [Financial Highlights](#xx_c519ce90-f4a5-4e05-b211-55765cbfe81a_1) | [12](#xx_c519ce90-f4a5-4e05-b211-55765cbfe81a_1)  |
| [Statement of Assets and Liabilities](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_1) | [14](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_1)  |
| [Statement of Operations](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_2) | [15](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_2)  |
| [Statement of Changes in Net Assets](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_3) | [16](#xx_9bb949eb-fd0b-456c-b4e1-8c68211defad_3)  |
| [Notes to Financial Statements](#xx_21b2e418-b876-4019-ba89-422bf1104573_1) | [17](#xx_21b2e418-b876-4019-ba89-422bf1104573_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_edcec9b8-0f93-4557-aa26-ff4da6d26e7e_1) | [23](#xx_edcec9b8-0f93-4557-aa26-ff4da6d26e7e_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_5bd2a5ea-fa62-44a3-8575-e59ef704859a_1) | [24](#xx_5bd2a5ea-fa62-44a3-8575-e59ef704859a_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Principal** <br>**Amount** <br>**or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—95.1% |  |
|  | **Aerospace/Defense—1.9%** |  |
| $250000 | Goat Holdco, LLC, 144A, 6.750%, 2/1/2032 | &nbsp;&nbsp; $256965 |
| 50000 | TransDigm, Inc., 144A, 6.250%, 1/31/2034 | &nbsp;&nbsp; 51910 |
| 375000 | TransDigm, Inc., 1st Priority Sr. Secd. Note, 144A, 6.625%, 3/1/2032 | &nbsp;&nbsp; 390626 |
| 500000 | TransDigm, Inc., Sr. Secd. Note, 144A, 6.875%, 12/15/2030 | &nbsp;&nbsp; 523513 |
| 200000 | TransDigm, Inc., Sr. Sub. Note, 144A, 6.375%, 5/31/2033 | &nbsp;&nbsp; 205362 |
| 125000 | TransDigm, Inc., Sr. Sub. Note, 144A, 6.750%, 1/31/2034 | &nbsp;&nbsp; 130290 |
|  | TOTAL | &nbsp;&nbsp; 1558666 |
|  | **Automotive—2.9%** |  |
| 150000 | Adient Global Holdings Ltd., Sr. Unsecd. Note, 144A, 7.500%, 2/15/2033 | &nbsp;&nbsp; 154922 |
| 125000 | Adient Global Holdings Ltd., Sr. Unsecd. Note, 144A, 8.250%, 4/15/2031 | &nbsp;&nbsp; 131511 |
| 50000 | Clarios Global LP, Sr. Secd. Note, 144A, 6.750%, 2/15/2030 | &nbsp;&nbsp; 52328 |
| 475000 | Clarios Global LP, Sr. Unsecd. Note, 144A, 6.750%, 9/15/2032 | &nbsp;&nbsp; 492854 |
| 275000 | Dornoch Debt Merger Sub., Inc., Sr. Unsecd. Note, 144A, 6.625%, 10/15/2029 | &nbsp;&nbsp; 238420 |
| 200000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 4.271%, 1/9/2027 | &nbsp;&nbsp; 199036 |
| 375000 | Forvia SE, Sr. Unsecd. Note, 144A, 6.750%, 9/15/2033 | &nbsp;&nbsp; 387448 |
| 400000 | IHO Verwaltungs GmbH, 144A, 8.000%, 11/15/2032 | &nbsp;&nbsp; 422896 |
| 275000 | JB Poindexter & Co., Inc., Sr. Unsecd. Note, 144A, 8.750%, 12/15/2031 | &nbsp;&nbsp; 288400 |
|  | TOTAL | &nbsp;&nbsp; 2367815 |
|  | **Building Materials—3.9%** |  |
| 175000 | American Builders & Contractors Supply Co., Inc., 144A, 4.000%, 1/15/2028 | &nbsp;&nbsp; 173934 |
| 25000 | American Builders & Contractors Supply Co., Inc., Sr. Unsecd. Note, 144A, 3.875%, 11/15/2029 | &nbsp;&nbsp; 24115 |
| 250000 | CP Atlas Buyer, Inc., 144A, 9.750%, 7/15/2030 | &nbsp;&nbsp; 259179 |
| 250000 | Masterbrand, Inc., 144A, 7.000%, 7/15/2032 | &nbsp;&nbsp; 259308 |
| 350000 | Miter Brands Acquisition Holdco, Inc./MIWD Borrower LLC, Sr. Secd. Note, 144A, 6.750%, 4/1/2032 | &nbsp;&nbsp; 359035 |
| 25000 | MIWD Holdco II LLC/ MIWD Finance Corp., Sr. Unsecd. Note, 144A, 5.500%, 2/1/2030 | &nbsp;&nbsp; 24278 |
| 325000 | Patrick Industries, Inc., Co. Guarantee, 144A, 6.375%, 11/1/2032 | &nbsp;&nbsp; 333713 |
| 275000 | Queen MergerCo, Inc., Sr. Secd. Note, 144A, 6.750%, 4/30/2032 | &nbsp;&nbsp; 287435 |
| 200000 | Quikrete Holdings, Inc., Sr. Secd. Note, 144A, 6.375%, 3/1/2032 | &nbsp;&nbsp; 208307 |
| 100000 | Quikrete Holdings, Inc., Sr. Unsecd. Note, 144A, 6.750%, 3/1/2033 | &nbsp;&nbsp; 104498 |
| 175000 | Standard Industries, Inc., Sr. Unsecd. Note, 144A, 3.375%, 1/15/2031 | &nbsp;&nbsp; 160879 |
| 250000 | Standard Industries, Inc., Sr. Unsecd. Note, 144A, 6.250%, 8/1/2033 | &nbsp;&nbsp; 255526 |
| 200000 | Standard Industries, Inc., Sr. Unsecd. Note, 144A, 6.500%, 8/15/2032 | &nbsp;&nbsp; 206049 |
| 275000 | TopBuild Corp., Sr. Unsecd. Note, 144A, 5.625%, 1/31/2034 | &nbsp;&nbsp; 278333 |
| 225000 | White Cap Supply Holdings LLC, Sr. Unsecd. Note, 144A, 7.375%, 11/15/2030 | &nbsp;&nbsp; 233609 |
|  | TOTAL | &nbsp;&nbsp; 3168198 |
|  | **Cable Satellite—5.0%** |  |
| 125000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 4.250%, 2/1/2031 | &nbsp;&nbsp; 114932 |
| 100000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 4.250%, 1/15/2034 | &nbsp;&nbsp; 85122 |
| 225000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 4.500%, 6/1/2033 | &nbsp;&nbsp; 197212 |
| 700000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 4.750%, 3/1/2030 | &nbsp;&nbsp; 668968 |
| 350000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 5.000%, 2/1/2028 | &nbsp;&nbsp; 347427 |
| 275000 | CCO Holdings LLC/Cap Corp., Sr. Unsecd. Note, 144A, 5.375%, 6/1/2029 | &nbsp;&nbsp; 272085 |
| 225000 | CSC Holdings LLC, Sr. Unsecd. Note, 144A, 3.375%, 2/15/2031 | &nbsp;&nbsp; 136439 |
| 300000 | CSC Holdings LLC, Sr. Unsecd. Note, 144A, 4.500%, 11/15/2031 | &nbsp;&nbsp; 183702 |
| 200000 | CSC Holdings LLC, Sr. Unsecd. Note, 144A, 6.500%, 2/1/2029 | &nbsp;&nbsp; 132704 |
| 150000 | Sirius XM Radio, Inc., Sr. Unsecd. Note, 144A, 4.000%, 7/15/2028 | &nbsp;&nbsp; 146824 |
| 200000 | Sirius XM Radio, Inc., Sr. Unsecd. Note, 144A, 4.125%, 7/1/2030 | &nbsp;&nbsp; 190347 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Cable Satellite—continued** |  |
| $125000 | Sirius XM Radio, Inc., Sr. Unsecd. Note, 144A, 5.500%, 7/1/2029 | &nbsp;&nbsp; $126095 |
| 425000 | Sunrise FinCo I B.V., Sr. Note, 144A, 4.875%, 7/15/2031 | &nbsp;&nbsp; 405153 |
| 250000 | Telenet Finance Luxembourg, Sr. Secd. Note, 144A, 5.500%, 3/1/2028 | &nbsp;&nbsp; 249197 |
| 200000 | Virgin Media Finance PLC, Sr. Unsecd. Note, 144A, 5.000%, 7/15/2030 | &nbsp;&nbsp; 176521 |
| 200000 | Virgin Media Secured Finance PLC, Sr. Secd. Note, 144A, 4.500%, 8/15/2030 | &nbsp;&nbsp; 185870 |
| 200000 | Vmed O2 UK Financing I PLC, Sr. Note, 144A, 4.750%, 7/15/2031 | &nbsp;&nbsp; 184800 |
| 275000 | VZ Secured Financing B.V., Sr. Secd. Note, 144A, 5.000%, 1/15/2032 | &nbsp;&nbsp; 249077 |
|  | TOTAL | &nbsp;&nbsp; 4052475 |
|  | **Chemicals—4.2%** |  |
| 150000 | Ashland, Inc., Sr. Unsecd. Note, 144A, 3.375%, 9/1/2031 | &nbsp;&nbsp; 137344 |
| 150000 | Axalta Coating Systems LLC/Axalta Coating Systems Dutch Holding B B.V., Sr. Unsecd. Note, 144A, 4.750%, 6/15/2027 | &nbsp;&nbsp; 150260 |
| 150000 | Axalta Coating Systems LLC/Axalta Coating Systems Dutch Holding B B.V., Sr. Unsecd. Note, 144A, 7.250%, 2/15/2031 | &nbsp;&nbsp; 158380 |
| 50000 | Celanese US Holdings LLC, Sr. Unsecd. Note, 6.500%, 4/15/2030 | &nbsp;&nbsp; 50291 |
| 350000 | Celanese US Holdings LLC, Sr. Unsecd. Note, 6.750%, 4/15/2033 | &nbsp;&nbsp; 348480 |
| 125000 | Celanese US Holdings LLC, Sr. Unsecd. Note, 7.000%, 2/15/2031 | &nbsp;&nbsp; 128057 |
| 150000 | Element Solutions, Inc., Sr. Unsecd. Note, 144A, 3.875%, 9/1/2028 | &nbsp;&nbsp; 146718 |
| 175000 | H.B. Fuller Co., Sr. Unsecd. Note, 4.250%, 10/15/2028 | &nbsp;&nbsp; 173596 |
| 53000 | Illuminate Buyer LLC/Illuminate Holdings IV, Inc., Sr. Unsecd. Note, 144A, 9.000%, 7/1/2028 | &nbsp;&nbsp; 53348 |
| 350000 | Maxam Prill S.a.r.l., Sr. Secd. Note, 144A, 7.750%, 7/15/2030 | &nbsp;&nbsp; 363638 |
| 375000 | Olympus Water US Holding Corp., Secured Note, 144A, 7.250%, 2/15/2033 | &nbsp;&nbsp; 377194 |
| 325000 | Olympus Water US Holding Corp., Sr. Secd. Note, 144A, 4.250%, 10/1/2028 | &nbsp;&nbsp; 315726 |
| 200000 | Olympus Water US Holding Corp., Sr. Unsecd. Note, 144A, 6.250%, 10/1/2029 | &nbsp;&nbsp; 194797 |
| 75000 | Qnity Electronics, Inc., Sr. Secd. Note, 144A, 5.750%, 8/15/2032 | &nbsp;&nbsp; 76777 |
| 75000 | Qnity Electronics, Inc., Sr. Unsecd. Note, 144A, 6.250%, 8/15/2033 | &nbsp;&nbsp; 77835 |
| 200000 | SNF Group SACA, Sr. Unsecd. Note, 144A, 3.375%, 3/15/2030 | &nbsp;&nbsp; 187867 |
| 150000 | Solstice Advanced Materials, Inc., Sr. Unsecd. Note, 144A, 5.625%, 9/30/2033 | &nbsp;&nbsp; 151412 |
| 175000 | WR Grace Holdings LLC, Sr. Secd. Note, 144A, 6.625%, 8/15/2032 | &nbsp;&nbsp; 177361 |
| 75000 | WR Grace Holdings LLC, Sr. Secd. Note, 144A, 7.375%, 3/1/2031 | &nbsp;&nbsp; 77086 |
| 125000 | WR Grace Holdings LLC, Sr. Unsecd. Note, 144A, 5.625%, 8/15/2029 | &nbsp;&nbsp; 119472 |
|  | TOTAL | &nbsp;&nbsp; 3465639 |
|  | **Construction Machinery—0.8%** |  |
| 50000 | Herc Holdings, Inc., Sr. Unsecd. Note, 144A, 6.000%, 3/15/2034 | &nbsp;&nbsp; 50697 |
| 125000 | Herc Holdings, Inc., Sr. Unsecd. Note, 144A, 7.000%, 6/15/2030 | &nbsp;&nbsp; 131628 |
| 100000 | Herc Holdings, Inc., Sr. Unsecd. Note, 144A, 7.250%, 6/15/2033 | &nbsp;&nbsp; 106098 |
| 75000 | United Rentals North America, Inc., 144A, 6.000%, 12/15/2029 | &nbsp;&nbsp; 77105 |
| 175000 | United Rentals North America, Inc., Sr. Unsecd. Note, 3.750%, 1/15/2032 | &nbsp;&nbsp; 164680 |
| 75000 | United Rentals North America, Inc., Sr. Unsecd. Note, 4.000%, 7/15/2030 | &nbsp;&nbsp; 72751 |
| 50000 | United Rentals North America, Inc., Sr. Unsecd. Note, 144A, 5.375%, 11/15/2033 | &nbsp;&nbsp; 49995 |
|  | TOTAL | &nbsp;&nbsp; 652954 |
|  | **Consumer Cyclical Services—2.8%** |  |
| 75000 | Allied Universal Holdco LLC, Sr. Secd. Note, 144A, 6.875%, 6/15/2030 | &nbsp;&nbsp; 78131 |
| 300000 | Allied Universal Holdco LLC, Sr. Secd. Note, 144A, 7.875%, 2/15/2031 | &nbsp;&nbsp; 316342 |
| 225000 | Allied Universal Holdco LLC, Sr. Unsecd. Note, 144A, 6.000%, 6/1/2029 | &nbsp;&nbsp; 222856 |
| 125000 | Cars.com, Inc., Sr. Unsecd. Note, 144A, 6.375%, 11/1/2028 | &nbsp;&nbsp; 125252 |
| 50000 | Garda World Security Corp., Sr. Secd. Note, 144A, 6.500%, 1/15/2031 | &nbsp;&nbsp; 51194 |
| 75000 | Garda World Security Corp., Sr. Unsecd. Note, 144A, 6.000%, 6/1/2029 | &nbsp;&nbsp; 73619 |
| 650000 | Garda World Security Corp., Sr. Unsecd. Note, 144A, 8.375%, 11/15/2032 | &nbsp;&nbsp; 663051 |
| 450000 | Match Group Holdings II LLC, Sr. Unsecd. Note, 144A, 4.125%, 8/1/2030 | &nbsp;&nbsp; 427705 |
| 125000 | The Brink's Co., Sr. Unsecd. Note, 144A, 6.500%, 6/15/2029 | &nbsp;&nbsp; 129509 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Consumer Cyclical Services—continued** |  |
| $175000 | The Brink's Co., Sr. Unsecd. Note, 144A, 6.750%, 6/15/2032 | &nbsp;&nbsp; $183206 |
|  | TOTAL | &nbsp;&nbsp; 2270865 |
|  | **Consumer Products—2.5%** |  |
| 75000 | Acushnet Co., Sr. Unsecd. Note, 144A, 5.625%, 12/1/2033 | &nbsp;&nbsp; 76030 |
| 625000 | Beach Acquisition Bidco, Sr. Unsecd. Note, 144A, 10.000%, 7/15/2033 | &nbsp;&nbsp; 690396 |
| 275000 | Champ Acquisition Corp., Sr. Secd. Note, 144A, 8.375%, 12/1/2031 | &nbsp;&nbsp; 297716 |
| 375000 | Energizer Holdings, Inc., Sr. Unsecd. Note, 144A, 4.375%, 3/31/2029 | &nbsp;&nbsp; 358729 |
| 75000 | Energizer Holdings, Inc., Sr. Unsecd. Note, 144A, 4.750%, 6/15/2028 | &nbsp;&nbsp; 74450 |
| 200000 | Energizer Holdings, Inc., Sr. Unsecd. Note, 144A, 6.000%, 9/15/2033 | &nbsp;&nbsp; 192091 |
| 100000 | Whirlpool Corp., Sr. Unsecd. Note, 6.125%, 6/15/2030 | &nbsp;&nbsp; 99956 |
| 225000 | Whirlpool Corp., Sr. Unsecd. Note, 6.500%, 6/15/2033 | &nbsp;&nbsp; 218344 |
|  | TOTAL | &nbsp;&nbsp; 2007712 |
|  | **Diversified Manufacturing—1.6%** |  |
| 400000 | EMRLD Borrower LP / Emerald Co-Issuer, Inc., Sr. Secd. Note, 144A, 6.625%, 12/15/2030 | &nbsp;&nbsp; 417105 |
| 75000 | EnPro, Inc., Sr. Unsecd. Note, 144A, 6.125%, 6/1/2033 | &nbsp;&nbsp; 77580 |
| 400000 | Gates Corp., Sr. Unsecd. Note, 144A, 6.875%, 7/1/2029 | &nbsp;&nbsp; 415892 |
| 75000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 6.375%, 3/15/2033 | &nbsp;&nbsp; 78353 |
| 175000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 6.625%, 3/15/2032 | &nbsp;&nbsp; 182947 |
| 125000 | WESCO Distribution, Inc., Sr. Unsecd. Note, 144A, 7.250%, 6/15/2028 | &nbsp;&nbsp; 126885 |
|  | TOTAL | &nbsp;&nbsp; 1298762 |
|  | **Environmental—0.2%** |  |
| 150000 | Clean Harbors, Inc., Sr. Unsecd. Note, 144A, 5.750%, 10/15/2033 | &nbsp;&nbsp; 154174 |
|  | **Finance Companies—2.4%** |  |
| 350000 | Boost Newco Borrower LLC, 144A, 7.500%, 1/15/2031 | &nbsp;&nbsp; 372181 |
| 475000 | CrossCountry Intermediate HoldCo LLC, Sr. Unsecd. Note, 144A, 6.500%, 10/1/2030 | &nbsp;&nbsp; 485092 |
| 25000 | CrossCountry Intermediate HoldCo LLC, Sr. Unsecd. Note, 144A, 6.750%, 12/1/2032 | &nbsp;&nbsp; 25530 |
| 200000 | Rocket Cos., Inc., Sr. Unsecd. Note, 144A, 6.375%, 8/1/2033 | &nbsp;&nbsp; 208774 |
| 150000 | Rocket Mortgage Co-Issuer, Inc., Sr. Unsecd. Note, 144A, 2.875%, 10/15/2026 | &nbsp;&nbsp; 147914 |
| 100000 | Rocket Mortgage Co-Issuer, Inc., Sr. Unsecd. Note, 144A, 3.625%, 3/1/2029 | &nbsp;&nbsp; 96661 |
| 125000 | Rocket Mortgage Co-Issuer, Inc., Sr. Unsecd. Note, 144A, 3.875%, 3/1/2031 | &nbsp;&nbsp; 118793 |
| 150000 | Rocket Mortgage Co-Issuer, Inc., Sr. Unsecd. Note, 144A, 4.000%, 10/15/2033 | &nbsp;&nbsp; 139472 |
| 175000 | United Wholesale Mortgage, LLC, Sr. Unsecd. Note, 144A, 5.500%, 4/15/2029 | &nbsp;&nbsp; 173966 |
| 150000 | UWM Holdings LLC, Sr. Unsecd. Note, 144A, 6.250%, 3/15/2031 | &nbsp;&nbsp; 149833 |
| 50000 | UWM Holdings LLC, Sr. Unsecd. Note, 144A, 6.625%, 2/1/2030 | &nbsp;&nbsp; 50662 |
|  | TOTAL | &nbsp;&nbsp; 1968878 |
|  | **Food & Beverage—2.2%** |  |
| 350000 | Bellring Brands, Inc., Sr. Unsecd. Note, 144A, 7.000%, 3/15/2030 | &nbsp;&nbsp; 362128 |
| 500000 | Froneri Lux Finco S.a.r.l., Sr. Secd. Note, 144A, 6.000%, 8/1/2032 | &nbsp;&nbsp; 507262 |
| 125000 | Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 4.250%, 8/1/2029 | &nbsp;&nbsp; 122675 |
| 75000 | Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 5.500%, 10/15/2027 | &nbsp;&nbsp; 75157 |
| 125000 | Performance Food Group, Inc., Sr. Unsecd. Note, 144A, 6.125%, 9/15/2032 | &nbsp;&nbsp; 129020 |
| 125000 | Post Holdings, Inc., Sr. Secd. Note, 144A, 6.250%, 2/15/2032 | &nbsp;&nbsp; 128590 |
| 150000 | US Foods, Inc., Sr. Unsecd. Note, 144A, 4.625%, 6/1/2030 | &nbsp;&nbsp; 148150 |
| 250000 | US Foods, Inc., Sr. Unsecd. Note, 144A, 4.750%, 2/15/2029 | &nbsp;&nbsp; 248970 |
| 50000 | US Foods, Inc., Sr. Unsecd. Note, 144A, 5.750%, 4/15/2033 | &nbsp;&nbsp; 50976 |
|  | TOTAL | &nbsp;&nbsp; 1772928 |
|  | **Gaming—4.2%** |  |
| 125000 | Boyd Gaming Corp., Sr. Unsecd. Note, 4.750%, 12/1/2027 | &nbsp;&nbsp; 124911 |
| 100000 | Boyd Gaming Corp., Sr. Unsecd. Note, 144A, 4.750%, 6/15/2031 | &nbsp;&nbsp; 97773 |
| 500000 | Caesars Entertainment, Inc., 144A, 6.000%, 10/15/2032 | &nbsp;&nbsp; 486604 |

---

Annual Financial Statements and Additional Information

**3**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Gaming—continued** |  |
| $150000 | Caesars Entertainment, Inc., Sr. Secd. Note, 144A, 6.500%, 2/15/2032 | &nbsp;&nbsp; $153744 |
| 300000 | Churchill Downs, Inc., Sr. Secd. Note, 144A, 5.750%, 4/1/2030 | &nbsp;&nbsp; 303097 |
| 100000 | Churchill Downs, Inc., Sr. Unsecd. Note, 144A, 6.750%, 5/1/2031 | &nbsp;&nbsp; 103818 |
| 50000 | Light & Wonder International, Inc., Sr. Unsecd. Note, 144A, 6.250%, 10/1/2033 | &nbsp;&nbsp; 50643 |
| 100000 | Light & Wonder International, Inc., Sr. Unsecd. Note, 144A, 7.250%, 11/15/2029 | &nbsp;&nbsp; 102759 |
| 250000 | Light & Wonder International, Inc., Sr. Unsecd. Note, 144A, 7.500%, 9/1/2031 | &nbsp;&nbsp; 261320 |
| 150000 | MGM Resorts International, Sr. Unsecd. Note, 6.125%, 9/15/2029 | &nbsp;&nbsp; 154233 |
| 225000 | MGM Resorts International, Sr. Unsecd. Note, 6.500%, 4/15/2032 | &nbsp;&nbsp; 231953 |
| 375000 | Midwest Gaming Borrower LLC, Sr. Note, 144A, 4.875%, 5/1/2029 | &nbsp;&nbsp; 369127 |
| 175000 | Rivers Enterprise Lender LLC/Rivers Enterprise Lender Corp., Secured Note, 144A, 6.250%, 10/15/2030 | &nbsp;&nbsp; 178710 |
| 75000 | Station Casinos, LLC, 144A, 6.625%, 3/15/2032 | &nbsp;&nbsp; 77117 |
| 225000 | Station Casinos, LLC, Sr. Unsecd. Note, 144A, 4.500%, 2/15/2028 | &nbsp;&nbsp; 223274 |
| 250000 | Station Casinos, LLC, Sr. Unsecd. Note, 144A, 4.625%, 12/1/2031 | &nbsp;&nbsp; 237220 |
| 275000 | Wynn Resorts Finance LLC/Wynn Resorts Capital Corp., Sr. Unsecd. Note, 144A, 6.250%, 3/15/2033 | &nbsp;&nbsp; 281351 |
|  | TOTAL | &nbsp;&nbsp; 3437654 |
|  | **Health Care—4.5%** |  |
| 175000 | AHP Health Partners, Inc., Sr. Unsecd. Note, 144A, 5.750%, 7/15/2029 | &nbsp;&nbsp; 174335 |
| 225000 | Avantor Funding, Inc., Sr. Unsecd. Note, 144A, 3.875%, 11/1/2029 | &nbsp;&nbsp; 216160 |
| 250000 | Avantor Funding, Inc., Sr. Unsecd. Note, 144A, 4.625%, 7/15/2028 | &nbsp;&nbsp; 248837 |
| 75000 | CHS/Community Health Systems, Inc., 144A, 6.125%, 4/1/2030 | &nbsp;&nbsp; 60161 |
| 75000 | CHS/Community Health Systems, Inc., 144A, 6.875%, 4/15/2029 | &nbsp;&nbsp; 66821 |
| 125000 | CHS/Community Health Systems, Inc., Sr. Note, 144A, 5.250%, 5/15/2030 | &nbsp;&nbsp; 117624 |
| 50000 | CHS/Community Health Systems, Inc., Sr. Secd. Note, 144A, 6.000%, 1/15/2029 | &nbsp;&nbsp; 50181 |
| 150000 | CHS/Community Health Systems, Inc., Sr. Secd. Note, 144A, 9.750%, 1/15/2034 | &nbsp;&nbsp; 157737 |
| 275000 | Concentra Escrow Issuer Corp., Sr. Unsecd. Note, 144A, 6.875%, 7/15/2032 | &nbsp;&nbsp; 287940 |
| 50000 | Insulet Corp., Sr. Unsecd. Note, 144A, 6.500%, 4/1/2033 | &nbsp;&nbsp; 52311 |
| 875000 | Medline Borrower LP, Sr. Unsecd. Note, 144A, 5.250%, 10/1/2029 | &nbsp;&nbsp; 880247 |
| 125000 | Medline Borrower LP/Medline Co-Issuer, Inc., 144A, 6.250%, 4/1/2029 | &nbsp;&nbsp; 129376 |
| 250000 | Raven Acquisition Holdings LLC, Sr. Secd. Note, 144A, 6.875%, 11/15/2031 | &nbsp;&nbsp; 257845 |
| 300000 | Select Medical Corp., 144A, 6.250%, 12/1/2032 | &nbsp;&nbsp; 293546 |
| 50000 | Teleflex, Inc., Sr. Unsecd. Note, 144A, 4.250%, 6/1/2028 | &nbsp;&nbsp; 49464 |
| 25000 | Tenet Healthcare Corp., 4.625%, 6/15/2028 | &nbsp;&nbsp; 25139 |
| 75000 | Tenet Healthcare Corp., 5.125%, 11/1/2027 | &nbsp;&nbsp; 75424 |
| 75000 | Tenet Healthcare Corp., 144A, 5.500%, 11/15/2032 | &nbsp;&nbsp; 76077 |
| 50000 | Tenet Healthcare Corp., Sr. Secd. Note, 6.125%, 6/15/2030 | &nbsp;&nbsp; 51227 |
| 150000 | Tenet Healthcare Corp., Sr. Secd. Note, 6.750%, 5/15/2031 | &nbsp;&nbsp; 156157 |
| 210000 | Tenet Healthcare Corp., Sr. Unsecd. Note, 6.125%, 10/1/2028 | &nbsp;&nbsp; 211067 |
| 25000 | Tenet Healthcare Corp., Sr. Unsecd. Note, 144A, 6.000%, 11/15/2033 | &nbsp;&nbsp; 25755 |
|  | TOTAL | &nbsp;&nbsp; 3663431 |
|  | **Health Insurance—0.3%** |  |
| 250000 | Molina Healthcare, Inc., Sr. Unsecd. Note, 144A, 6.250%, 1/15/2033 | &nbsp;&nbsp; 255085 |
|  | **Independent Energy—4.1%** |  |
| 350000 | Aethon United BR LP/Aethon United Finance Corp., 144A, 7.500%, 10/1/2029 | &nbsp;&nbsp; 366865 |
| 75000 | Antero Resources Corp., Sr. Unsecd. Note, 144A, 5.375%, 3/1/2030 | &nbsp;&nbsp; 76083 |
| 13000 | Antero Resources Corp., Sr. Unsecd. Note, 144A, 7.625%, 2/1/2029 | &nbsp;&nbsp; 13246 |
| 125000 | Ascent Resources Utica Holdings LLC/ ARU Finance Corp., Sr. Unsecd. Note, 144A, 5.875%, 6/30/2029 | &nbsp;&nbsp; 125813 |
| 75000 | Ascent Resources Utica Holdings LLC/ ARU Finance Corp., Sr. Unsecd. Note, 144A, 6.625%, 7/15/2033 | &nbsp;&nbsp; 77676 |
| 75000 | Ascent Resources Utica Holdings LLC/ ARU Finance Corp., Sr. Unsecd. Note, 144A, 9.000%, 11/1/2027 | &nbsp;&nbsp; 95710 |
| 150000 | Chord Energy Corp., Sr. Unsecd. Note, 144A, 6.000%, 10/1/2030 | &nbsp;&nbsp; 152410 |
| 100000 | Civitas Resources, Inc., Sr. Unsecd. Note, 144A, 8.625%, 11/1/2030 | &nbsp;&nbsp; 104868 |

---

Annual Financial Statements and Additional Information

**4**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Independent Energy—continued** |  |
| $150000 | Civitas Resources, Inc., Sr. Unsecd. Note, 144A, 8.750%, 7/1/2031 | &nbsp;&nbsp; $155798 |
| 125000 | Civitas Resources, Inc., Unsecd. Note, 144A, 8.375%, 7/1/2028 | &nbsp;&nbsp; 128955 |
| 150000 | CNX Resources Corp., Sr. Unsecd. Note, 144A, 7.250%, 3/1/2032 | &nbsp;&nbsp; 156685 |
| 300000 | Comstock Resources, Inc., Sr. Unsecd. Note, 144A, 6.750%, 3/1/2029 | &nbsp;&nbsp; 300872 |
| 125000 | Comstock Resources, Inc., Sr. Unsecd. Note, 144A, 6.750%, 3/1/2029 | &nbsp;&nbsp; 124847 |
| 70000 | EQT Corp., Sr. Unsecd. Note, 4.500%, 1/15/2029 | &nbsp;&nbsp; 70180 |
| 75000 | EQT Corp., Sr. Unsecd. Note, 4.750%, 1/15/2031 | &nbsp;&nbsp; 75517 |
| 75000 | EQT Corp., Sr. Unsecd. Note, 6.375%, 4/1/2029 | &nbsp;&nbsp; 77633 |
| 125000 | Expand Energy Corp., Sr. Unsecd. Note, 4.750%, 2/1/2032 | &nbsp;&nbsp; 123345 |
| 250000 | Matador Resources Co., Sr. Unsecd. Note, 144A, 6.500%, 4/15/2032 | &nbsp;&nbsp; 253704 |
| 125000 | Range Resources Corp., Sr. Unsecd. Note, 8.250%, 1/15/2029 | &nbsp;&nbsp; 127555 |
| 75000 | Range Resources Corp., Sr. Unsecd. Note, 144A, 4.750%, 2/15/2030 | &nbsp;&nbsp; 74069 |
| 375000 | Rockcliff Energy II LLC, Sr. Unsecd. Note, 144A, 5.500%, 10/15/2029 | &nbsp;&nbsp; 372687 |
| 50000 | SM Energy Co., Sr. Unsecd. Note, 6.625%, 1/15/2027 | &nbsp;&nbsp; 50340 |
| 100000 | SM Energy Co., Sr. Unsecd. Note, 6.750%, 9/15/2026 | &nbsp;&nbsp; 100514 |
| 125000 | SM Energy Co., Sr. Unsecd. Note, 144A, 6.750%, 8/1/2029 | &nbsp;&nbsp; 125987 |
|  | TOTAL | &nbsp;&nbsp; 3331359 |
|  | **Industrial - Other—1.5%** |  |
| 125000 | Hillenbrand, Inc., Sr. Unsecd. Note, 6.250%, 2/15/2029 | &nbsp;&nbsp; 127950 |
| 600000 | Madison IAQ LLC, Sr. Unsecd. Note, 144A, 5.875%, 6/30/2029 | &nbsp;&nbsp; 596835 |
| 500000 | SPX Flow, Inc., Sr. Unsecd. Note, 144A, 8.750%, 4/1/2030 | &nbsp;&nbsp; 518088 |
|  | TOTAL | &nbsp;&nbsp; 1242873 |
|  | **Insurance - P&C—8.7%** |  |
| 50000 | Acrisure LLC, Sr. Secd. Note, 144A, 6.750%, 7/1/2032 | &nbsp;&nbsp; 51727 |
| 75000 | Acrisure LLC, Sr. Secd. Note, 144A, 7.500%, 11/6/2030 | &nbsp;&nbsp; 78410 |
| 250000 | Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 144A, 5.875%, 11/1/2029 | &nbsp;&nbsp; 251094 |
| 200000 | Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, 144A, 7.375%, 10/1/2032 | &nbsp;&nbsp; 207624 |
| 250000 | Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer, Sr. Secd. Note, 144A, 7.000%, 1/15/2031 | &nbsp;&nbsp; 259541 |
| 275000 | AmWINS Group, Inc., Sr. Secd. Note, 144A, 6.375%, 2/15/2029 | &nbsp;&nbsp; 282985 |
| 375000 | AmWINS Group, Inc., Sr. Unsecd. Note, 144A, 4.875%, 6/30/2029 | &nbsp;&nbsp; 369092 |
| 400000 | Amynta Agency/Warranty Borrower, Inc., Sr. Unsecd. Note, 144A, 7.500%, 7/15/2033 | &nbsp;&nbsp; 406813 |
| 925000 | Ardonagh Group Finance Ltd., Sr. Unsecd. Note, 144A, 8.875%, 2/15/2032 | &nbsp;&nbsp; 965122 |
| 400000 | Baldwin Insurance Group Holdings LLC/Baldwin Insurance Group Holdings Finance, 144A, 7.125%, 5/15/2031 | &nbsp;&nbsp; 414731 |
| 700000 | Broadstreet Partners, Inc., Sr. Unsecd. Note, 144A, 5.875%, 4/15/2029 | &nbsp;&nbsp; 702479 |
| 200000 | Hub International Ltd., Sr. Secd. Note, 144A, 7.250%, 6/15/2030 | &nbsp;&nbsp; 210096 |
| 300000 | Hub International Ltd., Sr. Unsecd. Note, 144A, 5.625%, 12/1/2029 | &nbsp;&nbsp; 300173 |
| 650000 | Hub International Ltd., Sr. Unsecd. Note, 144A, 7.375%, 1/31/2032 | &nbsp;&nbsp; 682616 |
| 150000 | Jones Deslauriers Insurance Management, Inc., Sr. Secd. Note, 144A, 8.500%, 3/15/2030 | &nbsp;&nbsp; 157320 |
| 425000 | Jones Deslauriers Insurance Management, Inc., Sr. Unsecd. Note, 144A, 6.875%, 10/1/2033 | &nbsp;&nbsp; 410653 |
| 525000 | Panther Escrow Issuer, Sr. Secd. Note, 144A, 7.125%, 6/1/2031 | &nbsp;&nbsp; 544361 |
| 75000 | Ryan Specialty LLC, Sr. Secd. Note, 144A, 4.375%, 2/1/2030 | &nbsp;&nbsp; 73702 |
| 200000 | Ryan Specialty LLC, Sr. Secd. Note, 144A, 5.875%, 8/1/2032 | &nbsp;&nbsp; 204482 |
| 525000 | USI, Inc./NY, Sr. Unsecd. Note, 144A, 7.500%, 1/15/2032 | &nbsp;&nbsp; 550898 |
|  | TOTAL | &nbsp;&nbsp; 7123919 |
|  | **Leisure—2.1%** |  |
| 50000 | Carnival Corp., Sr. Unsecd. Note, 144A, 5.125%, 5/1/2029 | &nbsp;&nbsp; 50579 |
| 175000 | Carnival Corp., Sr. Unsecd. Note, 144A, 5.750%, 3/15/2030 | &nbsp;&nbsp; 180120 |
| 50000 | Carnival Corp., Sr. Unsecd. Note, 144A, 5.750%, 8/1/2032 | &nbsp;&nbsp; 51377 |
| 175000 | Carnival Corp., Sr. Unsecd. Note, 144A, 6.125%, 2/15/2033 | &nbsp;&nbsp; 180795 |
| 25000 | NCL Corp. Ltd., Sr. Secd. Note, 144A, 5.875%, 1/15/2031 | &nbsp;&nbsp; 24920 |

---

Annual Financial Statements and Additional Information

**5**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Leisure—continued** |  |
| $25000 | NCL Corp. Ltd., Sr. Secd. Note, 144A, 6.250%, 9/15/2033 | &nbsp;&nbsp; $25001 |
| 200000 | NCL Corp. Ltd., Sr. Unsecd. Note, 144A, 6.750%, 2/1/2032 | &nbsp;&nbsp; 204908 |
| 50000 | NCL Corp. Ltd., Sr. Unsecd. Note, 144A, 7.750%, 2/15/2029 | &nbsp;&nbsp; 53256 |
| 50000 | NCL Finance Ltd., Sr. Unsecd. Note, 144A, 6.125%, 3/15/2028 | &nbsp;&nbsp; 51583 |
| 150000 | Royal Caribbean Cruises, Ltd., 144A, 6.000%, 2/1/2033 | &nbsp;&nbsp; 154177 |
| 100000 | Royal Caribbean Cruises, Ltd., Sr. Unsecd. Note, 144A, 5.625%, 9/30/2031 | &nbsp;&nbsp; 102264 |
| 200000 | Royal Caribbean Cruises, Ltd., Sr. Unsecd. Note, 144A, 6.250%, 3/15/2032 | &nbsp;&nbsp; 207023 |
| 175000 | Six Flags Entertainment Corp., Sr. Unsecd. Note, 144A, 7.250%, 5/15/2031 | &nbsp;&nbsp; 168050 |
| 300000 | United Parks & Resorts, Inc., Sr. Unsecd. Note, 144A, 5.250%, 8/15/2029 | &nbsp;&nbsp; 292431 |
|  | TOTAL | &nbsp;&nbsp; 1746484 |
|  | **Lodging—1.6%** |  |
| 100000 | Hilton Domestic Operating Co., Inc., Sr. Unsecd. Note, 144A, 3.625%, 2/15/2032 | &nbsp;&nbsp; 92908 |
| 50000 | Hilton Domestic Operating Co., Inc., Sr. Unsecd. Note, 144A, 5.500%, 3/31/2034 | &nbsp;&nbsp; 50369 |
| 150000 | Hilton Domestic Operating Co., Inc., Sr. Unsecd. Note, 144A, 5.750%, 9/15/2033 | &nbsp;&nbsp; 153588 |
| 175000 | Hilton Domestic Operating Co., Inc., Sr. Unsecd. Note, Series WI, 4.875%, 1/15/2030 | &nbsp;&nbsp; 175688 |
| 275000 | RHP Hotel Property/RHP Finance Corp., Sr. Unsecd. Note, 144A, 6.500%, 4/1/2032 | &nbsp;&nbsp; 285387 |
| 50000 | RHP Hotel Property/RHP Finance Corp., Sr. Unsecd. Note, 144A, 6.500%, 6/15/2033 | &nbsp;&nbsp; 52178 |
| 200000 | Wyndham Hotels & Resorts, Inc., Sr. Unsecd. Note, 144A, 4.375%, 8/15/2028 | &nbsp;&nbsp; 198111 |
| 325000 | XHR LP, Sr. Unsecd. Note, 144A, 6.625%, 5/15/2030 | &nbsp;&nbsp; 335834 |
|  | TOTAL | &nbsp;&nbsp; 1344063 |
|  | **Media Entertainment—1.7%** |  |
| 150000 | Gray Escrow II, Inc., Sr. Unsecd. Note, 144A, 5.375%, 11/15/2031 | &nbsp;&nbsp; 112613 |
| 100000 | Lamar Media Corp., Sr. Unsecd. Note, 4.875%, 1/15/2029 | &nbsp;&nbsp; 100074 |
| 100000 | Lamar Media Corp., Sr. Unsecd. Note, Series WI, 3.625%, 1/15/2031 | &nbsp;&nbsp; 94220 |
| 25000 | Outfront Media Capital LLC / Outfront Media Capital Corp., 144A, 7.375%, 2/15/2031 | &nbsp;&nbsp; 26477 |
| 50000 | Outfront Media Capital LLC / Outfront Media Capital Corp., Sr. Unsecd. Note, 144A, 4.250%, 1/15/2029 | &nbsp;&nbsp; 48903 |
| 275000 | Outfront Media Capital LLC / Outfront Media Capital Corp., Sr. Unsecd. Note, 144A, 4.625%, 3/15/2030 | &nbsp;&nbsp; 269145 |
| 250000 | Univision Communications, Inc., Sr. Secd. Note, 144A, 4.500%, 5/1/2029 | &nbsp;&nbsp; 240339 |
| 175000 | Univision Communications, Inc., Sr. Secd. Note, 144A, 7.375%, 6/30/2030 | &nbsp;&nbsp; 178499 |
| 50000 | Univision Communications, Inc., Sr. Secd. Note, 144A, 8.000%, 8/15/2028 | &nbsp;&nbsp; 51822 |
| 350000 | Warnermedia Holdings, Inc., Sr. Unsecd. Note, 5.050%, 3/15/2042 | &nbsp;&nbsp; 247187 |
|  | TOTAL | &nbsp;&nbsp; 1369279 |
|  | **Metals & Mining—1.2%** |  |
| 50000 | Carpenter Technology Corp., Sr. Unsecd. Note, 144A, 5.625%, 3/1/2034 | &nbsp;&nbsp; 50849 |
| 150000 | Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 4.625%, 3/1/2029 | &nbsp;&nbsp; 147834 |
| 200000 | Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 6.750%, 4/15/2030 | &nbsp;&nbsp; 205926 |
| 200000 | Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 7.000%, 3/15/2032 | &nbsp;&nbsp; 205250 |
| 50000 | Cleveland-Cliffs, Inc., Sr. Unsecd. Note, 144A, 7.500%, 9/15/2031 | &nbsp;&nbsp; 52783 |
| 300000 | Coeur Mining, Inc., Sr. Unsecd. Note, 144A, 5.125%, 2/15/2029 | &nbsp;&nbsp; 298195 |
|  | TOTAL | &nbsp;&nbsp; 960837 |
|  | **Midstream—5.5%** |  |
| 150000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.375%, 6/15/2029 | &nbsp;&nbsp; 150099 |
| 400000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 1/15/2028 | &nbsp;&nbsp; 401326 |
| 100000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 10/15/2033 | &nbsp;&nbsp; 100657 |
| 50000 | Antero Midstream Partners LP, Sr. Unsecd. Note, 144A, 5.750%, 7/1/2034 | &nbsp;&nbsp; 50402 |
| 150000 | Aris Water Holdings LLC, Sr. Unsecd. Note, 144A, 7.250%, 4/1/2030 | &nbsp;&nbsp; 160199 |
| 75000 | Blue Racer Midstream LLC/Blue Racer Finance Corp., Sr. Unsecd. Note, 144A, 7.000%, 7/15/2029 | &nbsp;&nbsp; 78557 |
| 100000 | Blue Racer Midstream LLC/Blue Racer Finance Corp., Sr. Unsecd. Note, 144A, 7.250%, 7/15/2032 | &nbsp;&nbsp; 106187 |
| 325000 | CNX Midstream Partners LP, Sr. Unsecd. Note, 144A, 4.750%, 4/15/2030 | &nbsp;&nbsp; 316613 |
| 75000 | DBR Land Holdings LLC, Sr. Unsecd. Note, 144A, 6.250%, 12/1/2030 | &nbsp;&nbsp; 76763 |

---

Annual Financial Statements and Additional Information

**6**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Midstream—continued** |  |
| $275000 | DT Midstream, Inc., Sr. Unsecd. Note, 144A, 4.375%, 6/15/2031 | &nbsp;&nbsp; $269318 |
| 175000 | Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.125%, 6/15/2028 | &nbsp;&nbsp; 175817 |
| 100000 | Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 5.500%, 10/15/2030 | &nbsp;&nbsp; 101630 |
| 100000 | Hess Midstream Operations LP, Sr. Unsecd. Note, 144A, 6.500%, 6/1/2029 | &nbsp;&nbsp; 103649 |
| 250000 | Northriver Midstream Fin, 144A, 6.750%, 7/15/2032 | &nbsp;&nbsp; 254942 |
| 275000 | Rockies Express Pipeline, Sr. Unsecd. Note, 144A, 6.750%, 3/15/2033 | &nbsp;&nbsp; 290557 |
| 200000 | Suburban Propane Partners LP, Sr. Unsecd. Note, 5.875%, 3/1/2027 | &nbsp;&nbsp; 200295 |
| 175000 | Suburban Propane Partners LP, Sr. Unsecd. Note, 144A, 5.000%, 6/1/2031 | &nbsp;&nbsp; 168413 |
| 150000 | Suburban Propane Partners LP, Sr. Unsecd. Note, 144A, 6.500%, 12/15/2035 | &nbsp;&nbsp; 150127 |
| 325000 | Tallgrass Energy Partners LP, Sr. Unsecd. Note, 144A, 6.750%, 3/15/2034 | &nbsp;&nbsp; 325190 |
| 225000 | Venture Global Plaquemines LNG LLC, Sr. Secd. Note, 144A, 6.500%, 1/15/2034 | &nbsp;&nbsp; 230569 |
| 275000 | Venture Global Plaquemines LNG LLC, Sr. Secd. Note, 144A, 7.500%, 5/1/2033 | &nbsp;&nbsp; 297290 |
| 225000 | Venture Global Plaquemines LNG LLC, Sr. Unsecd. Note, 144A, 6.500%, 6/15/2034 | &nbsp;&nbsp; 230012 |
| 150000 | WBI Operating LLC, Sr. Unsecd. Note, 144A, 6.250%, 10/15/2030 | &nbsp;&nbsp; 151007 |
| 100000 | WBI Operating LLC, Sr. Unsecd. Note, 144A, 6.500%, 10/15/2033 | &nbsp;&nbsp; 99675 |
|  | TOTAL | &nbsp;&nbsp; 4489294 |
|  | **Oil Field Services—1.6%** |  |
| 200000 | Archrock Partners LP / Archrock Partners Finance Corp., Sr. Unsecd. Note, 144A, 6.250%, 4/1/2028 | &nbsp;&nbsp; 201336 |
| 150000 | Kodiak Gas Services LLC, Sr. Unsecd. Note, 144A, 6.500%, 10/1/2033 | &nbsp;&nbsp; 153260 |
| 100000 | Kodiak Gas Services LLC, Sr. Unsecd. Note, 144A, 6.750%, 10/1/2035 | &nbsp;&nbsp; 102868 |
| 100000 | Kodiak Gas Services LLC, Sr. Unsecd. Note, 144A, 7.250%, 2/15/2029 | &nbsp;&nbsp; 104095 |
| 75000 | Nabors Industries, Inc., Co. Guarantee, 144A, 9.125%, 1/31/2030 | &nbsp;&nbsp; 78694 |
| 150000 | Nabors Industries, Inc., Sr. Unsecd. Note, 144A, 7.625%, 11/15/2032 | &nbsp;&nbsp; 147527 |
| 75000 | Nabors Industries, Inc., Sr. Unsecd. Note, 144A, 8.875%, 8/15/2031 | &nbsp;&nbsp; 72808 |
| 100000 | Precision Drilling Corp., Sr. Unsecd. Note, 144A, 6.875%, 1/15/2029 | &nbsp;&nbsp; 101198 |
| 175000 | USA Compression Partners LP, Sr. Unsecd. Note, 144A, 6.250%, 10/1/2033 | &nbsp;&nbsp; 177182 |
| 150000 | USA Compression Partners LP, Sr. Unsecd. Note, 144A, 7.125%, 3/15/2029 | &nbsp;&nbsp; 155337 |
|  | TOTAL | &nbsp;&nbsp; 1294305 |
|  | **Packaging—3.1%** |  |
| 1<br><sup>1,2,3</sup> <br>| ARD Finance S.A., Secured Note, 144A, 7.250% PIK, 6/30/2027 | &nbsp;&nbsp; 0 |
| 102000 | Ardagh Group S.A., Secured Note, 144A, 9.500%, 12/1/2030 | &nbsp;&nbsp; 110726 |
| 200000 | Ardagh Metal Packaging, Secured Note, 144A, 6.250%, 1/30/2031 | &nbsp;&nbsp; 204678 |
| 325000 | Ardagh Metal Packaging, Sr. Unsecd. Note, 144A, 4.000%, 9/1/2029 | &nbsp;&nbsp; 306230 |
| 225000 | Ball Corp., Sr. Unsecd. Note, 2.875%, 8/15/2030 | &nbsp;&nbsp; 208201 |
| 100000 | Ball Corp., Sr. Unsecd. Note, 6.000%, 6/15/2029 | &nbsp;&nbsp; 102914 |
| 200000 | Clydesdale Acquisition Holdings, Inc., Sr. Secd. Note, 144A, 6.750%, 4/15/2032 | &nbsp;&nbsp; 205789 |
| 125000 | Clydesdale Acquisition Holdings, Inc., Sr. Unsecd. Note, 144A, 8.750%, 4/15/2030 | &nbsp;&nbsp; 127175 |
| 275000 | Crown Americas LLC, Sr. Unsecd. Note, 144A, 5.875%, 6/1/2033 | &nbsp;&nbsp; 281486 |
| 225000 | Sealed Air Corp., 144A, 6.500%, 7/15/2032 | &nbsp;&nbsp; 233969 |
| 100000 | Sealed Air Corp., Sr. Unsecd. Note, 144A, 5.000%, 4/15/2029 | &nbsp;&nbsp; 100889 |
| 180000 | Trivium Packaging Finance B.V., 144A, 8.250%, 7/15/2030 | &nbsp;&nbsp; 193095 |
| 450000 | Trivium Packaging Finance B.V., 144A, 12.250%, 1/15/2031 | &nbsp;&nbsp; 488653 |
|  | TOTAL | &nbsp;&nbsp; 2563805 |
|  | **Paper—0.5%** |  |
| 200000 | Clearwater Paper Corp., Sr. Unsecd. Note, 144A, 4.750%, 8/15/2028 | &nbsp;&nbsp; 188054 |
| 150000 | Graphic Packaging International, LLC, Sr. Unsecd. Note, 144A, 3.500%, 3/1/2029 | &nbsp;&nbsp; 143655 |
| 25000 | Graphic Packaging International, LLC, Sr. Unsecd. Note, 144A, 3.750%, 2/1/2030 | &nbsp;&nbsp; 23734 |
| 25000 | Graphic Packaging International, LLC, Sr. Unsecd. Note, 144A, 4.750%, 7/15/2027 | &nbsp;&nbsp; 25030 |
|  | TOTAL | &nbsp;&nbsp; 380473 |

---

Annual Financial Statements and Additional Information

**7**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Pharmaceuticals—2.3%** |  |
| $50000 | Amneal Pharmaceuticals, Inc., Sr. Secd. Note, 144A, 6.875%, 8/1/2032 | &nbsp;&nbsp; $52878 |
| 75000 | Bausch Health Cos., Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2029 | &nbsp;&nbsp; 57814 |
| 100000 | Bausch Health Cos., Inc., Sr. Unsecd. Note, 144A, 5.250%, 2/15/2031 | &nbsp;&nbsp; 65589 |
| 500000 | Bausch Health, Sr. Secd. Note, 144A, 10.000%, 4/15/2032 | &nbsp;&nbsp; 520384 |
| 200000 | Genmab A/S/Genmab Finance LLC, Sr. Unsecd. Note, 144A, 7.250%, 12/15/2033 | &nbsp;&nbsp; 210250 |
| 425000 | Grifols Escrow Issuer S.A., Sr. Unsecd. Note, 144A, 4.750%, 10/15/2028 | &nbsp;&nbsp; 420044 |
| 200000 | Opal Bidco SAS, Sr. Secd. Note, 144A, 6.500%, 3/31/2032 | &nbsp;&nbsp; 204984 |
| 200000 | Organon & Co./Organon Foreign Debt Co-Issuer B.V., Sr. Unsecd. Note, 144A, 7.875%, 5/15/2034 | &nbsp;&nbsp; 163036 |
| 250000 | Organon Finance 1 LLC, Sr. Unsecd. Note, 144A, 5.125%, 4/30/2031 | &nbsp;&nbsp; 207234 |
|  | TOTAL | &nbsp;&nbsp; 1902213 |
|  | **Restaurant—1.5%** |  |
| 225000 | 1011778 BC Unltd. Liability Co./New Red Finance, Inc., 144A, 3.500%, 2/15/2029 | &nbsp;&nbsp; 218185 |
| 650000 | 1011778 BC Unltd. Liability Co./New Red Finance, Inc., 144A, 4.000%, 10/15/2030 | &nbsp;&nbsp; 619797 |
| 75000 | 1011778 BC Unltd. Liability Co./New Red Finance, Inc., 144A, 5.625%, 9/15/2029 | &nbsp;&nbsp; 76458 |
| 75000 | KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC, Sr. Unsecd. Note, 144A, 4.750%, 6/1/2027 | &nbsp;&nbsp; 74972 |
| 275000 | Yum! Brands, Inc., Sr. Unsecd. Note, 4.625%, 1/31/2032 | &nbsp;&nbsp; 269806 |
|  | TOTAL | &nbsp;&nbsp; 1259218 |
|  | **Retailers—2.8%** |  |
| 150000 | Academy Ltd., Sr. Secd. Note, 144A, 6.000%, 11/15/2027 | &nbsp;&nbsp; 150642 |
| 100000 | Asbury Automotive Group, Inc., Sr. Unsecd. Note, 144A, 4.625%, 11/15/2029 | &nbsp;&nbsp; 98382 |
| 250000 | Asbury Automotive Group, Inc., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2032 | &nbsp;&nbsp; 243097 |
| 300000 | BELRON UK Finance PLC, 144A, 5.750%, 10/15/2029 | &nbsp;&nbsp; 306513 |
| 250000 | Gap (The), Inc., Sr. Unsecd. Note, 144A, 3.625%, 10/1/2029 | &nbsp;&nbsp; 237355 |
| 225000 | Group 1 Automotive, Inc., Sr. Unsecd. Note, 144A, 6.375%, 1/15/2030 | &nbsp;&nbsp; 231945 |
| 175000 | LCM Investments Holdings II, LLC, Sr. Unsecd. Note, 144A, 4.875%, 5/1/2029 | &nbsp;&nbsp; 172537 |
| 100000 | LCM Investments Holdings II, LLC, Sr. Unsecd. Note, 144A, 8.250%, 8/1/2031 | &nbsp;&nbsp; 105830 |
| 275000 | Lithia Motors, Inc., Sr. Unsecd. Note, 144A, 5.500%, 10/1/2030 | &nbsp;&nbsp; 277078 |
| 175000 | Sally Hldgs. LLC/Sally Capital, Inc., Sr. Unsecd. Note, 6.750%, 3/1/2032 | &nbsp;&nbsp; 182961 |
| 275000 | William Carter Co., Sr. Unsecd. Note, 144A, 7.375%, 2/15/2031 | &nbsp;&nbsp; 284667 |
|  | TOTAL | &nbsp;&nbsp; 2291007 |
|  | **Supermarkets—0.6%** |  |
| 425000 | Albertsons Cos. LLC/SAFEW, Sr. Unsecd. Note, 144A, 3.500%, 3/15/2029 | &nbsp;&nbsp; 408717 |
| 75000 | Albertsons Cos. LLC/SAFEW, Sr. Unsecd. Note, 144A, 5.875%, 2/15/2028 | &nbsp;&nbsp; 75543 |
| 50000 | Albertsons Cos. LLC/SAFEW, Sr. Unsecd. Note, 144A, 6.250%, 3/15/2033 | &nbsp;&nbsp; 51457 |
|  | TOTAL | &nbsp;&nbsp; 535717 |
|  | **Technology—13.6%** |  |
| 250000 | Amentum Holdings, Inc., Sr. Unsecd. Note, 144A, 7.250%, 8/1/2032 | &nbsp;&nbsp; 263670 |
| 350000 | APLD Computeco LLC, Sr. Secd. Note, 144A, 9.250%, 12/15/2030 | &nbsp;&nbsp; 343586 |
| 400000 | AthenaHealth Group, Inc., Sr. Unsecd. Note, 144A, 6.500%, 2/15/2030 | &nbsp;&nbsp; 399136 |
| 100000 | CACI International, Inc., Sr. Unsecd. Note, 144A, 6.375%, 6/15/2033 | &nbsp;&nbsp; 103593 |
| 375000 | Capstone Borrower, Inc., Sr. Secd. Note, 144A, 8.000%, 6/15/2030 | &nbsp;&nbsp; 386578 |
| 100000 | Centerfield Media Parent, Sr. Note, 144A, 6.625%, 8/1/2026 | &nbsp;&nbsp; 96452 |
| 50000 | Ciena Corp., Sr. Unsecd. Note, 144A, 4.000%, 1/31/2030 | &nbsp;&nbsp; 48264 |
| 175000 | Cipher Compute LLC, 144A, 7.125%, 11/15/2030 | &nbsp;&nbsp; 178453 |
| 400000 | Clarivate Science Holdings Corp., Sr. Unsecd. Note, 144A, 4.875%, 7/1/2029 | &nbsp;&nbsp; 378566 |
| 325000 | Cloud Software Group, Inc., Secured Note, 144A, 9.000%, 9/30/2029 | &nbsp;&nbsp; 338715 |
| 375000 | Cloud Software Group, Inc., Sr. Secd. Note, 144A, 6.500%, 3/31/2029 | &nbsp;&nbsp; 380156 |
| 100000 | Cloud Software Group, Inc., Sr. Secd. Note, 144A, 6.625%, 8/15/2033 | &nbsp;&nbsp; 99168 |
| 100000 | Cloud Software Group, Inc., Sr. Secd. Note, 144A, 8.250%, 6/30/2032 | &nbsp;&nbsp; 104559 |
| 325000 | Coherent Corp., Sr. Unsecd. Note, 144A, 5.000%, 12/15/2029 | &nbsp;&nbsp; 324177 |

---

Annual Financial Statements and Additional Information

**8**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Technology—continued** |  |
| $250000 | Consensus Cloud Solutions, Inc., Sr. Unsecd. Note, 144A, 6.500%, 10/15/2028 | &nbsp;&nbsp; $252143 |
| 50000 | CoreWeave, Inc., Sr. Unsecd. Note, 144A, 9.000%, 2/1/2031 | &nbsp;&nbsp; 45889 |
| 175000 | CoreWeave, Inc., Sr. Unsecd. Note, 144A, 9.250%, 6/1/2030 | &nbsp;&nbsp; 162891 |
| 325000 | Elastic N.V., Sr. Unsecd. Note, 144A, 4.125%, 7/15/2029 | &nbsp;&nbsp; 315514 |
| 100000 | Ellucian Holdings, Inc., Sr. Secd. Note, 144A, 6.500%, 12/1/2029 | &nbsp;&nbsp; 102215 |
| 425000 | Entegris, Inc., Sr. Unsecd. Note, 144A, 5.950%, 6/15/2030 | &nbsp;&nbsp; 433821 |
| 125000 | Fair Isaac & Co., Inc., Sr. Unsecd. Note, 144A, 6.000%, 5/15/2033 | &nbsp;&nbsp; 128792 |
| 375000 | Fortress Intermediate 3, Inc., Sr. Secd. Note, 144A, 7.500%, 6/1/2031 | &nbsp;&nbsp; 391759 |
| 150000 | Gen Digital, Inc., Sr. Unsecd. Note, 144A, 6.250%, 4/1/2033 | &nbsp;&nbsp; 155316 |
| 225000 | HealthEquity, Inc., Sr. Unsecd. Note, 144A, 4.500%, 10/1/2029 | &nbsp;&nbsp; 221320 |
| 250000 | Insight Enterprises, Inc., Sr. Unsecd. Note, 144A, 6.625%, 5/15/2032 | &nbsp;&nbsp; 257204 |
| 200000 | Iron Mountain, Inc., 144A, 6.250%, 1/15/2033 | &nbsp;&nbsp; 201803 |
| 75000 | Iron Mountain, Inc., Sr. Unsecd. Note, 144A, 5.250%, 7/15/2030 | &nbsp;&nbsp; 74151 |
| 200000 | Iron Mountain, Inc., Sr. Unsecd. Note, 144A, 7.000%, 2/15/2029 | &nbsp;&nbsp; 205570 |
| 300000 | KIOXIA Holdings Corp., Sr. Unsecd. Note, 144A, 6.625%, 7/24/2033 | &nbsp;&nbsp; 312233 |
| 725000 | McAfee Corp., Sr. Unsecd. Note, 144A, 7.375%, 2/15/2030 | &nbsp;&nbsp; 633028 |
| 175000 | NCR Voyix Corp., Sr. Unsecd. Note, 144A, 5.000%, 10/1/2028 | &nbsp;&nbsp; 174491 |
| 59000 | NCR Voyix Corp., Sr. Unsecd. Note, 144A, 5.125%, 4/15/2029 | &nbsp;&nbsp; 58764 |
| 175000 | Open Text, Inc., Sr. Unsecd. Note, 144A, 3.875%, 2/15/2028 | &nbsp;&nbsp; 171847 |
| 75000 | Open Text, Inc., Sr. Unsecd. Note, 144A, 4.125%, 2/15/2030 | &nbsp;&nbsp; 71737 |
| 175000 | Open Text, Inc., Sr. Unsecd. Note, 144A, 4.125%, 12/1/2031 | &nbsp;&nbsp; 163488 |
| 200000 | Rocket Software, Inc., Sr. Secd. Note, 144A, 9.000%, 11/28/2028 | &nbsp;&nbsp; 206393 |
| 350000 | Rocket Software, Inc., Sr. Unsecd. Note, 144A, 6.500%, 2/15/2029 | &nbsp;&nbsp; 344630 |
| 75000 | Science Applications International Corp., Sr. Unsecd. Note, 144A, 4.875%, 4/1/2028 | &nbsp;&nbsp; 74878 |
| 150000 | Science Applications International Corp., Sr. Unsecd. Note, 144A, 5.875%, 11/1/2033 | &nbsp;&nbsp; 152167 |
| 25000 | Seagate Data Storage Technology Pte. Ltd., Sr. Unsecd. Note, 144A, 5.875%, 7/15/2030 | &nbsp;&nbsp; 25803 |
| 125000 | Seagate Data Storage Technology Pte. Ltd., Sr. Unsecd. Note, 144A, 8.500%, 7/15/2031 | &nbsp;&nbsp; 132989 |
| 231000 | Seagate Data Storage Technology Pte. Ltd., Sr. Unsecd. Note, 144A, 9.625%, 12/1/2032 | &nbsp;&nbsp; 262377 |
| 75000 | Sensata Technologies, Inc., Sr. Unsecd. Note, 144A, 3.750%, 2/15/2031 | &nbsp;&nbsp; 70429 |
| 200000 | Sensata Technologies, Inc., Sr. Unsecd. Note, 144A, 6.625%, 7/15/2032 | &nbsp;&nbsp; 209579 |
| 75000 | Shift4 Payments, Inc., Sr. Unsecd. Note, 144A, 6.750%, 8/15/2032 | &nbsp;&nbsp; 77482 |
| 200000 | SS&C Technologies, Inc., Sr. Unsecd. Note, 144A, 5.500%, 9/30/2027 | &nbsp;&nbsp; 200313 |
| 125000 | SS&C Technologies, Inc., Sr. Unsecd. Note, 144A, 6.500%, 6/1/2032 | &nbsp;&nbsp; 130154 |
| 175000 | TTM Technologies, Inc., Sr. Unsecd. Note, 144A, 4.000%, 3/1/2029 | &nbsp;&nbsp; 171583 |
| 275000 | UKG, Inc., Sr. Secd. Note, 144A, 6.875%, 2/1/2031 | &nbsp;&nbsp; 282918 |
| 250000 | Viavi Solutions, Inc., Sr. Unsecd. Note, 144A, 3.750%, 10/1/2029 | &nbsp;&nbsp; 239533 |
| 250000 | VOLTAGRID LLC, 144A, 7.375%, 11/1/2030 | &nbsp;&nbsp; 247808 |
| 225000 | WULF Compute LLC, Secured Note, 144A, 7.750%, 10/15/2030 | &nbsp;&nbsp; 231977 |
| 75000 | ZipRecruiter, Inc., Sr. Unsecd. Note, 144A, 5.000%, 1/15/2030 | &nbsp;&nbsp; 58955 |
|  | TOTAL | &nbsp;&nbsp; 11099017 |
|  | **Transportation Services—0.3%** |  |
| 250000 | Watco Cos LLC/Finance Co., Sr. Unsecd. Note, 144A, 7.125%, 8/1/2032 | &nbsp;&nbsp; 261967 |
|  | **Utility - Electric—3.0%** |  |
| 75000 | Calpine Corp., 144A, 4.500%, 2/15/2028 | &nbsp;&nbsp; 75085 |
| 200000 | Calpine Corp., Sr. Secd. Note, 144A, 3.750%, 3/1/2031 | &nbsp;&nbsp; 193457 |
| 25000 | Calpine Corp., Sr. Unsecd. Note, 144A, 4.625%, 2/1/2029 | &nbsp;&nbsp; 25003 |
| 25000 | Calpine Corp., Sr. Unsecd. Note, 144A, 5.000%, 2/1/2031 | &nbsp;&nbsp; 25497 |
| 175000 | Calpine Corp., Sr. Unsecd. Note, 144A, 5.125%, 3/15/2028 | &nbsp;&nbsp; 175278 |
| 39000 | NRG Energy, Inc., Sr. Unsecd. Note, 144A, 3.875%, 2/15/2032 | &nbsp;&nbsp; 36624 |
| 250000 | NRG Energy, Inc., Sr. Unsecd. Note, 144A, 5.250%, 6/15/2029 | &nbsp;&nbsp; 251637 |

---

Annual Financial Statements and Additional Information

**9**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Utility - Electric—continued** |  |
| $50000 | NRG Energy, Inc., Sr. Unsecd. Note, 144A, 5.750%, 1/15/2034 | &nbsp;&nbsp; $50535 |
| 275000 | NRG Energy, Inc., Sr. Unsecd. Note, 144A, 6.000%, 1/15/2036 | &nbsp;&nbsp; 278786 |
| 50000 | TerraForm Power Operating LLC, Sr. Unsecd. Note, 144A, 4.750%, 1/15/2030 | &nbsp;&nbsp; 48767 |
| 300000 | TerraForm Power Operating LLC, Sr. Unsecd. Note, 144A, 5.000%, 1/31/2028 | &nbsp;&nbsp; 299885 |
| 125000 | TransAlta Corp., Sr. Unsecd. Note, 5.875%, 2/1/2034 | &nbsp;&nbsp; 125936 |
| 200000 | Vistra Operations Co., LLC, Sr. Unsecd. Note, 144A, 5.625%, 2/15/2027 | &nbsp;&nbsp; 200181 |
| 250000 | Vistra Operations Co., LLC, Sr. Unsecd. Note, 144A, 7.750%, 10/15/2031 | &nbsp;&nbsp; 264912 |
| 150000 | XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 7.250%, 1/15/2029 | &nbsp;&nbsp; 153771 |
| 75000 | XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 7.750%, 4/15/2034 | &nbsp;&nbsp; 76280 |
| 50000 | XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 8.375%, 1/15/2031 | &nbsp;&nbsp; 52572 |
| 125000 | XPLR Infrastructure Operating Partners, LP, Sr. Unsecd. Note, 144A, 8.625%, 3/15/2033 | &nbsp;&nbsp; 131587 |
|  | TOTAL | &nbsp;&nbsp; 2465793 |
|  | TOTAL CORPORATE BONDS <br>(IDENTIFIED COST $77,584,572)<br>| &nbsp;&nbsp; 77756859 |
|  | COMMON STOCKS—0.2% |  |
|  | **Media Entertainment—0.0%** |  |
| 1050<br><sup>2,3</sup> <br>| Audacy Capital Corp. | &nbsp;&nbsp; 18123 |
|  | **Packaging—0.2%** |  |
| 17027<br><sup>2,3</sup> <br>| Yeoman Capital S.A. | &nbsp;&nbsp; 150076 |
|  | TOTAL COMMON STOCKS <br>(IDENTIFIED COST $1,431,115)<br>| &nbsp;&nbsp; 168199 |
|  | WARRANTS—0.0% |  |
|  | **Media Entertainment—0.0%** |  |
| 1272<br><sup>2,3</sup> <br>| Audacy Capital Corp., Warrants, 9/30/2028 | &nbsp;&nbsp; 13 |
| 212<br><sup>2,3</sup> <br>| Audacy Capital Corp., Warrants, 9/30/2028 | &nbsp;&nbsp; 2 |
|  | TOTAL WARRANTS <br>(IDENTIFIED COST $429)<br>| &nbsp;&nbsp; 15 |
|  | REPURCHASE AGREEMENT—3.2% |  |
| $2588000 | Interest in $292,000,000 joint repurchase agreement 3.85%, dated 12/31/2025 under which Bank of America, N.A. will <br> repurchase securities provided as collateral for $292,062,456 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 10/1/2050 and the market value of those underlying securities was $297,903,705. <br>(IDENTIFIED COST $2,588,000)<br>| &nbsp;&nbsp; 2588000 |
|  | TOTAL INVESTMENT IN SECURITIES—98.5% <br>(IDENTIFIED COST $81,604,116)<sup>4</sup> <br>| &nbsp;&nbsp; 80513073 |
|  | OTHER ASSETS AND LIABILITIES - NET—1.5%<sup>5</sup> <br>| &nbsp;&nbsp; 1248800 |
|  | NET ASSETS—100% | &nbsp;&nbsp; $81761873 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Issuer in default. |
| 2 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established <br> by and under the general supervision of the Fund's Adviser acting through its Valuation Committee.<br>|
| 3 | Non-income-producing security. |
| 4 | The cost of investments for federal tax purposes amounts to $81,652,021. |
| 5 | 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 net assets at December 31, 2025.

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.

Annual Financial Statements and Additional Information

**10**

------

The following is a summary of the inputs used, as of December 31, 2025, in valuing the Fund's assets carried at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** |
|  | **Level 1—** <br>**Quoted** <br>**Prices**<br>| **Level 2—** <br>**Other** <br>**Significant** <br>**Observable** <br>**Inputs**<br>| **Level 3—** <br>**Significant** <br>**Unobservable** <br>**Inputs**<br>| **Total** |
| **Debt Securities:** |  |  |  |  |
| Corporate Bonds | &nbsp;&nbsp; $— | &nbsp;&nbsp; $77756859 | &nbsp;&nbsp; $0 | &nbsp;&nbsp; $77756859 |
| **Equity Securities:** |  |  |  |  |
| Common Stocks |  |  |  |  |
| International | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 150076 | &nbsp;&nbsp; 150076 |
| Domestic | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 18123 | &nbsp;&nbsp; 18123 |
| **Warrants** | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 15 | &nbsp;&nbsp; 15 |
| **Repurchase Agreement** | &nbsp;&nbsp; — | &nbsp;&nbsp; 2588000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 2588000 |
| TOTAL SECURITIES | &nbsp;&nbsp; $— | &nbsp;&nbsp; $80344859 | &nbsp;&nbsp; $168214 | &nbsp;&nbsp; $80513073 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The following acronym(s) are used throughout this portfolio: <br> PIK —Payment in Kind

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**11**

------

Financial Highlights–Primary Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$5.68** | &nbsp;&nbsp; **$5.66** | &nbsp;&nbsp; **$5.34** | &nbsp;&nbsp; **$6.39** | &nbsp;&nbsp; **$6.41** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.31 | 0.31 | 0.30 | 0.29 | 0.28 |
| Net realized and unrealized gain (loss) | 0.13 | 0.03 | 0.34 | &nbsp;&nbsp; (1.02) | 0.02 |
| Total From Investment Operations | 0.44 | 0.34 | 0.64 | &nbsp;&nbsp; (0.73) | 0.30 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.34) | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.32) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$5.78** | &nbsp;&nbsp; **$5.68** | &nbsp;&nbsp; **$5.66** | &nbsp;&nbsp; **$5.34** | &nbsp;&nbsp; **$6.39** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 8.23% | &nbsp;&nbsp; 6.27% | &nbsp;&nbsp; 12.71% | &nbsp;&nbsp; (11.78)% | &nbsp;&nbsp; 4.85% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 0.81% | &nbsp;&nbsp; 0.83% | &nbsp;&nbsp; 0.81% | &nbsp;&nbsp; 0.81% | &nbsp;&nbsp; 0.81% |
| Net investment income | &nbsp;&nbsp; 5.51% | &nbsp;&nbsp; 5.53% | &nbsp;&nbsp; 5.69% | &nbsp;&nbsp; 5.15% | &nbsp;&nbsp; 4.42% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.04% | &nbsp;&nbsp; 0.06% | &nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 0.04% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $68273 | &nbsp;&nbsp; $68370 | &nbsp;&nbsp; $72987 | &nbsp;&nbsp; $68740 | &nbsp;&nbsp; $103152 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 28% | &nbsp;&nbsp; 28% | &nbsp;&nbsp; 16% | &nbsp;&nbsp; 13% | &nbsp;&nbsp; 39% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**12**

------

Financial Highlights–Service Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$5.64** | &nbsp;&nbsp; **$5.63** | &nbsp;&nbsp; **$5.31** | &nbsp;&nbsp; **$6.35** | &nbsp;&nbsp; **$6.38** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.28 | 0.29 | 0.29 | 0.27 | 0.26 |
| Net realized and unrealized gain (loss) | 0.16 | 0.02 | 0.34 | &nbsp;&nbsp; (1.00) | 0.01 |
| Total From Investment Operations | 0.44 | 0.31 | 0.63 | &nbsp;&nbsp; (0.73) | 0.27 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.33) | &nbsp;&nbsp; (0.30) | &nbsp;&nbsp; (0.31) | &nbsp;&nbsp; (0.31) | &nbsp;&nbsp; (0.30) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$5.75** | &nbsp;&nbsp; **$5.64** | &nbsp;&nbsp; **$5.63** | &nbsp;&nbsp; **$5.31** | &nbsp;&nbsp; **$6.35** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 8.18% | &nbsp;&nbsp; 5.85% | &nbsp;&nbsp; 12.47% | &nbsp;&nbsp; (11.92)% | &nbsp;&nbsp; 4.44% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 1.06% | &nbsp;&nbsp; 1.08% | &nbsp;&nbsp; 1.06% | &nbsp;&nbsp; 1.06% | &nbsp;&nbsp; 1.06% |
| Net investment income | &nbsp;&nbsp; 4.96% | &nbsp;&nbsp; 5.27% | &nbsp;&nbsp; 5.44% | &nbsp;&nbsp; 4.92% | &nbsp;&nbsp; 4.16% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.04% | &nbsp;&nbsp; 0.06% | &nbsp;&nbsp; 0.05% | &nbsp;&nbsp; 0.04% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $13489 | &nbsp;&nbsp; $50281 | &nbsp;&nbsp; $50747 | &nbsp;&nbsp; $47172 | &nbsp;&nbsp; $57578 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 28% | &nbsp;&nbsp; 28% | &nbsp;&nbsp; 16% | &nbsp;&nbsp; 13% | &nbsp;&nbsp; 39% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**13**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in securities, at value (identified cost $81,604,116) | &nbsp;&nbsp; $80513073 |
| Cash | &nbsp;&nbsp; 523 |
| Income receivable | &nbsp;&nbsp; 1311093 |
| Receivable for shares sold | &nbsp;&nbsp; 10008 |
| Total Assets | &nbsp;&nbsp; 81834697 |
| **Liabilities:** |  |
| Payable for shares redeemed | &nbsp;&nbsp; 32052 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 1059 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 173 |
| Payable for custodian fees | &nbsp;&nbsp; 5465 |
| Payable for legal fees | &nbsp;&nbsp; 13043 |
| Payable for commitment fees | &nbsp;&nbsp; 2491 |
| Payable for portfolio accounting fees | &nbsp;&nbsp; 12517 |
| Payable for distribution services fee (Note 5) | &nbsp;&nbsp; 2860 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 3164 |
| Total Liabilities | &nbsp;&nbsp; 72824 |
| Net assets for 14,155,107 shares outstanding | &nbsp;&nbsp; $81761873 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $100306362 |
| Total distributable earnings (loss) | &nbsp;&nbsp; (18544489) |
| Net Assets | &nbsp;&nbsp; $81761873 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| **Primary Shares:** |  |
| $68,272,802 ÷ 11,809,019 shares outstanding, no par value, unlimited shares authorized | $5.78 |
| **Service Shares:** |  |
| $13,489,071 ÷ 2,346,088 shares outstanding, no par value, unlimited shares authorized | $5.75 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**14**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Interest | &nbsp;&nbsp; $6856850 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 663194 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 93585 |
| Custodian fees | &nbsp;&nbsp; 13537 |
| Transfer agent fees | &nbsp;&nbsp; 14275 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 1955 |
| Auditing fees | &nbsp;&nbsp; 39257 |
| Legal fees | &nbsp;&nbsp; 13348 |
| Portfolio accounting fees | &nbsp;&nbsp; 91192 |
| Distribution services fee (Note 5) | &nbsp;&nbsp; 109417 |
| Printing and postage | &nbsp;&nbsp; 37695 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 20895 |
| TOTAL EXPENSES | &nbsp;&nbsp; 1098350 |
| Waiver of investment adviser fee (Note 5) | &nbsp;&nbsp; (88205) |
| Net expenses | &nbsp;&nbsp; 1010145 |
| Net investment income | &nbsp;&nbsp; 5846705 |
| **Realized and Unrealized Gain (Loss) on Investments:** |  |
| Net realized loss on investments | &nbsp;&nbsp; (428870) |
| Net change in unrealized depreciation of investments | &nbsp;&nbsp; 3417337 |
| Net realized and unrealized gain (loss) on investments | &nbsp;&nbsp; 2988467 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $8835172 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**15**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment income | &nbsp;&nbsp; $5846705 | &nbsp;&nbsp; $6545417 |
| Net realized gain (loss) | &nbsp;&nbsp; (428870) | &nbsp;&nbsp; (3690396) |
| Net change in unrealized appreciation/depreciation | &nbsp;&nbsp; 3417337 | &nbsp;&nbsp; 4070567 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 8835172 | &nbsp;&nbsp; 6925588 |
| **Distributions to Shareholders:** |  |  |
| Primary Shares | &nbsp;&nbsp; (3796953) | &nbsp;&nbsp; (4067938) |
| Service Shares | &nbsp;&nbsp; (2904084) | &nbsp;&nbsp; (2683396) |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | &nbsp;&nbsp; (6701037) | &nbsp;&nbsp; (6751334) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 19889348 | &nbsp;&nbsp; 17568118 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 6701032 | &nbsp;&nbsp; 6751329 |
| Cost of shares redeemed | &nbsp;&nbsp; (65614167) | &nbsp;&nbsp; (29576411) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (39023787) | &nbsp;&nbsp; (5256964) |
| Change in net assets | &nbsp;&nbsp; (36889652) | &nbsp;&nbsp; (5082710) |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 118651525 | &nbsp;&nbsp; 123734235 |
| End of period | &nbsp;&nbsp; $81761873 | &nbsp;&nbsp; $118651525 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**16**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes High Income Bond Fund II (the "Fund"), a 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: Primary Shares and Service Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is to seek high current income.

**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 Federated Investment Management Company (the "Adviser").

■

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 ask quotations.

■

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.

■

For securities that are fair valued in accordance with procedures established by and under the general supervision of the Adviser, 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 Adviser's valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser's 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 and Significant Events Procedures** 

Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.

The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review 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

Annual Financial Statements and Additional Information

**17**

------

the prices bid and ask 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 Adviser.

The Adviser has also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■

With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;

■

Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;

■

Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Adviser has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Adviser. The Trustees periodically review fair valuations made in response to significant events.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Repurchase agreements are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Distributions of net investment income and capital gains, if any, are declared and paid at least annually. 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 $88,205 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 Primary Shares and Service 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 December 31, 2025, the Fund's Primary Shares and Service Shares did not incur other service fees; however, it may begin to incur this fee upon approval of the Trustees.

Annual Financial Statements and Additional Information

**18**

------

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 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 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 Adviser.

**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** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Primary Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 2703547 | &nbsp;&nbsp; $15004706 | &nbsp;&nbsp; 2175343 | &nbsp;&nbsp; $12041641 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 701840 | &nbsp;&nbsp; 3796953 | &nbsp;&nbsp; 757530 | &nbsp;&nbsp; 4067937 |
| Shares redeemed | &nbsp;&nbsp; (3643054) | &nbsp;&nbsp; (20506728) | &nbsp;&nbsp; (3771903) | &nbsp;&nbsp; (20723523) |
| NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | &nbsp;&nbsp; (237667) | &nbsp;&nbsp; $(1705069) | &nbsp;&nbsp; (839030) | &nbsp;&nbsp; $(4613945) |
|  | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Service Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 873075 | &nbsp;&nbsp; $4884642 | &nbsp;&nbsp; 1000522 | &nbsp;&nbsp; $5526477 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 538790 | &nbsp;&nbsp; 2904079 | &nbsp;&nbsp; 501569 | &nbsp;&nbsp; 2683392 |
| Shares redeemed | &nbsp;&nbsp; (7979626) | &nbsp;&nbsp; (45107439) | &nbsp;&nbsp; (1599110) | &nbsp;&nbsp; (8852888) |
| NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | &nbsp;&nbsp; (6567761) | &nbsp;&nbsp; $(37318718) | &nbsp;&nbsp; (97019) | &nbsp;&nbsp; $(643019) |
| NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (6805428) | &nbsp;&nbsp; $(39023787) | &nbsp;&nbsp; (936049) | &nbsp;&nbsp; $(5256964) |

---

**4. FEDERAL TAX INFORMATION** 

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income | &nbsp;&nbsp; $6701037 | &nbsp;&nbsp; $6751334 |

---

Annual Financial Statements and Additional Information

**19**

------

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income | &nbsp;&nbsp; $6274858 |
| Net unrealized depreciation | &nbsp;&nbsp; $(1138948) |
| Capital loss carryforwards and deferrals | &nbsp;&nbsp; $(23680399) |
| TOTAL | &nbsp;&nbsp; $(18544489) |

---

At December 31, 2025, the cost of investments for federal tax purposes was $81,652,021. The net unrealized depreciation of investments for federal tax purposes was $1,138,948. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $1,604,295 and unrealized depreciation from investments for those securities having an excess of cost over value of $2,743,243. The difference between book-basis and tax-basis net unrealized depreciation is attributable to differing treatments for defaulted securities and discount accretion/premium amortization on debt securities.

As of December 31, 2025, the Fund had a capital loss carryforward of $23,680,399 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** |
| $— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $23680399 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $23680399 |

---

The Fund used capital loss carryforwards of $148,819 to offset capital gains realized during the year ended December 31, 2025.

**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 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 December 31, 2025, the Adviser voluntarily waived $88,205 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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 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 December 31, 2025, the annualized fee paid to FAS was 0.085% 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 Service Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at 0.25% 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.

For the year ended December 31, 2025, distribution services fees for the Fund were as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Distribution Services** <br>**Fees Incurred**<br>|
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $109417 |

---

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended December 31, 2025, FSC retained $796 of fees paid by the Fund.

Annual Financial Statements and Additional Information

**20**

------

**Expense Limitation** 

The Adviser and certain of its affiliates (which may include FAS and FSC) 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, if any) paid by the Fund's Primary Shares and Service Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.81% and 1.06% (the "Fee Limit"), respectively, up to but not including the later of (the "Termination Date"): (a) May 1, 2026; 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 approval 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 December 31, 2025, were as follows:

---

| | |
|:---|:---|
| Purchases | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $29363095 |
| Sales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $68263426 |

---

**7. 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 17, 2025. 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 December 31, 2025, the Fund had no outstanding loans. During the year ended December 31, 2025, the Fund did not utilize the LOC.

**8. 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**9. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**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

Annual Financial Statements and Additional Information

**21**

------

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. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the fiscal year ended December 31, 2025, 98.6% of total ordinary income distributions qualified as business interest income for purposes of 163(j) of the Code and the regulations thereunder.

Annual Financial Statements and Additional Information

**22**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes High Income Bond Fund II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes High Income Bond Fund II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian 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.

![](kpmgsig.jpg)

We have served as the auditor of one or more Federated Hermes' investment companies since 2006.

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**23**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes High Income Bond Fund II (the "Fund")**

At its meetings in May 2025 (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, as amended (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 such information deemed necessary to evaluate the terms of the Contract and 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.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 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.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation 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").

Annual Financial Statements and Additional Information

**24**

------

In addition, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace, 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

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 full 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Adviser, including the execution of portfolio transactions and the selection of brokers for those transactions. 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).

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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, 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, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard. 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.

Annual Financial Statements and Additional Information

**25**

------

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.

**<u>Fund Investment Performance</u>**

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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes' explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. ("Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement 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 also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

The Board considered that 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, 2024. 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.

**<u>Fund Expenses</u>**

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, 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 overall 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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other 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 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.

Annual Financial Statements and Additional Information

**26**

------

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 contractual advisory fee rate and other expenses 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 nature and extent of services offered and fees charged by Federated Hermes 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 statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and can cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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

Annual Financial Statements and Additional Information

**27**

------

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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts, including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**28**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes High Income Bond Fund II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916306

CUSIP 313916843

G00844-01 (2/26)© 2026 Federated Hermes, Inc.

------

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](imgd2513a8a1.gif)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Share Class** | **Primary**  | **Service**  |

---

------

Federated Hermes Kaufmann Fund II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_ac2317aa-79b3-4930-8048-c30655c8eeb3_1) | [1](#xx_ac2317aa-79b3-4930-8048-c30655c8eeb3_1)  |
| [Financial Highlights](#xx_2c12c09f-b903-4fd5-b4da-06996f823b6d_1) | [7](#xx_2c12c09f-b903-4fd5-b4da-06996f823b6d_1)  |
| [Statement of Assets and Liabilities](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_1) | [9](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_1)  |
| [Statement of Operations](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_2) | [10](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_2)  |
| [Statement of Changes in Net Assets](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_3) | [11](#xx_04e7e2eb-0bb9-42d9-a4fe-88208807920b_3)  |
| [Notes to Financial Statements](#xx_c0647370-08ab-4ef5-97b2-165070b68074_1) | [12](#xx_c0647370-08ab-4ef5-97b2-165070b68074_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_c76983e9-455e-45e7-948a-579ff7aa058e_1) | [19](#xx_c76983e9-455e-45e7-948a-579ff7aa058e_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_6836e76c-e36f-4ee3-80a1-aacf78b2f0ca_1) | [20](#xx_6836e76c-e36f-4ee3-80a1-aacf78b2f0ca_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Shares or** <br>**Principal** <br>**Amount**<br>|  | **Value** |
|  | COMMON STOCKS—97.7% |  |
|  | **Communication Services—1.7%** |  |
| 718 | Meta Platforms, Inc. | &nbsp;&nbsp; $473944 |
| 2214<br><sup>1</sup> <br>| Spotify Technology S.A. | &nbsp;&nbsp; 1285692 |
|  | TOTAL | &nbsp;&nbsp; 1759636 |
|  | **Consumer Discretionary—10.6%** |  |
| 7581<br><sup>1</sup> <br>| Amazon.com, Inc. | &nbsp;&nbsp; 1749847 |
| 13936<br><sup>1</sup> <br>| Birkenstock Holding PLC | &nbsp;&nbsp; 569982 |
| 10100<br><sup>1</sup> <br>| Chipotle Mexican Grill, Inc. | &nbsp;&nbsp; 373700 |
| 3216 | D. R. Horton, Inc. | &nbsp;&nbsp; 463200 |
| 3973<br><sup>1</sup> <br>| DoorDash, Inc. | &nbsp;&nbsp; 899805 |
| 10812<br><sup>1</sup> <br>| DraftKings, Inc. | &nbsp;&nbsp; 372582 |
| 3876<br><sup>1</sup> <br>| Floor & Decor Holdings, Inc. | &nbsp;&nbsp; 236010 |
| 318<br><sup>1</sup> <br>| Mercadolibre, Inc. | &nbsp;&nbsp; 640535 |
| 7181 | Moncler SpA | &nbsp;&nbsp; 461530 |
| 8620<br><sup>1</sup> <br>| On Holding AG | &nbsp;&nbsp; 400658 |
| 4241<br><sup>1</sup> <br>| Planet Fitness, Inc. | &nbsp;&nbsp; 460021 |
| 32000<br><sup>1</sup> <br>| Sportradar Group AG | &nbsp;&nbsp; 760640 |
| 2077 | Texas Roadhouse, Inc. | &nbsp;&nbsp; 344782 |
| 5574 | TJX Cos., Inc. | &nbsp;&nbsp; 856222 |
| 18691<br><sup>1</sup> <br>| Viking Holdings Ltd. | &nbsp;&nbsp; 1334724 |
| 4781 | Wingstop, Inc. | &nbsp;&nbsp; 1140221 |
|  | TOTAL | &nbsp;&nbsp; 11064459 |
|  | **Consumer Staples—2.5%** |  |
| 1236 | Costco Wholesale Corp. | &nbsp;&nbsp; 1065852 |
| 4131<br><sup>1</sup> <br>| Maplebear, Inc. | &nbsp;&nbsp; 185813 |
| 8468 | Philip Morris International, Inc. | &nbsp;&nbsp; 1358267 |
|  | TOTAL | &nbsp;&nbsp; 2609932 |
|  | **Financials—7.0%** |  |
| 9306 | Apollo Global Management, Inc. | &nbsp;&nbsp; 1347136 |
| 638 | BlackRock, Inc. | &nbsp;&nbsp; 682877 |
| 81555<br><sup>1</sup> <br>| Blue Owl Capital, Inc. | &nbsp;&nbsp; 1218432 |
| 16032<br><sup>1</sup> <br>| Chime Financial, Inc. | &nbsp;&nbsp; 403525 |
| 9615 | Hamilton Lane, Inc. | &nbsp;&nbsp; 1291390 |
| 1190 | JPMorgan Chase & Co. | &nbsp;&nbsp; 383442 |
| 842 | MSCI, Inc., Class A | &nbsp;&nbsp; 483081 |
| 2103 | S&P Global, Inc. | &nbsp;&nbsp; 1099007 |
| 10539<br><sup>1</sup> <br>| Toast, Inc. | &nbsp;&nbsp; 374240 |
|  | TOTAL | &nbsp;&nbsp; 7283130 |
|  | **Health Care—25.0%** |  |
| 58700<br><sup>1,2</sup> <br>| Albireo Pharma CVR, Rights | &nbsp;&nbsp; 126205 |
| 44440<br><sup>1,3</sup> <br>| Arcturus Therapeutics Holdings, Inc. | &nbsp;&nbsp; 272417 |
| 4636<br><sup>1</sup> <br>| Argenx SE | &nbsp;&nbsp; 3901907 |
| 161911<br><sup>1,2,3</sup> <br>| AstraZeneca PLC, Rights | &nbsp;&nbsp; 89051 |
| 117801<br><sup>1,3</sup> <br>| aTyr Pharma, Inc. | &nbsp;&nbsp; 92250 |
| 15602<br><sup>1</sup> <br>| Boston Scientific Corp. | &nbsp;&nbsp; 1487651 |
| 26339<br><sup>1</sup> <br>| Centessa Pharmaceuticals Ltd., ADR | &nbsp;&nbsp; 658738 |
| 56475<br><sup>1,2</sup> <br>| Contra Akouos, Inc., Rights | &nbsp;&nbsp; 29706 |
| 5558<br><sup>1</sup> <br>| Cytokinetics, Inc. | &nbsp;&nbsp; 353155 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Health Care—continued** |  |
| 5987<br><sup>1</sup> <br>| Dyne Therapeutics, Inc. | &nbsp;&nbsp; $117106 |
| 58633<br><sup>1</sup> <br>| EyePoint, Inc. | &nbsp;&nbsp; 1071225 |
| 22216<br><sup>1</sup> <br>| Forte Biosciences, Inc. | &nbsp;&nbsp; 605830 |
| 8879<br><sup>1,3</sup> <br>| Genmab A/S, ADR | &nbsp;&nbsp; 273473 |
| 19423<br><sup>1</sup> <br>| Guardant Health, Inc. | &nbsp;&nbsp; 1983865 |
| 42616<br><sup>1</sup> <br>| IDEAYA Biosciences, Inc. | &nbsp;&nbsp; 1473235 |
| 4181<br><sup>1</sup> <br>| Insulet Corp. | &nbsp;&nbsp; 1188408 |
| 2423<br><sup>1</sup> <br>| Intuitive Surgical, Inc. | &nbsp;&nbsp; 1372290 |
| 9287<br><sup>1</sup> <br>| Kymera Therapeutics, Inc. | &nbsp;&nbsp; 722622 |
| 735<br><sup>1</sup> <br>| Medline, Inc. | &nbsp;&nbsp; 30870 |
| 21275<br><sup>1</sup> <br>| Minerva Neurosciences, Inc. | &nbsp;&nbsp; 85525 |
| 65274<br><sup>1,2,4</sup> <br>| Minerva Neurosciences, Inc. - Restricted | &nbsp;&nbsp; 227689 |
| 7605<br><sup>1</sup> <br>| Natera, Inc. | &nbsp;&nbsp; 1742230 |
| 435683<br><sup>1,2</sup> <br>| Novartis AG, Rights | &nbsp;&nbsp; 505392 |
| 5009<br><sup>1</sup> <br>| Palvella Therapeutics, Inc. | &nbsp;&nbsp; 524292 |
| 165799<br><sup>1</sup> <br>| Rezolute, Inc. | &nbsp;&nbsp; 391286 |
| 15172<br><sup>1</sup> <br>| Rhythm Pharmaceuticals, Inc. | &nbsp;&nbsp; 1624011 |
| 8613<br><sup>1</sup> <br>| Scholar Rock Holding Corp. | &nbsp;&nbsp; 379403 |
| 2334 | Stryker Corp. | &nbsp;&nbsp; 820331 |
| 1967 | UCB S.A. | &nbsp;&nbsp; 548630 |
| 5865<br><sup>1</sup> <br>| Vaxcyte, Inc. | &nbsp;&nbsp; 270611 |
| 2232<br><sup>1</sup> <br>| Veeva Systems, Inc. | &nbsp;&nbsp; 498249 |
| 60127<br><sup>1</sup> <br>| Wave Life Sciences Ltd. | &nbsp;&nbsp; 1022159 |
| 7237<br><sup>1</sup> <br>| Xenon Pharmaceuticals, Inc. | &nbsp;&nbsp; 324362 |
| 36537<br><sup>1,3</sup> <br>| Zenas Biopharma, Inc. | &nbsp;&nbsp; 1326659 |
|  | TOTAL | &nbsp;&nbsp; 26140833 |
|  | **Industrials—20.0%** |  |
| 1720<br><sup>1</sup> <br>| Axon Enterprise, Inc. | &nbsp;&nbsp; 976839 |
| 13419<br><sup>1</sup> <br>| BETA Technologies, Inc. | &nbsp;&nbsp; 378550 |
| 1815 | Comfort Systems USA, Inc. | &nbsp;&nbsp; 1693921 |
| 1280 | Eaton Corp. PLC | &nbsp;&nbsp; 407693 |
| 7890 | GE Aerospace | &nbsp;&nbsp; 2430357 |
| 3668<br><sup>1</sup> <br>| GE Vernova, Inc. | &nbsp;&nbsp; 2397295 |
| 6157 | HEICO Corp. | &nbsp;&nbsp; 1992344 |
| 2680 | Howmet Aerospace, Inc. | &nbsp;&nbsp; 549454 |
| 18702<br><sup>1</sup> <br>| Loar Holdings, Inc. | &nbsp;&nbsp; 1271736 |
| 8017 | Quanta Services, Inc. | &nbsp;&nbsp; 3383655 |
| 3000<br><sup>1</sup> <br>| QXO, Inc. | &nbsp;&nbsp; 57870 |
| 3773 | Trane Technologies PLC | &nbsp;&nbsp; 1468451 |
| 10655<br><sup>1</sup> <br>| Uber Technologies, Inc. | &nbsp;&nbsp; 870620 |
| 8309 | UL Solutions, Inc. | &nbsp;&nbsp; 655248 |
| 5437 | Veralto Corp. | &nbsp;&nbsp; 542504 |
| 1758 | Vertiv Holdings Co. | &nbsp;&nbsp; 284813 |
| 7089 | Westinghouse Air Brake Technologies Corp. | &nbsp;&nbsp; 1513147 |
|  | TOTAL | &nbsp;&nbsp; 20874497 |
|  | **Information Technology—22.5%** |  |
| 3900<br><sup>1</sup> <br>| Advanced Micro Devices, Inc. | &nbsp;&nbsp; 835224 |
| 316<br><sup>1</sup> <br>| AppLovin Corp. | &nbsp;&nbsp; 212927 |
| 2857<br><sup>1</sup> <br>| Astera Labs, Inc. | &nbsp;&nbsp; 475290 |
| 502<br><sup>1</sup> <br>| CloudFlare, Inc. | &nbsp;&nbsp; 98969 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Information Technology—continued** |  |
| 2894<br><sup>1</sup> <br>| Commvault Systems, Inc. | &nbsp;&nbsp; $362792 |
| 2692<br><sup>1</sup> <br>| Crowdstrike Holdings, Inc. | &nbsp;&nbsp; 1261902 |
| 2299<br><sup>1</sup> <br>| CyberArk Software Ltd. | &nbsp;&nbsp; 1025492 |
| 6596<br><sup>1</sup> <br>| Datadog, Inc. | &nbsp;&nbsp; 896990 |
| 11597<br><sup>1</sup> <br>| Elastic N.V. | &nbsp;&nbsp; 874878 |
| 110<br><sup>1</sup> <br>| Impinj, Inc. | &nbsp;&nbsp; 19141 |
| 973 | KLA Corp. | &nbsp;&nbsp; 1182273 |
| 31807<br><sup>1</sup> <br>| Klaviyo, Inc. | &nbsp;&nbsp; 1032773 |
| 3116 | Micron Technology, Inc. | &nbsp;&nbsp; 889338 |
| 2351 | Microsoft Corp. | &nbsp;&nbsp; 1136991 |
| 2966<br><sup>1</sup> <br>| MongoDB, Inc. | &nbsp;&nbsp; 1244801 |
| 1685 | Motorola Solutions, Inc. | &nbsp;&nbsp; 645894 |
| 8480 | NVIDIA Corp. | &nbsp;&nbsp; 1581520 |
| 863<br><sup>1</sup> <br>| Palantir Technologies, Inc. | &nbsp;&nbsp; 153398 |
| 6278<br><sup>1</sup> <br>| Q2 Holdings, Inc. | &nbsp;&nbsp; 453020 |
| 36100<br><sup>1</sup> <br>| QXO, Inc. | &nbsp;&nbsp; 696369 |
| 15300<br><sup>1</sup> <br>| Rubrik, Inc. | &nbsp;&nbsp; 1170144 |
| 7925<br><sup>1</sup> <br>| ServiceNow, Inc. | &nbsp;&nbsp; 1214031 |
| 15308<br><sup>1</sup> <br>| Shopify, Inc. | &nbsp;&nbsp; 2464129 |
| 4520<br><sup>1</sup> <br>| Snowflake, Inc. | &nbsp;&nbsp; 991507 |
| 4710 | Taiwan Semiconductor Manufacturing Co. Ltd., ADR | &nbsp;&nbsp; 1431322 |
| 1955<br><sup>1</sup> <br>| Tyler Technologies, Inc. | &nbsp;&nbsp; 887472 |
| 1049<br><sup>1</sup> <br>| Vertex, Inc. | &nbsp;&nbsp; 20948 |
| 2095<br><sup>1</sup> <br>| Wix.com Ltd. | &nbsp;&nbsp; 217650 |
|  | TOTAL | &nbsp;&nbsp; 23477185 |
|  | **Materials—3.8%** |  |
| 10710 | Agnico Eagle Mines Ltd. | &nbsp;&nbsp; 1815666 |
| 1591 | Eagle Materials, Inc. | &nbsp;&nbsp; 328828 |
| 1510 | Martin Marietta Materials | &nbsp;&nbsp; 940217 |
| 2647 | Sherwin-Williams Co. | &nbsp;&nbsp; 857707 |
|  | TOTAL | &nbsp;&nbsp; 3942418 |
|  | **Real Estate—2.5%** |  |
| 21138<br><sup>1</sup> <br>| CoStar Group, Inc. | &nbsp;&nbsp; 1421319 |
| 6382 | Gaming and Leisure Properties, Inc. | &nbsp;&nbsp; 285212 |
| 4216 | Ryman Hospitality Properties, Inc. | &nbsp;&nbsp; 398918 |
| 19061 | VICI Properties, Inc. | &nbsp;&nbsp; 535995 |
|  | TOTAL | &nbsp;&nbsp; 2641444 |
|  | **Utilities—2.1%** |  |
| 4220 | American Electric Power Co., Inc. | &nbsp;&nbsp; 486608 |
| 4243 | Duke Energy Corp. | &nbsp;&nbsp; 497322 |
| 10137 | NextEra Energy, Inc. | &nbsp;&nbsp; 813798 |
| 2768 | Vistra Corp. | &nbsp;&nbsp; 446562 |
|  | TOTAL | &nbsp;&nbsp; 2244290 |
|  | TOTAL COMMON STOCKS <br>(IDENTIFIED COST $50,526,905)<br>| &nbsp;&nbsp; 102037824 |
|  | PREFERRED STOCKS—0.4% |  |
|  | **Health Care—0.4%** |  |
| 60006<br><sup>2,4</sup> <br>| CeQur S.A. | &nbsp;&nbsp; 309552 |
| 4307<br><sup>1,2,4</sup> <br>| Sail Biomedicines, Inc. | &nbsp;&nbsp; 135160 |
|  | TOTAL PREFERRED STOCKS <br>(IDENTIFIED COST $441,869)<br>| &nbsp;&nbsp; 444712 |

---

Annual Financial Statements and Additional Information

**3**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | WARRANTS—0.6% |  |
|  | **Health Care—0.6%** |  |
| 138<br><sup>1,2,4</sup> <br>| Minerva Neurosciences, Inc., Tranche A Warrants 12/31/2099 | &nbsp;&nbsp; $146384 |
| 69<br><sup>1,2,4</sup> <br>| Minerva Neurosciences, Inc., Tranche B Warrants 12/31/2099 | &nbsp;&nbsp; 89875 |
| 5250<br><sup>1</sup> <br>| Minerva Neurosciences, Inc., Warrants 12/31/2099 | &nbsp;&nbsp; 21105 |
| 5696<br><sup>1</sup> <br>| Rezolute, Inc., Warrants 10/8/2027 | &nbsp;&nbsp; 6712 |
| 1400<br><sup>1</sup> <br>| Rezolute, Inc., Warrants 1/1/2099 | &nbsp;&nbsp; 3304 |
| 68385<br><sup>1</sup> <br>| Rezolute, Inc., Warrants 4/30/2099 | &nbsp;&nbsp; 161388 |
| 25100<br><sup>1</sup> <br>| Rezolute, Inc., Warrants 6/24/2099 | &nbsp;&nbsp; 59236 |
| 44952<br><sup>1</sup> <br>| Rezolute, Inc., Warrants 12/31/2099 | &nbsp;&nbsp; 106087 |
| 644<br><sup>1</sup> <br>| Scynexis, Inc., Warrants 4/26/2029 | &nbsp;&nbsp; 62 |
| 53000<br><sup>1</sup> <br>| Scynexis, Inc., Warrants 1/1/2099 | &nbsp;&nbsp; 33517 |
|  | TOTAL WARRANTS <br>(IDENTIFIED COST $886,061)<br>| &nbsp;&nbsp; 627670 |
|  | INVESTMENT COMPANY—1.3% |  |
| 1361567 | Federated Hermes Government Obligations Fund, Premier Shares, 3.68%<sup>5</sup> <br>(IDENTIFIED COST $1,361,567)<br>| &nbsp;&nbsp; 1361567 |
|  | REPURCHASE AGREEMENT—1.3% |  |
| $1331000 | Interest in $292,000,000 joint repurchase agreement 3.85%, dated 12/31/2025 under which Bank of America, N.A. will <br> repurchase securities provided as collateral for $292,062,456 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 10/2/2050 and the market value of those underlying securities was $297,903,705. <br>(IDENTIFIED COST $1,331,000)<br>| &nbsp;&nbsp; 1331000 |
|  | TOTAL INVESTMENT IN SECURITIES—101.3% <br>(IDENTIFIED COST $54,547,402)<sup>6</sup> <br>| &nbsp;&nbsp; 105802773 |
|  | OTHER ASSETS AND LIABILITIES - NET—(1.3)%<sup>7</sup> <br>| &nbsp;&nbsp; (1313869) |
|  | NET ASSETS—100% | &nbsp;&nbsp; $104488904 |

---

Annual Financial Statements and Additional Information

**4**

------

An affiliated company is a company in which the Fund, alone or in combination with other Federated Hermes funds, has ownership of at least 5% of the voting shares. Transactions with affiliated companies during the period ended December 31, 2025, were as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Affiliated** | **Value as of** <br>**12/31/2024**<br>| **Purchases** <br>**at Cost\***<br>| **Proceeds** <br>**from Sales\***<br>| **Change in** <br>**Unrealized** <br>**Appreciation/** <br>**(Depreciation)\***<br>| **Net** <br>**Realized Gain/** <br>**(Loss)\***<br>| **Value as of** <br>**12/31/2025**<br>| **Shares** <br>**Held as of** <br>**12/31/2025**<br>| **Dividend** <br>**Income\***<br>|
| **Health Care:** |  |  |  |  |  |  |  |  |
| Arcturus Therapeutics Holdings, Inc. | $1020915 | $— | $(167959) | $(12737) | $(567802) | $272417 | 44440 | $— |
| aTyr Pharma, Inc. | $711692 | $— | $(77068) | $(230723) | $(311651) | $92250 | 117801 | $— |
| EyePoint, Inc. | $431273 | $240000 | $(218817) | $629067 | $(10298) | $1071225 | 58633 | $— |
| Forte Biosciences, Inc. | $— | $333342 | $(79655) | $353449 | $(1306) | $605830 | 22216 | $— |
| IDEAYA Biosciences, Inc.\*\* | $1966050 | $— | $(937377) | $771396 | $(326834) | $1473235 | 42616 | $— |
| Minerva Neurosciences, Inc. | $47231 | $— | $— | $38294 | $— | $85525 | 21275 | $— |
| Minerva Neurosciences, Inc. - Restricted | $— | $138000 | $— | $89689 | $— | $227689 | 65274 | $— |
| Minerva Neurosciences, Inc., Tranche A War-<br> rants 12/31/2099<br>| $— | $— | $— | $146384 | $— | $146384 | 138 | $— |
| Minerva Neurosciences, Inc., Tranche B War-<br> rants 12/31/2099<br>| $— | $— | $— | $89875 | $— | $89875 | 69 | $— |
| Minerva Neurosciences, Inc., Warrants <br> 12/31/2099<br>| $11655 | $— | $— | $9450 | $— | $21105 | 5250 | $— |
| Rezolute, Inc. | $477329 | $222251 | $— | $(308294) | $— | $391286 | 165799 | $— |
| Rezolute, Inc., Warrants 10/8/2027 | $6458 | $— | $— | $254 | $— | $6712 | 5696 | $— |
| Rezolute, Inc., Warrants 1/1/2099 | $6860 | $— | $— | $(3556) | $— | $3304 | 1400 | $— |
| Rezolute, Inc., Warrants 4/30/2099 | $— | $222182 | $— | $(60794) | $— | $161388 | 68385 | $— |
| Rezolute, Inc., Warrants 6/24/2099 | $122990 | $— | $— | $(63754) | $— | $59236 | 25100 | $— |
| Rezolute, Inc., Warrants 12/31/2099 | $220265 | $— | $— | $(114178) | $— | $106087 | 44952 | $— |
| Scynexis, Inc., Warrants 4/26/2029 | $299 | $— | $— | $(237) | $— | $62 | 644 | $— |
| Scynexis, Inc., Warrants 1/1/2099 | $64130 | $— | $— | $(30613) | $— | $33517 | 53000 | $— |
| Affiliated issuers no longer in the portfolio at <br> period end<br>| $695226 | $7402 | $(3564038) | $89400 | $2772010 | $— |  | $— |
| TOTAL OF AFFILIATED COMPANIES <br>TRANSACTIONS<br>| $5782373 | $1163177 | $(5044914) | $1392372 | $1554119 | $4847127 | 742688 | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* A portion of the amount shown may have been recorded when the Fund no longer had ownership of at least 5% of the voting shares.

\*\* At December 31, 2025, the Fund no longer has ownership of at least 5% of the voting shares.

Transactions with affiliated investment companies, which are funds managed by the Adviser or an affiliate of the Adviser, during the period ended December 31, 2025, were as follows:

---

| | |
|:---|:---|
|  | **Federated Hermes** <br>**Government** <br>**Obligations Fund,** <br>**Premier Shares\***<br>|
| Value as of 12/31/2024 | &nbsp;&nbsp; $1061889 |
| Purchases at Cost | &nbsp;&nbsp; $24828988 |
| Proceeds from Sales | &nbsp;&nbsp; $(24529310) |
| Change in Unrealized Appreciation/Depreciation | &nbsp;&nbsp; $— |
| Net Realized Gain/(Loss) | &nbsp;&nbsp; $— |
| Value as of 12/31/2025 | &nbsp;&nbsp; $1361567 |
| Shares Held as of 12/31/2025 | &nbsp;&nbsp; 1361567 |
| Dividend Income | &nbsp;&nbsp; $43721 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* All or a portion of the balance/activity for the fund relates to cash collateral received on securities lending transactions.

Annual Financial Statements and Additional Information

**5**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Non-income-producing security. |
| 2 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established <br> by and under the general supervision of the Fund's Adviser acting through its Valuation Committee.<br>|
| 3 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers. |
| 4 | 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 <br> the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2025, these restricted securities amounted to $908,660, <br> which represented 0.8% of net assets.<br>|
| 5 | 7-day net yield. |
| 6 | The cost of investments for federal tax purposes amounts to $54,701,174. |
| 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 net assets at December 31, 2025.

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.

The following is a summary of the inputs used, as of December 31, 2025, in valuing the Fund's assets carried at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** |
|  | **Level 1—** <br>**Quoted** <br>**Prices**<br>| **Level 2—** <br>**Other** <br>**Significant** <br>**Observable** <br>**Inputs**<br>| **Level 3—** <br>**Significant** <br>**Unobservable** <br>**Inputs**<br>| **Total** |
| **Equity Securities:** |  |  |  |  |
| Common Stocks |  |  |  |  |
| Domestic | &nbsp;&nbsp; $84938113 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $888992 | &nbsp;&nbsp; $85827105 |
| International | &nbsp;&nbsp; 11209601 | &nbsp;&nbsp; 4912067 | &nbsp;&nbsp; 89051 | &nbsp;&nbsp; 16210719 |
| Preferred Stocks |  |  |  |  |
| Domestic | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 135160 | &nbsp;&nbsp; 135160 |
| International | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 309552 | &nbsp;&nbsp; 309552 |
| **Debt Securities:** |  |  |  |  |
| Warrants | &nbsp;&nbsp; 351120 | &nbsp;&nbsp; 40291 | &nbsp;&nbsp; 236259 | &nbsp;&nbsp; 627670 |
| **Investment Company** | &nbsp;&nbsp; 1361567 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 1361567 |
| **Repurchase Agreement** | &nbsp;&nbsp; — | &nbsp;&nbsp; 1331000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 1331000 |
| TOTAL SECURITIES | &nbsp;&nbsp; $97860401 | &nbsp;&nbsp; $6283358 | &nbsp;&nbsp; $1659014 | &nbsp;&nbsp; $105802773 |

---

Following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

---

| | |
|:---|:---|
|  | **Investments in** <br>**Securities**<br>|
| Balance as of 12/31/2024 | &nbsp;&nbsp; $617450 |
| Realized gain (loss) | &nbsp;&nbsp; - |
| Change in unrealized appreciation/depreciation | &nbsp;&nbsp; 398171 |
| Purchases | &nbsp;&nbsp; 643393 |
| Balance as of 12/31/2025 | &nbsp;&nbsp; $1659014 |
| Total change in unrealized appreciation/depreciation attributable to <br>investments still held at 12/31/2025<br>| &nbsp;&nbsp; $398171 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The following acronym(s) are used throughout this portfolio: <br> ADR —American Depositary Receipt <br> CVR —Contingent Value Right

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**6**

------

Financial Highlights–Primary Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$19.64** | &nbsp;&nbsp; **$17.40** | &nbsp;&nbsp; **$15.10** | &nbsp;&nbsp; **$24.31** | &nbsp;&nbsp; **$25.46** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| &nbsp;&nbsp; (0.18) | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (0.02) | &nbsp;&nbsp; (0.08) | &nbsp;&nbsp; (0.24) |
| Net realized and unrealized gain (loss) | 2.07 | 3.07 | 2.32 | &nbsp;&nbsp; (6.87) | 0.83 |
| Total From Investment Operations | 1.89 | 2.91 | 2.30 | &nbsp;&nbsp; (6.95) | 0.59 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; — | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — |
| Distributions from net realized gain | &nbsp;&nbsp; (2.03) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.26) | &nbsp;&nbsp; (1.74) |
| Total Distributions | &nbsp;&nbsp; (2.03) | &nbsp;&nbsp; (0.67) | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.26) | &nbsp;&nbsp; (1.74) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$19.50** | &nbsp;&nbsp; **$19.64** | &nbsp;&nbsp; **$17.40** | &nbsp;&nbsp; **$15.10** | &nbsp;&nbsp; **$24.31** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 11.52% | &nbsp;&nbsp; 17.05% | &nbsp;&nbsp; 15.23% | &nbsp;&nbsp; (30.09)% | &nbsp;&nbsp; 2.51% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 1.54% | &nbsp;&nbsp; 1.56% | &nbsp;&nbsp; 1.54% | &nbsp;&nbsp; 1.54% | &nbsp;&nbsp; 1.50% |
| Net investment loss | &nbsp;&nbsp; (0.97)% | &nbsp;&nbsp; (0.89)% | &nbsp;&nbsp; (0.15)% | &nbsp;&nbsp; (0.51)% | &nbsp;&nbsp; (0.99)% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; —% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $31680 | &nbsp;&nbsp; $33718 | &nbsp;&nbsp; $33266 | &nbsp;&nbsp; $34430 | &nbsp;&nbsp; $55366 |
| Portfolio turnover<sup>6</sup> <br>| &nbsp;&nbsp; 25% | &nbsp;&nbsp; 47% | &nbsp;&nbsp; 56% | &nbsp;&nbsp; 41% | &nbsp;&nbsp; 34% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 4 | This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above. Amount does not reflect expense waiver/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Represents less than 0.01%. |
| 6 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**7**

------

Financial Highlights–Service Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$17.74** | &nbsp;&nbsp; **$15.78** | &nbsp;&nbsp; **$13.73** | &nbsp;&nbsp; **$22.40** | &nbsp;&nbsp; **$23.65** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| &nbsp;&nbsp; (0.21) | &nbsp;&nbsp; (0.19) | &nbsp;&nbsp; (0.05) | &nbsp;&nbsp; (0.11) | &nbsp;&nbsp; (0.28) |
| Net realized and unrealized gain (loss) | 1.84 | 2.77 | 2.10 | &nbsp;&nbsp; (6.30) | 0.77 |
| Total From Investment Operations | 1.63 | 2.58 | 2.05 | &nbsp;&nbsp; (6.41) | 0.49 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; — | &nbsp;&nbsp; (0.11) | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — |
| Distributions from net realized gain | &nbsp;&nbsp; (2.03) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.26) | &nbsp;&nbsp; (1.74) |
| Total Distributions | &nbsp;&nbsp; (2.03) | &nbsp;&nbsp; (0.62) | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.26) | &nbsp;&nbsp; (1.74) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$17.34** | &nbsp;&nbsp; **$17.74** | &nbsp;&nbsp; **$15.78** | &nbsp;&nbsp; **$13.73** | &nbsp;&nbsp; **$22.40** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 11.26% | &nbsp;&nbsp; 16.70% | &nbsp;&nbsp; 14.93% | &nbsp;&nbsp; (30.26)% | &nbsp;&nbsp; 2.26% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 1.79% | &nbsp;&nbsp; 1.81% | &nbsp;&nbsp; 1.79% | &nbsp;&nbsp; 1.79% | &nbsp;&nbsp; 1.75% |
| Net investment loss | &nbsp;&nbsp; (1.22)% | &nbsp;&nbsp; (1.14)% | &nbsp;&nbsp; (0.38)% | &nbsp;&nbsp; (0.73)% | &nbsp;&nbsp; (1.24)% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; 0.02% | &nbsp;&nbsp; 0.00%<sup>5</sup> <br>| &nbsp;&nbsp; —% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $72809 | &nbsp;&nbsp; $104963 | &nbsp;&nbsp; $90210 | &nbsp;&nbsp; $108981 | &nbsp;&nbsp; $150983 |
| Portfolio turnover<sup>6</sup> <br>| &nbsp;&nbsp; 25% | &nbsp;&nbsp; 47% | &nbsp;&nbsp; 56% | &nbsp;&nbsp; 41% | &nbsp;&nbsp; 34% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 4 | This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above. Amount does not reflect expense waiver/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Represents less than 0.01%. |
| 6 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**8**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in securities, at value including $1,288,482 of securities loaned and $6,208,694 of investments in affiliated holdings\* (identified cost <br> $54,547,402, including $6,978,808 of identified cost in affiliated holdings)<br>| &nbsp;&nbsp; $105802773 |
| Cash | &nbsp;&nbsp; 4067 |
| Cash denominated in foreign currencies (identified cost $29,840) | &nbsp;&nbsp; 30878 |
| Income receivable | &nbsp;&nbsp; 45982 |
| Receivable for investments sold | &nbsp;&nbsp; 59282 |
| Receivable for shares sold | &nbsp;&nbsp; 26819 |
| Total Assets | &nbsp;&nbsp; 105969801 |
| **Liabilities:** |  |
| Payable for shares redeemed | &nbsp;&nbsp; 27943 |
| Payable for collateral due to broker for securities lending (Note 2) | &nbsp;&nbsp; 1361567 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 3621 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 223 |
| Payable for portfolio accounting fees | &nbsp;&nbsp; 18386 |
| Payable for distribution services fee (Note 5) | &nbsp;&nbsp; 15754 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 53403 |
| Total Liabilities | &nbsp;&nbsp; 1480897 |
| Net assets for 5,823,035 shares outstanding | &nbsp;&nbsp; $104488904 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $31773416 |
| Total distributable earnings (loss) | &nbsp;&nbsp; 72715488 |
| Net Assets | &nbsp;&nbsp; $104488904 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| **Primary Shares:** |  |
| $31,679,641 ÷ 1,624,637 shares outstanding, no par value, unlimited shares authorized | $19.50 |
| **Service Shares:** |  |
| $72,809,263 ÷ 4,198,398 shares outstanding, no par value, unlimited shares authorized | $17.34 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**9**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Dividends (net of foreign taxes withheld of $9,303) | &nbsp;&nbsp; $664028 |
| Interest | &nbsp;&nbsp; 69572 |
| Net income on securities loaned (includes $43,721 earned from affiliated holdings related to cash collateral balances\*) (Note 2) | &nbsp;&nbsp; 15515 |
| TOTAL INCOME | &nbsp;&nbsp; 749115 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 1702311 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 103784 |
| Custodian fees | &nbsp;&nbsp; 24831 |
| Transfer agent fees | &nbsp;&nbsp; 13680 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 2055 |
| Auditing fees | &nbsp;&nbsp; 41482 |
| Legal fees | &nbsp;&nbsp; 14984 |
| Portfolio accounting fees | &nbsp;&nbsp; 64687 |
| Distribution services fee (Note 5) | &nbsp;&nbsp; 245468 |
| Printing and postage | &nbsp;&nbsp; 35679 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 24497 |
| TOTAL EXPENSES | &nbsp;&nbsp; 2273458 |
| Waiver of investment adviser fee (Note 5) | &nbsp;&nbsp; (4989) |
| Net expenses | &nbsp;&nbsp; 2268469 |
| Net investment income (loss) | &nbsp;&nbsp; (1519354) |
| **Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions:** |  |
| Net realized gain on investments (including net realized gain of $1,554,119 on sales of investments in affiliated holdings\*) | &nbsp;&nbsp; 22545031 |
| Net realized loss on foreign currency transactions | (424) |
| Net change in unrealized appreciation of investments (including net change in unrealized depreciation of $1,392,372 on investments in affiliated <br> holdings\*)<br>| &nbsp;&nbsp; (5404121) |
| Net change in unrealized appreciation/depreciation of translation of assets and liabilities in foreign currency | &nbsp;&nbsp; 1415 |
| Net realized and unrealized gain (loss) on investments and foreign currency transactions | &nbsp;&nbsp; 17141901 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $15622547 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**10**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment loss | &nbsp;&nbsp; $(1519354) | &nbsp;&nbsp; $(1423545) |
| Net realized gain (loss) | &nbsp;&nbsp; 22544607 | &nbsp;&nbsp; 16192287 |
| Net change in unrealized appreciation/depreciation | &nbsp;&nbsp; (5402706) | &nbsp;&nbsp; 5747568 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 15622547 | &nbsp;&nbsp; 20516310 |
| **Distributions to Shareholders:** |  |  |
| Primary Shares | &nbsp;&nbsp; (3377137) | &nbsp;&nbsp; (1230987) |
| Service Shares | &nbsp;&nbsp; (11803131) | &nbsp;&nbsp; (3413207) |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | &nbsp;&nbsp; (15180268) | &nbsp;&nbsp; (4644194) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 6930866 | &nbsp;&nbsp; 22986243 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 15180253 | &nbsp;&nbsp; 4644189 |
| Cost of shares redeemed | &nbsp;&nbsp; (56744712) | &nbsp;&nbsp; (28297636) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (34633593) | &nbsp;&nbsp; (667204) |
| Change in net assets | &nbsp;&nbsp; (34191314) | &nbsp;&nbsp; 15204912 |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 138680218 | &nbsp;&nbsp; 123475306 |
| End of period | &nbsp;&nbsp; $104488904 | &nbsp;&nbsp; $138680218 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**11**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes Kaufmann Fund II (the "Fund"), a 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: Primary Shares and Service Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is capital appreciation.

Effective August 1, 2024, the Fund's Board of Trustees (the"Trustees") approved the replacement of Federated Equity Management Company of Pennsylvania with Federated Global Investment Management Corp. ("Fed Global") as Adviser to the Fund. Previously, Fed Global served as the Fund's Sub-Adviser.

**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:

■

Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.

■

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.

■

Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by Fed Global (the "Adviser").

■

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 ask quotations.

■

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.

■

For securities that are fair valued in accordance with procedures established by and under the general supervision of the Adviser, 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 Adviser's valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser's 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 and Significant Events Procedures** 

Pursuant to Rule 2a-5 under the Act, the Trustees have designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.

The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review any changes made to the procedures.

As of December 31, 2025, investments valued at $1,659,014 were fair valued utilizing significant unobservable inputs. The Fund's investments in these securities are illiquid and executed trade prices are unavailable to utilize as a source for evaluations, therefore the inputs utilized are less observable. Inputs considered by the Adviser in evaluating these investments include the following:

■

Contingent Value Rights–values reflect the probability that the contingencies will be resolved and payment received.

Annual Financial Statements and Additional Information

**12**

------

■

Private Investment in Public Equities–any unregistered shares are valued based on the common shares public price less a discount factor to reflect the illiquidity of the shares held.

■

Warrants related to Private Investment in Public Equity–warrants received are valued based on the Black-Sholes warrant model less a discount factor to reflect the illiquidity of the underlying shares.

■

Private Equity Shares–investments in non-public entities are valued at their initial investment adjusted for an applicable index movement or implied value based on current fundraising.

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 ask 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 Adviser.

The Adviser has also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■

With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;

■

Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;

■

Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Adviser has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Adviser. The Trustees periodically review fair valuations made in response to significant events.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Repurchase agreements are subject to Master Netting Agreements (MNA) which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Amortization/accretion of premium and discount is included in investment income. Distributions of net investment income and capital gains, if any, are declared and paid at least annually. Non-cash dividends included in dividend income, if any, are recorded at fair value.

Annual Financial Statements and Additional Information

**13**

------

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 $4,989 is disclosed in Note 5.

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.

The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.

**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.

**Foreign Currency Translation** 

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at period end, resulting from changes in the exchange rate.

**Securities Lending** 

The Fund participates in a securities lending program providing for the lending of equity securities to qualified brokers. The term of the loans within the program is one year or less. The Fund receives cash collateral for securities loaned, which generally is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund's securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings from collateral invested in affiliated holdings as presented parenthetically on the Statement of Operations do not reflect fees and rebates and are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.

Securities lending transactions are subject to MNA. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated below, the cash collateral received by the Fund exceeds the market value of the securities loaned reducing the net settlement amount to zero. The chart below identifies the amount of collateral received as well as the market value of securities on loan. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.

As of December 31, 2025, securities subject to this type of arrangement and related collateral were as follows:

---

| | |
|:---|:---|
| **Fair Value of** <br>**Securities Loaned**<br>| **Collateral** <br>**Received**<br>|
| $1288482 | &nbsp;&nbsp; $1361567 |

---

Annual Financial Statements and Additional Information

**14**

------

**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 Adviser.

Additional information on restricted securities held at December 31, 2025, is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Security** | **Acquisition** <br>**Date**<br>| **Cost** | **Value** |
| CeQur S.A. | &nbsp;&nbsp; 3/26/2021 | &nbsp;&nbsp; $321274 | &nbsp;&nbsp; $309552 |
| Minerva Neurosciences, Inc. - Restricted | &nbsp;&nbsp; 10/21/2025 | &nbsp;&nbsp; $138000 | &nbsp;&nbsp; $227689 |
| Minerva Neurosciences, Inc., Tranche A Warrants 12/31/2099 | &nbsp;&nbsp; 10/21/2025 | &nbsp;&nbsp; $0 | &nbsp;&nbsp; $146384 |
| Minerva Neurosciences, Inc., Tranche B Warrants 12/31/2099 | &nbsp;&nbsp; 10/21/2025 | &nbsp;&nbsp; $0 | &nbsp;&nbsp; $89875 |
| Sail Biomedicines, Inc. | &nbsp;&nbsp; 7/28/2021 | &nbsp;&nbsp; $120596 | &nbsp;&nbsp; $135160 |

---

**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** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Primary Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 51365 | &nbsp;&nbsp; $964372 | &nbsp;&nbsp; 72333 | &nbsp;&nbsp; $1362807 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 204551 | &nbsp;&nbsp; 3377135 | &nbsp;&nbsp; 68085 | &nbsp;&nbsp; 1230985 |
| Shares redeemed | &nbsp;&nbsp; (348180) | &nbsp;&nbsp; (6608929) | &nbsp;&nbsp; (335209) | &nbsp;&nbsp; (6249699) |
| NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | &nbsp;&nbsp; (92264) | &nbsp;&nbsp; $(2267422) | &nbsp;&nbsp; (194791) | &nbsp;&nbsp; $(3655907) |
|  | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Service Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 358621 | &nbsp;&nbsp; $5966494 | &nbsp;&nbsp; 1288557 | &nbsp;&nbsp; $21623436 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 802387 | &nbsp;&nbsp; 11803118 | &nbsp;&nbsp; 208504 | &nbsp;&nbsp; 3413204 |
| Shares redeemed | &nbsp;&nbsp; (2878286) | &nbsp;&nbsp; (50135783) | &nbsp;&nbsp; (1299232) | &nbsp;&nbsp; (22047937) |
| NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | &nbsp;&nbsp; (1717278) | &nbsp;&nbsp; $(32366171) | &nbsp;&nbsp; 197829 | &nbsp;&nbsp; $2988703 |
| NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (1809542) | &nbsp;&nbsp; $(34633593) | &nbsp;&nbsp; 3038 | &nbsp;&nbsp; $(667204) |

---

**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 primarily result from net operating losses.

For the year ended December 31, 2025, permanent differences identified and reclassified among the components of net assets were as follows:

---

| | |
|:---|:---|
| **Increase (Decrease)** | **Increase (Decrease)** |
| **Paid-In Capital**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Distributable** <br>**Earnings (Loss)** <br>|
| $(2167205) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $2167205 |

---

Annual Financial Statements and Additional Information

**15**

------

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income<sup>1</sup> <br>| &nbsp;&nbsp; $— | &nbsp;&nbsp; $887742 |
| Long-term capital gains | &nbsp;&nbsp; $15180268 | &nbsp;&nbsp; $3756452 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 For tax purposes, short-term capital gains distributions are considered ordinary income distributions.

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Net unrealized appreciation | &nbsp;&nbsp; $51101599 |
| Undistributed long-term capital gains | &nbsp;&nbsp; $21612794 |
| Other temporary differences | &nbsp;&nbsp; $1095 |
| TOTAL | &nbsp;&nbsp; $72715488 |

---

At December 31, 2025, the cost of investments for federal tax purposes was $54,701,174. The net unrealized appreciation of investments for federal tax purposes was $51,101,599. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $54,831,150 and unrealized depreciation from investments for those securities having an excess of cost over value of $3,729,551. The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for deferral of losses on wash sales, non-REITs adjustments and passive foreign investment company adjustments.

**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 1.30% of the Fund's average daily net assets. 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 December 31, 2025, the Adviser voluntarily waived $4,989 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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 0.100% | on assets up to $50 billion |
| 0.075% | on assets over $50 billion |

---

FAS may voluntarily choose to waive any portion of its fee. For the year ended December 31, 2025, 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 Primary Shares and Service 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:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage of Average Daily** <br>**Net Assets of Class**<br>|
| Primary Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.25% |
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.25% |

---

FSC may voluntarily choose to waive any portion of its fee. For the year ended December 31, 2025, distribution services fees for the Fund were as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Distribution Services** <br>**Fees Incurred**<br>|
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $245468 |

---

Annual Financial Statements and Additional Information

**16**

------

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended December 31, 2025, FSC retained $760 of fees paid by the Fund. For the year ended December 31, 2025, the Fund's Primary Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.

**Expense Limitation** 

The Adviser and certain of its affiliates (which may include FSC and FAS) 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, if any) paid by the Fund's Primary Shares and Service Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.54% and 1.79% (the "Fee Limit"), respectively, up to but not including the later of (the "Termination Date"): (a) May 1, 2026 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 approval of the Trustees.

**Interfund Transactions** 

During the year ended December 31, 2025, 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 $69,801 and $192,911, respectively. Net realized gain recognized on these transactions was $5,596.

**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 December 31, 2025, were as follows:

---

| | |
|:---|:---|
| Purchases | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $31931400 |
| Sales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $81563694 |

---

**7. CONCENTRATION OF RISK** 

The Fund may invest a portion of its assets in securities of companies that are deemed by the Fund's management to be classified in similar business sectors. Economic developments may have an effect on the liquidity and volatility of the portfolio securities. A substantial portion of the Fund's portfolio may be comprised of entities in the Health Care sector. As a result, the Fund may be more susceptible to any economic, business, political or other developments which generally affect these entities.

**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 17, 2025. 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 December 31, 2025, the Fund had no outstanding loans. During the year ended December 31, 2025, 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**10. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the

Annual Financial Statements and Additional Information

**17**

------

Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**11. 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.

**12. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the year ended December 31, 2025, the amount of long-term capital gains designated by the Fund was $15,180,268.

Annual Financial Statements and Additional Information

**18**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes Kaufmann Fund II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes Kaufmann Fund II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian, transfer agent of the underlying fund 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.

![](kpmgsig.jpg)

We have served as the auditor of one or more Federated Hermes' investment companies since 2006.

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**19**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes Kaufmann Fund II (the "Fund")**

At its meetings in May 2025 (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, as amended (the "Independent Trustees"), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and Federated Global Investment Management Corp. (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 such information deemed necessary to evaluate the terms of the Contract and to approve the continuation of the existing arrangements. The information, factors and conclusions that formed the basis for the Board's approval are summarized below.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 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. The Independent Trustees also considered the presentation from Federated Hermes' Chief Investment Officer of Equities received at the Board's February 2025 meetings regarding the results and status of the performance plans for the Fund previously discussed at the Board's February 2023 and 2024 meetings.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance–in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund–in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation of the Contract to the extent it

Annual Financial Statements and Additional Information

**20**

------

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, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

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 full 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Adviser, including the execution of portfolio transactions and the selection of brokers for those transactions. 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).

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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, 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

Annual Financial Statements and Additional Information

**21**

------

led, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard. 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.

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.

**<u>Fund Investment Performance</u>**

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 the Fund's unique investment strategies. 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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes' explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. ("Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement 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 also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

For the periods ended December 31, 2024, the Fund's performance fell below the Performance Peer Group median for the three-year and five-year periods, and was above the Performance Peer Group median for the one-year period. The Board discussed the Fund's performance with the Adviser, including the reasons for and any plans to seek to improve the Fund's performance, 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.

**<u>Fund Expenses</u>**

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, 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 overall 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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant.

Annual Financial Statements and Additional Information

**22**

------

The Board considered that other registered funds 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 contractual advisory fee rate and other expenses 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 nature and extent of services offered and fees charged by Federated Hermes 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 any of the Adviser or its affiliates serve as sub-adviser. The Board noted the CCO's statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and may cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

Annual Financial Statements and Additional Information

**23**

------

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts, including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**24**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes Kaufmann Fund II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916827

CUSIP 313916777

28136 (2/26)© 2026 Federated Hermes, Inc.

------

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](img692627be1.gif)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Share Class** | **Primary**  | **Service**  |

---

------

Federated Hermes Managed Volatility Fund II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_83c362f5-23f0-40d0-aa44-815b411ed942_1) | [1](#xx_83c362f5-23f0-40d0-aa44-815b411ed942_1)  |
| [Financial Highlights](#xx_59646fb5-8f8f-4157-9099-94c597c368e2_1) | [18](#xx_59646fb5-8f8f-4157-9099-94c597c368e2_1)  |
| [Statement of Assets and Liabilities](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_1) | [20](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_1)  |
| [Statement of Operations](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_2) | [21](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_2)  |
| [Statement of Changes in Net Assets](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_3) | [22](#xx_2ce73bf4-9736-4c18-90b2-10ba097dbdfb_3)  |
| [Notes to Financial Statements](#xx_579cc135-e8f6-434d-b9ef-2bb0b42c62a5_1) | [23](#xx_579cc135-e8f6-434d-b9ef-2bb0b42c62a5_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_32a94efc-a008-469d-ad9f-d52d8a296095_1) | [30](#xx_32a94efc-a008-469d-ad9f-d52d8a296095_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_94430827-5013-4009-aa3f-3f62c73811fa_1) | [31](#xx_94430827-5013-4009-aa3f-3f62c73811fa_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Shares or** <br>**Principal** <br>**Amount**<br>|  | **Value** |
|  | COMMON STOCKS—42.2% |  |
|  | **Communication Services—3.4%** |  |
| 3469 | Alphabet, Inc., Class A | &nbsp;&nbsp; $1085797 |
| 4782 | Alphabet, Inc., Class C | &nbsp;&nbsp; 1500592 |
| 238<br><sup>1</sup> <br>| AST SpaceMobile, Inc. | &nbsp;&nbsp; 17286 |
| 22605 | AT&T, Inc. | &nbsp;&nbsp; 561508 |
| 11455 | Comcast Corp., Class A | &nbsp;&nbsp; 342390 |
| 7000<br><sup>1</sup> <br>| Criteo S.A., ADR | &nbsp;&nbsp; 144270 |
| 1906 | Electronic Arts, Inc. | &nbsp;&nbsp; 389453 |
| 5506<br><sup>1</sup> <br>| Liberty Global Ltd. | &nbsp;&nbsp; 61337 |
| 650 | Meta Platforms, Inc. | &nbsp;&nbsp; 429058 |
| 18000<br><sup>1</sup> <br>| MNTN, Inc. | &nbsp;&nbsp; 214920 |
| 1212<br><sup>1</sup> <br>| Take-Two Interactive Software, Inc. | &nbsp;&nbsp; 310308 |
| 394 | T-Mobile USA, Inc. | &nbsp;&nbsp; 79998 |
| 6901 | Verizon Communications, Inc. | &nbsp;&nbsp; 281078 |
| 4004 | Walt Disney Co. | &nbsp;&nbsp; 455535 |
| 5884<br><sup>1</sup> <br>| Warner Bros. Discovery, Inc. | &nbsp;&nbsp; 169577 |
|  | TOTAL | &nbsp;&nbsp; 6043107 |
|  | **Consumer Discretionary—3.1%** |  |
| 41169 | ADT, Inc. | &nbsp;&nbsp; 332234 |
| 4554<br><sup>1</sup> <br>| Amazon.com, Inc. | &nbsp;&nbsp; 1051154 |
| 142<br><sup>1</sup> <br>| Aptiv PLC | &nbsp;&nbsp; 10805 |
| 49<br><sup>1</sup> <br>| AutoZone, Inc. | &nbsp;&nbsp; 166184 |
| 6620 | Bath & Body Works, Inc. | &nbsp;&nbsp; 132930 |
| 63 | Booking Holdings, Inc. | &nbsp;&nbsp; 337386 |
| 360 | BorgWarner, Inc. | &nbsp;&nbsp; 16222 |
| 193<br><sup>1</sup> <br>| Bright Horizons Family Solutions, Inc. | &nbsp;&nbsp; 19570 |
| 477 | Brunswick Corp. | &nbsp;&nbsp; 35412 |
| 12<br><sup>1</sup> <br>| Carnival Corp. | &nbsp;&nbsp; 366 |
| 9600<br><sup>1</sup> <br>| Cirsa Enterprises S.A. | &nbsp;&nbsp; 166988 |
| 824<br><sup>1</sup> <br>| Crocs, Inc. | &nbsp;&nbsp; 70468 |
| 285 | D. R. Horton, Inc. | &nbsp;&nbsp; 41049 |
| 124 | Darden Restaurants, Inc. | &nbsp;&nbsp; 22818 |
| 3366 | eBay, Inc. | &nbsp;&nbsp; 293179 |
| 3773<br><sup>1</sup> <br>| Etsy, Inc. | &nbsp;&nbsp; 209175 |
| 416<br><sup>1</sup> <br>| Five Below, Inc. | &nbsp;&nbsp; 78358 |
| 3085 | Ford Motor Co. | &nbsp;&nbsp; 40475 |
| 2122 | General Motors Co. | &nbsp;&nbsp; 172561 |
| 113<br><sup>1</sup> <br>| Grand Canyon Education, Inc. | &nbsp;&nbsp; 18793 |
| 3767 | Hasbro, Inc. | &nbsp;&nbsp; 308894 |
| 30000<br><sup>1</sup> <br>| HBX Group International PLC | &nbsp;&nbsp; 263217 |
| 656 | Home Depot, Inc. | &nbsp;&nbsp; 225730 |
| 1442 | Lowe's Cos., Inc. | &nbsp;&nbsp; 347753 |
| 112<br><sup>1</sup> <br>| Lululemon Athletica, Inc. | &nbsp;&nbsp; 23275 |
| 1608 | Macy's, Inc. | &nbsp;&nbsp; 35456 |
| 977 | McDonald's Corp. | &nbsp;&nbsp; 298601 |
| 1569<br><sup>1</sup> <br>| O'Reilly Automotive, Inc. | &nbsp;&nbsp; 143108 |
| 9707<br><sup>1</sup> <br>| Rivian Automotive, Inc. | &nbsp;&nbsp; 191325 |
| 18000<br><sup>1</sup> <br>| Savers Value Village, Inc. | &nbsp;&nbsp; 168120 |
| 1499 | Tapestry, Inc. | &nbsp;&nbsp; 191527 |
| 55<br><sup>1</sup> <br>| TopBuild Corp. | &nbsp;&nbsp; 22945 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Consumer Discretionary—continued** |  |
| 2225<br><sup>1</sup> <br>| YETI Holdings, Inc. | &nbsp;&nbsp; $98278 |
|  | TOTAL | &nbsp;&nbsp; 5534356 |
|  | **Consumer Staples—3.0%** |  |
| 6832 | Archer-Daniels-Midland Co. | &nbsp;&nbsp; 392772 |
| 2626 | Colgate-Palmolive Co. | &nbsp;&nbsp; 207507 |
| 1666 | Conagra Brands, Inc. | &nbsp;&nbsp; 28838 |
| 1612 | Constellation Brands, Inc., Class A | &nbsp;&nbsp; 222391 |
| 1395<br><sup>1</sup> <br>| Coty, Inc. - CL A | &nbsp;&nbsp; 4297 |
| 270<br><sup>1</sup> <br>| Darling Ingredients, Inc. | &nbsp;&nbsp; 9720 |
| 2503<br><sup>1</sup> <br>| Dollar Tree, Inc. | &nbsp;&nbsp; 307894 |
| 1195 | Estee Lauder Cos., Inc., Class A | &nbsp;&nbsp; 125140 |
| 2308 | Kenvue, Inc. | &nbsp;&nbsp; 39813 |
| 1453 | Kimberly-Clark Corp. | &nbsp;&nbsp; 146593 |
| 11499 | Kraft Heinz Co./The | &nbsp;&nbsp; 278851 |
| 1969 | Lamb Weston Holdings, Inc. | &nbsp;&nbsp; 82481 |
| 885<br><sup>1</sup> <br>| Maplebear, Inc. | &nbsp;&nbsp; 39807 |
| 6000<br><sup>1</sup> <br>| Oddity Tech Ltd. | &nbsp;&nbsp; 241080 |
| 1136 | PepsiCo, Inc. | &nbsp;&nbsp; 163039 |
| 5058 | Philip Morris International, Inc. | &nbsp;&nbsp; 811303 |
| 4373 | Procter & Gamble Co. | &nbsp;&nbsp; 626695 |
| 3041 | Smucker (J.M.) Co. | &nbsp;&nbsp; 297440 |
| 148<br><sup>1</sup> <br>| The Boston Beer Co., Inc., Class A | &nbsp;&nbsp; 28879 |
| 3015<br><sup>1</sup> <br>| US Foods Holding Corp. | &nbsp;&nbsp; 227090 |
| 8697 | WalMart, Inc. | &nbsp;&nbsp; 968933 |
|  | TOTAL | &nbsp;&nbsp; 5250563 |
|  | **Energy—2.6%** |  |
| 1410 | Antero Midstream Corp. | &nbsp;&nbsp; 25084 |
| 621 | Cheniere Energy, Inc. | &nbsp;&nbsp; 120716 |
| 3589 | Chevron Corp. | &nbsp;&nbsp; 547000 |
| 4118 | ConocoPhillips | &nbsp;&nbsp; 385486 |
| 1309 | Devon Energy Corp. | &nbsp;&nbsp; 47949 |
| 2486 | DT Midstream, Inc. | &nbsp;&nbsp; 297524 |
| 123 | EOG Resources, Inc. | &nbsp;&nbsp; 12916 |
| 5322 | EQT Corp. | &nbsp;&nbsp; 285259 |
| 8692 | Exxon Mobil Corp. | &nbsp;&nbsp; 1045995 |
| 9600<br><sup>1</sup> <br>| Infinity Natural Resources, Inc. | &nbsp;&nbsp; 141408 |
| 9746 | Kinder Morgan, Inc. | &nbsp;&nbsp; 267918 |
| 75000<br><sup>1</sup> <br>| NS Group, Inc. | &nbsp;&nbsp; 641120 |
| 9275 | Ovintiv, Inc. | &nbsp;&nbsp; 363487 |
| 1548 | TechnipFMC PLC | &nbsp;&nbsp; 68979 |
| 6852 | Williams Cos., Inc. | &nbsp;&nbsp; 411874 |
|  | TOTAL | &nbsp;&nbsp; 4662715 |
|  | **Financials—9.4%** |  |
| 1080 | Affiliated Managers Group, Inc. | &nbsp;&nbsp; 311342 |
| 4715 | AGNC Investment Corp. | &nbsp;&nbsp; 50545 |
| 2182 | Allstate Corp. | &nbsp;&nbsp; 454183 |
| 325 | American Express Co. | &nbsp;&nbsp; 120234 |
| 8400<br><sup>1</sup> <br>| American Integrity Insurance Group, Inc. | &nbsp;&nbsp; 174972 |
| 3575<br><sup>1</sup> <br>| Arch Capital Group Ltd. | &nbsp;&nbsp; 342914 |
| 15210 | Bank of America Corp. | &nbsp;&nbsp; 836550 |
| 4421 | Bank of New York Mellon Corp. | &nbsp;&nbsp; 513234 |
| 4800<br><sup>1</sup> <br>| Berkshire Hathaway, Inc., Class B | &nbsp;&nbsp; 2412720 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Financials—continued** |  |
| 59 | BlackRock, Inc. | &nbsp;&nbsp; $63150 |
| 54 | Cboe Global Markets, Inc. | &nbsp;&nbsp; 13554 |
| 590 | Charles Schwab Corp. | &nbsp;&nbsp; 58947 |
| 19 | Chubb Ltd. | &nbsp;&nbsp; 5930 |
| 3052 | Citigroup, Inc. | &nbsp;&nbsp; 356138 |
| 132<br><sup>1</sup> <br>| Coinbase Global, Inc. | &nbsp;&nbsp; 29850 |
| 8184 | Corebridge Financial, Inc. | &nbsp;&nbsp; 246911 |
| 511 | Everest Group Ltd. | &nbsp;&nbsp; 173408 |
| 27000<br><sup>1</sup> <br>| Exzeo Group, Inc. | &nbsp;&nbsp; 654750 |
| 392 | Fidelity National Information Services, Inc. | &nbsp;&nbsp; 26052 |
| 203 | First Citizens Bancshares, Inc., Class A | &nbsp;&nbsp; 435675 |
| 3367<br><sup>1</sup> <br>| Fiserv, Inc. | &nbsp;&nbsp; 226161 |
| 4845 | Global Payments, Inc. | &nbsp;&nbsp; 375003 |
| 242 | Goldman Sachs Group, Inc. | &nbsp;&nbsp; 212718 |
| 4335 | Janus Henderson Group PLC | &nbsp;&nbsp; 206216 |
| 6948 | JPMorgan Chase & Co. | &nbsp;&nbsp; 2238785 |
| 3045 | KKR & Co., Inc. | &nbsp;&nbsp; 388177 |
| 4790 | MetLife, Inc. | &nbsp;&nbsp; 378123 |
| 4519 | MGIC Investment Corp. | &nbsp;&nbsp; 132045 |
| 4376 | Morgan Stanley | &nbsp;&nbsp; 776871 |
| 24000<br><sup>1</sup> <br>| Oportun Financial Corp. | &nbsp;&nbsp; 126960 |
| 318<br><sup>1</sup> <br>| PayPal Holdings, Inc. | &nbsp;&nbsp; 18565 |
| 55 | PNC Financial Services Group, Inc. | &nbsp;&nbsp; 11480 |
| 1140 | Progressive Corp., OH | &nbsp;&nbsp; 259601 |
| 1556 | Prudential Financial, Inc. | &nbsp;&nbsp; 175641 |
| 2050 | Regions Financial Corp. | &nbsp;&nbsp; 55555 |
| 1354 | RenaissanceRe Holdings Ltd. | &nbsp;&nbsp; 380691 |
| 776 | S&P Global, Inc. | &nbsp;&nbsp; 405530 |
| 15000<br><sup>1</sup> <br>| SBI Shinsei Bank Ltd. | &nbsp;&nbsp; 166624 |
| 1894 | State Street Corp. | &nbsp;&nbsp; 244345 |
| 1377 | Synovus Financial Corp. | &nbsp;&nbsp; 68919 |
| 769 | The Hartford Insurance Group, Inc. | &nbsp;&nbsp; 105968 |
| 3419 | U.S. Bancorp | &nbsp;&nbsp; 182438 |
| 2845 | Unum Group | &nbsp;&nbsp; 220488 |
| 2194 | VOYA Financial, Inc.. | &nbsp;&nbsp; 163431 |
| 33000<br><sup>1</sup> <br>| Wealthfront Corp. | &nbsp;&nbsp; 448470 |
| 4292 | Webster Financial Corp. Waterbury | &nbsp;&nbsp; 270138 |
| 6547 | Wells Fargo & Co. | &nbsp;&nbsp; 610180 |
| 36989 | Western Union Co. | &nbsp;&nbsp; 344368 |
| 1909<br><sup>1</sup> <br>| WEX, Inc. | &nbsp;&nbsp; 284403 |
|  | TOTAL | &nbsp;&nbsp; 16758953 |
|  | **Health Care—5.4%** |  |
| 1492 | Abbott Laboratories | &nbsp;&nbsp; 186933 |
| 875 | Agilent Technologies, Inc. | &nbsp;&nbsp; 119061 |
| 364<br><sup>1</sup> <br>| Align Technology, Inc. | &nbsp;&nbsp; 56839 |
| 2864<br><sup>1</sup> <br>| Avantor, Inc. | &nbsp;&nbsp; 32821 |
| 226<br><sup>1</sup> <br>| Biogen, Inc. | &nbsp;&nbsp; 39774 |
| 49<br><sup>1</sup> <br>| Bio-Rad Laboratories, Inc., Class A | &nbsp;&nbsp; 14846 |
| 5646<br><sup>1</sup> <br>| Boston Scientific Corp. | &nbsp;&nbsp; 538346 |
| 10469 | Bristol-Myers Squibb Co. | &nbsp;&nbsp; 564698 |
| 1440<br><sup>1,2</sup> <br>| Bristol-Myers Squibb Co., Rights | &nbsp;&nbsp; 1008 |
| 172 | Cardinal Health, Inc. | &nbsp;&nbsp; 35346 |

---

Annual Financial Statements and Additional Information

**3**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Health Care—continued** |  |
| 6785<br><sup>1</sup> <br>| Centene Corp. | &nbsp;&nbsp; $279203 |
| 2000<br><sup>1</sup> <br>| CG Oncology, Inc. | &nbsp;&nbsp; 83040 |
| 245<br><sup>1</sup> <br>| Charles River Laboratories International, Inc. | &nbsp;&nbsp; 48873 |
| 9 | Chemed Corp. | &nbsp;&nbsp; 3851 |
| 992 | CVS Health Corp. | &nbsp;&nbsp; 78725 |
| 1610 | Danaher Corp. | &nbsp;&nbsp; 368561 |
| 11472 | Dentsply Sirona, Inc. | &nbsp;&nbsp; 131125 |
| 235 | Elevance Health, Inc. | &nbsp;&nbsp; 82379 |
| 3911<br><sup>1</sup> <br>| Exact Sciences Corp. | &nbsp;&nbsp; 397201 |
| 4737 | Gilead Sciences, Inc. | &nbsp;&nbsp; 581419 |
| 1004 | HCA Healthcare, Inc. | &nbsp;&nbsp; 468727 |
| 2877<br><sup>1</sup> <br>| Hologic, Inc. | &nbsp;&nbsp; 214308 |
| 293<br><sup>1</sup> <br>| Incyte Genomics, Inc. | &nbsp;&nbsp; 28940 |
| 4000<br><sup>1</sup> <br>| Inmode Ltd. | &nbsp;&nbsp; 58760 |
| 431<br><sup>1</sup> <br>| Insmed, Inc. | &nbsp;&nbsp; 75011 |
| 218<br><sup>1</sup> <br>| IQVIA Holdings, Inc. | &nbsp;&nbsp; 49139 |
| 6785 | Johnson & Johnson | &nbsp;&nbsp; 1404156 |
| 12000<br><sup>1</sup> <br>| Kyverna Therapeutics, Inc. | &nbsp;&nbsp; 112800 |
| 3000<br><sup>1</sup> <br>| LB Pharmaceuticals, Inc. | &nbsp;&nbsp; 66780 |
| 9900<br><sup>1</sup> <br>| Legend Biotech Corp., ADR | &nbsp;&nbsp; 215226 |
| 12500<br><sup>1</sup> <br>| Lumexa Imaging Holdings, Inc. | &nbsp;&nbsp; 231250 |
| 417 | McKesson Corp. | &nbsp;&nbsp; 342061 |
| 2012 | Medtronic PLC | &nbsp;&nbsp; 193273 |
| 2103 | Merck & Co., Inc. | &nbsp;&nbsp; 221362 |
| 4141 | Pfizer, Inc. | &nbsp;&nbsp; 103111 |
| 2450<br><sup>1</sup> <br>| Qiagen NV | &nbsp;&nbsp; 110176 |
| 123<br><sup>1</sup> <br>| Regeneron Pharmaceuticals, Inc. | &nbsp;&nbsp; 94940 |
| 6000 | Simulations Plus, Inc. | &nbsp;&nbsp; 109380 |
| 112606<br><sup>1</sup> <br>| Sophia Genetics S.A. | &nbsp;&nbsp; 525870 |
| 56 | STERIS PLC | &nbsp;&nbsp; 14197 |
| 1047 | The Cigna Group | &nbsp;&nbsp; 288166 |
| 616 | Thermo Fisher Scientific, Inc. | &nbsp;&nbsp; 356941 |
| 2042 | UnitedHealth Group, Inc. | &nbsp;&nbsp; 674085 |
| 260<br><sup>1</sup> <br>| Veeva Systems, Inc. | &nbsp;&nbsp; 58040 |
|  | TOTAL | &nbsp;&nbsp; 9660748 |
|  | **Industrials—5.4%** |  |
| 79 | AGCO Corp. | &nbsp;&nbsp; 8241 |
| 20000<br><sup>1</sup> <br>| Astroscale Holdings, Inc. | &nbsp;&nbsp; 84268 |
| 614<br><sup>1</sup> <br>| ATI, Inc. | &nbsp;&nbsp; 70463 |
| 139 | Automatic Data Processing, Inc. | &nbsp;&nbsp; 35755 |
| 4500<br><sup>1</sup> <br>| BETA Technologies, Inc. | &nbsp;&nbsp; 126945 |
| 606<br><sup>1</sup> <br>| Boeing Co. | &nbsp;&nbsp; 131575 |
| 681 | Broadridge Financial Solutions, Inc. | &nbsp;&nbsp; 151979 |
| 567<br><sup>1</sup> <br>| Builders Firstsource, Inc. | &nbsp;&nbsp; 58339 |
| 1332 | BWX Technologies, Inc. | &nbsp;&nbsp; 230223 |
| 11339<br><sup>1</sup> <br>| Cardinal Infrastructure Group, Inc. | &nbsp;&nbsp; 274177 |
| 814 | Caterpillar, Inc. | &nbsp;&nbsp; 466316 |
| 34167 | CNH Industrial NV | &nbsp;&nbsp; 315020 |
| 925 | Crane Co. | &nbsp;&nbsp; 170598 |
| 2570 | CSX Corp. | &nbsp;&nbsp; 93162 |
| 39 | Cummins, Inc. | &nbsp;&nbsp; 19907 |
| 660 | Curtiss-Wright Corp. | &nbsp;&nbsp; 363838 |

---

Annual Financial Statements and Additional Information

**4**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Industrials—continued** |  |
| 181 | Deere & Co. | &nbsp;&nbsp; $84268 |
| 411 | Eaton Corp. PLC | &nbsp;&nbsp; 130908 |
| 559 | Emcor Group, Inc. | &nbsp;&nbsp; 341991 |
| 116 | FedEx Corp. | &nbsp;&nbsp; 33508 |
| 6000<br><sup>1</sup> <br>| Fiverr International Ltd. | &nbsp;&nbsp; 118560 |
| 51 | Fortive Corp. | &nbsp;&nbsp; 2816 |
| 33<br><sup>1</sup> <br>| Generac Holdings, Inc. | &nbsp;&nbsp; 4500 |
| 713 | General Dynamics Corp. | &nbsp;&nbsp; 240039 |
| 3721 | Graco, Inc. | &nbsp;&nbsp; 305010 |
| 6000<br><sup>1</sup> <br>| Grupo Aeromexico SAB de CV, ADR | &nbsp;&nbsp; 131760 |
| 2530 | Honeywell International, Inc. | &nbsp;&nbsp; 493578 |
| 143 | Ingersoll-Rand, Inc. | &nbsp;&nbsp; 11328 |
| 2096 | J. B. Hunt Transportation Services, Inc. | &nbsp;&nbsp; 407337 |
| 238 | Johnson Controls International PLC | &nbsp;&nbsp; 28500 |
| 719 | Leonardo DRS, Inc. | &nbsp;&nbsp; 24511 |
| 2607<br><sup>1</sup> <br>| Lyft, Inc. | &nbsp;&nbsp; 50498 |
| 263<br><sup>1</sup> <br>| Mastec, Inc. | &nbsp;&nbsp; 57168 |
| 1132<br><sup>1</sup> <br>| Middleby Corp. | &nbsp;&nbsp; 168294 |
| 1037 | Norfolk Southern Corp. | &nbsp;&nbsp; 299403 |
| 12 | Northrop Grumman Corp. | &nbsp;&nbsp; 6842 |
| 1407 | Oshkosh Corp. | &nbsp;&nbsp; 176761 |
| 3417 | Owens Corning, Inc. | &nbsp;&nbsp; 382396 |
| 316 | Parker-Hannifin Corp. | &nbsp;&nbsp; 277751 |
| 43 | Paycom Software, Inc. | &nbsp;&nbsp; 6852 |
| 3304 | Pentair PLC | &nbsp;&nbsp; 344079 |
| 2076 | Republic Services, Inc. | &nbsp;&nbsp; 439967 |
| 1047 | Rockwell Automation, Inc. | &nbsp;&nbsp; 407356 |
| 2999 | RTX Corp. | &nbsp;&nbsp; 550017 |
| 1822 | Ryder System, Inc. | &nbsp;&nbsp; 348713 |
| 680 | Sensata Technologies Holdings PLC | &nbsp;&nbsp; 22637 |
| 174 | Southwest Airlines Co. | &nbsp;&nbsp; 7191 |
| 12000<br><sup>1</sup> <br>| Timee, Inc. | &nbsp;&nbsp; 96963 |
| 1898<br><sup>1</sup> <br>| United Airlines Holdings, Inc. | &nbsp;&nbsp; 212234 |
| 112 | United Parcel Service, Inc. | &nbsp;&nbsp; 11109 |
| 165 | United Rentals North America, Inc. | &nbsp;&nbsp; 133538 |
| 855 | Valmont Industries, Inc. | &nbsp;&nbsp; 343984 |
| 485 | Verisk Analytics, Inc. | &nbsp;&nbsp; 108490 |
| 784 | Xylem, Inc. | &nbsp;&nbsp; 106765 |
|  | TOTAL | &nbsp;&nbsp; 9518428 |
|  | **Information Technology—5.1%** |  |
| 853 | Accenture PLC | &nbsp;&nbsp; 228860 |
| 1631<br><sup>1</sup> <br>| Advanced Micro Devices, Inc. | &nbsp;&nbsp; 349295 |
| 806 | Analog Devices, Inc. | &nbsp;&nbsp; 218587 |
| 181<br><sup>1</sup> <br>| Ciena Corp. | &nbsp;&nbsp; 42330 |
| 1070<br><sup>1</sup> <br>| Cirrus Logic, Inc. | &nbsp;&nbsp; 126795 |
| 10516 | Cisco Systems, Inc. | &nbsp;&nbsp; 810047 |
| 840<br><sup>1</sup> <br>| F5, Inc. | &nbsp;&nbsp; 214418 |
| 11<br><sup>1</sup> <br>| Fair Isaac & Co., Inc. | &nbsp;&nbsp; 18597 |
| 1869 | IBM Corp. | &nbsp;&nbsp; 553616 |
| 6012<br><sup>1</sup> <br>| Innoscripta SE | &nbsp;&nbsp; 637729 |
| 14945<br><sup>1</sup> <br>| Intel Corp. | &nbsp;&nbsp; 551471 |
| 2193<br><sup>1</sup> <br>| Keysight Technologies, Inc. | &nbsp;&nbsp; 445596 |

---

Annual Financial Statements and Additional Information

**5**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Information Technology—continued** |  |
| 1958 | Marvell Technology, Inc. | &nbsp;&nbsp; $166391 |
| 3136 | Micron Technology, Inc. | &nbsp;&nbsp; 895046 |
| 900<br><sup>1</sup> <br>| Monday.com Ltd. | &nbsp;&nbsp; 132804 |
| 33<br><sup>1</sup> <br>| MongoDB, Inc. | &nbsp;&nbsp; 13850 |
| 2775<br><sup>1</sup> <br>| Nutanix, Inc. | &nbsp;&nbsp; 143440 |
| 449<br><sup>1</sup> <br>| Okta, Inc. | &nbsp;&nbsp; 38825 |
| 2410<br><sup>1</sup> <br>| ON Semiconductor Corp. | &nbsp;&nbsp; 130502 |
| 276<br><sup>1</sup> <br>| Onto Innovation, Inc. | &nbsp;&nbsp; 43569 |
| 943<br><sup>1</sup> <br>| PTC, Inc. | &nbsp;&nbsp; 164280 |
| 419<br><sup>1</sup> <br>| Pure Storage, Inc. | &nbsp;&nbsp; 28077 |
| 1906<br><sup>1</sup> <br>| Qorvo, Inc. | &nbsp;&nbsp; 161076 |
| 3011 | Qualcomm, Inc. | &nbsp;&nbsp; 515032 |
| 16<br><sup>1</sup> <br>| Ralliant Corp. | &nbsp;&nbsp; 815 |
| 79 | Roper Technologies, Inc. | &nbsp;&nbsp; 35165 |
| 1220<br><sup>1</sup> <br>| Rubrik, Inc. | &nbsp;&nbsp; 93306 |
| 2114 | Salesforce, Inc. | &nbsp;&nbsp; 560020 |
| 417<br><sup>1</sup> <br>| Sandisk Corp. | &nbsp;&nbsp; 98987 |
| 135000<br><sup>1</sup> <br>| Silvaco Group, Inc. | &nbsp;&nbsp; 546750 |
| 18000<br><sup>1</sup> <br>| SimilarWeb Ltd. | &nbsp;&nbsp; 134820 |
| 721<br><sup>1</sup> <br>| Super Micro Computer, Inc. | &nbsp;&nbsp; 21104 |
| 6500<br><sup>1</sup> <br>| Tekscend Photomask Corp. | &nbsp;&nbsp; 123672 |
| 18<br><sup>1</sup> <br>| Teledyne Technologies, Inc. | &nbsp;&nbsp; 9193 |
| 1073<br><sup>1</sup> <br>| Twilio, Inc. | &nbsp;&nbsp; 152624 |
| 131<br><sup>1</sup> <br>| Tyler Technologies, Inc. | &nbsp;&nbsp; 59467 |
| 472<br><sup>1</sup> <br>| Unity Software, Inc. | &nbsp;&nbsp; 20848 |
| 1140<br><sup>1</sup> <br>| Verisign, Inc. | &nbsp;&nbsp; 276963 |
| 814 | Western Digital Corp. | &nbsp;&nbsp; 140228 |
| 971<br><sup>1</sup> <br>| Zebra Technologies Corp., Class A | &nbsp;&nbsp; 235778 |
|  | TOTAL | &nbsp;&nbsp; 9139973 |
|  | **Materials—1.5%** |  |
| 176 | Albemarle Corp. | &nbsp;&nbsp; 24893 |
| 519 | AngloGold Ashanti PLC | &nbsp;&nbsp; 44260 |
| 1095 | Aptargroup, Inc. | &nbsp;&nbsp; 133546 |
| 219 | Avery Dennison Corp. | &nbsp;&nbsp; 39832 |
| 825 | CF Industries Holdings, Inc. | &nbsp;&nbsp; 63805 |
| 3655 | Corteva, Inc. | &nbsp;&nbsp; 244995 |
| 3341 | CRH PLC | &nbsp;&nbsp; 416957 |
| 1054 | Crown Holdings, Inc. | &nbsp;&nbsp; 108530 |
| 1225 | Ecolab, Inc. | &nbsp;&nbsp; 321587 |
| 71 | Freeport-McMoRan, Inc. | &nbsp;&nbsp; 3606 |
| 504 | International Flavors & Fragrances, Inc. | &nbsp;&nbsp; 33965 |
| 1232 | James Hardie Industries PLC | &nbsp;&nbsp; 25564 |
| 1319 | Linde PLC | &nbsp;&nbsp; 562408 |
| 557<br><sup>1</sup> <br>| MP Materials Corp. | &nbsp;&nbsp; 28140 |
| 35 | Newmarket Corp. | &nbsp;&nbsp; 24054 |
| 6038 | Newmont Corp. | &nbsp;&nbsp; 602894 |
| 117 | Packaging Corp. of America | &nbsp;&nbsp; 24129 |
| 632<br><sup>1</sup> <br>| Solstice Advanced Materials, Inc. | &nbsp;&nbsp; 30703 |
|  | TOTAL | &nbsp;&nbsp; 2733868 |
|  | **Real Estate—1.6%** |  |
| 1495 | Avalonbay Communities, Inc. | &nbsp;&nbsp; 271058 |
| 1584<br><sup>1</sup> <br>| CBRE Group, Inc. | &nbsp;&nbsp; 254691 |

---

Annual Financial Statements and Additional Information

**6**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMON STOCKS—continued |  |
|  | **Real Estate—continued** |  |
| 66 | Digital Realty Trust, Inc. | &nbsp;&nbsp; $10211 |
| 46 | Equinix, Inc. | &nbsp;&nbsp; 35243 |
| 12000<br><sup>1</sup> <br>| Fermi LLC | &nbsp;&nbsp; 96000 |
| 17110 | Healthcare Realty Trust, Inc. | &nbsp;&nbsp; 290015 |
| 1261 | Public Storage | &nbsp;&nbsp; 327230 |
| 1527 | Rayonier, Inc. | &nbsp;&nbsp; 33060 |
| 3767 | Regency Centers Corp. | &nbsp;&nbsp; 260036 |
| 1498 | SBA Communications Corp. | &nbsp;&nbsp; 289758 |
| 2229 | Simon Property Group, Inc. | &nbsp;&nbsp; 412610 |
| 324 | Sun Communities, Inc. | &nbsp;&nbsp; 40147 |
| 4905 | Vornado Realty Trust, LP | &nbsp;&nbsp; 163238 |
| 4666 | WP Carey, Inc. | &nbsp;&nbsp; 300304 |
|  | TOTAL | &nbsp;&nbsp; 2783601 |
|  | **Utilities—1.7%** |  |
| 4247 | Clearway Energy, Inc., Class A | &nbsp;&nbsp; 133441 |
| 3300 | Clearway Energy, Inc., Class C | &nbsp;&nbsp; 109758 |
| 493 | Constellation Energy Corp. | &nbsp;&nbsp; 174162 |
| 1297 | DTE Energy Co. | &nbsp;&nbsp; 167287 |
| 4159 | Duke Energy Corp. | &nbsp;&nbsp; 487476 |
| 2599 | EverSource Energy | &nbsp;&nbsp; 174991 |
| 3815 | National Fuel Gas Co. | &nbsp;&nbsp; 305429 |
| 8042 | NextEra Energy, Inc. | &nbsp;&nbsp; 645612 |
| 3088 | Public Service Enterprises Group, Inc. | &nbsp;&nbsp; 247966 |
| 445<br><sup>1</sup> <br>| Talen Energy Corp. | &nbsp;&nbsp; 166804 |
| 10101 | UGI Corp. | &nbsp;&nbsp; 378080 |
|  | TOTAL | &nbsp;&nbsp; 2991006 |
|  | TOTAL COMMON STOCKS <br>(IDENTIFIED COST $56,535,084)<br>| &nbsp;&nbsp; 75077318 |
|  | U.S. TREASURIES—22.0% |  |
|  | **Treasury Inflation-Indexed Note—1.6%** |  |
| $13741 | U.S. Treasury Inflation-Protected Notes, 1.000%, 2/15/2046 | &nbsp;&nbsp; 10349 |
| 1912407 | U.S. Treasury Inflation-Protected Notes, 1.125%, 10/15/2030 | &nbsp;&nbsp; 1883845 |
| 963252 | U.S. Treasury Inflation-Protected Notes, 1.875%, 7/15/2035 | &nbsp;&nbsp; 960886 |
|  | TOTAL | &nbsp;&nbsp; 2855080 |
|  | **U.S. Treasury Bond—4.1%** |  |
| 150000 | United States Treasury Bond, 1.375%, 11/15/2040 | &nbsp;&nbsp; 97477 |
| 760000 | United States Treasury Bond, 1.625%, 11/15/2050 | &nbsp;&nbsp; 399864 |
| 660000 | United States Treasury Bond, 2.375%, 2/15/2042 | &nbsp;&nbsp; 486256 |
| 20000 | United States Treasury Bond, 2.750%, 11/15/2047 | &nbsp;&nbsp; 14264 |
| 1000 | United States Treasury Bond, 3.000%, 11/15/2044 | &nbsp;&nbsp; 775 |
| 900000 | United States Treasury Bond, 3.000%, 2/15/2049 | &nbsp;&nbsp; 664034 |
| 1100000 | United States Treasury Bond, 3.125%, 5/15/2048 | &nbsp;&nbsp; 836358 |
| 475000 | United States Treasury Bond, 4.250%, 2/15/2054 | &nbsp;&nbsp; 430331 |
| 2720000 | United States Treasury Bond, 4.250%, 8/15/2054 | &nbsp;&nbsp; 2464427 |
| 370000 | United States Treasury Bond, 4.500%, 2/15/2044 | &nbsp;&nbsp; 358473 |
| 310000 | United States Treasury Bond, 4.625%, 5/15/2044 | &nbsp;&nbsp; 304801 |
| 1200000 | United States Treasury Bond, 4.625%, 2/15/2055 | &nbsp;&nbsp; 1158316 |
|  | TOTAL | &nbsp;&nbsp; 7215376 |
|  | **U.S. Treasury Note—16.3%** |  |
| 200000 | United States Treasury Note, 0.875%, 11/15/2030 | &nbsp;&nbsp; 174847 |
| 675000 | United States Treasury Note, 1.250%, 12/31/2026 | &nbsp;&nbsp; 659971 |
| 300000 | United States Treasury Note, 1.375%, 11/15/2031 | &nbsp;&nbsp; 261352 |
| 400000 | United States Treasury Note, 1.500%, 1/31/2027 | &nbsp;&nbsp; 391438 |

---

Annual Financial Statements and Additional Information

**7**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | U.S. TREASURIES—continued |  |
|  | **U.S. Treasury Note—continued** |  |
| $200000 | United States Treasury Note, 1.625%, 5/15/2031 | &nbsp;&nbsp; $179188 |
| 50000 | United States Treasury Note, 2.250%, 11/15/2027 | &nbsp;&nbsp; 48889 |
| 3800000 | United States Treasury Note, 2.625%, 5/31/2027 | &nbsp;&nbsp; 3753922 |
| 4150000 | United States Treasury Note, 2.750%, 7/31/2027 | &nbsp;&nbsp; 4102988 |
| 110000 | United States Treasury Note, 3.125%, 8/31/2027 | &nbsp;&nbsp; 109358 |
| 1600000 | United States Treasury Note, 3.500%, 9/30/2027 | &nbsp;&nbsp; 1600406 |
| 250000 | United States Treasury Note, 3.625%, 3/31/2028 | &nbsp;&nbsp; 250664 |
| 150000 | United States Treasury Note, 3.875%, 11/30/2027 | &nbsp;&nbsp; 151058 |
| 1000000 | United States Treasury Note, 3.875%, 3/15/2028 | &nbsp;&nbsp; 1008070 |
| 1000000 | United States Treasury Note, 3.875%, 4/30/2030 | &nbsp;&nbsp; 1007812 |
| 225000 | United States Treasury Note, 3.875%, 6/30/2030 | &nbsp;&nbsp; 226687 |
| 340000 | United States Treasury Note, 3.875%, 8/15/2034 | &nbsp;&nbsp; 334953 |
| 835000 | United States Treasury Note, 4.000%, 7/31/2029 | &nbsp;&nbsp; 845830 |
| 300000 | United States Treasury Note, 4.125%, 7/31/2028 | &nbsp;&nbsp; 304456 |
| 760000 | United States Treasury Note, 4.125%, 11/30/2029 | &nbsp;&nbsp; 773062 |
| 270000 | United States Treasury Note, 4.125%, 3/31/2031 | &nbsp;&nbsp; 274622 |
| 225000 | United States Treasury Note, 4.125%, 7/31/2031 | &nbsp;&nbsp; 228674 |
| 600000 | United States Treasury Note, 4.125%, 10/31/2031 | &nbsp;&nbsp; 609375 |
| 600000 | United States Treasury Note, 4.125%, 5/31/2032 | &nbsp;&nbsp; 608082 |
| 1000000 | United States Treasury Note, 4.250%, 12/31/2026 | &nbsp;&nbsp; 1007046 |
| 600000 | United States Treasury Note, 4.250%, 2/28/2029 | &nbsp;&nbsp; 612171 |
| 2600000 | United States Treasury Note, 4.250%, 11/15/2034 | &nbsp;&nbsp; 2628844 |
| 645000 | United States Treasury Note, 4.375%, 7/31/2026 | &nbsp;&nbsp; 648103 |
| 750000 | United States Treasury Note, 4.500%, 5/31/2029 | &nbsp;&nbsp; 771513 |
| 750000 | United States Treasury Note, 4.625%, 2/28/2026 | &nbsp;&nbsp; 750943 |
| 500000 | United States Treasury Note, 4.625%, 4/30/2029 | &nbsp;&nbsp; 516171 |
| 2900000 | United States Treasury Note, 4.625%, 2/15/2035 | &nbsp;&nbsp; 3011922 |
| 330000 | United States Treasury Note, 4.625%, 2/15/2055 | &nbsp;&nbsp; 324452 |
| 750000 | United States Treasury Note, 4.875%, 4/30/2026 | &nbsp;&nbsp; 753036 |
|  | TOTAL | &nbsp;&nbsp; 28929905 |
|  | TOTAL U.S. TREASURIES <br>(IDENTIFIED COST $40,396,416)<br>| &nbsp;&nbsp; 39000361 |
|  | CORPORATE BONDS—12.9% |  |
|  | **Basic Industry - Chemicals—0.1%** |  |
| 105000 | RPM International, Inc., Sr. Unsecd. Note, 4.550%, 3/1/2029 | &nbsp;&nbsp; 106349 |
|  | **Basic Industry - Metals & Mining—0.1%** |  |
| 75000 | Freeport-McMoRan, Inc., Sr. Unsecd. Note, 5.400%, 11/14/2034 | &nbsp;&nbsp; 77392 |
| 60000 | Glencore Funding LLC, Sr. Unsecd. Note, 144A, 1.625%, 4/27/2026 | &nbsp;&nbsp; 59513 |
|  | TOTAL | &nbsp;&nbsp; 136905 |
|  | **Capital Goods - Aerospace & Defense—0.5%** |  |
| 125000 | Boeing Co., Sr. Unsecd. Note, 2.700%, 2/1/2027 | &nbsp;&nbsp; 123234 |
| 55000 | Boeing Co., Sr. Unsecd. Note, 6.528%, 5/1/2034 | &nbsp;&nbsp; 60869 |
| 70000 | Boeing Co., Sr. Unsecd. Note, 6.858%, 5/1/2054 | &nbsp;&nbsp; 78671 |
| 70000 | HEICO Corp., Sr. Unsecd. Note, 5.350%, 8/1/2033 | &nbsp;&nbsp; 72711 |
| 130000 | Huntington Ingalls Industries, Inc., Sr. Unsecd. Note, 3.483%, 12/1/2027 | &nbsp;&nbsp; 128616 |
| 120000 | Lockheed Martin Corp., Sr. Unsecd. Note, 4.750%, 2/15/2034 | &nbsp;&nbsp; 121725 |
| 125000 | Northrop Grumman Corp., Sr. Unsecd. Note, 4.700%, 3/15/2033 | &nbsp;&nbsp; 126254 |
| 115000 | RTX Corp., Sr. Unsecd. Note, 5.150%, 2/27/2033 | &nbsp;&nbsp; 118820 |
| 100000 | Textron, Inc., Sr. Unsecd. Note, 3.650%, 3/15/2027 | &nbsp;&nbsp; 99535 |
|  | TOTAL | &nbsp;&nbsp; 930435 |
|  | **Capital Goods - Building Materials—0.0%** |  |
| 30000 | Carrier Global Corp., Sr. Unsecd. Note, 5.900%, 3/15/2034 | &nbsp;&nbsp; 32195 |

---

Annual Financial Statements and Additional Information

**8**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Capital Goods - Building Materials—continued** |  |
| $30000 | Carrier Global Corp., Sr. Unsecd. Note, 6.200%, 3/15/2054 | &nbsp;&nbsp; $32463 |
|  | TOTAL | &nbsp;&nbsp; 64658 |
|  | **Capital Goods - Construction Machinery—0.2%** |  |
| 125000 | Caterpillar Financial Services Corp., Sr. Unsecd. Note, 3.950%, 11/14/2028 | &nbsp;&nbsp; 125329 |
| 50000 | CNH Industrial NV, Sr. Unsecd. Note, Series MTN, 3.850%, 11/15/2027 | &nbsp;&nbsp; 49857 |
| 145000 | John Deere Capital Corp., Sr. Unsecd. Note, Series MTN, 2.800%, 7/18/2029 | &nbsp;&nbsp; 139522 |
|  | TOTAL | &nbsp;&nbsp; 314708 |
|  | **Capital Goods - Diversified Manufacturing—0.1%** |  |
| 80000 | Honeywell International, Inc., Sr. Unsecd. Note, 2.800%, 6/1/2050 | &nbsp;&nbsp; 52554 |
| 75000 | Honeywell International, Inc., Sr. Unsecd. Note, 4.500%, 1/15/2034 | &nbsp;&nbsp; 74359 |
| 60000 | Ingersoll-Rand, Inc., Sr. Unsecd. Note, 5.450%, 6/15/2034 | &nbsp;&nbsp; 62479 |
| 60000 | Xylem, Inc., Sr. Unsecd. Note, 2.250%, 1/30/2031 | &nbsp;&nbsp; 54530 |
|  | TOTAL | &nbsp;&nbsp; 243922 |
|  | **Capital Goods - Environmental—0.1%** |  |
| 40000 | Republic Services, Inc., Sr. Unsecd. Note, 2.375%, 3/15/2033 | &nbsp;&nbsp; 34948 |
| 55000 | Republic Services, Inc., Sr. Unsecd. Note, 4.875%, 4/1/2029 | &nbsp;&nbsp; 56443 |
| 60000 | Waste Connections, Inc., Sr. Unsecd. Note, 2.600%, 2/1/2030 | &nbsp;&nbsp; 56632 |
| 40000 | Waste Connections, Inc., Sr. Unsecd. Note, 4.200%, 1/15/2033 | &nbsp;&nbsp; 39251 |
|  | TOTAL | &nbsp;&nbsp; 187274 |
|  | **Communications - Cable & Satellite—0.3%** |  |
| 75000 | Charter Communications Operating, LLC/Charter Communications Operating Capital Corp., Sec. Fac. Bond, 3.850%, 4/1/2061 | &nbsp;&nbsp; 44759 |
| 50000 | Charter Communications Operating, LLC/Charter Communications Operating Capital Corp., Sec. Fac. Bond, 4.800%, 3/1/2050 | &nbsp;&nbsp; 37596 |
| 275000 | Comcast Corp., Sr. Unsecd. Note, 3.300%, 2/1/2027 | &nbsp;&nbsp; 273498 |
| 180000 | Comcast Corp., Sr. Unsecd. Note, 5.350%, 5/15/2053 | &nbsp;&nbsp; 161820 |
|  | TOTAL | &nbsp;&nbsp; 517673 |
|  | **Communications - Media & Entertainment—0.2%** |  |
| 60000 | AppLovin Corp., Sr. Unsecd. Note, 5.500%, 12/1/2034 | &nbsp;&nbsp; 61671 |
| 100000 | Meta Platforms, Inc., Sr. Unsecd. Note, 3.500%, 8/15/2027 | &nbsp;&nbsp; 99863 |
| 75000 | Meta Platforms, Inc., Sr. Unsecd. Note, 3.850%, 8/15/2032 | &nbsp;&nbsp; 72784 |
| 100000 | Meta Platforms, Inc., Sr. Unsecd. Note, 5.550%, 8/15/2064 | &nbsp;&nbsp; 92835 |
| 90000 | Walt Disney Co., Sr. Unsecd. Note, 3.600%, 1/13/2051 | &nbsp;&nbsp; 66961 |
| 45000 | Walt Disney Co., Sr. Unsecd. Note, 3.800%, 5/13/2060 | &nbsp;&nbsp; 33069 |
|  | TOTAL | &nbsp;&nbsp; 427183 |
|  | **Communications - Telecom Wireless—0.3%** |  |
| 60000 | American Tower Corp., Sr. Unsecd. Note, 2.700%, 4/15/2031 | &nbsp;&nbsp; 55125 |
| 110000 | American Tower Corp., Sr. Unsecd. Note, 3.100%, 6/15/2050 | &nbsp;&nbsp; 72360 |
| 100000 | T-Mobile USA, Inc., Series WI, 3.000%, 2/15/2041 | &nbsp;&nbsp; 74557 |
| 80000 | T-Mobile USA, Inc., Sr. Unsecd. Note, 5.050%, 7/15/2033 | &nbsp;&nbsp; 81661 |
| 65000 | T-Mobile USA, Inc., Sr. Unsecd. Note, 5.200%, 1/15/2033 | &nbsp;&nbsp; 67109 |
| 115000 | Vodafone Group PLC, Sr. Unsecd. Note, 5.250%, 5/30/2048 | &nbsp;&nbsp; 106554 |
|  | TOTAL | &nbsp;&nbsp; 457366 |
|  | **Communications - Telecom Wirelines—0.4%** |  |
| 125000 | AT&T, Inc., Sr. Unsecd. Note, 4.900%, 11/1/2035 | &nbsp;&nbsp; 123505 |
| 200000 | AT&T, Inc., Sr. Unsecd. Note, 5.375%, 8/15/2035 | &nbsp;&nbsp; 205025 |
| 80000 | Rogers Communications, Inc., Sr. Unsecd. Note, 4.500%, 3/15/2042 | &nbsp;&nbsp; 68416 |
| 80000 | Rogers Communications, Inc., Sr. Unsecd. Note, 4.550%, 3/15/2052 | &nbsp;&nbsp; 63720 |
| 80000 | Verizon Communications, Inc., Sr. Unsecd. Note, 3.400%, 3/22/2041 | &nbsp;&nbsp; 62719 |
| 150000 | Verizon Communications, Inc., Sr. Unsecd. Note, 4.125%, 8/15/2046 | &nbsp;&nbsp; 120396 |
| 40000 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.875%, 11/30/2055 | &nbsp;&nbsp; 39548 |
|  | TOTAL | &nbsp;&nbsp; 683329 |
|  | **Consumer Cyclical - Automotive—0.3%** |  |
| 150000 | Daimler Trucks Financial NA, Sr. Unsecd. Note, 144A, 2.375%, 12/14/2028 | &nbsp;&nbsp; 142738 |

---

Annual Financial Statements and Additional Information

**9**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Consumer Cyclical - Automotive—continued** |  |
| $50000 | General Motors Financial Co., Inc., Sr. Unsecd. Note, 2.400%, 4/10/2028 | &nbsp;&nbsp; $48177 |
| 125000 | General Motors Financial Co., Inc., Sr. Unsecd. Note, 5.750%, 2/8/2031 | &nbsp;&nbsp; 131544 |
| 120000 | Hyundai Capital America, Sr. Unsecd. Note, 144A, 5.300%, 1/8/2029 | &nbsp;&nbsp; 123179 |
|  | TOTAL | &nbsp;&nbsp; 445638 |
|  | **Consumer Cyclical - Retailers—0.1%** |  |
| 60000 | AutoZone, Inc., Sr. Unsecd. Note, 4.750%, 2/1/2033 | &nbsp;&nbsp; 60272 |
| 110000 | Home Depot, Inc., Sr. Unsecd. Note, 2.950%, 6/15/2029 | &nbsp;&nbsp; 106479 |
| 100000 | WalMart, Inc., Sr. Unsecd. Note, 4.100%, 4/28/2027 | &nbsp;&nbsp; 100737 |
|  | TOTAL | &nbsp;&nbsp; 267488 |
|  | **Consumer Cyclical - Services—0.1%** |  |
| 115000 | Amazon.com, Inc., Sr. Unsecd. Note, 2.500%, 6/3/2050 | &nbsp;&nbsp; 68862 |
| 125000 | Amazon.com, Inc., Sr. Unsecd. Note, 3.875%, 8/22/2037 | &nbsp;&nbsp; 114716 |
| 65000 | Uber Technologies, Inc., Sr. Unsecd. Note, 4.300%, 1/15/2030 | &nbsp;&nbsp; 65454 |
|  | TOTAL | &nbsp;&nbsp; 249032 |
|  | **Consumer Non-Cyclical - Food/Beverage—0.5%** |  |
| 100000 | Bacardi-MartinI B.V., Sr. Unsecd. Note, 144A, 6.000%, 2/1/2035 | &nbsp;&nbsp; 103872 |
| 150000 | Coca-Cola Femsa S.A.B. de C.V., Sr. Unsecd. Note, 5.100%, 5/6/2035 | &nbsp;&nbsp; 152435 |
| 50000 | Constellation Brands, Inc., Sr. Unsecd. Note, 3.750%, 5/1/2050 | &nbsp;&nbsp; 36466 |
| 25000 | Flowers Foods, Inc., Sr. Unsecd. Note, 2.400%, 3/15/2031 | &nbsp;&nbsp; 22105 |
| 125000 | Flowers Foods, Inc., Sr. Unsecd. Note, 3.500%, 10/1/2026 | &nbsp;&nbsp; 124435 |
| 50000 | Kraft Heinz Foods Co., Sr. Unsecd. Note, 4.375%, 6/1/2046 | &nbsp;&nbsp; 41346 |
| 95000 | Mars, Inc., Sr. Unsecd. Note, 144A, 5.200%, 3/1/2035 | &nbsp;&nbsp; 97679 |
| 60000 | Mars, Inc., Sr. Unsecd. Note, 144A, 5.700%, 5/1/2055 | &nbsp;&nbsp; 59810 |
| 70000 | PepsiCo, Inc., Sr. Unsecd. Note, 2.750%, 10/21/2051 | &nbsp;&nbsp; 43970 |
| 85000 | The Campbell's Co., Sr. Unsecd. Note, 5.200%, 3/21/2029 | &nbsp;&nbsp; 87101 |
| 150000 | Tyson Foods, Inc., Sr. Unsecd. Note, 5.700%, 3/15/2034 | &nbsp;&nbsp; 158224 |
|  | TOTAL | &nbsp;&nbsp; 927443 |
|  | **Consumer Non-Cyclical - Health Care—0.2%** |  |
| 62000 | Becton Dickinson & Co., Sr. Unsecd. Note, 3.794%, 5/20/2050 | &nbsp;&nbsp; 46471 |
| 110000 | CVS Health Corp., Sr. Unsecd. Note, 4.250%, 4/1/2050 | &nbsp;&nbsp; 85561 |
| 85000 | CVS Health Corp., Sr. Unsecd. Note, 5.700%, 6/1/2034 | &nbsp;&nbsp; 89103 |
| 115000 | Danaher Corp., Sr. Unsecd. Note, 2.600%, 10/1/2050 | &nbsp;&nbsp; 70544 |
| 105000 | HCA, Inc., Sec. Fac. Bond, 3.500%, 7/15/2051 | &nbsp;&nbsp; 71453 |
|  | TOTAL | &nbsp;&nbsp; 363132 |
|  | **Consumer Non-Cyclical - Pharmaceuticals—0.6%** |  |
| 120000 | AbbVie, Inc., Sr. Unsecd. Note, 4.250%, 11/21/2049 | &nbsp;&nbsp; 98903 |
| 60000 | AbbVie, Inc., Sr. Unsecd. Note, 4.875%, 3/15/2030 | &nbsp;&nbsp; 61831 |
| 124000 | Amgen, Inc., Sr. Unsecd. Note, 5.250%, 3/2/2033 | &nbsp;&nbsp; 128397 |
| 95000 | Amgen, Inc., Sr. Unsecd. Note, 5.650%, 3/2/2053 | &nbsp;&nbsp; 93088 |
| 110000 | AstraZeneca PLC, Sr. Unsecd. Note, 1.375%, 8/6/2030 | &nbsp;&nbsp; 97835 |
| 75000 | Biogen, Inc., Sr. Unsecd. Note, 3.150%, 5/1/2050 | &nbsp;&nbsp; 48529 |
| 75000 | Bristol-Myers Squibb Co., Sr. Sub. Secd. Note, 5.550%, 2/22/2054 | &nbsp;&nbsp; 73707 |
| 70000 | Bristol-Myers Squibb Co., Sr. Unsecd. Note, 3.700%, 3/15/2052 | &nbsp;&nbsp; 51477 |
| 40000 | Bristol-Myers Squibb Co., Sr. Unsecd. Note, Series WI, 4.250%, 10/26/2049 | &nbsp;&nbsp; 32719 |
| 30000 | Gilead Sciences, Inc., Sr. Unsecd. Note, 5.250%, 10/15/2033 | &nbsp;&nbsp; 31535 |
| 70000 | Pfizer Investment Enterprises Pte Ltd., Sr. Unsecd. Note, 4.450%, 5/19/2028 | &nbsp;&nbsp; 70937 |
| 70000 | Pfizer Investment Enterprises Pte Ltd., Sr. Unsecd. Note, 4.750%, 5/19/2033 | &nbsp;&nbsp; 70764 |
| 60000 | Pfizer Investment Enterprises Pte Ltd., Sr. Unsecd. Note, 5.300%, 5/19/2053 | &nbsp;&nbsp; 56852 |
| 45000 | Pfizer, Inc., Sr. Unsecd. Note, 4.200%, 11/15/2030 | &nbsp;&nbsp; 45220 |
| 71000 | Regeneron Pharmaceuticals, Inc., Sr. Unsecd. Note, 2.800%, 9/15/2050 | &nbsp;&nbsp; 43373 |
|  | TOTAL | &nbsp;&nbsp; 1005167 |

---

Annual Financial Statements and Additional Information

**10**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Consumer Non-Cyclical - Supermarkets—0.1%** |  |
| $120000 | Kroger Co., Sr. Unsecd. Note, 5.000%, 9/15/2034 | &nbsp;&nbsp; $120709 |
|  | **Consumer Non-Cyclical - Tobacco—0.2%** |  |
| 110000 | BAT Capital Corp., Sr. Unsecd. Note, Series WI, 4.540%, 8/15/2047 | &nbsp;&nbsp; 91337 |
| 125000 | Philip Morris International, Inc., Sr. Unsecd. Note, 2.100%, 5/1/2030 | &nbsp;&nbsp; 114586 |
| 75000 | Philip Morris International, Inc., Sr. Unsecd. Note, 5.750%, 11/17/2032 | &nbsp;&nbsp; 80284 |
| 25000 | Reynolds American, Inc., Sr. Unsecd. Note, 7.000%, 8/4/2041 | &nbsp;&nbsp; 26238 |
|  | TOTAL | &nbsp;&nbsp; 312445 |
|  | **Energy - Independent—0.1%** |  |
| 35000 | Canadian Natural Resources Ltd., Sr. Unsecd. Note, 5.000%, 12/15/2029 | &nbsp;&nbsp; 35909 |
| 60000 | Ovintiv, Inc., Sr. Unsecd. Note, 7.100%, 7/15/2053 | &nbsp;&nbsp; 64106 |
|  | TOTAL | &nbsp;&nbsp; 100015 |
|  | **Energy - Integrated—0.1%** |  |
| 35000 | Cenovus Energy, Inc., Sr. Unsecd. Note, 5.400%, 3/20/2036 | &nbsp;&nbsp; 34970 |
| 95000 | Chevron Corp., Sr. Unsecd. Note, 3.078%, 5/11/2050 | &nbsp;&nbsp; 64531 |
|  | TOTAL | &nbsp;&nbsp; 99501 |
|  | **Energy - Midstream—0.7%** |  |
| 55000 | Boardwalk Pipeline Partners LP, Sr. Unsecd. Note, 3.400%, 2/15/2031 | &nbsp;&nbsp; 52071 |
| 30000 | Boardwalk Pipeline Partners LP, Sr. Unsecd. Note, 4.800%, 5/3/2029 | &nbsp;&nbsp; 30408 |
| 80000 | Columbia Pipeline Holding Co. LLC, Sr. Unsecd. Note, 144A, 5.681%, 1/15/2034 | &nbsp;&nbsp; 82663 |
| 45000 | Eastern Gas Transmission & Storage, Inc., Sr. Unsecd. Note, 3.000%, 11/15/2029 | &nbsp;&nbsp; 43028 |
| 145000 | Eastern Gas Transmission & Storage, Inc., Sr. Unsecd. Note, 3.900%, 11/15/2049 | &nbsp;&nbsp; 106077 |
| 110000 | Energy Transfer LP, Sr. Unsecd. Note, Series 10Y, 4.950%, 6/15/2028 | &nbsp;&nbsp; 111844 |
| 75000 | Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 6.375%, 3/1/2041 | &nbsp;&nbsp; 80199 |
| 100000 | MPLX LP, Sr. Unsecd. Note, 4.950%, 9/1/2032 | &nbsp;&nbsp; 100703 |
| 50000 | MPLX LP, Sr. Unsecd. Note, 5.400%, 9/15/2035 | &nbsp;&nbsp; 50390 |
| 40000 | National Fuel Gas Co., Sr. Unsecd. Note, 2.950%, 3/1/2031 | &nbsp;&nbsp; 36557 |
| 25000 | ONEOK, Inc., Sr. Unsecd. Note, 4.950%, 7/13/2047 | &nbsp;&nbsp; 21897 |
| 25000 | ONEOK, Inc., Sr. Unsecd. Note, 6.100%, 11/15/2032 | &nbsp;&nbsp; 26813 |
| 65000 | ONEOK, Inc., Sr. Unsecd. Note, 6.625%, 9/1/2053 | &nbsp;&nbsp; 68143 |
| 60000 | Plains All American Pipeline LP, Sr. Unsecd. Note, 5.150%, 6/1/2042 | &nbsp;&nbsp; 55022 |
| 160000 | Targa Resources, Inc., Sr. Unsecd. Note, 4.200%, 2/1/2033 | &nbsp;&nbsp; 153243 |
| 80000 | TransCanada PipeLines Ltd., Sr. Secd. Note, 5.100%, 3/15/2049 | &nbsp;&nbsp; 74146 |
| 90000 | Williams Cos., Inc., Sr. Unsecd. Note, 5.800%, 11/15/2054 | &nbsp;&nbsp; 89012 |
|  | TOTAL | &nbsp;&nbsp; 1182216 |
|  | **Energy - Refining—0.0%** |  |
| 60000 | Marathon Petroleum Corp., Sr. Unsecd. Note, 4.750%, 9/15/2044 | &nbsp;&nbsp; 51445 |
|  | **Financial Institution - Banking—2.9%** |  |
| 25000 | American Express Co., Sr. Unsecd. Note, 4.918%, 7/20/2033 | &nbsp;&nbsp; 25451 |
| 90000 | American Express Co., Sr. Unsecd. Note, 5.085%, 1/30/2031 | &nbsp;&nbsp; 92811 |
| 160000 | Bank of America Corp., Sr. Unsecd. Note, 2.299%, 7/21/2032 | &nbsp;&nbsp; 143119 |
| 385000 | Bank of America Corp., Sr. Unsecd. Note, 3.419%, 12/20/2028 | &nbsp;&nbsp; 380281 |
| 140000 | Bank of America Corp., Sr. Unsecd. Note, 5.468%, 1/23/2035 | &nbsp;&nbsp; 145888 |
| 125000 | Bank of America Corp., Sr. Unsecd. Note, 5.511%, 1/24/2036 | &nbsp;&nbsp; 130403 |
| 50000 | Bank of New York Mellon Corp., Sr. Unsecd. Note, Series MTN, 3.992%, 6/13/2028 | &nbsp;&nbsp; 50035 |
| 85000 | Capital One Financial Co., Sr. Unsecd. Note, 5.197%, 9/11/2036 | &nbsp;&nbsp; 84603 |
| 115000 | Citigroup, Inc., Sr. Unsecd. Note, 3.057%, 1/25/2033 | &nbsp;&nbsp; 105376 |
| 110000 | Citigroup, Inc., Sr. Unsecd. Note, 3.668%, 7/24/2028 | &nbsp;&nbsp; 109332 |
| 10000 | Citigroup, Inc., Sr. Unsecd. Note, 5.174%, 9/11/2036 | &nbsp;&nbsp; 10098 |
| 195000 | Citigroup, Inc., Sub. Note, 6.020%, 1/24/2036 | &nbsp;&nbsp; 204322 |
| 120000 | Citizens Financial Group, Inc., Sr. Unsecd. Note, 5.718%, 7/23/2032 | &nbsp;&nbsp; 125863 |
| 60000 | Comerica, Inc., Sr. Unsecd. Note, 5.982%, 1/30/2030 | &nbsp;&nbsp; 62604 |
| 120000 | Fifth Third Bancorp, Sr. Unsecd. Note, 6.361%, 10/27/2028 | &nbsp;&nbsp; 124885 |

---

Annual Financial Statements and Additional Information

**11**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Financial Institution - Banking—continued** |  |
| $75000 | FNB Corp. (PA), 5.722%, 12/11/2030 | &nbsp;&nbsp; $76611 |
| 100000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 1.948%, 10/21/2027 | &nbsp;&nbsp; 98331 |
| 275000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 1.992%, 1/27/2032 | &nbsp;&nbsp; 244559 |
| 135000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 4.939%, 10/21/2036 | &nbsp;&nbsp; 134069 |
| 120000 | Huntington Bancshares, Inc., Sr. Unsecd. Note, 4.443%, 8/4/2028 | &nbsp;&nbsp; 120687 |
| 100000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 2.963%, 1/25/2033 | &nbsp;&nbsp; 91803 |
| 360000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 3.509%, 1/23/2029 | &nbsp;&nbsp; 356796 |
| 90000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 5.350%, 6/1/2034 | &nbsp;&nbsp; 93541 |
| 125000 | JPMorgan Chase & Co., Sub., 5.576%, 7/23/2036 | &nbsp;&nbsp; 129354 |
| 95000 | KeyCorp, Sr. Unsecd. Note, 6.401%, 3/6/2035 | &nbsp;&nbsp; 103222 |
| 120000 | M&T Bank Corp., Sr. Unsecd. Note, 5.053%, 1/27/2034 | &nbsp;&nbsp; 120803 |
| 75000 | Morgan Stanley, Sr. Unsecd. Note, 5.466%, 1/18/2035 | &nbsp;&nbsp; 77988 |
| 90000 | Morgan Stanley, Sr. Unsecd. Note, 5.831%, 4/19/2035 | &nbsp;&nbsp; 95676 |
| 290000 | Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 3.772%, 1/24/2029 | &nbsp;&nbsp; 288415 |
| 40000 | Morgan Stanley, Sr. Unsecd. Note, Series MTN, 1.794%, 2/13/2032 | &nbsp;&nbsp; 35172 |
| 75000 | Morgan Stanley, Sr. Unsecd. Note, Series MTN, 1.928%, 4/28/2032 | &nbsp;&nbsp; 65837 |
| 125000 | Northern Trust Corp., Sub., 6.125%, 11/2/2032 | &nbsp;&nbsp; 136525 |
| 80000 | PNC Financial Services Group, Inc., 5.575%, 1/29/2036 | &nbsp;&nbsp; 83459 |
| 135000 | PNC Financial Services Group, Inc., Sub., 4.626%, 6/6/2033 | &nbsp;&nbsp; 133987 |
| 60000 | Regions Financial Corp., Sr. Unsecd. Note, 5.722%, 6/6/2030 | &nbsp;&nbsp; 62566 |
| 65000 | Truist Financial Corp., Sr. Unsecd. Note, Series I, 4.964%, 10/23/2036 | &nbsp;&nbsp; 64332 |
| 20000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 5.122%, 1/26/2034 | &nbsp;&nbsp; 20384 |
| 40000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 5.867%, 6/8/2034 | &nbsp;&nbsp; 42577 |
| 175000 | U.S. Bancorp, 4.967%, 7/22/2033 | &nbsp;&nbsp; 176365 |
| 30000 | Wells Fargo & Co., Sr. Unsecd. Note, 5.244%, 1/24/2031 | &nbsp;&nbsp; 31082 |
| 75000 | Wells Fargo & Co., Sr. Unsecd. Note, 5.499%, 1/23/2035 | &nbsp;&nbsp; 78296 |
| 120000 | Wells Fargo & Co., Sr. Unsecd. Note, 5.707%, 4/22/2028 | &nbsp;&nbsp; 122506 |
| 100000 | Wells Fargo & Co., Sr. Unsecd. Note, 6.491%, 10/23/2034 | &nbsp;&nbsp; 110753 |
| 200000 | Wells Fargo & Co., Sr. Unsecd. Note, Series MTN, 3.584%, 5/22/2028 | &nbsp;&nbsp; 198747 |
|  | TOTAL | &nbsp;&nbsp; 5189514 |
|  | **Financial Institution - Broker/Asset Mgr/Exchange—0.1%** |  |
| 40000 | BlackRock, Inc., Sr. Unsecd. Note, 4.750%, 5/25/2033 | &nbsp;&nbsp; 40987 |
| 125000 | Jefferies Financial Group, Inc., Sr. Unsecd. Note, 2.750%, 10/15/2032 | &nbsp;&nbsp; 108837 |
| 100000 | Raymond James Financial, Inc., Sr. Unsecd. Note, 4.900%, 9/11/2035 | &nbsp;&nbsp; 99466 |
|  | TOTAL | &nbsp;&nbsp; 249290 |
|  | **Financial Institution - Insurance - Health—0.1%** |  |
| 120000 | Elevance Health, Inc., Sr. Unsecd. Note, 4.750%, 2/15/2033 | &nbsp;&nbsp; 120464 |
| 150000 | UnitedHealth Group, Inc., Sr. Unsecd. Note, 3.050%, 5/15/2041 | &nbsp;&nbsp; 113795 |
|  | TOTAL | &nbsp;&nbsp; 234259 |
|  | **Financial Institution - Insurance - Life—0.3%** |  |
| 110000 | CoreBridge Global Funding, Secured Note, 144A, 4.900%, 12/3/2029 | &nbsp;&nbsp; 112069 |
| 65000 | Lincoln National Corp., Sr. Unsecd. Note, 3.400%, 1/15/2031 | &nbsp;&nbsp; 61899 |
| 100000 | Massachusetts Mutual Life Insurance Co., Sub. Note, 144A, 4.900%, 4/1/2077 | &nbsp;&nbsp; 80814 |
| 50000 | Pacific Life Global Funding II, Sr. Secd. Note, 144A, 4.900%, 1/11/2029 | &nbsp;&nbsp; 51132 |
| 70000 | Pacific Life Insurance Co., Sub. Note, 144A, 4.300%, 10/24/2067 | &nbsp;&nbsp; 56484 |
| 120000 | Principal Life Global Funding II, 144A, 1.625%, 11/19/2030 | &nbsp;&nbsp; 105047 |
| 100000 | Prudential Financial, Inc., Sr. Unsecd. Note, Series MTN, 4.600%, 5/15/2044 | &nbsp;&nbsp; 89569 |
|  | TOTAL | &nbsp;&nbsp; 557014 |
|  | **Financial Institution - Insurance - P&C—0.4%** |  |
| 130000 | Aon North America, Inc., 5.750%, 3/1/2054 | &nbsp;&nbsp; 129437 |
| 100000 | Chubb INA Holdings LLC., Sr. Unsecd. Note, 1.375%, 9/15/2030 | &nbsp;&nbsp; 88206 |
| 30000 | Chubb INA Holdings LLC., Sr. Unsecd. Note, 3.350%, 5/3/2026 | &nbsp;&nbsp; 29948 |

---

Annual Financial Statements and Additional Information

**12**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Financial Institution - Insurance - P&C—continued** |  |
| $120000 | CNA Financial Corp., Sr. Unsecd. Note, 5.500%, 6/15/2033 | &nbsp;&nbsp; $124645 |
| 70000 | Marsh & McLennan Cos., Inc., Sr. Unsecd. Note, 4.650%, 3/15/2030 | &nbsp;&nbsp; 71473 |
| 200000 | Nationwide Mutual Insurance Co., Sub. Note, 144A, 9.375%, 8/15/2039 | &nbsp;&nbsp; 267836 |
| 60000 | The Travelers Cos., Inc., Sr. Unsecd. Note, 5.450%, 5/25/2053 | &nbsp;&nbsp; 59167 |
|  | TOTAL | &nbsp;&nbsp; 770712 |
|  | **Financial Institution - REIT - Apartment—0.3%** |  |
| 135000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN, 3.350%, 5/15/2027 | &nbsp;&nbsp; 134041 |
| 125000 | Camden Property Trust, Sr. Unsecd. Note, 4.900%, 1/15/2034 | &nbsp;&nbsp; 126819 |
| 85000 | Mid-America Apartment Communities LP, Sr. Unsecd. Note, 5.300%, 2/15/2032 | &nbsp;&nbsp; 88860 |
| 100000 | UDR, Inc., Sr. Unsecd. Note, Series GMTN, 3.500%, 1/15/2028 | &nbsp;&nbsp; 98908 |
|  | TOTAL | &nbsp;&nbsp; 448628 |
|  | **Financial Institution - REIT - Healthcare—0.3%** |  |
| 100000 | Healthcare Trust of America, Sr. Unsecd. Note, 2.000%, 3/15/2031 | &nbsp;&nbsp; 87839 |
| 125000 | Physicians Realty Trust, Sr. Unsecd. Note, 3.950%, 1/15/2028 | &nbsp;&nbsp; 124409 |
| 60000 | Welltower OP LLC, Sr. Unsecd. Note, 5.125%, 7/1/2035 | &nbsp;&nbsp; 61259 |
| 90000 | Welltower, Inc., Sr. Unsecd. Note, 2.800%, 6/1/2031 | &nbsp;&nbsp; 83426 |
| 100000 | Welltower, Inc., Sr. Unsecd. Note, 4.250%, 4/1/2026 | &nbsp;&nbsp; 100005 |
|  | TOTAL | &nbsp;&nbsp; 456938 |
|  | **Financial Institution - REIT - Office—0.1%** |  |
| 125000 | Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 1.875%, 2/1/2033 | &nbsp;&nbsp; 102564 |
| 100000 | Boston Properties LP, Sr. Unsecd. Note, 3.650%, 2/1/2026 | &nbsp;&nbsp; 99931 |
| 40000 | Piedmont Operating Partnership, LP, Sr. Unsecd. Note, 2.750%, 4/1/2032 | &nbsp;&nbsp; 34418 |
|  | TOTAL | &nbsp;&nbsp; 236913 |
|  | **Financial Institution - REIT - Retail—0.1%** |  |
| 125000 | Kimco Realty Corp., Sr. Unsecd. Note, 6.400%, 3/1/2034 | &nbsp;&nbsp; 138042 |
| 120000 | Regency Centers LP, Sr. Unsecd. Note, 4.125%, 3/15/2028 | &nbsp;&nbsp; 120326 |
|  | TOTAL | &nbsp;&nbsp; 258368 |
|  | **Technology—1.4%** |  |
| 115000 | Alphabet, Inc., Sr. Unsecd. Note, 2.050%, 8/15/2050 | &nbsp;&nbsp; 62726 |
| 215000 | Apple, Inc., Sr. Unsecd. Note, 2.375%, 2/8/2041 | &nbsp;&nbsp; 155236 |
| 65000 | Apple, Inc., Sr. Unsecd. Note, 2.400%, 8/20/2050 | &nbsp;&nbsp; 38635 |
| 80000 | Apple, Inc., Sr. Unsecd. Note, 4.000%, 5/10/2028 | &nbsp;&nbsp; 80629 |
| 60000 | Autodesk, Inc., Sr. Unsecd. Note, 5.300%, 6/15/2035 | &nbsp;&nbsp; 61678 |
| 20000 | Broadcom, Inc., Sr. Unsecd. Note, 4.150%, 11/15/2030 | &nbsp;&nbsp; 19926 |
| 65000 | Broadcom, Inc., Sr. Unsecd. Note, 4.900%, 2/15/2038 | &nbsp;&nbsp; 63755 |
| 65000 | Broadcom, Inc., Sr. Unsecd. Note, 5.050%, 7/12/2029 | &nbsp;&nbsp; 66940 |
| 80000 | Broadcom, Inc., Sr. Unsecd. Note, 144A, 3.187%, 11/15/2036 | &nbsp;&nbsp; 67877 |
| 65000 | CDW LLC/ CDW Finance Corp., Sr. Unsecd. Note, 5.550%, 8/22/2034 | &nbsp;&nbsp; 66289 |
| 75000 | Cisco Systems, Inc., Sr. Unsecd. Note, 4.750%, 2/24/2030 | &nbsp;&nbsp; 77118 |
| 75000 | Cisco Systems, Inc., Sr. Unsecd. Note, 4.800%, 2/26/2027 | &nbsp;&nbsp; 75861 |
| 65000 | Dell International LLC / EMC Corp., Sr. Unsecd. Note, 5.000%, 4/1/2030 | &nbsp;&nbsp; 66634 |
| 60000 | Dell International LLC / EMC Corp., Sr. Unsecd. Note, 5.100%, 2/15/2036 | &nbsp;&nbsp; 59283 |
| 125000 | Fiserv, Inc., Sr. Unsecd. Note, 3.500%, 7/1/2029 | &nbsp;&nbsp; 121272 |
| 110000 | Fortinet, Inc., Sr. Unsecd. Note, 1.000%, 3/15/2026 | &nbsp;&nbsp; 109277 |
| 150000 | Global Payments, Inc., Sr. Unsecd. Note, 5.550%, 11/15/2035 | &nbsp;&nbsp; 149149 |
| 45000 | Hewlett Packard Enterprise Co., 5.600%, 10/15/2054 | &nbsp;&nbsp; 41723 |
| 35000 | Hewlett Packard Enterprise Co., Sr. Unsecd. Note, 4.400%, 10/15/2030 | &nbsp;&nbsp; 34903 |
| 50000 | Hewlett Packard Enterprise Co., Sr. Unsecd. Note, 5.000%, 10/15/2034 | &nbsp;&nbsp; 49578 |
| 60000 | Keysight Technologies, Inc., Sr. Unsecd. Note, 4.950%, 10/15/2034 | &nbsp;&nbsp; 60595 |
| 65000 | Keysight Technologies, Inc., Sr. Unsecd. Note, 5.350%, 7/30/2030 | &nbsp;&nbsp; 67813 |
| 100000 | Lam Research Corp., Sr. Unsecd. Note, 4.000%, 3/15/2029 | &nbsp;&nbsp; 100063 |
| 65000 | Microsoft Corp., Sr. Unsecd. Note, 2.525%, 6/1/2050 | &nbsp;&nbsp; 39740 |

---

Annual Financial Statements and Additional Information

**13**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Technology—continued** |  |
| $105000 | Oracle Corp., Sr. Unsecd. Note, 5.200%, 9/26/2035 | &nbsp;&nbsp; $100636 |
| 105000 | Oracle Corp., Sr. Unsecd. Note, 5.375%, 9/27/2054 | &nbsp;&nbsp; 84985 |
| 20000 | Oracle Corp., Sr. Unsecd. Note, 5.950%, 9/26/2055 | &nbsp;&nbsp; 17733 |
| 125000 | Roper Technologies, Inc., Sr. Unsecd. Note, 4.900%, 10/15/2034 | &nbsp;&nbsp; 124771 |
| 60000 | Trimble, Inc., Sr. Unsecd. Note, 6.100%, 3/15/2033 | &nbsp;&nbsp; 64631 |
| 120000 | Verisign, Inc., Sr. Unsecd. Note, 2.700%, 6/15/2031 | &nbsp;&nbsp; 109297 |
| 130000 | Verisk Analytics, Inc., Sr. Unsecd. Note, 4.125%, 3/15/2029 | &nbsp;&nbsp; 129812 |
| 40000 | VMware, Inc., Sr. Unsecd. Note, 1.400%, 8/15/2026 | &nbsp;&nbsp; 39419 |
| 50000 | VMware, Inc., Sr. Unsecd. Note, 2.200%, 8/15/2031 | &nbsp;&nbsp; 44449 |
|  | TOTAL | &nbsp;&nbsp; 2452433 |
|  | **Transportation - Railroads—0.2%** |  |
| 90000<br><sup>3</sup> <br>| Burlington Northern Santa Fe LLC, Sr. Unsecd. Note, 5.200% (180-DAY AVERAGE SOFR +0.000%), 4/15/2054 | &nbsp;&nbsp; 84812 |
| 135000 | Canadian Pacific Railway Co., Sr. Unsecd. Note, 3.500%, 5/1/2050 | &nbsp;&nbsp; 97849 |
| 65000 | Union Pacific Corp., Sr. Unsecd. Note, 2.375%, 5/20/2031 | &nbsp;&nbsp; 59628 |
| 125000 | Union Pacific Corp., Sr. Unsecd. Note, 2.400%, 2/5/2030 | &nbsp;&nbsp; 117106 |
|  | TOTAL | &nbsp;&nbsp; 359395 |
|  | **Transportation - Services—0.1%** |  |
| 65000 | Enterprise Rent-A-Car USA Finance Co., Sr. Unsecd. Note, 144A, 4.900%, 5/1/2033 | &nbsp;&nbsp; 66061 |
| 80000 | FedEx Corp., Sr. Unsecd. Note, 3.250%, 5/15/2041 | &nbsp;&nbsp; 60171 |
| 75000 | Ryder System, Inc., Sr. Unsecd. Note, Series MTN, 2.850%, 3/1/2027 | &nbsp;&nbsp; 74065 |
|  | TOTAL | &nbsp;&nbsp; 200297 |
|  | **Utility - Electric—1.2%** |  |
| 165000 | Ameren Corp., Sr. Unsecd. Note, 1.750%, 3/15/2028 | &nbsp;&nbsp; 157008 |
| 70000 | American Electric Power Co., Inc., Sr. Unsecd. Note, 5.625%, 3/1/2033 | &nbsp;&nbsp; 73570 |
| 100000 | Black Hills Corp., Sr. Unsecd. Note, 2.500%, 6/15/2030 | &nbsp;&nbsp; 92822 |
| 75000 | Constellation Energy Generation LLC, Sr. Unsecd. Note, 5.800%, 3/1/2033 | &nbsp;&nbsp; 80089 |
| 25000 | Constellation Energy Generation LLC, Sr. Unsecd. Note, 6.500%, 10/1/2053 | &nbsp;&nbsp; 27276 |
| 125000 | Duke Energy Corp., Sr. Unsecd. Note, 2.650%, 9/1/2026 | &nbsp;&nbsp; 123969 |
| 125000 | Duke Energy Corp., Sr. Unsecd. Note, 3.750%, 9/1/2046 | &nbsp;&nbsp; 95151 |
| 75000 | Emera US Finance LP, Sr. Unsecd. Note, 3.550%, 6/15/2026 | &nbsp;&nbsp; 74774 |
| 50000 | Emera US Finance LP, Sr. Unsecd. Note, 4.750%, 6/15/2046 | &nbsp;&nbsp; 42707 |
| 100000 | Enel Finance International NV, Co. Guarantee, 144A, 6.000%, 10/7/2039 | &nbsp;&nbsp; 105348 |
| 190000 | Evergy Metro, Inc., Sr. Unsecd. Note, 4.200%, 3/15/2048 | &nbsp;&nbsp; 156128 |
| 25000 | Exelon Corp., Sr. Unsecd. Note, 4.100%, 3/15/2052 | &nbsp;&nbsp; 19424 |
| 125000 | Exelon Corp., Sr. Unsecd. Note, 4.700%, 4/15/2050 | &nbsp;&nbsp; 107525 |
| 120000 | FirstEnergy Transmission LLC, Sr. Unsecd. Note, 144A, 4.550%, 4/1/2049 | &nbsp;&nbsp; 102081 |
| 93000 | Fortis, Inc. / Canada, Sr. Unsecd. Note, 3.055%, 10/4/2026 | &nbsp;&nbsp; 92256 |
| 70000 | National Rural Utilities Cooperative Finance Corp., Sr. Sub. Note, 5.250%, 4/20/2046 | &nbsp;&nbsp; 69948 |
| 235000 | NextEra Energy Capital Holdings, Inc., Sr. Unsecd. Note, 2.250%, 6/1/2030 | &nbsp;&nbsp; 216258 |
| 75000 | NextEra Energy Capital Holdings, Inc., Sr. Unsecd. Note, 5.050%, 3/15/2030 | &nbsp;&nbsp; 77409 |
| 80000 | NiSource, Inc., Sr. Unsecd. Note, 4.375%, 5/15/2047 | &nbsp;&nbsp; 66579 |
| 10000 | NiSource, Inc., Sr. Unsecd. Note, 5.250%, 3/30/2028 | &nbsp;&nbsp; 10261 |
| 100000 | PPL Capital Funding, Inc., Sr. Unsecd. Note, 3.100%, 5/15/2026 | &nbsp;&nbsp; 99688 |
| 125000 | Puget Energy, Inc., Sec. Fac. Bond, 2.379%, 6/15/2028 | &nbsp;&nbsp; 119752 |
| 100000 | Southern Co., Jr. Sub. Note, Series B, 4.000%, 1/15/2051 | &nbsp;&nbsp; 100322 |
| 20000 | WEC Energy Group, Inc., Sr. Unsecd. Note, 5.150%, 10/1/2027 | &nbsp;&nbsp; 20407 |
|  | TOTAL | &nbsp;&nbsp; 2130752 |
|  | **Utility - Natural Gas—0.1%** |  |
| 155000 | Sempra Energy, Sr. Unsecd. Note, 3.700%, 4/1/2029 | &nbsp;&nbsp; 152624 |
|  | TOTAL CORPORATE BONDS <br>(IDENTIFIED COST $23,445,808)<br>| &nbsp;&nbsp; 22891170 |

---

Annual Financial Statements and Additional Information

**14**

------

---

| | | |
|:---|:---|:---|
| **Shares or**<br> **Principal**<br> **Amount**<br>|  | **Value** |
|  | COMMERCIAL MORTGAGE-BACKED SECURITIES—0.4% |  |
|  | **Commercial Mortgage—0.3%** |  |
| $110000 | Bank 2022-BNK40, Class A4, 3.389%, 3/15/2064 | &nbsp;&nbsp; $102867 |
| 85000 | Bank, Class A4, 3.488%, 11/15/2050 | &nbsp;&nbsp; 83047 |
| 200000 | Benchmark Mortgage Trust 2020-B19, Class A5, 1.850%, 9/15/2053 | &nbsp;&nbsp; 176508 |
| 35529 | Commercial Mortgage Trust 2015-DC1, Class AM, 3.724%, 2/10/2048 | &nbsp;&nbsp; 35102 |
| 100000 | JPMDB Commercial Mortgage Securities Trust 2016-C4, Class A3, 3.141%, 12/15/2049 | &nbsp;&nbsp; 98325 |
|  | TOTAL | &nbsp;&nbsp; 495849 |
|  | **Federal Home Loan Mortgage Corporation—0.1%** |  |
| 181340 | FHLMC REMIC, Series K105, Class A1, 1.536%, 9/25/2029 | &nbsp;&nbsp; 172794 |
|  | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES <br>(IDENTIFIED COST $725,110)<br>| &nbsp;&nbsp; 668643 |
|  | FOREIGN GOVERNMENTS/AGENCY—0.1% |  |
|  | **Sovereign—0.1%** |  |
| 200000 | Mexico, Government of, 3.750%, 1/11/2028 <br>(IDENTIFIED COST $199,213)<br>| &nbsp;&nbsp; 198000 |
|  | MORTGAGE-BACKED SECURITIES—0.0% |  |
|  | **Government National Mortgage Association—0.0%** |  |
| 1437 | Government National Mortgage Association, Pool 2796, 7.000%, 8/20/2029 | &nbsp;&nbsp; 1478 |
| 1015 | Government National Mortgage Association, Pool 3040, 7.000%, 2/20/2031 | &nbsp;&nbsp; 1055 |
| 3081 | Government National Mortgage Association, Pool 3188, 6.500%, 1/20/2032 | &nbsp;&nbsp; 3206 |
| 4112 | Government National Mortgage Association, Pool 3239, 6.500%, 5/20/2032 | &nbsp;&nbsp; 4289 |
|  | TOTAL MORTGAGE-BACKED SECURITIES <br>(IDENTIFIED COST $9,617)<br>| &nbsp;&nbsp; 10028 |
|  | ADJUSTABLE RATE MORTGAGE—0.0% |  |
|  | **Federal National Mortgage Association—0.0%** |  |
| 1363<br><sup>3</sup> <br>| Federal National Mortgage Association ARM, 6.594%, 9/1/2037 <br>(IDENTIFIED COST $1,365)<br>| &nbsp;&nbsp; 1420 |
|  | INVESTMENT COMPANIES—18.4% |  |
| 117411 | Bank Loan Core Fund | &nbsp;&nbsp; 1006210 |
| 189166 | Emerging Markets Core Fund | &nbsp;&nbsp; 1717623 |
| 482543 | Federated Hermes High Income Bond Fund II, Class P | &nbsp;&nbsp; 2789101 |
| 1213 | Federated Hermes Short-Intermediate Government Fund, Institutional Shares | &nbsp;&nbsp; 11904 |
| 2383264 | Mortgage Core Fund | &nbsp;&nbsp; 20210080 |
| 783892 | Project and Trade Finance Core Fund | &nbsp;&nbsp; 6992318 |
|  | TOTAL INVESTMENT COMPANIES <br>(IDENTIFIED COST $31,836,221)<br>| &nbsp;&nbsp; 32727236 |
|  | REPURCHASE AGREEMENT—1.6% |  |
| $2902000 | Interest in $292,000,000 joint repurchase agreement 3.85%, dated 12/31/2025 under which Bank of America, N.A. will <br> repurchase securities provided as collateral for $292,062,456 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 10/1/2050 and the market value of those underlying securities was $297,903,705. <br>(IDENTIFIED COST $2,902,000)<br>| &nbsp;&nbsp; 2902000 |
|  | TOTAL INVESTMENT IN SECURITIES—97.6% <br>(IDENTIFIED COST $156,050,834)<sup>4</sup> <br>| &nbsp;&nbsp; 173476176 |
|  | OTHER ASSETS AND LIABILITIES - NET—2.4%<sup>5</sup> <br>| &nbsp;&nbsp; 4267178 |
|  | NET ASSETS—100% | &nbsp;&nbsp; $177743354 |

---

Annual Financial Statements and Additional Information

**15**

------

At December 31, 2025, the Fund had the following outstanding futures contracts:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description** | **Number of** <br>**Contracts**<br>| &nbsp;&nbsp; **Notional** <br>**Value**<br>| &nbsp;&nbsp;&nbsp; **Expiration** <br>**Date**<br>| &nbsp;&nbsp; **Value and** <br>**Unrealized** <br>**Appreciation** <br>**(Depreciation)**<br>|
| **Long Futures:** |  |  |  |  |
| S&P 500 E-Mini Long Futures | &nbsp;&nbsp; 160 | &nbsp;&nbsp;&nbsp; $55140000 | March 2026 | &nbsp;&nbsp;&nbsp; $208274 |
| United States Treasury Notes 2-Year Long Futures | &nbsp;&nbsp; 92 | &nbsp;&nbsp;&nbsp; $19208594 | March 2026 | &nbsp;&nbsp;&nbsp; $(10274) |
| United States Treasury Notes 5-Year Long Futures | &nbsp;&nbsp; 69 | &nbsp;&nbsp;&nbsp; $7542023 | March 2026 | &nbsp;&nbsp;&nbsp; $(23369) |
| United States Treasury Notes 10-Year Ultra Long Futures | &nbsp;&nbsp; 22 | &nbsp;&nbsp;&nbsp; $2530344 | March 2026 | &nbsp;&nbsp;&nbsp; $(16206) |
| **Short Futures:** |  |  |  |  |
| United States Treasury Notes 10-Year Short Futures | &nbsp;&nbsp; 320 | &nbsp;&nbsp;&nbsp; $35980000 | March 2026 | &nbsp;&nbsp;&nbsp; $249229 |
| United States Treasury Ultra Bond Short Futures | &nbsp;&nbsp; 16 | &nbsp;&nbsp;&nbsp; $1888000 | March 2026 | &nbsp;&nbsp;&nbsp; $32184 |
| NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | &nbsp;&nbsp;&nbsp; $439838 |

---

Net Unrealized Appreciation on Futures Contracts is included in "Other Assets and Liabilities—Net."

Affiliated fund holdings are investment companies which are managed by Federated Investment Management Company and Federated Equity Management Company of Pennsylvania (collectively, the "Co-Advisers") or an affiliate of the Co-Advisers. Transactions with affiliated fund holdings during the period ended December 31, 2025, were as follows:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Affiliates** | **Value as of** <br>**12/31/2024**<br>| **Purchases** <br>**at Cost**<br>| **Proceeds** <br>**from Sales**<br>| **Change in** <br>**Unrealized** <br>**Appreciation/** <br>**Depreciation**<br>| **Net** <br>**Realized** <br>**Gain/** <br>**(Loss)**<br>| **Value as of** <br>**12/31/2025**<br>| **Shares** <br>**Held as of** <br>**12/31/2025**<br>| **Dividend** <br>**Income**<br>|
| Bank Loan Core Fund | $548535 | $1017925 | $(551843) | $3791 | $(12198) | $1006210 | 117411 | $18039 |
| Emerging Markets Core Fund | $2603116 | $174141 | $(1135000) | $(38007) | $113373 | $1717623 | 189166 | $160851 |
| Federated Hermes High Income Bond Fund II, <br> Class P<br>| $3250926 | $1392081 | $(1950000) | $31842 | $64252 | $2789101 | 482543 | $167081 |
| Federated Hermes Short-Intermediate Govern-<br> ment Fund, Institutional Shares<br>| $11237 | $431 | $— | $236 | $— | $11904 | 1213 | $467 |
| Mortgage Core Fund | $27825913 | $1079749 | $(9500000) | $1718745 | $(914327) | $20210080 | 2383264 | $1079866 |
| Project and Trade Finance Core Fund | $6022842 | $1424283 | $(500000) | $55891 | $(10698) | $6992318 | 783892 | $425296 |
| TOTAL OF AFFILIATED TRANSACTIONS | $40262569 | $5088610 | $(13636843) | $1772498 | $(759598) | $32727236 | 3957489 | $1851600 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Non-income-producing security. |
| 2 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established <br> by and under the general supervision of the Fund's Adviser acting through its Valuation Committee.<br>|
| 3 | Floating/adjustable note with current rate and current maturity or next reset date shown. Adjustable rate mortgage security coupons are based on the weighted <br> average note rates of the underlying mortgages less the guarantee and servicing fees. These securities do not indicate an index and spread in their description <br> above.<br>|
| 4 | The cost of investments for federal tax purposes amounts to $157,789,593. |
| 5 | 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 net assets at December 31, 2025.

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.

Annual Financial Statements and Additional Information

**16**

------

The following is a summary of the inputs used, as of December 31, 2025, in valuing the Fund's assets carried at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** |
|  | **Level 1—** <br>**Quoted** <br>**Prices**<br>| **Level 2—** <br>**Other** <br>**Significant** <br>**Observable** <br>**Inputs**<br>| **Level 3—** <br>**Significant** <br>**Unobservable** <br>**Inputs**<br>| **Total** |
| **Equity Securities:** |  |  |  |  |
| Common Stocks |  |  |  |  |
| Domestic | &nbsp;&nbsp; $71139387 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $1008 | &nbsp;&nbsp; $71140395 |
| International | &nbsp;&nbsp; 2564086 | &nbsp;&nbsp; 1372837 | &nbsp;&nbsp; — | &nbsp;&nbsp; 3936923 |
| **Debt Securities:** |  |  |  |  |
| U.S. Treasuries | &nbsp;&nbsp; — | &nbsp;&nbsp; 39000361 | &nbsp;&nbsp; — | &nbsp;&nbsp; 39000361 |
| Corporate Bonds | &nbsp;&nbsp; — | &nbsp;&nbsp; 22891170 | &nbsp;&nbsp; — | &nbsp;&nbsp; 22891170 |
| Commercial Mortgage-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 668643 | &nbsp;&nbsp; — | &nbsp;&nbsp; 668643 |
| Foreign Governments/Agency | &nbsp;&nbsp; — | &nbsp;&nbsp; 198000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 198000 |
| Mortgage-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 10028 | &nbsp;&nbsp; — | &nbsp;&nbsp; 10028 |
| Adjustable Rate Mortgage | &nbsp;&nbsp; — | &nbsp;&nbsp; 1420 | &nbsp;&nbsp; — | &nbsp;&nbsp; 1420 |
| **Investment Companies** | &nbsp;&nbsp; 25734918 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 25734918 |
| Other Investments<sup>1</sup> <br>| &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 6992318 |
| **Repurchase Agreement** | &nbsp;&nbsp; — | &nbsp;&nbsp; 2902000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 2902000 |
| TOTAL SECURITIES | &nbsp;&nbsp; $99438391 | &nbsp;&nbsp; $67044459 | &nbsp;&nbsp; $1008 | &nbsp;&nbsp; $173476176 |
| **Other Financial Instruments:**<sup>2</sup> <br>|  |  |  |  |
| Assets | &nbsp;&nbsp; $489687 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $— | &nbsp;&nbsp; $489687 |
| Liabilities | &nbsp;&nbsp; (49849) | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (49849) |
| TOTAL OTHER FINANCIAL INSTRUMENTS | &nbsp;&nbsp; $439838 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $— | &nbsp;&nbsp; $439838 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | As permitted by U.S. generally accepted accounting principles (GAAP), an Investment Company valued at $6,992,318 is measured at fair value using the net asset <br> value (NAV) per share practical expedient and has not been categorized in the fair value hierarchy chart above. The price of shares redeemed of Project and Trade <br> Finance Core Fund (PTCORE), a portfolio of Federated Hermes Core Trust III, may be determined as of the closing NAV of the fund up to twenty-four days after <br> receipt of a shareholder redemption request. The investment objective of PTCORE is to provide total return. Copies of the PTCORE financial statements are <br> available on the EDGAR database on the SEC's website or upon request from the Fund.<br>|
| 2 | Other financial instruments are futures contracts. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| The following acronym(s) are used throughout this portfolio: | The following acronym(s) are used throughout this portfolio: |
| ADR | —American Depositary Receipt |
| ARM | —Adjustable Rate Mortgage |
| FHLMC | —Federal Home Loan Mortgage Corporation |
| GMTN | —Global Medium Term Note |
| MTN | —Medium Term Note |
| REIT | —Real Estate Investment Trust |
| REMIC | —Real Estate Mortgage Investment Conduit |
| SOFR | —Secured Overnight Financing Rate |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**17**

------

Financial Highlights–Primary Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$10.19** | &nbsp;&nbsp; **$9.02** | &nbsp;&nbsp; **$8.46** | &nbsp;&nbsp; **$12.90** | &nbsp;&nbsp; **$11.09** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.24 | 0.25 | 0.20 | 0.16 | 0.19 |
| Net realized and unrealized gain (loss) | 0.43 | 1.13 | 0.52 | &nbsp;&nbsp; (1.72) | 1.83 |
| Total From Investment Operations | 0.67 | 1.38 | 0.72 | &nbsp;&nbsp; (1.56) | 2.02 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.29) | &nbsp;&nbsp; (0.21) | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (0.21) | &nbsp;&nbsp; (0.21) |
| Distributions from net realized gain | &nbsp;&nbsp; (0.18) | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.67) | &nbsp;&nbsp; — |
| Total Distributions | &nbsp;&nbsp; (0.47) | &nbsp;&nbsp; (0.21) | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (2.88) | &nbsp;&nbsp; (0.21) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$10.39** | &nbsp;&nbsp; **$10.19** | &nbsp;&nbsp; **$9.02** | &nbsp;&nbsp; **$8.46** | &nbsp;&nbsp; **$12.90** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 6.93% | &nbsp;&nbsp; 15.56% | &nbsp;&nbsp; 8.68% | &nbsp;&nbsp; (13.75)% | &nbsp;&nbsp; 18.51% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 0.95% | &nbsp;&nbsp; 0.98% | &nbsp;&nbsp; 0.95% | &nbsp;&nbsp; 0.95% | &nbsp;&nbsp; 0.93% |
| Net investment income | &nbsp;&nbsp; 2.42% | &nbsp;&nbsp; 2.55% | &nbsp;&nbsp; 2.39% | &nbsp;&nbsp; 1.72% | &nbsp;&nbsp; 1.58% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.14% | &nbsp;&nbsp; 0.12% | &nbsp;&nbsp; 0.13% | &nbsp;&nbsp; 0.11% | &nbsp;&nbsp; 0.02% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $176017 | &nbsp;&nbsp; $185398 | &nbsp;&nbsp; $174228 | &nbsp;&nbsp; $173194 | &nbsp;&nbsp; $217682 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 60% | &nbsp;&nbsp; 69% | &nbsp;&nbsp; 47% | &nbsp;&nbsp; 51% | &nbsp;&nbsp; 60% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**18**

------

Financial Highlights–Service Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$10.41** | &nbsp;&nbsp; **$9.20** | &nbsp;&nbsp; **$8.63** | &nbsp;&nbsp; **$12.90** | &nbsp;&nbsp; **$11.09** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.22 | 0.23 | 0.19 | 0.14 | 0.16 |
| Net realized and unrealized gain (loss) | 0.43 | 1.17 | 0.52 | &nbsp;&nbsp; (1.74) | 1.84 |
| Total From Investment Operations | 0.65 | 1.40 | 0.71 | &nbsp;&nbsp; (1.60) | 2.00 |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.27) | &nbsp;&nbsp; (0.19) | &nbsp;&nbsp; (0.14) | &nbsp;&nbsp; — | &nbsp;&nbsp; (0.19) |
| Distributions from net realized gain | &nbsp;&nbsp; (0.18) | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (2.67) | &nbsp;&nbsp; — |
| Total Distributions | &nbsp;&nbsp; (0.45) | &nbsp;&nbsp; (0.19) | &nbsp;&nbsp; (0.14) | &nbsp;&nbsp; (2.67) | &nbsp;&nbsp; (0.19) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$10.61** | &nbsp;&nbsp; **$10.41** | &nbsp;&nbsp; **$9.20** | &nbsp;&nbsp; **$8.63** | &nbsp;&nbsp; **$12.90** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 6.53% | &nbsp;&nbsp; 15.41% | &nbsp;&nbsp; 8.33% | &nbsp;&nbsp; (14.00)% | &nbsp;&nbsp; 18.25% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 1.20% | &nbsp;&nbsp; 1.23% | &nbsp;&nbsp; 1.20% | &nbsp;&nbsp; 1.20% | &nbsp;&nbsp; 1.16% |
| Net investment income | &nbsp;&nbsp; 2.17% | &nbsp;&nbsp; 2.30% | &nbsp;&nbsp; 2.14% | &nbsp;&nbsp; 1.47% | &nbsp;&nbsp; 1.38% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.14% | &nbsp;&nbsp; 0.12% | &nbsp;&nbsp; 0.13% | &nbsp;&nbsp; 0.11% | &nbsp;&nbsp; 0.02% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $1726 | &nbsp;&nbsp; $1523 | &nbsp;&nbsp; $1581 | &nbsp;&nbsp; $1576 | &nbsp;&nbsp; $1949 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 60% | &nbsp;&nbsp; 69% | &nbsp;&nbsp; 47% | &nbsp;&nbsp; 51% | &nbsp;&nbsp; 60% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**19**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in securities, at value including $32,727,236 of investments in affiliated holdings\* (identified cost $156,050,834, including <br> $31,836,221 of identified cost in affiliated holdings)<br>| &nbsp;&nbsp; $173476176 |
| Cash | &nbsp;&nbsp; 257 |
| Due from broker (Note 2) | &nbsp;&nbsp; 4002000 |
| Income receivable | &nbsp;&nbsp; 724465 |
| Income receivable from affiliated holdings | &nbsp;&nbsp; 141872 |
| Receivable for investments sold | &nbsp;&nbsp; 52536 |
| Receivable for shares sold | &nbsp;&nbsp; 5470 |
| Total Assets | &nbsp;&nbsp; 178402776 |
| **Liabilities:** |  |
| Payable for investments purchased | &nbsp;&nbsp; 199454 |
| Payable for shares redeemed | &nbsp;&nbsp; 8355 |
| Payable for variation margin on futures contracts | &nbsp;&nbsp; 331118 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 2804 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 721 |
| Payable for auditing fees | &nbsp;&nbsp; 33185 |
| Payable for insurance premiums | &nbsp;&nbsp; 7724 |
| Payable for legal fees | &nbsp;&nbsp; 12313 |
| Payable for portfolio accounting fees | &nbsp;&nbsp; 37701 |
| Payable for distribution services fee (Note 5) | &nbsp;&nbsp; 366 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 25681 |
| Total Liabilities | &nbsp;&nbsp; 659422 |
| Net assets for 17,108,888 shares outstanding | &nbsp;&nbsp; $177743354 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $158093962 |
| Total distributable earnings (loss) | &nbsp;&nbsp; 19649392 |
| Net Assets | &nbsp;&nbsp; $177743354 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| **Primary Shares:** |  |
| $176,016,964 ÷ 16,946,245 shares outstanding, no par value, unlimited shares authorized | $10.39 |
| **Service Shares:** |  |
| $1,726,390 ÷ 162,643 shares outstanding, no par value, unlimited shares authorized | $10.61 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**20**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Dividends (including $1,851,600 received from affiliated holdings\* and net of foreign taxes withheld of $2,238) | &nbsp;&nbsp; $3199778 |
| Interest | &nbsp;&nbsp; 2834886 |
| TOTAL INCOME | &nbsp;&nbsp; 6034664 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 1342209 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 275313 |
| Custodian fees | &nbsp;&nbsp; 63463 |
| Transfer agent fees | &nbsp;&nbsp; 17496 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 2304 |
| Auditing fees | &nbsp;&nbsp; 41482 |
| Legal fees | &nbsp;&nbsp; 13624 |
| Portfolio accounting fees | &nbsp;&nbsp; 142106 |
| Distribution services fee (Note 5) | &nbsp;&nbsp; 4130 |
| Printing and postage | &nbsp;&nbsp; 39917 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 28624 |
| TOTAL EXPENSES | &nbsp;&nbsp; 1970668 |
| **Waiver and Reimbursement:** |  |
| Waiver/reimbursement of investment adviser fee (Note 5) | &nbsp;&nbsp; (257636) |
| Net expenses | &nbsp;&nbsp; 1713032 |
| Net investment income | &nbsp;&nbsp; 4321632 |
| **Realized and Unrealized Gain (Loss) on Investments, Foreign Currency Transactions and Futures Contracts:** |  |
| Net realized gain on investments (including net realized loss of $(759598) on sales of investments in affiliated holdings\*) | &nbsp;&nbsp; 6009778 |
| Net realized loss on foreign currency transactions | &nbsp;&nbsp; (14457) |
| Net realized loss on futures contracts | &nbsp;&nbsp; (9291338) |
| Net change in unrealized appreciation of investments (including net change in unrealized depreciation of $1,772,498 on investments in affiliated <br> holdings\*)<br>| &nbsp;&nbsp; 7191951 |
| Net change in unrealized depreciation of futures contracts | &nbsp;&nbsp; 3397208 |
| Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts | &nbsp;&nbsp; 7293142 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $11614774 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**21**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment income | &nbsp;&nbsp; $4321632 | &nbsp;&nbsp; $4697998 |
| Net realized gain (loss) | &nbsp;&nbsp; (3296017) | &nbsp;&nbsp; 25986481 |
| Net change in unrealized appreciation/depreciation | &nbsp;&nbsp; 10589159 | &nbsp;&nbsp; (4052981) |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 11614774 | &nbsp;&nbsp; 26631498 |
| **Distributions to Shareholders:** |  |  |
| Primary Shares | &nbsp;&nbsp; (8402350) | &nbsp;&nbsp; (4066627) |
| Service Shares | &nbsp;&nbsp; (72878) | &nbsp;&nbsp; (32143) |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | &nbsp;&nbsp; (8475228) | &nbsp;&nbsp; (4098770) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 3689363 | &nbsp;&nbsp; 4596248 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 8475223 | &nbsp;&nbsp; 4098768 |
| Cost of shares redeemed | &nbsp;&nbsp; (24481688) | &nbsp;&nbsp; (20116208) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (12317102) | &nbsp;&nbsp; (11421192) |
| Change in net assets | &nbsp;&nbsp; (9177556) | &nbsp;&nbsp; 11111536 |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 186920910 | &nbsp;&nbsp; 175809374 |
| End of period | &nbsp;&nbsp; $177743354 | &nbsp;&nbsp; $186920910 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**22**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes Managed Volatility Fund II (the "Fund"), a 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: Primary Shares and Service Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is to achieve high current income and moderate capital appreciation. The Co-Advisers each are registered as a "commodity pool operator" with respect to operation of the 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:

■

Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.

■

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.

■

Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Co-Advisers.

■

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 ask quotations.

■

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Co-Advisers.

■

For securities that are fair valued in accordance with procedures established by and under the general supervision of the Co-Advisers, 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 Co-Advisers' valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Co-Advisers' 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 and Significant Events Procedures** 

Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated the Co-Advisers as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Co-Advisers are subject to the Trustees oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Co-Advisers' fair value determinations.

The Co-Advisers acting through their Valuation Committee, are responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Co-Advisers and certain of the Co-Advisers' affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Co-Advisers 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 Co-Advisers. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Co-Advisers' fair valuation and significant events procedures as part of the Fund's compliance program and will review 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

Annual Financial Statements and Additional Information

**23**

------

the prices bid and ask 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 Co-Advisers.

The Co-Advisers have also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■

With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;

■

Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;

■

Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Co-Advisers have adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Co-Advisers. The Trustees periodically review fair valuations made in response to significant events.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Co-Advisers and their affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Repurchase agreements are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Positive or negative inflation adjustments on Treasury Inflation-Protected Securities are included in interest income. Distributions of net investment income and capital gains, if any, are declared and paid at least annually. 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. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of 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/reimbursement of $257,636 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.

Annual Financial Statements and Additional Information

**24**

------

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.

The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.

**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.

**Futures Contracts** 

The Fund purchases and sells financial futures contracts to seek to increase return and to manage duration, market 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 clearinghouse, as counterparty to all exchange-traded futures contracts, guarantees the futures contracts against default.

Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.

The average notional value of long and short futures contracts held by the Fund throughout the period was $75,057,062 and $38,102,032, respectively. This is based on amounts held as of each month-end throughout the fiscal period.

**Foreign Currency Translation** 

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

**Option Contracts** 

The Fund buys or sells put and call options to seek to increase return and to manage market risk. The seller ("writer") of an option receives a payment or premium, from the buyer, which the writer keeps regardless of whether the buyer exercises the option. When the Fund writes a put or call option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the underlying reference instrument. When the Fund purchases a put or call option, an amount equal to the premium paid is recorded as an increase to the cost of the investment and subsequently marked to market to reflect the current value of the option purchased. Premiums paid for purchasing options which expire are treated as realized losses. Premiums received/paid for writing/purchasing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying reference instrument to determine the realized gain or loss. The risk associated with purchasing put and call options is limited to the premium paid. Options can trade on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. This protects investors against potential defaults by the counterparty.

Purchased option contracts outstanding at period-end are listed in the Fund's Portfolio of Investments.

At December 31, 2025, the Fund had no outstanding written option contracts.

The average market value of purchased put and call options held by the Fund throughout the period was $151,622 and $23,335, respectively. This is based on amounts held as of each month-end throughout the fiscal period.

Annual Financial Statements and Additional Information

**25**

------

**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 Co-Advisers.

**Additional Disclosure Related to Derivative Instruments** 

---

| | | |
|:---|:---|:---|
| **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** |
|  | **Liabilities** | **Liabilities** |
|  | &nbsp;&nbsp; **Statement of** <br>**Assets and** <br>**Liabilities** <br>**Location**<br>| **Fair** <br>**Value**<br>|
| Derivatives not accounted for as hedging <br>instruments under ASC Topic 815<br>|  |  |
| Interest rate contracts | &nbsp;&nbsp; Payable for variation margin <br>on futures contracts<br>| &nbsp;&nbsp; $(231564)\* |
| Equity contracts | &nbsp;&nbsp; Payable for variation margin <br>on futures contracts<br>| &nbsp;&nbsp; (208274)\* |
| Total derivatives not accounted for as hedging instruments under ASC Topic 815 |  | &nbsp;&nbsp; $(439838) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Includes cumulative appreciation/(depreciation) of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's variation margin is reported within the Statement of Assets and Liabilities.

**The Effect of Derivative Instruments on the Statement of Operations for the Year Ended December 31, 2025** 

---

| | | | |
|:---|:---|:---|:---|
| **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** | **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** | **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** | **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>| **Purchased** <br>**Options** <br>**Contracts**<sup>1</sup> <br>| **Total** |
| Interest rate contracts | &nbsp;&nbsp; $(197644) | &nbsp;&nbsp; $— | &nbsp;&nbsp; $(197644) |
| Equity contracts | &nbsp;&nbsp; (9093694) | &nbsp;&nbsp; (1979338) | &nbsp;&nbsp; (11073032) |
| TOTAL | &nbsp;&nbsp; $(9291338) | &nbsp;&nbsp; $(1979338) | &nbsp;&nbsp; $(11270676) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 The net realized loss on Purchased Options Contracts is found within the Net realized gain on investments on the Statement of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** | **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** | **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** | **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>| **Purchased** <br>**Options** <br>**Contracts**<sup>1</sup> <br>| **Total** |
| Interest rate contracts | &nbsp;&nbsp; $(305692) | &nbsp;&nbsp; $— | &nbsp;&nbsp; $(305692) |
| Equity contracts | &nbsp;&nbsp; 3702900 | &nbsp;&nbsp; (28553) | &nbsp;&nbsp; 3674347 |
| TOTAL | &nbsp;&nbsp; $3397208 | &nbsp;&nbsp; $(28553) | &nbsp;&nbsp; $3368655 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 The net change in unrealized depreciation of Purchased Options Contracts is found within the Net change in unrealized appreciation of investments on the Statement of Operations.

**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 Financial Statements and Additional Information

**26**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**3. SHARES OF BENEFICIAL INTEREST** 

The following tables summarize share activity:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Primary Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 344280 | &nbsp;&nbsp; $3399650 | &nbsp;&nbsp; 454927 | &nbsp;&nbsp; $4347303 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 868012 | &nbsp;&nbsp; 8402351 | &nbsp;&nbsp; 436802 | &nbsp;&nbsp; 4066627 |
| Shares redeemed | &nbsp;&nbsp; (2451236) | &nbsp;&nbsp; (24289959) | &nbsp;&nbsp; (2027519) | &nbsp;&nbsp; (19592705) |
| NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | &nbsp;&nbsp; (1238944) | &nbsp;&nbsp; $(12487958) | &nbsp;&nbsp; (1135790) | &nbsp;&nbsp; $(11178775) |
|  | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Service Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 28153 | &nbsp;&nbsp; $289713 | &nbsp;&nbsp; 24331 | &nbsp;&nbsp; $248945 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 7353 | &nbsp;&nbsp; 72872 | &nbsp;&nbsp; 3373 | &nbsp;&nbsp; 32141 |
| Shares redeemed | &nbsp;&nbsp; (19191) | &nbsp;&nbsp; (191729) | &nbsp;&nbsp; (53222) | &nbsp;&nbsp; (523503) |
| NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | &nbsp;&nbsp; 16315 | &nbsp;&nbsp; $170856 | &nbsp;&nbsp; (25518) | &nbsp;&nbsp; $(242417) |
| NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (1222629) | &nbsp;&nbsp; $(12317102) | &nbsp;&nbsp; (1161308) | &nbsp;&nbsp; $(11421192) |

---

**4. FEDERAL TAX INFORMATION** 

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income<sup>1</sup> <br>| &nbsp;&nbsp; $7761210 | &nbsp;&nbsp; $4098770 |
| Long-term capital gains | &nbsp;&nbsp; $714018 | &nbsp;&nbsp; $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income<sup>1</sup> <br>| &nbsp;&nbsp; $4618433 |
| Net unrealized appreciation | &nbsp;&nbsp; $15686583 |
| Capital loss carryforwards | &nbsp;&nbsp; $(655624) |
| TOTAL | &nbsp;&nbsp; $19649392 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 For tax purposes, short-term capital gains are considered ordinary income in determining distributable earnings.

At December 31, 2025, the cost of investments for federal tax purposes was $157,789,593. The net unrealized appreciation of investments for federal tax purposes was $15,686,583. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $20,567,613 and unrealized depreciation from investments for those securities having an excess of cost over value of $4,881,030. The amounts presented are inclusive of derivative contracts. The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities, the deferral of losses on wash sales, mark-to-market on futures contracts, and straddle loss deferrals.

As of December 31, 2025, the Fund had a capital loss carryforward of $655,624 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** |
| $628871 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $26753 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $655624 |

---

At December 31, 2025, for federal income tax purposes, the Fund had $11,437 in straddle loss deferrals.

Annual Financial Statements and Additional Information

**27**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES** 

**Investment Adviser Fee** 

The co-advisory agreement between the Fund and the Co-Advisers provides for an annual fee equal to 0.75% of the Fund's average daily net assets. Subject to the terms described in the Expense Limitation note, the Co-Advisers may voluntarily choose to waive any portion of their 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 December 31, 2025, the Co-Advisers voluntarily waived $243,144 of their fee.

The Co-Advisers have agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated investment companies. For the year ended December 31, 2025, the Co-Advisers reimbursed $14,492.

**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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 0.100% | on assets up to $50 billion |
| 0.075% | on assets over $50 billion |

---

In addition to the fees described above, the Fund agrees to pay FAS an annual Administrative Service Charge of $125,000 for administrative and compliance services related to commodities Futures Trading Commission Rule 4.5. For the year ended December 31, 2025, the annualized fee paid to FAS was 0.154% of average daily net assets of the Fund.

In addition, FAS may charge certain out-of-pocket expenses to the Fund.

**Expense Limitation** 

The Co-Advisers and certain of their affiliates (which may include, FAS and FSC) 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, proxy-related expenses and extraordinary expenses, if any) paid by the Fund's Primary Shares and Service Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.95% and 1.20% (the "Fee Limit"), respectively, up to but not including the later of (the "Termination Date"): (a) May 1, 2026; or (b) the date of the Fund's next effective Prospectus. While the Co-Advisers and their 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 approval of the Trustees.

**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 Service Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at 0.25% of average daily net assets, annually, to compensate FSC. For the year ended December 31, 2025, distribution services fees for the Fund were as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Distribution Services** <br>**Fees Incurred**<br>|
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $4130 |

---

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended December 31, 2025, FSC did not retain any fees paid by the Fund.

**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 Co-Advisers 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 December 31, 2025, were as follows:

---

| | |
|:---|:---|
| Purchases | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $80984113 |
| Sales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $104267272 |

---

Annual Financial Statements and Additional Information

**28**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**7. 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 17, 2025. 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 December 31, 2025, the Fund had no outstanding loans. During the year ended December 31, 2025, the Fund did not utilize the LOC.

**8. 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**9. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**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. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the fiscal year ended December 31, 2025, 17.8% of total ordinary income distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.

Of the ordinary income distributions made by the Fund during the year ended December 31, 2025, 17.4% qualify for the dividend received deduction available to corporate shareholders.

For the year ended December 31, 2025, 51.9% of total ordinary income distributions qualified as business interest income for purposes of 163(j) and the regulations thereunder.

For the year ended December 31, 2025, the amount of long-term capital gains designated by the Fund was $714,018.

Annual Financial Statements and Additional Information

**29**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes Managed Volatility Fund II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes Managed Volatility Fund II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian, transfer agents of the underlying funds, 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 of one or more Federated Hermes' investment companies investment companies since 2006.

![](kpmgsig.jpg)

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**30**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes Managed Volatility Fund II (the "Fund")**

At its meetings in May 2025 (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, as amended, (the "Independent Trustees"), reviewed and unanimously approved the continuation of the investment advisory contract between the Fund and each of Federated Investment Management Company and Federated Equity Management Company of Pennsylvania and they (each, an "Adviser" and together, the "Co-Advisers") (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 such information deemed necessary to evaluate the terms of the Contract and to approve the continuation of the existing arrangements. The information, factors and conclusions that formed the basis for the Board's approval are summarized below.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 Co-Advisers and their 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 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.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Co-Advisers' investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Co-Advisers' profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation of the Contract to the extent it considered them to be appropriate and relevant, as discussed further below. Also, in weighing these factors, the Board considered the aggregate advisory fee paid by the Fund for the services of the Co-Advisers in addition to considering the

Annual Financial Statements and Additional Information

**31**

------

allocation of that aggregate fee among the Co-Advisers and the rationale for that allocation. 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, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

The Board considered the nature, extent and quality of the services provided to the Fund by the Co-Advisers 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 full range of services provided to the Fund by Federated Hermes. In particular, the Board considered the services provided by the Co-Advisers in the aggregate, to the extent that the Co-Advisers collaborate in the implementation of the Fund's strategy, as well as separately, to the extent to which specific services provided by a Co-Adviser are distinguishable and subject to meaningful assessment. The Board considered the Co-Advisers' 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Co-Advisers, including the execution of portfolio transactions and the selection of brokers for those transactions. The Board also considered the Co-Advisers' 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 Co-Advisers are 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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, including Federated Hermes' commitment to respond to rulemaking and other regulatory initiatives of the SEC.

Annual Financial Statements and Additional Information

**32**

------

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, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard.

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.

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 Co-Advisers to the Fund.

**<u>Fund Investment Performance</u>**

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 Co-Advisers' 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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes; explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. ("Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Co-Advisers in managing the Fund.

The Board also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

The Board considered that for the one-year, three-year and five-year periods ended December 31, 2024, the Fund's performance was above the median of the Performance Peer Group.

Based on these considerations, the Board concluded that it had continued confidence in the Co-Advisers' overall capabilities to manage the Fund.

**<u>Fund Expenses</u>**

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, 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 overall 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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other registered funds more heavily than non-registered fund products or services because such comparisons are believed to be more relevant.

Annual Financial Statements and Additional Information

**33**

------

The Board considered that other registered funds 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 contractual advisory fee rate and other expenses 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 nature and extent of services offered and fees charged by Federated Hermes 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 any of the Co-Advisers or their affiliates serve as sub-adviser. The Board noted the CCO's statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and may cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Co-Advisers from their relationships with the Fund was not unreasonable in relation to the services provided.

The Board considered that the Contract provides for payment of a single advisory fee by the Fund for all services provided by the Co-Advisers. The Board further considered that the Contract permits the Co-Advisers to allocate the advisory fee in a manner commensurate with the services they provide to the Fund. Throughout the year, as well as in connection with its May Meetings, the Board considered the fee allocation and the Co-Advisers' analysis as to whether the allocation of fees among the Co-Advisers continued to be a reasonable proxy for and measurement of the level of resources and services provided by each Co-Adviser toward the management of the Fund.

Annual Financial Statements and Additional Information

**34**

------

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**35**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes Managed Volatility Fund II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916108

CUSIP 313916744

G00845-01 (2/26)© 2026 Federated Hermes, Inc.

------

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](img0d156b001.gif)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Share Class** | **Primary**  | **Service**  |

---

------

Federated Hermes Quality Bond Fund II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_2c66115b-cf08-4d02-a3b5-412087e88eef_1) | [1](#xx_2c66115b-cf08-4d02-a3b5-412087e88eef_1)  |
| [Financial Highlights](#xx_ae441531-ab35-44d1-afd8-c34cfe3f0a32_1) | [12](#xx_ae441531-ab35-44d1-afd8-c34cfe3f0a32_1)  |
| [Statement of Assets and Liabilities](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_1) | [14](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_1)  |
| [Statement of Operations](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_2) | [15](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_2)  |
| [Statement of Changes in Net Assets](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_3) | [16](#xx_32fd6920-5bb2-497f-897a-9dfca86b37c3_3)  |
| [Notes to Financial Statements](#xx_77c7ba32-f8cf-44e5-b164-9f633fe7f0f5_1) | [17](#xx_77c7ba32-f8cf-44e5-b164-9f633fe7f0f5_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_d7a6f23f-f150-41f9-bb38-bf2d2d35228c_1) | [24](#xx_d7a6f23f-f150-41f9-bb38-bf2d2d35228c_1)  |
| [Shareholder Meeting Results](#xx_835cb41a-49ec-4fc9-9d5c-19e2e9a92459_1) | [25](#xx_835cb41a-49ec-4fc9-9d5c-19e2e9a92459_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_19a248d1-cecb-46aa-9e93-3c14cacc11b3_1) | [26](#xx_19a248d1-cecb-46aa-9e93-3c14cacc11b3_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Principal** <br>**Amount** <br>**or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—95.4% |  |
|  | **Basic Industry - Chemicals—0.4%** |  |
| $475000 | RPM International, Inc., Sr. Unsecd. Note, 4.550%, 3/1/2029 | &nbsp;&nbsp; $481103 |
|  | **Basic Industry - Metals & Mining—0.8%** |  |
| 335000 | Anglo American Capital PLC, Sr. Unsecd. Note, 144A, 2.250%, 3/17/2028 | &nbsp;&nbsp; 320887 |
| 200000 | Anglo American Capital PLC, Sr. Unsecd. Note, 144A, 2.875%, 3/17/2031 | &nbsp;&nbsp; 185030 |
| 200000 | Anglo American Capital PLC, Sr. Unsecd. Note, 144A, 5.500%, 5/2/2033 | &nbsp;&nbsp; 207042 |
| 340000 | Glencore Funding LLC, Sr. Unsecd. Note, 144A, 6.125%, 10/6/2028 | &nbsp;&nbsp; 357082 |
|  | TOTAL | &nbsp;&nbsp; 1070041 |
|  | **Basic Industry - Paper—0.3%** |  |
| 380000 | Smurfit Kappa Treasury Unlimited Co., Sr. Unsecd. Note, 5.200%, 1/15/2030 | &nbsp;&nbsp; 392405 |
|  | **Capital Goods - Aerospace & Defense—2.7%** |  |
| 580000 | Airbus Group SE, Sr. Unsecd. Note, 144A, 3.150%, 4/10/2027 | &nbsp;&nbsp; 575239 |
| 200000 | BAE Systems PLC, Sr. Unsecd. Note, 144A, 3.400%, 4/15/2030 | &nbsp;&nbsp; 193424 |
| 565000 | Boeing Co., Sr. Unsecd. Note, 2.700%, 2/1/2027 | &nbsp;&nbsp; 557019 |
| 470000 | Boeing Co., Sr. Unsecd. Note, 3.625%, 2/1/2031 | &nbsp;&nbsp; 451714 |
| 190000 | Boeing Co., Sr. Unsecd. Note, 6.528%, 5/1/2034 | &nbsp;&nbsp; 210275 |
| 385000 | Huntington Ingalls Industries, Inc., Sr. Unsecd. Note, 3.483%, 12/1/2027 | &nbsp;&nbsp; 380900 |
| 565000 | Leidos, Inc., Sr. Unsecd. Note, Series WI, 2.300%, 2/15/2031 | &nbsp;&nbsp; 509057 |
| 755000 | RTX Corp., Sr. Unsecd. Note, 4.125%, 11/16/2028 | &nbsp;&nbsp; 758192 |
|  | TOTAL | &nbsp;&nbsp; 3635820 |
|  | **Capital Goods - Building Materials—0.9%** |  |
| 395000 | Allegion PLC, Sr. Unsecd. Note, 3.500%, 10/1/2029 | &nbsp;&nbsp; 385726 |
| 150000 | Allegion US Holdings Co., Inc., Sr. Unsecd. Note, 5.600%, 5/29/2034 | &nbsp;&nbsp; 157034 |
| 140000 | Carrier Global Corp., Sr. Unsecd. Note, 5.900%, 3/15/2034 | &nbsp;&nbsp; 150243 |
| 293000 | Masco Corp., Sr. Unsecd. Note, 2.000%, 10/1/2030 | &nbsp;&nbsp; 261663 |
| 293000 | Masco Corp., Sr. Unsecd. Note, 3.500%, 11/15/2027 | &nbsp;&nbsp; 290184 |
|  | TOTAL | &nbsp;&nbsp; 1244850 |
|  | **Capital Goods - Construction Machinery—0.9%** |  |
| 490000 | Ashtead Capital, Inc., Sr. Unsecd. Note, 144A, 1.500%, 8/12/2026 | &nbsp;&nbsp; 481750 |
| 200000 | Ashtead Capital, Inc., Sr. Unsecd. Note, 144A, 5.550%, 5/30/2033 | &nbsp;&nbsp; 206453 |
| 560000 | CNH Industrial NV, Sr. Unsecd. Note, Series MTN, 3.850%, 11/15/2027 | &nbsp;&nbsp; 558399 |
|  | TOTAL | &nbsp;&nbsp; 1246602 |
|  | **Capital Goods - Diversified Manufacturing—1.4%** |  |
| 565000 | Honeywell International, Inc., Sr. Unsecd. Note, 1.950%, 6/1/2030 | &nbsp;&nbsp; 515950 |
| 525000 | Hubbell, Inc., Sr. Unsecd. Note, 2.300%, 3/15/2031 | &nbsp;&nbsp; 478418 |
| 190000 | Ingersoll-Rand, Inc., Sr. Unsecd. Note, 5.176%, 6/15/2029 | &nbsp;&nbsp; 196457 |
| 85000 | Ingersoll-Rand, Inc., Sr. Unsecd. Note, 5.450%, 6/15/2034 | &nbsp;&nbsp; 88512 |
| 490000 | Vontier Corp., Sr. Unsecd. Note, Series WI, 2.400%, 4/1/2028 | &nbsp;&nbsp; 470121 |
| 125000 | Wabtec Corp., Sr. Unsecd. Note, 5.611%, 3/11/2034 | &nbsp;&nbsp; 131327 |
|  | TOTAL | &nbsp;&nbsp; 1880785 |
|  | **Capital Goods - Environmental—0.2%** |  |
| 240000 | Waste Connections, Inc., Sr. Unsecd. Note, 5.250%, 9/1/2035 | &nbsp;&nbsp; 248544 |
|  | **Communications - Cable & Satellite—1.2%** |  |
| 85000 | Charter Communications Operating, LLC/Charter Communications Operating Capital Corp., Sec. Fac. Bond, <br> 6.100%, 6/1/2029<br>| &nbsp;&nbsp; 88752 |
| 145000 | Charter Communications Operating, LLC/Charter Communications Operating Capital Corp., Sec. Fac. Bond, <br> 6.550%, 6/1/2034<br>| &nbsp;&nbsp; 152558 |
| 390000 | Comcast Corp., Sr. Unsecd. Note, 2.350%, 1/15/2027 | &nbsp;&nbsp; 384110 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Communications - Cable & Satellite—continued** |  |
| $725000 | Comcast Corp., Sr. Unsecd. Note, 2.650%, 2/1/2030 | &nbsp;&nbsp; $684531 |
| 290000 | Comcast Corp., Sr. Unsecd. Note, 4.950%, 5/15/2032 | &nbsp;&nbsp; 297154 |
|  | TOTAL | &nbsp;&nbsp; 1607105 |
|  | **Communications - Media & Entertainment—1.9%** |  |
| 335000 | AppLovin Corp., Sr. Unsecd. Note, 5.375%, 12/1/2031 | &nbsp;&nbsp; 347857 |
| 230000 | AppLovin Corp., Sr. Unsecd. Note, 5.500%, 12/1/2034 | &nbsp;&nbsp; 236406 |
| 215000 | Meta Platforms, Inc., Sr. Unsecd. Note, 3.500%, 8/15/2027 | &nbsp;&nbsp; 214706 |
| 245000 | Meta Platforms, Inc., Sr. Unsecd. Note, 3.850%, 8/15/2032 | &nbsp;&nbsp; 237761 |
| 250000 | Meta Platforms, Inc., Sr. Unsecd. Note, 4.875%, 11/15/2035 | &nbsp;&nbsp; 249762 |
| 965000 | Netflix, Inc., Sr. Unsecd. Note, 144A, 4.875%, 6/15/2030 | &nbsp;&nbsp; 989670 |
| 295000 | Paramount Global, Sr. Unsecd. Note, 4.200%, 5/19/2032 | &nbsp;&nbsp; 266649 |
|  | TOTAL | &nbsp;&nbsp; 2542811 |
|  | **Communications - Telecom Wireless—2.5%** |  |
| 290000 | America Movil S.A.B. de C.V., Sr. Unsecd. Note, 5.000%, 1/20/2033 | &nbsp;&nbsp; 295388 |
| 475000 | American Tower Corp., Sr. Unsecd. Note, 1.450%, 9/15/2026 | &nbsp;&nbsp; 466477 |
| 505000 | American Tower Corp., Sr. Unsecd. Note, 4.700%, 12/15/2032 | &nbsp;&nbsp; 505261 |
| 225000 | American Tower Corp., Sr. Unsecd. Note, 4.900%, 3/15/2030 | &nbsp;&nbsp; 229895 |
| 240000 | Crown Castle, Inc., Sr. Unsecd. Note, 4.800%, 9/1/2028 | &nbsp;&nbsp; 243788 |
| 240000 | Crown Castle, Inc., Sr. Unsecd. Note, 5.100%, 5/1/2033 | &nbsp;&nbsp; 242117 |
| 850000 | T-Mobile USA, Inc., Series WI, 3.875%, 4/15/2030 | &nbsp;&nbsp; 836032 |
| 475000 | T-Mobile USA, Inc., Sr. Unsecd. Note, 5.050%, 7/15/2033 | &nbsp;&nbsp; 484861 |
|  | TOTAL | &nbsp;&nbsp; 3303819 |
|  | **Communications - Telecom Wirelines—2.6%** |  |
| 827000 | AT&T, Inc., Sr. Unsecd. Note, 2.550%, 12/1/2033 | &nbsp;&nbsp; 706066 |
| 250000 | AT&T, Inc., Sr. Unsecd. Note, 4.900%, 11/1/2035 | &nbsp;&nbsp; 247010 |
| 245000 | AT&T, Inc., Sr. Unsecd. Note, 5.375%, 8/15/2035 | &nbsp;&nbsp; 251156 |
| 200000 | NBN Co. Ltd., Sr. Unsecd. Note, 144A, 4.000%, 10/1/2027 | &nbsp;&nbsp; 199701 |
| 190000 | Rogers Communications, Inc., Sr. Unsecd. Note, 5.000%, 2/15/2029 | &nbsp;&nbsp; 193677 |
| 190000 | Rogers Communications, Inc., Sr. Unsecd. Note, 5.300%, 2/15/2034 | &nbsp;&nbsp; 191843 |
| 240000 | Telefonica S.A., Co. Guarantee, 7.045%, 6/20/2036 | &nbsp;&nbsp; 267913 |
| 755000 | Verizon Communications, Inc., Sr. Unsecd. Note, 1.750%, 1/20/2031 | &nbsp;&nbsp; 664912 |
| 385000 | Verizon Communications, Inc., Sr. Unsecd. Note, 2.550%, 3/21/2031 | &nbsp;&nbsp; 351715 |
| 165000 | Verizon Communications, Inc., Sr. Unsecd. Note, 3.150%, 3/22/2030 | &nbsp;&nbsp; 158100 |
| 245000 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.000%, 1/15/2036 | &nbsp;&nbsp; 243015 |
|  | TOTAL | &nbsp;&nbsp; 3475108 |
|  | **Consumer Cyclical - Automotive—3.6%** |  |
| 225000 | American Honda Finance Corp., Sr. Unsecd. Note, Series GMTN, 4.400%, 9/5/2029 | &nbsp;&nbsp; 227336 |
| 285000 | Daimler Trucks Financial NA, Sr. Unsecd. Note, 144A, 5.125%, 1/19/2028 | &nbsp;&nbsp; 290543 |
| 565000<br><sup>1</sup> <br>| Daimler Trucks Financial NA, Sr. Unsecd. Note, 144A, 5.125%, 9/25/2029 | &nbsp;&nbsp; 580389 |
| 240000 | Ford Motor Co., Sr. Unsecd. Note, 4.346%, 12/8/2026 | &nbsp;&nbsp; 239789 |
| 240000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 5.800%, 3/8/2029 | &nbsp;&nbsp; 245302 |
| 200000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 6.500%, 2/7/2035 | &nbsp;&nbsp; 207275 |
| 275000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 6.798%, 11/7/2028 | &nbsp;&nbsp; 288597 |
| 200000 | Ford Motor Credit Co. LLC, Sr. Unsecd. Note, 7.122%, 11/7/2033 | &nbsp;&nbsp; 214904 |
| 475000 | General Motors Financial Co., Inc., Sr. Unsecd. Note, 2.400%, 4/10/2028 | &nbsp;&nbsp; 457680 |
| 240000 | General Motors Financial Co., Inc., Sr. Unsecd. Note, 5.350%, 1/7/2030 | &nbsp;&nbsp; 247907 |
| 200000 | General Motors Financial Co., Inc., Sr. Unsecd. Note, 5.850%, 4/6/2030 | &nbsp;&nbsp; 210177 |
| 210000 | Hyundai Capital America, Sr. Unsecd. Note, 144A, 4.500%, 9/18/2030 | &nbsp;&nbsp; 210099 |
| 640000 | Hyundai Capital America, Sr. Unsecd. Note, 144A, 5.300%, 1/8/2029 | &nbsp;&nbsp; 656953 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Consumer Cyclical - Automotive—continued** |  |
| $680000 | Nissan Motor Co., Ltd., Sr. Unsecd. Note, 144A, 4.345%, 9/17/2027 | &nbsp;&nbsp; $671279 |
|  | TOTAL | &nbsp;&nbsp; 4748230 |
|  | **Consumer Cyclical - Retailers—2.8%** |  |
| 995000 | Advance Auto Parts, Inc., Sr. Unsecd. Note, Series WI, 3.900%, 4/15/2030 | &nbsp;&nbsp; 914166 |
| 445000 | Alimentation Couche-Tard, Inc., Sr. Unsecd. Note, 144A, 2.950%, 1/25/2030 | &nbsp;&nbsp; 421876 |
| 250000 | AutoNation, Inc., Sr. Unsecd. Note, 4.750%, 6/1/2030 | &nbsp;&nbsp; 252616 |
| 230000 | AutoZone, Inc., Sr. Unsecd. Note, 4.750%, 2/1/2033 | &nbsp;&nbsp; 231042 |
| 240000 | AutoZone, Inc., Sr. Unsecd. Note, 5.400%, 7/15/2034 | &nbsp;&nbsp; 249039 |
| 260000 | Costco Wholesale Corp., Sr. Unsecd. Note, 1.375%, 6/20/2027 | &nbsp;&nbsp; 252118 |
| 475000 | Home Depot, Inc., Sr. Unsecd. Note, 4.750%, 6/25/2029 | &nbsp;&nbsp; 487167 |
| 305000 | O'Reilly Automotive, Inc., Sr. Unsecd. Note, 1.750%, 3/15/2031 | &nbsp;&nbsp; 267733 |
| 115000 | O'Reilly Automotive, Inc., Sr. Unsecd. Note, 4.200%, 4/1/2030 | &nbsp;&nbsp; 114855 |
| 545000 | Tractor Supply Co., Sr. Unsecd. Note, 1.750%, 11/1/2030 | &nbsp;&nbsp; 483024 |
| 90000 | Tractor Supply Co., Sr. Unsecd. Note, 5.250%, 5/15/2033 | &nbsp;&nbsp; 93101 |
|  | TOTAL | &nbsp;&nbsp; 3766737 |
|  | **Consumer Cyclical - Services—1.5%** |  |
| 200000 | Alibaba Group Holding Ltd., Sr. Unsecd. Note, 2.125%, 2/9/2031 | &nbsp;&nbsp; 181835 |
| 475000 | Alibaba Group Holding Ltd., Sr. Unsecd. Note, 3.400%, 12/6/2027 | &nbsp;&nbsp; 471336 |
| 160000 | Amazon.com, Inc., Sr. Unsecd. Note, 3.150%, 8/22/2027 | &nbsp;&nbsp; 158823 |
| 250000 | Amazon.com, Inc., Sr. Unsecd. Note, 3.300%, 4/13/2027 | &nbsp;&nbsp; 249090 |
| 705000 | Cintas Corp. No. 2, Sr. Unsecd. Note, 3.700%, 4/1/2027 | &nbsp;&nbsp; 704027 |
| 54000 | Expedia Group, Inc., Sr. Unsecd. Note, Series WI, 2.950%, 3/15/2031 | &nbsp;&nbsp; 50287 |
| 235000 | Uber Technologies, Inc., Sr. Unsecd. Note, 4.300%, 1/15/2030 | &nbsp;&nbsp; 236640 |
|  | TOTAL | &nbsp;&nbsp; 2052038 |
|  | **Consumer Non-Cyclical - Food/Beverage—4.4%** |  |
| 425000 | Anheuser-Busch InBev Worldwide, Inc., Sr. Unsecd. Note, 4.750%, 1/23/2029 | &nbsp;&nbsp; 433637 |
| 260000 | Campbells Co./The, Sr. Unsecd. Note, 4.550%, 3/21/2031 | &nbsp;&nbsp; 258785 |
| 955000 | Coca-Cola Femsa S.A.B. de C.V., Sr. Unsecd. Note, 2.750%, 1/22/2030 | &nbsp;&nbsp; 905992 |
| 705000 | Constellation Brands, Inc., Sr. Unsecd. Note, 4.650%, 11/15/2028 | &nbsp;&nbsp; 715253 |
| 360000 | Flowers Foods, Inc., Sr. Unsecd. Note, 3.500%, 10/1/2026 | &nbsp;&nbsp; 358373 |
| 265000 | Flowers Foods, Inc., Sr. Unsecd. Note, 5.750%, 3/15/2035 | &nbsp;&nbsp; 266271 |
| 730000 | Keurig Dr Pepper, Inc., Sr. Unsecd. Note, 3.950%, 4/15/2029 | &nbsp;&nbsp; 722311 |
| 835000 | Kraft Heinz Foods Co., Sr. Unsecd. Note, Series WI, 3.875%, 5/15/2027 | &nbsp;&nbsp; 833264 |
| 490000 | Mars, Inc., Sr. Unsecd. Note, 144A, 5.200%, 3/1/2035 | &nbsp;&nbsp; 503815 |
| 295000 | Smithfield Foods, Inc., Sr. Unsecd. Note, 144A, 2.625%, 9/13/2031 | &nbsp;&nbsp; 261624 |
| 500000 | Smithfield Foods, Inc., Sr. Unsecd. Note, 144A, 3.000%, 10/15/2030 | &nbsp;&nbsp; 460848 |
| 60000 | Smithfield Foods, Inc., Sr. Unsecd. Note, 144A, 4.250%, 2/1/2027 | &nbsp;&nbsp; 59815 |
| 150000 | Tyson Foods, Inc., Sr. Unsecd. Note, 5.400%, 3/15/2029 | &nbsp;&nbsp; 155128 |
|  | TOTAL | &nbsp;&nbsp; 5935116 |
|  | **Consumer Non-Cyclical - Health Care—2.2%** |  |
| 490000 | 180 Medical, Inc., Sr. Unsecd. Note, 144A, 5.300%, 10/8/2035 | &nbsp;&nbsp; 489519 |
| 240000 | Becton Dickinson & Co., Sr. Unsecd. Note, 3.700%, 6/6/2027 | &nbsp;&nbsp; 239097 |
| 500000 | CVS Health Corp., Sr. Unsecd. Note, 4.300%, 3/25/2028 | &nbsp;&nbsp; 501774 |
| 485000 | CVS Health Corp., Sr. Unsecd. Note, 5.700%, 6/1/2034 | &nbsp;&nbsp; 508412 |
| 225000 | DH Europe Finance II S.a.r.l., Sr. Unsecd. Note, 2.600%, 11/15/2029 | &nbsp;&nbsp; 213556 |
| 285000 | GE HealthCare Technologies, Inc., Sr. Unsecd. Note, 5.905%, 11/22/2032 | &nbsp;&nbsp; 307160 |
| 85000 | HCA, Inc., Sr. Unsecd. Note, 3.125%, 3/15/2027 | &nbsp;&nbsp; 84139 |
| 475000 | HCA, Inc., Sr. Unsecd. Note, 5.500%, 6/1/2033 | &nbsp;&nbsp; 494545 |
| 113000 | Solventum Corp., Sr. Unsecd. Note, Series WI, 5.400%, 3/1/2029 | &nbsp;&nbsp; 117058 |
|  | TOTAL | &nbsp;&nbsp; 2955260 |

---

Annual Financial Statements and Additional Information

**3**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Consumer Non-Cyclical - Pharmaceuticals—3.5%** |  |
| $428000 | Abbott Laboratories, Sr. Unsecd. Note, 3.750%, 11/30/2026 | &nbsp;&nbsp; $428095 |
| 250000 | AbbVie, Inc., Sr. Unsecd. Note, 3.200%, 11/21/2029 | &nbsp;&nbsp; 242510 |
| 67000 | AbbVie, Inc., Sr. Unsecd. Note, 4.750%, 3/15/2045 | &nbsp;&nbsp; 61078 |
| 485000 | AbbVie, Inc., Sr. Unsecd. Note, 5.050%, 3/15/2034 | &nbsp;&nbsp; 498590 |
| 940000 | Amgen, Inc., Sr. Unsecd. Note, 5.250%, 3/2/2030 | &nbsp;&nbsp; 976110 |
| 225000 | Biogen, Inc., Sr. Unsecd. Note, 2.250%, 5/1/2030 | &nbsp;&nbsp; 206827 |
| 395000 | Bristol-Myers Squibb Co., Sr. Unsecd. Note, 4.900%, 2/22/2029 | &nbsp;&nbsp; 406496 |
| 147000 | Bristol-Myers Squibb Co., Sr. Unsecd. Note, Series WI, 5.000%, 8/15/2045 | &nbsp;&nbsp; 138834 |
| 400000 | Pfizer, Inc., Sr. Unsecd. Note, 4.500%, 11/15/2032 | &nbsp;&nbsp; 401036 |
| 635000 | Regeneron Pharmaceuticals, Inc., Sr. Unsecd. Note, 1.750%, 9/15/2030 | &nbsp;&nbsp; 566875 |
| 425000<br><sup>1</sup> <br>| Revvity, Inc., Sr. Unsecd. Note, 3.300%, 9/15/2029 | &nbsp;&nbsp; 409646 |
| 290000 | Teva Pharmaceutical Finance Netherlands III B.V., Sr. Unsecd. Note, 3.150%, 10/1/2026 | &nbsp;&nbsp; 287302 |
|  | TOTAL | &nbsp;&nbsp; 4623399 |
|  | **Consumer Non-Cyclical - Products—0.1%** |  |
| 195000 | Kenvue, Inc., Sr. Unsecd. Note, 5.000%, 3/22/2030 | &nbsp;&nbsp; 201174 |
|  | **Consumer Non-Cyclical - Supermarkets—0.5%** |  |
| 575000 | Kroger Co., Bond, 6.900%, 4/15/2038 | &nbsp;&nbsp; 662587 |
|  | **Consumer Non-Cyclical - Tobacco—1.7%** |  |
| 285000 | BAT Capital Corp., Sr. Unsecd. Note, 5.834%, 2/20/2031 | &nbsp;&nbsp; 302663 |
| 285000 | BAT Capital Corp., Sr. Unsecd. Note, 7.750%, 10/19/2032 | &nbsp;&nbsp; 333667 |
| 300000 | Philip Morris International, Inc., Sr. Unsecd. Note, 4.250%, 10/29/2032 | &nbsp;&nbsp; 295334 |
| 290000 | Philip Morris International, Inc., Sr. Unsecd. Note, 4.750%, 11/1/2031 | &nbsp;&nbsp; 296262 |
| 485000 | Philip Morris International, Inc., Sr. Unsecd. Note, 5.125%, 2/15/2030 | &nbsp;&nbsp; 501517 |
| 135000 | Philip Morris International, Inc., Sr. Unsecd. Note, 5.625%, 11/17/2029 | &nbsp;&nbsp; 142003 |
| 345000 | Reynolds American, Inc., Sr. Unsecd. Note, 7.000%, 8/4/2041 | &nbsp;&nbsp; 362081 |
|  | TOTAL | &nbsp;&nbsp; 2233527 |
|  | **Energy - Independent—1.7%** |  |
| 210000 | Cimarex Energy Co., Sr. Unsecd. Note, 4.375%, 3/15/2029 | &nbsp;&nbsp; 203602 |
| 190000 | Diamondback Energy, Inc., Sr. Unsecd. Note, 5.150%, 1/30/2030 | &nbsp;&nbsp; 195652 |
| 285000 | Diamondback Energy, Inc., Sr. Unsecd. Note, 5.400%, 4/18/2034 | &nbsp;&nbsp; 291913 |
| 150000 | Diamondback Energy, Inc., Sr. Unsecd. Note, 6.250%, 3/15/2033 | &nbsp;&nbsp; 161697 |
| 660000 | Hess Corp., Sr. Unsecd. Note, 4.300%, 4/1/2027 | &nbsp;&nbsp; 663039 |
| 190000 | Ovintiv, Inc., Sr. Unsecd. Note, 5.650%, 5/15/2028 | &nbsp;&nbsp; 195660 |
| 550000 | Ovintiv, Inc., Sr. Unsecd. Note, 6.250%, 7/15/2033 | &nbsp;&nbsp; 583695 |
|  | TOTAL | &nbsp;&nbsp; 2295258 |
|  | **Energy - Integrated—1.0%** |  |
| 485000 | BP Capital Markets America, Inc., Sr. Unsecd. Note, 4.699%, 4/10/2029 | &nbsp;&nbsp; 494527 |
| 285000 | Cenovus Energy, Inc., Sr. Unsecd. Note, 2.650%, 1/15/2032 | &nbsp;&nbsp; 253406 |
| 85000 | Cenovus Energy, Inc., Sr. Unsecd. Note, 5.400%, 3/20/2036 | &nbsp;&nbsp; 84928 |
| 415000 | CNPC Hong Kong Overseas Capital Ltd., Co. Guarantee, 144A, 5.950%, 4/28/2041 | &nbsp;&nbsp; 457111 |
|  | TOTAL | &nbsp;&nbsp; 1289972 |
|  | **Energy - Midstream—4.1%** |  |
| 250000 | Boardwalk Pipeline Partners LP, Sr. Unsecd. Note, 3.400%, 2/15/2031 | &nbsp;&nbsp; 236684 |
| 300000 | Enbridge, Inc., Sr. Unsecd. Note, 5.200%, 11/20/2035 | &nbsp;&nbsp; 303170 |
| 290000 | Enbridge, Inc., Sr. Unsecd. Note, 5.550%, 6/20/2035 | &nbsp;&nbsp; 300171 |
| 285000 | Energy Transfer LP, Sr. Unsecd. Note, 3.750%, 5/15/2030 | &nbsp;&nbsp; 277465 |
| 100000 | Energy Transfer LP, Sr. Unsecd. Note, 5.550%, 5/15/2034 | &nbsp;&nbsp; 102914 |
| 375000 | MPLX LP, Sr. Unsecd. Note, 4.125%, 3/1/2027 | &nbsp;&nbsp; 375315 |
| 390000 | MPLX LP, Sr. Unsecd. Note, 5.000%, 1/15/2033 | &nbsp;&nbsp; 392222 |
| 600000 | National Fuel Gas Co., Sr. Unsecd. Note, 2.950%, 3/1/2031 | &nbsp;&nbsp; 548349 |

---

Annual Financial Statements and Additional Information

**4**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Energy - Midstream—continued** |  |
| $330000 | ONEOK, Inc., Sr. Unsecd. Note, 4.000%, 7/13/2027 | &nbsp;&nbsp; $329834 |
| 335000 | ONEOK, Inc., Sr. Unsecd. Note, 6.000%, 6/15/2035 | &nbsp;&nbsp; 354805 |
| 120000 | ONEOK, Inc., Sr. Unsecd. Note, 6.100%, 11/15/2032 | &nbsp;&nbsp; 128705 |
| 475000 | Plains All American Pipeline LP, Sr. Unsecd. Note, 3.550%, 12/15/2029 | &nbsp;&nbsp; 461647 |
| 135000 | Targa Resources, Inc., Sr. Unsecd. Note, 4.200%, 2/1/2033 | &nbsp;&nbsp; 129299 |
| 380000 | Targa Resources, Inc., Sr. Unsecd. Note, 6.125%, 3/15/2033 | &nbsp;&nbsp; 407028 |
| 260000 | Targa Resources, Inc., Sr. Unsecd. Note, 6.150%, 3/1/2029 | &nbsp;&nbsp; 273796 |
| 565000 | TC Pipelines, LP, Sr. Unsecd. Note, 3.900%, 5/25/2027 | &nbsp;&nbsp; 562947 |
| 265000 | Williams Cos., Inc., Sr. Unsecd. Note, 5.300%, 9/30/2035 | &nbsp;&nbsp; 269674 |
|  | TOTAL | &nbsp;&nbsp; 5454025 |
|  | **Energy - Refining—0.4%** |  |
| 320000 | Valero Energy Corp., Sr. Unsecd. Note, 6.625%, 6/15/2037 | &nbsp;&nbsp; 352702 |
| 205000 | Valero Energy Corp., Sr. Unsecd. Note, 7.500%, 4/15/2032 | &nbsp;&nbsp; 234838 |
|  | TOTAL | &nbsp;&nbsp; 587540 |
|  | **Financial Institution - Banking—22.5%** |  |
| 400000 | American Express Co., Sr. Unsecd. Note, 4.804%, 10/24/2036 | &nbsp;&nbsp; 395128 |
| 155000 | American Express Co., Sr. Unsecd. Note, 5.085%, 1/30/2031 | &nbsp;&nbsp; 159841 |
| 60000 | Associated Banc-Corp., Sr. Unsecd. Note, 6.455%, 8/29/2030 | &nbsp;&nbsp; 62365 |
| 285000 | Bank of America Corp., Sr. Unsecd. Note, 1.734%, 7/22/2027 | &nbsp;&nbsp; 281403 |
| 1850000 | Bank of America Corp., Sr. Unsecd. Note, 2.592%, 4/29/2031 | &nbsp;&nbsp; 1724478 |
| 580000 | Bank of America Corp., Sr. Unsecd. Note, 3.705%, 4/24/2028 | &nbsp;&nbsp; 577626 |
| 500000 | Bank of America Corp., Sr. Unsecd. Note, 5.468%, 1/23/2035 | &nbsp;&nbsp; 521029 |
| 475000 | Bank of America Corp., Sr. Unsecd. Note, Series MTN, 3.248%, 10/21/2027 | &nbsp;&nbsp; 470791 |
| 475000 | Bank of America Corp., Sr. Unsecd. Note, Series MTN, 4.271%, 7/23/2029 | &nbsp;&nbsp; 477271 |
| 450000 | Capital One Financial Co., Sr. Unsecd. Note, 4.493%, 9/11/2031 | &nbsp;&nbsp; 449436 |
| 475000 | Citigroup, Inc., 4.125%, 7/25/2028 | &nbsp;&nbsp; 475253 |
| 1325000 | Citigroup, Inc., Sr. Unsecd. Note, 2.572%, 6/3/2031 | &nbsp;&nbsp; 1228161 |
| 475000 | Citigroup, Inc., Sr. Unsecd. Note, 4.075%, 4/23/2029 | &nbsp;&nbsp; 474770 |
| 270000 | Citigroup, Inc., Sr. Unsecd. Note, 5.174%, 9/11/2036 | &nbsp;&nbsp; 272642 |
| 220000 | Citigroup, Inc., Sub. Note, 6.020%, 1/24/2036 | &nbsp;&nbsp; 230518 |
| 90000 | Citizens Financial Group, Inc., Sr. Unsecd. Note, 2.500%, 2/6/2030 | &nbsp;&nbsp; 83803 |
| 142000 | Citizens Financial Group, Inc., Sr. Unsecd. Note, 5.841%, 1/23/2030 | &nbsp;&nbsp; 148135 |
| 250000 | Citizens Financial Group, Inc., Sr. Unsecd. Note, 6.645%, 4/25/2035 | &nbsp;&nbsp; 274992 |
| 285000 | Comerica, Inc., 3.800%, 7/22/2026 | &nbsp;&nbsp; 284078 |
| 150000 | Comerica, Inc., Sr. Unsecd. Note, 5.982%, 1/30/2030 | &nbsp;&nbsp; 156509 |
| 425000 | Fifth Third Bancorp, Sr. Unsecd. Note, 4.337%, 4/25/2033 | &nbsp;&nbsp; 415589 |
| 132000 | Fifth Third Bancorp, Sr. Unsecd. Note, 4.895%, 9/6/2030 | &nbsp;&nbsp; 134167 |
| 250000 | Fifth Third Bank, Inc., Sr. Unsecd. Note, Series BKNT, 2.250%, 2/1/2027 | &nbsp;&nbsp; 245742 |
| 250000 | FNB Corp. (PA), 5.722%, 12/11/2030 | &nbsp;&nbsp; 255371 |
| 190000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 1.431%, 3/9/2027 | &nbsp;&nbsp; 189040 |
| 715000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 1.992%, 1/27/2032 | &nbsp;&nbsp; 635853 |
| 240000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 2.640%, 2/24/2028 | &nbsp;&nbsp; 236336 |
| 660000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 3.500%, 11/16/2026 | &nbsp;&nbsp; 657886 |
| 475000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 4.223%, 5/1/2029 | &nbsp;&nbsp; 476395 |
| 400000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 4.369%, 10/21/2031 | &nbsp;&nbsp; 399132 |
| 385000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.536%, 1/28/2036 | &nbsp;&nbsp; 399804 |
| 245000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.851%, 4/25/2035 | &nbsp;&nbsp; 260566 |
| 230000 | Huntington Bancshares, Inc., Sr. Unsecd. Note, 2.550%, 2/4/2030 | &nbsp;&nbsp; 214752 |
| 210000 | Huntington Bancshares, Inc., Sr. Unsecd. Note, 6.208%, 8/21/2029 | &nbsp;&nbsp; 220473 |
| 940000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 2.545%, 11/8/2032 | &nbsp;&nbsp; 848592 |

---

Annual Financial Statements and Additional Information

**5**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Financial Institution - Banking—continued** |  |
| $940000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 2.580%, 4/22/2032 | &nbsp;&nbsp; $859552 |
| 475000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 4.452%, 12/5/2029 | &nbsp;&nbsp; 479992 |
| 240000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 5.294%, 7/22/2035 | &nbsp;&nbsp; 247689 |
| 155000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 5.336%, 1/23/2035 | &nbsp;&nbsp; 160699 |
| 390000 | JPMorgan Chase & Co., Sr. Unsecd. Note, 5.572%, 4/22/2036 | &nbsp;&nbsp; 409326 |
| 375000 | KeyCorp, Sr. Unsecd. Note, 6.401%, 3/6/2035 | &nbsp;&nbsp; 407454 |
| 385000 | M&T Bank Corp., Sr. Unsecd. Note, 4.553%, 8/16/2028 | &nbsp;&nbsp; 387334 |
| 240000 | M&T Bank Corp., Sr. Unsecd. Note, 5.053%, 1/27/2034 | &nbsp;&nbsp; 241606 |
| 300000 | M&T Bank Corp., Sr. Unsecd. Note, Series MTN, 5.385%, 1/16/2036 | &nbsp;&nbsp; 304954 |
| 940000 | Morgan Stanley, Sr. Unsecd. Note, 3.625%, 1/20/2027 | &nbsp;&nbsp; 937772 |
| 225000 | Morgan Stanley, Sr. Unsecd. Note, 4.892%, 10/22/2036 | &nbsp;&nbsp; 223094 |
| 475000 | Morgan Stanley, Sr. Unsecd. Note, 5.250%, 4/21/2034 | &nbsp;&nbsp; 489189 |
| 185000 | Morgan Stanley, Sr. Unsecd. Note, 5.466%, 1/18/2035 | &nbsp;&nbsp; 192371 |
| 110000 | Morgan Stanley, Sr. Unsecd. Note, 5.587%, 1/18/2036 | &nbsp;&nbsp; 114990 |
| 195000 | Morgan Stanley, Sr. Unsecd. Note, 5.664%, 4/17/2036 | &nbsp;&nbsp; 204808 |
| 475000 | Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 2.239%, 7/21/2032 | &nbsp;&nbsp; 422199 |
| 155000 | Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 2.699%, 1/22/2031 | &nbsp;&nbsp; 145444 |
| 475000 | PNC Financial Services Group, Inc., Sr. Unsecd. Note, 3.150%, 5/19/2027 | &nbsp;&nbsp; 470774 |
| 475000 | PNC Financial Services Group, Inc., Sr. Unsecd. Note, 5.068%, 1/24/2034 | &nbsp;&nbsp; 486175 |
| 195000 | PNC Financial Services Group, Inc., Sr. Unsecd. Note, 5.373%, 7/21/2036 | &nbsp;&nbsp; 200640 |
| 190000 | PNC Financial Services Group, Inc., Sr. Unsecd. Note, 5.582%, 6/12/2029 | &nbsp;&nbsp; 197105 |
| 175000 | PNC Financial Services Group, Inc., Sr. Unsecd. Note, 5.676%, 1/22/2035 | &nbsp;&nbsp; 184574 |
| 335000 | Regions Financial Corp., Sr. Unsecd. Note, 5.502%, 9/6/2035 | &nbsp;&nbsp; 345498 |
| 65000 | State Street Corp., Sr. Unsecd. Note, 4.421%, 5/13/2033 | &nbsp;&nbsp; 64708 |
| 1130000 | Synovus Bank GA, Sr. Unsecd. Note, 5.625%, 2/15/2028 | &nbsp;&nbsp; 1154670 |
| 155000 | Synovus Financial Corp., Sr. Unsecd. Note, 6.168%, 11/1/2030 | &nbsp;&nbsp; 161134 |
| 475000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 1.125%, 8/3/2027 | &nbsp;&nbsp; 455299 |
| 315000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 5.071%, 5/20/2031 | &nbsp;&nbsp; 323685 |
| 380000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 5.122%, 1/26/2034 | &nbsp;&nbsp; 387290 |
| 190000 | Truist Financial Corp., Sr. Unsecd. Note, Series MTN, 7.161%, 10/30/2029 | &nbsp;&nbsp; 205004 |
| 285000 | U.S. Bancorp, Sr. Unsecd. Note, 5.384%, 1/23/2030 | &nbsp;&nbsp; 295232 |
| 240000 | U.S. Bancorp, Sr. Unsecd. Note, 5.836%, 6/12/2034 | &nbsp;&nbsp; 256188 |
| 1180000 | U.S. Bancorp, Sr. Unsecd. Note, Series MTN, 2.215%, 1/27/2028 | &nbsp;&nbsp; 1159322 |
| 265000 | Wells Fargo & Co., Sr. Unsecd. Note, 3.000%, 10/23/2026 | &nbsp;&nbsp; 263114 |
| 300000<br><sup>1</sup> <br>| Wells Fargo & Co., Sr. Unsecd. Note, 4.892%, 9/15/2036 | &nbsp;&nbsp; 299177 |
| 225000 | Wells Fargo & Co., Sr. Unsecd. Note, 5.389%, 4/24/2034 | &nbsp;&nbsp; 234168 |
| 240000 | Wells Fargo & Co., Sr. Unsecd. Note, 5.574%, 7/25/2029 | &nbsp;&nbsp; 248722 |
| 707000 | Wells Fargo & Co., Sr. Unsecd. Note, Series MTN, 2.393%, 6/2/2028 | &nbsp;&nbsp; 691015 |
| 1425000 | Wells Fargo & Co., Sr. Unsecd. Note, Series MTN, 2.572%, 2/11/2031 | &nbsp;&nbsp; 1331441 |
|  | TOTAL | &nbsp;&nbsp; 29981335 |
|  | **Financial Institution - Broker/Asset Mgr/Exchange—1.1%** |  |
| 475000 | Jefferies Financial Group, Inc., Sr. Unsecd. Note, 2.625%, 10/15/2031 | &nbsp;&nbsp; 421683 |
| 190000 | Jefferies Financial Group, Inc., Sr. Unsecd. Note, 6.500%, 1/20/2043 | &nbsp;&nbsp; 197849 |
| 235000 | Nuveen LLC, Sr. Unsecd. Note, 144A, 4.000%, 11/1/2028 | &nbsp;&nbsp; 235277 |
| 560000 | Raymond James Financial, Inc., Sr. Unsecd. Note, 4.900%, 9/11/2035 | &nbsp;&nbsp; 557012 |
|  | TOTAL | &nbsp;&nbsp; 1411821 |
|  | **Financial Institution - Finance Companies—2.3%** |  |
| 195000 | AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust, Sr. Unsecd. Note, 3.000%, 10/29/2028 | &nbsp;&nbsp; 189103 |
| 475000 | AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust, Sr. Unsecd. Note, 3.300%, 1/30/2032 | &nbsp;&nbsp; 438712 |
| 525000 | AerCap Ireland Capital Ltd. / AerCap Global Aviation Trust, Sr. Unsecd. Note, 4.625%, 10/15/2027 | &nbsp;&nbsp; 529575 |

---

Annual Financial Statements and Additional Information

**6**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Financial Institution - Finance Companies—continued** |  |
| $665000 | Air Lease Corp., Sr. Unsecd. Note, 1.875%, 8/15/2026 | &nbsp;&nbsp; $655282 |
| 525000 | Air Lease Corp., Sr. Unsecd. Note, 3.625%, 12/1/2027 | &nbsp;&nbsp; 519403 |
| 130000 | Air Lease Corp., Sr. Unsecd. Note, 5.850%, 12/15/2027 | &nbsp;&nbsp; 133729 |
| 195000 | Aircastle Ltd., Sr. Secd. Note, 144A, 5.000%, 9/15/2030 | &nbsp;&nbsp; 197151 |
| 175000 | Ally Financial, Inc., Sr. Unsecd. Note, 6.992%, 6/13/2029 | &nbsp;&nbsp; 184922 |
| 240000 | Discover Financial Services, Sr. Unsecd. Note, 4.100%, 2/9/2027 | &nbsp;&nbsp; 240212 |
|  | TOTAL | &nbsp;&nbsp; 3088089 |
|  | **Financial Institution - Insurance - Health—1.1%** |  |
| 610000 | Centene Corp., Sr. Unsecd. Note, 2.450%, 7/15/2028 | &nbsp;&nbsp; 571646 |
| 300000 | Elevance Health, Inc., Sr. Unsecd. Note, 4.600%, 9/15/2032 | &nbsp;&nbsp; 299954 |
| 190000 | The Cigna Group, Sr. Unsecd. Note, 4.375%, 10/15/2028 | &nbsp;&nbsp; 191764 |
| 390000 | UnitedHealth Group, Inc., Sr. Unsecd. Note, 4.900%, 4/15/2031 | &nbsp;&nbsp; 400890 |
|  | TOTAL | &nbsp;&nbsp; 1464254 |
|  | **Financial Institution - Insurance - Life—1.6%** |  |
| 340000 | AIA Group Ltd., Sr. Unsecd. Note, 144A, 3.600%, 4/9/2029 | &nbsp;&nbsp; 335695 |
| 485000 | CoreBridge Global Funding, Sec. Fac. Bond, 144A, 5.200%, 1/12/2029 | &nbsp;&nbsp; 498034 |
| 340000 | CoreBridge Global Funding, Sr. Secd. Note, 144A, 5.900%, 9/19/2028 | &nbsp;&nbsp; 355509 |
| 755000 | Lincoln National Corp., Sr. Unsecd. Note, 3.050%, 1/15/2030 | &nbsp;&nbsp; 720609 |
| 165000 | Massachusetts Mutual Life Insurance Co., Sub. Note, 144A, 8.875%, 6/1/2039 | &nbsp;&nbsp; 218320 |
|  | TOTAL | &nbsp;&nbsp; 2128167 |
|  | **Financial Institution - Insurance - P&C—0.8%** |  |
| 285000 | Aon North America, Inc., Sr. Unsecd. Note, 5.300%, 3/1/2031 | &nbsp;&nbsp; 297315 |
| 240000 | CNA Financial Corp., Sr. Unsecd. Note, 3.450%, 8/15/2027 | &nbsp;&nbsp; 237870 |
| 95000 | CNA Financial Corp., Sr. Unsecd. Note, 3.900%, 5/1/2029 | &nbsp;&nbsp; 94131 |
| 285000 | Nationwide Mutual Insurance Co., Sub. Note, 144A, 9.375%, 8/15/2039 | &nbsp;&nbsp; 381667 |
|  | TOTAL | &nbsp;&nbsp; 1010983 |
|  | **Financial Institution - REIT - Apartment—1.1%** |  |
| 300000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, 4.350%, 12/1/2030 | &nbsp;&nbsp; 300782 |
| 375000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN, 3.350%, 5/15/2027 | &nbsp;&nbsp; 372337 |
| 110000 | Camden Property Trust, Sr. Unsecd. Note, 2.800%, 5/15/2030 | &nbsp;&nbsp; 103952 |
| 305000 | Mid-America Apartment Communities LP, Sr. Unsub., 1.700%, 2/15/2031 | &nbsp;&nbsp; 267663 |
| 475000 | UDR, Inc., Sr. Unsecd. Note, Series MTN, 2.950%, 9/1/2026 | &nbsp;&nbsp; 472184 |
|  | TOTAL | &nbsp;&nbsp; 1516918 |
|  | **Financial Institution - REIT - Healthcare—1.3%** |  |
| 420000 | Healthcare Trust of America, Sr. Unsecd. Note, 2.000%, 3/15/2031 | &nbsp;&nbsp; 368925 |
| 670000 | Physicians Realty Trust, Sr. Unsecd. Note, 4.300%, 3/15/2027 | &nbsp;&nbsp; 671270 |
| 195000 | Welltower OP LLC, Sr. Unsecd. Note, 5.125%, 7/1/2035 | &nbsp;&nbsp; 199090 |
| 355000 | Welltower, Inc., Sr. Unsecd. Note, 2.750%, 1/15/2031 | &nbsp;&nbsp; 330427 |
| 235000 | Welltower, Inc., Sr. Unsecd. Note, 3.100%, 1/15/2030 | &nbsp;&nbsp; 225515 |
|  | TOTAL | &nbsp;&nbsp; 1795227 |
|  | **Financial Institution - REIT - Office—0.5%** |  |
| 240000 | Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 4.900%, 12/15/2030 | &nbsp;&nbsp; 243334 |
| 80000 | Boston Properties LP, Sr. Unsecd. Note, 3.250%, 1/30/2031 | &nbsp;&nbsp; 75083 |
| 120000 | Piedmont Operating Partnership, LP, Sr. Unsecd. Note, 2.750%, 4/1/2032 | &nbsp;&nbsp; 103255 |
| 245000 | Piedmont Operating Partnership, LP, Sr. Unsecd. Note, 9.250%, 7/20/2028 | &nbsp;&nbsp; 271006 |
|  | TOTAL | &nbsp;&nbsp; 692678 |
|  | **Financial Institution - REIT - Other—1.1%** |  |
| 75000 | Host Hotels & Resorts LP, Sr. Unsecd. Note, 4.250%, 12/15/2028 | &nbsp;&nbsp; 75091 |
| 365000 | Host Hotels & Resorts LP, Sr. Unsecd. Note, 5.700%, 7/1/2034 | &nbsp;&nbsp; 378142 |
| 305000 | ProLogis LP, Sr. Unsecd. Note, 4.375%, 2/1/2029 | &nbsp;&nbsp; 308295 |

---

Annual Financial Statements and Additional Information

**7**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Financial Institution - REIT - Other—continued** |  |
| $260000 | WP Carey, Inc., Sr. Unsecd. Note, 2.400%, 2/1/2031 | &nbsp;&nbsp; $234772 |
| 195000 | WP Carey, Inc., Sr. Unsecd. Note, 4.650%, 7/15/2030 | &nbsp;&nbsp; 196448 |
| 240000 | WP Carey, Inc., Sr. Unsecd. Note, 5.375%, 6/30/2034 | &nbsp;&nbsp; 248449 |
|  | TOTAL | &nbsp;&nbsp; 1441197 |
|  | **Financial Institution - REIT - Retail—1.2%** |  |
| 685000 | Kimco Realty Corp., Sr. Unsecd. Note, 1.900%, 3/1/2028 | &nbsp;&nbsp; 658358 |
| 240000<br><sup>1</sup> <br>| Kimco Realty Corp., Sr. Unsecd. Note, 2.700%, 10/1/2030 | &nbsp;&nbsp; 225060 |
| 380000 | Regency Centers LP, Sr. Unsecd. Note, 3.700%, 6/15/2030 | &nbsp;&nbsp; 372944 |
| 285000 | Regency Centers LP, Sr. Unsecd. Note, 5.250%, 1/15/2034 | &nbsp;&nbsp; 293141 |
|  | TOTAL | &nbsp;&nbsp; 1549503 |
|  | **Sovereign—0.4%** |  |
| 510000 | Inter-American Development Bank, Series MTN, 6.750%, 7/15/2027 | &nbsp;&nbsp; 530703 |
|  | **Technology—8.6%** |  |
| 285000 | Accenture Capital, Inc., Sr. Unsecd. Note, 4.050%, 10/4/2029 | &nbsp;&nbsp; 286177 |
| 180000 | Alphabet, Inc., Sr. Unsecd. Note, 4.700%, 11/15/2035 | &nbsp;&nbsp; 180115 |
| 120000<br><sup>1</sup> <br>| Apple, Inc., Sr. Unsecd. Note, 4.450%, 5/6/2044 | &nbsp;&nbsp; 110488 |
| 160000 | Autodesk, Inc., Sr. Unsecd. Note, 5.300%, 6/15/2035 | &nbsp;&nbsp; 164474 |
| 630000 | Broadcom, Inc., Sr. Unsecd. Note, 4.110%, 9/15/2028 | &nbsp;&nbsp; 631936 |
| 375000 | Broadcom, Inc., Sr. Unsecd. Note, 5.150%, 11/15/2031 | &nbsp;&nbsp; 389235 |
| 240000 | Broadcom, Inc., Sr. Unsecd. Note, 144A, 4.000%, 4/15/2029 | &nbsp;&nbsp; 239056 |
| 130000 | Broadcom, Inc., Sr. Unsecd. Note, Series WI, 3.419%, 4/15/2033 | &nbsp;&nbsp; 120374 |
| 240000 | CDW LLC/ CDW Finance Corp., Sr. Unsecd. Note, 2.670%, 12/1/2026 | &nbsp;&nbsp; 236894 |
| 205000 | Concentrix Corp., Sr. Unsecd. Note, 6.650%, 8/2/2026 | &nbsp;&nbsp; 207038 |
| 220000 | Fiserv, Inc., Sr. Secd. Note, 5.250%, 8/11/2035 | &nbsp;&nbsp; 219589 |
| 240000 | Fiserv, Inc., Sr. Unsecd. Note, 2.650%, 6/1/2030 | &nbsp;&nbsp; 221403 |
| 475000 | Fiserv, Inc., Sr. Unsecd. Note, 4.200%, 10/1/2028 | &nbsp;&nbsp; 473985 |
| 215000 | Fiserv, Inc., Sr. Unsecd. Note, 5.450%, 3/2/2028 | &nbsp;&nbsp; 220261 |
| 285000 | Global Payments, Inc., Sr. Unsecd. Note, 2.150%, 1/15/2027 | &nbsp;&nbsp; 279141 |
| 88000 | Global Payments, Inc., Sr. Unsecd. Note, 2.900%, 5/15/2030 | &nbsp;&nbsp; 81722 |
| 283000 | Global Payments, Inc., Sr. Unsecd. Note, 2.900%, 11/15/2031 | &nbsp;&nbsp; 253812 |
| 300000 | Global Payments, Inc., Sr. Unsecd. Note, 5.200%, 11/15/2032 | &nbsp;&nbsp; 300356 |
| 65000 | Global Payments, Inc., Sr. Unsecd. Note, 5.550%, 11/15/2035 | &nbsp;&nbsp; 64631 |
| 400000 | Hewlett Packard Enterprise Co., Sr. Unsecd. Note, 4.400%, 10/15/2030 | &nbsp;&nbsp; 398896 |
| 190000 | Hewlett Packard Enterprise Co., Sr. Unsecd. Note, 4.850%, 10/15/2031 | &nbsp;&nbsp; 191982 |
| 190000 | Hewlett Packard Enterprise Co., Sr. Unsecd. Note, 5.000%, 10/15/2034 | &nbsp;&nbsp; 188397 |
| 375000 | Intel Corp., Sr. Unsecd. Note, 5.000%, 2/21/2031 | &nbsp;&nbsp; 383528 |
| 100000 | Keysight Technologies, Inc., Sr. Unsecd. Note, 3.000%, 10/30/2029 | &nbsp;&nbsp; 95896 |
| 230000 | Keysight Technologies, Inc., Sr. Unsecd. Note, 4.950%, 10/15/2034 | &nbsp;&nbsp; 232282 |
| 295000 | Lam Research Corp., Sr. Unsecd. Note, 4.000%, 3/15/2029 | &nbsp;&nbsp; 295185 |
| 190000 | Microchip Technology, Inc., Sr. Unsecd. Note, 5.050%, 3/15/2029 | &nbsp;&nbsp; 193960 |
| 90000 | Microchip Technology, Inc., Sr. Unsecd. Note, 5.050%, 2/15/2030 | &nbsp;&nbsp; 91866 |
| 540000 | Oracle Corp., Sr. Unsecd. Note, 2.300%, 3/25/2028 | &nbsp;&nbsp; 515051 |
| 220000 | Oracle Corp., Sr. Unsecd. Note, 6.150%, 11/9/2029 | &nbsp;&nbsp; 229767 |
| 405000 | Roper Technologies, Inc., Sr. Unsecd. Note, 2.000%, 6/30/2030 | &nbsp;&nbsp; 366970 |
| 825000 | Roper Technologies, Inc., Sr. Unsecd. Note, 3.800%, 12/15/2026 | &nbsp;&nbsp; 823688 |
| 290000 | Roper Technologies, Inc., Sr. Unsecd. Note, 5.100%, 9/15/2035 | &nbsp;&nbsp; 292317 |
| 760000 | S&P Global, Inc., Sr. Unsecd. Note, 2.900%, 3/1/2032 | &nbsp;&nbsp; 700814 |
| 380000 | Trimble, Inc., Sr. Unsecd. Note, 6.100%, 3/15/2033 | &nbsp;&nbsp; 409328 |
| 520000 | Verisign, Inc., Sr. Unsecd. Note, 2.700%, 6/15/2031 | &nbsp;&nbsp; 473622 |
| 565000 | Verisk Analytics, Inc., Sr. Unsecd. Note, 4.125%, 3/15/2029 | &nbsp;&nbsp; 564182 |

---

Annual Financial Statements and Additional Information

**8**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | CORPORATE BONDS—continued |  |
|  | **Technology—continued** |  |
| $65000 | Verisk Analytics, Inc., Sr. Unsecd. Note, 4.500%, 8/15/2030 | &nbsp;&nbsp; $65521 |
| 250000 | VMware, Inc., Sr. Unsecd. Note, 1.400%, 8/15/2026 | &nbsp;&nbsp; 246371 |
|  | TOTAL | &nbsp;&nbsp; 11440310 |
|  | **Transportation - Railroads—0.7%** |  |
| 475000 | Canadian Pacific Railway Co., Sr. Unsecd. Note, 2.450%, 12/2/2031 | &nbsp;&nbsp; 427495 |
| 475000 | Union Pacific Corp., Sr. Unsecd. Note, 2.150%, 2/5/2027 | &nbsp;&nbsp; 466736 |
|  | TOTAL | &nbsp;&nbsp; 894231 |
|  | **Transportation - Services—1.5%** |  |
| 380000 | Enterprise Rent-A-Car USA Finance Co., Sr. Unsecd. Note, 144A, 5.000%, 2/15/2029 | &nbsp;&nbsp; 389742 |
| 195000 | GXO Logistics, Inc., Sr. Unsecd. Note, 6.250%, 5/6/2029 | &nbsp;&nbsp; 205640 |
| 295000 | GXO Logistics, Inc., Sr. Unsecd. Note, Series WI, 2.650%, 7/15/2031 | &nbsp;&nbsp; 266022 |
| 525000 | Penske Truck Leasing Co. LP & PTL Finance Corp., Sr. Unsecd. Note, 144A, 5.250%, 7/1/2029 | &nbsp;&nbsp; 540131 |
| 285000 | Penske Truck Leasing Co. LP & PTL Finance Corp., Sr. Unsecd. Note, 144A, 5.700%, 2/1/2028 | &nbsp;&nbsp; 293359 |
| 350000 | Ryder System, Inc., Sr. Unsecd. Note, 4.300%, 12/1/2030 | &nbsp;&nbsp; 348611 |
|  | TOTAL | &nbsp;&nbsp; 2043505 |
|  | **Utility - Electric—5.7%** |  |
| 240000 | AEP Texas, Inc., Sr. Unsecd. Note, 3.950%, 6/1/2028 | &nbsp;&nbsp; 239196 |
| 400000 | American Electric Power Co., Inc., Sr. Unsecd. Note, 2.300%, 3/1/2030 | &nbsp;&nbsp; 370182 |
| 380000 | Duke Energy Corp., Sr. Unsecd. Note, 2.450%, 6/1/2030 | &nbsp;&nbsp; 352767 |
| 380000 | EDP Finance B.V., Sr. Unsecd. Note, 144A, 1.710%, 1/24/2028 | &nbsp;&nbsp; 362045 |
| 200000 | Electricite de France S.A., Sr. Unsecd. Note, 144A, 5.700%, 5/23/2028 | &nbsp;&nbsp; 206716 |
| 380000 | EverSource Energy, Sr. Unsecd. Note, 5.950%, 2/1/2029 | &nbsp;&nbsp; 397398 |
| 600000 | Exelon Corp., Sr. Unsecd. Note, 4.050%, 4/15/2030 | &nbsp;&nbsp; 594668 |
| 240000 | Exelon Corp., Sr. Unsecd. Note, 5.150%, 3/15/2028 | &nbsp;&nbsp; 245302 |
| 475000 | Exelon Corp., Sr. Unsecd. Note, Series WI, 2.750%, 3/15/2027 | &nbsp;&nbsp; 468070 |
| 230000 | Fortis, Inc. / Canada, Sr. Unsecd. Note, 3.055%, 10/4/2026 | &nbsp;&nbsp; 228159 |
| 475000 | National Rural Utilities Cooperative Finance Corp., Sr. Unsecd. Note, 5.150%, 6/15/2029 | &nbsp;&nbsp; 491730 |
| 250000 | NextEra Energy Capital Holdings, Inc., Sr. Unsecd. Note, 4.625%, 7/15/2027 | &nbsp;&nbsp; 252834 |
| 565000 | NextEra Energy Capital Holdings, Inc., Sr. Unsecd. Note, 5.000%, 2/28/2030 | &nbsp;&nbsp; 582581 |
| 475000 | NiSource, Inc., Sr. Unsecd. Note, 3.490%, 5/15/2027 | &nbsp;&nbsp; 472221 |
| 45000 | NiSource, Inc., Sr. Unsecd. Note, 5.250%, 3/30/2028 | &nbsp;&nbsp; 46175 |
| 235000 | Puget Energy, Inc., Sec. Fac. Bond, 2.379%, 6/15/2028 | &nbsp;&nbsp; 225134 |
| 240000 | Southern Co., Sr. Unsecd. Note, Series A, 3.700%, 4/30/2030 | &nbsp;&nbsp; 234569 |
| 700000 | Southern Power Co., Sr. Unsecd. Note, Series B, 4.900%, 10/1/2035 | &nbsp;&nbsp; 692884 |
| 283000 | Virginia Electric & Power Co., Sr. Unsecd. Note, Series B, 3.750%, 5/15/2027 | &nbsp;&nbsp; 282637 |
| 755000 | WEC Energy Group, Inc., Sr. Unsecd. Note, 1.800%, 10/15/2030 | &nbsp;&nbsp; 672671 |
| 150000 | WEC Energy Group, Inc., Sr. Unsecd. Note, 2.200%, 12/15/2028 | &nbsp;&nbsp; 142524 |
|  | TOTAL | &nbsp;&nbsp; 7560463 |
|  | **Utility - Natural Gas—0.4%** |  |
| 475000 | Sempra Energy, Sr. Unsecd. Note, 3.250%, 6/15/2027 | &nbsp;&nbsp; 469394 |
|  | **Utility - Natural Gas Distributor—0.2%** |  |
| 240000 | Southern California Gas Co., Term Loan - 1st Lien, 5.050%, 9/1/2034 | &nbsp;&nbsp; 243991 |
|  | TOTAL CORPORATE BONDS <br>(IDENTIFIED COST $127,409,462)<br>| &nbsp;&nbsp; 127196625 |
|  | U.S. TREASURIES—1.0% |  |
|  | **U.S. Treasury Notes—1.0%** |  |
| 850000 | United States Treasury Note, 3.875%, 4/30/2030 | &nbsp;&nbsp; 856641 |
| 500000 | United States Treasury Note, 4.625%, 2/15/2035 | &nbsp;&nbsp; 519297 |
|  | TOTAL U.S. TREASURIES <br>(IDENTIFIED COST $1,360,628)<br>| &nbsp;&nbsp; 1375938 |

---

Annual Financial Statements and Additional Information

**9**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br> **or Shares**<br>|  | **Value** |
|  | MORTGAGE-BACKED SECURITIES—0.0% |  |
|  | **Federal Home Loan Mortgage Corporation—0.0%** |  |
| $157 | Federal Home Loan Mortgage Corp., Pool C01051, 8.000%, 9/1/2030 | &nbsp;&nbsp; $165 |
|  | **Government National Mortgage Association—0.0%** |  |
| 296 | Government National Mortgage Association, Pool 2630, 6.500%, 8/20/2028 | &nbsp;&nbsp; 306 |
| 473 | Government National Mortgage Association, Pool 2631, 7.000%, 8/20/2028 | &nbsp;&nbsp; 487 |
| 611 | Government National Mortgage Association, Pool 2658, 6.500%, 10/20/2028 | &nbsp;&nbsp; 632 |
| 991 | Government National Mortgage Association, Pool 2701, 6.500%, 1/20/2029 | &nbsp;&nbsp; 1025 |
| 958 | Government National Mortgage Association, Pool 2796, 7.000%, 8/20/2029 | &nbsp;&nbsp; 985 |
| 221 | Government National Mortgage Association, Pool 3039, 6.500%, 2/20/2031 | &nbsp;&nbsp; 229 |
| 812 | Government National Mortgage Association, Pool 3040, 7.000%, 2/20/2031 | &nbsp;&nbsp; 843 |
| 3081 | Government National Mortgage Association, Pool 3188, 6.500%, 1/20/2032 | &nbsp;&nbsp; 3206 |
| 2455 | Government National Mortgage Association, Pool 3239, 6.500%, 5/20/2032 | &nbsp;&nbsp; 2561 |
| 5488 | Government National Mortgage Association, Pool 3261, 6.500%, 7/20/2032 | &nbsp;&nbsp; 5737 |
|  | TOTAL | &nbsp;&nbsp; 16011 |
|  | TOTAL MORTGAGE-BACKED SECURITIES <br>(IDENTIFIED COST $15,544)<br>| &nbsp;&nbsp; 16176 |
|  | REPURCHASE AGREEMENT—2.5% |  |
| 3371000 | Interest in $292,000,000 joint repurchase agreement 3.85%, dated 12/31/2025 under which Bank of America, N.A. will <br> repurchase securities provided as collateral for $292,062,456 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 10/1/2050 and the market value of those underlying securities was $297,903,705. <br>(IDENTIFIED COST $3,371,000)<br>| &nbsp;&nbsp; 3371000 |
|  | INVESTMENT COMPANY—0.7% |  |
| 850558 | Federated Hermes Government Obligations Fund, Premier Shares, 3.68%<sup>2</sup> <br>(IDENTIFIED COST $850,558)<br>| &nbsp;&nbsp; 850558 |
|  | TOTAL INVESTMENT IN SECURITIES—99.6% <br>(IDENTIFIED COST $133,007,192)<sup>3</sup> <br>| &nbsp;&nbsp; 132810297 |
|  | OTHER ASSETS AND LIABILITIES - NET—0.4%<sup>4</sup> <br>| &nbsp;&nbsp; 507838 |
|  | NET ASSETS—100% | &nbsp;&nbsp; $133318135 |

---

At December 31, 2025, the Fund had the following outstanding futures contracts:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description** | **Number of** <br>**Contracts**<br>| &nbsp;&nbsp; **Notional** <br>**Value**<br>| &nbsp;&nbsp;&nbsp; **Expiration** <br>**Date**<br>| &nbsp;&nbsp; **Value and** <br>**Unrealized** <br>**(Depreciation)**<br>|
| **Long Futures:** |  |  |  |  |
| United States Treasury Notes 10-Year Long Futures | &nbsp;&nbsp; 12 | &nbsp;&nbsp;&nbsp; $1349250 | March 2026 | &nbsp;&nbsp;&nbsp; $(8371) |
| United States Treasury Notes 10-Year Ultra Long Futures | &nbsp;&nbsp; 27 | &nbsp;&nbsp;&nbsp; $3105422 | March 2026 | &nbsp;&nbsp;&nbsp; $(19889) |
| NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | &nbsp;&nbsp;&nbsp; $(28260) |

---

Net Unrealized Depreciation on Futures Contracts is included in "Other Assets and Liabilities—Net."

Annual Financial Statements and Additional Information

**10**

------

Transactions with affiliated investment companies, which are funds managed by the Adviser or an affiliate of the Adviser, during the period ended December 31, 2025, were as follows:

---

| | |
|:---|:---|
|  | **Federated Hermes** <br>**Government** <br>**Obligations Fund,** <br>**Premier Shares\***<br>|
| Value as of 12/31/2024 | &nbsp;&nbsp; $1944103 |
| Purchases at Cost | &nbsp;&nbsp; $19517160 |
| Proceeds from Sales | &nbsp;&nbsp; $(20610705) |
| Change in Unrealized Appreciation/Depreciation | &nbsp;&nbsp; $— |
| Net Realized Gain/(Loss) | &nbsp;&nbsp; $— |
| Value as of 12/31/2025 | &nbsp;&nbsp; $850558 |
| Shares Held as of 12/31/2025 | &nbsp;&nbsp; 850558 |
| Dividend Income | &nbsp;&nbsp; $53966 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* All or a portion of the balance/activity for the fund relates to cash collateral received on securities lending transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers. |
| 2 | 7-day net yield. |
| 3 | The cost of investments for federal tax purposes amounts to $133,007,226. |
| 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 net assets at December 31, 2025.

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.

The following is a summary of the inputs used, as of December 31, 2025, in valuing the Fund's assets carried at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** |
|  | **Level 1—** <br>**Quoted** <br>**Prices**<br>| **Level 2—** <br>**Other** <br>**Significant** <br>**Observable** <br>**Inputs**<br>| **Level 3—** <br>**Significant** <br>**Unobservable** <br>**Inputs**<br>| **Total** |
| **Debt Securities:** |  |  |  |  |
| Corporate Bonds | &nbsp;&nbsp; $— | &nbsp;&nbsp; $127196625 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $127196625 |
| U.S. Treasuries | &nbsp;&nbsp; — | &nbsp;&nbsp; 1375938 | &nbsp;&nbsp; — | &nbsp;&nbsp; 1375938 |
| Mortgage-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 16176 | &nbsp;&nbsp; — | &nbsp;&nbsp; 16176 |
| **Investment Company** | &nbsp;&nbsp; 850558 | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; 850558 |
| **Repurchase Agreement** | &nbsp;&nbsp; — | &nbsp;&nbsp; 3371000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 3371000 |
| TOTAL SECURITIES | &nbsp;&nbsp; $850558 | &nbsp;&nbsp; $131959739 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $132810297 |
| **Other Financial Instruments:**<sup>1</sup> <br>|  |  |  |  |
| Liabilities | &nbsp;&nbsp; $(28260) | &nbsp;&nbsp; $— | &nbsp;&nbsp; $— | &nbsp;&nbsp; $(28260) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 Other financial instruments are futures contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| The following acronym(s) are used throughout this portfolio: | The following acronym(s) are used throughout this portfolio: |
| BKNT | —Bank Notes |
| GMTN | —Global Medium Term Note |
| MTN | —Medium Term Note |
| REIT | —Real Estate Investment Trust |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**11**

------

Financial Highlights–Primary Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$10.22** | &nbsp;&nbsp; **$10.14** | &nbsp;&nbsp; **$9.81** | &nbsp;&nbsp; **$11.26** | &nbsp;&nbsp; **$11.82** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.35 | 0.32 | 0.29 | 0.25 | 0.25 |
| Net realized and unrealized gain (loss) | 0.36 | 0.06 | 0.30 | &nbsp;&nbsp; (1.27) | &nbsp;&nbsp; (0.42) |
| Total From Investment Operations | 0.71 | 0.38 | 0.59 | &nbsp;&nbsp; (1.02) | &nbsp;&nbsp; (0.17) |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.35) | &nbsp;&nbsp; (0.30) | &nbsp;&nbsp; (0.26) | &nbsp;&nbsp; (0.27) | &nbsp;&nbsp; (0.29) |
| Distributions from net realized gain | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (0.10) |
| Total Distributions | &nbsp;&nbsp; (0.35) | &nbsp;&nbsp; (0.30) | &nbsp;&nbsp; (0.26) | &nbsp;&nbsp; (0.43) | &nbsp;&nbsp; (0.39) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$10.58** | &nbsp;&nbsp; **$10.22** | &nbsp;&nbsp; **$10.14** | &nbsp;&nbsp; **$9.81** | &nbsp;&nbsp; **$11.26** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 7.08% | &nbsp;&nbsp; 3.89% | &nbsp;&nbsp; 6.14% | &nbsp;&nbsp; (9.28)% | &nbsp;&nbsp; (1.40)% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 0.74% | &nbsp;&nbsp; 0.77% | &nbsp;&nbsp; 0.74% | &nbsp;&nbsp; 0.74% | &nbsp;&nbsp; 0.74% |
| Net investment income | &nbsp;&nbsp; 3.42% | &nbsp;&nbsp; 3.19% | &nbsp;&nbsp; 2.94% | &nbsp;&nbsp; 2.44% | &nbsp;&nbsp; 2.17% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.10% | &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.07% | &nbsp;&nbsp; 0.06% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $122038 | &nbsp;&nbsp; $126866 | &nbsp;&nbsp; $132027 | &nbsp;&nbsp; $134757 | &nbsp;&nbsp; $162034 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 19% | &nbsp;&nbsp; 21% | &nbsp;&nbsp; 15% | &nbsp;&nbsp; 15% | &nbsp;&nbsp; 27% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**12**

------

Financial Highlights–Service Shares

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$10.20** | &nbsp;&nbsp; **$10.12** | &nbsp;&nbsp; **$9.79** | &nbsp;&nbsp; **$11.23** | &nbsp;&nbsp; **$11.79** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.33 | 0.30 | 0.26 | 0.22 | 0.22 |
| Net realized and unrealized gain (loss) | 0.35 | 0.06 | 0.30 | &nbsp;&nbsp; (1.26) | &nbsp;&nbsp; (0.42) |
| Total From Investment Operations | 0.68 | 0.36 | 0.56 | &nbsp;&nbsp; (1.04) | &nbsp;&nbsp; (0.20) |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.28) | &nbsp;&nbsp; (0.23) | &nbsp;&nbsp; (0.24) | &nbsp;&nbsp; (0.26) |
| Distributions from net realized gain | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; — | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (0.10) |
| Total Distributions | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.28) | &nbsp;&nbsp; (0.23) | &nbsp;&nbsp; (0.40) | &nbsp;&nbsp; (0.36) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$10.56** | &nbsp;&nbsp; **$10.20** | &nbsp;&nbsp; **$10.12** | &nbsp;&nbsp; **$9.79** | &nbsp;&nbsp; **$11.23** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 6.82% | &nbsp;&nbsp; 3.62% | &nbsp;&nbsp; 5.85% | &nbsp;&nbsp; (9.46)% | &nbsp;&nbsp; (1.66)% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 0.99% | &nbsp;&nbsp; 1.02% | &nbsp;&nbsp; 0.99% | &nbsp;&nbsp; 0.99% | &nbsp;&nbsp; 0.99% |
| Net investment income | &nbsp;&nbsp; 3.17% | &nbsp;&nbsp; 2.94% | &nbsp;&nbsp; 2.69% | &nbsp;&nbsp; 2.19% | &nbsp;&nbsp; 1.92% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.10% | &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.08% | &nbsp;&nbsp; 0.07% | &nbsp;&nbsp; 0.06% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $11280 | &nbsp;&nbsp; $11669 | &nbsp;&nbsp; $12468 | &nbsp;&nbsp; $12873 | &nbsp;&nbsp; $16287 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 19% | &nbsp;&nbsp; 21% | &nbsp;&nbsp; 15% | &nbsp;&nbsp; 15% | &nbsp;&nbsp; 27% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**13**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in securities, at value including $830,535 of securities loaned and $850,558 of investments in affiliated holdings\* (identified cost <br> $133,007,192, including $850,558 of identified cost in affiliated holdings)<br>| &nbsp;&nbsp; $132810297 |
| Cash | &nbsp;&nbsp; 820 |
| Due from broker (Note 2) | &nbsp;&nbsp; 91350 |
| Income receivable | &nbsp;&nbsp; 1395123 |
| Receivable for shares sold | &nbsp;&nbsp; 40771 |
| Total Assets | &nbsp;&nbsp; 134338361 |
| **Liabilities:** |  |
| Payable for shares redeemed | &nbsp;&nbsp; 86123 |
| Payable for variation margin on futures contracts | &nbsp;&nbsp; 7451 |
| Payable for collateral due to broker for securities lending (Note 2) | &nbsp;&nbsp; 850558 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 1849 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 282 |
| Payable for auditing fees | &nbsp;&nbsp; 25804 |
| Payable for custodian fees | &nbsp;&nbsp; 3648 |
| Payable for distribution services fee (Note 5) | &nbsp;&nbsp; 2434 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 42077 |
| Total Liabilities | &nbsp;&nbsp; 1020226 |
| Net assets for 12,607,399 shares outstanding | &nbsp;&nbsp; $133318135 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $132158791 |
| Total distributable earnings (loss) | &nbsp;&nbsp; 1159344 |
| Net Assets | &nbsp;&nbsp; $133318135 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| **Primary Shares:** |  |
| $122,038,343 ÷ 11,538,749 shares outstanding, no par value, unlimited shares authorized | $10.58 |
| **Service Shares:** |  |
| $11,279,792 ÷ 1,068,650 shares outstanding, no par value, unlimited shares authorized | $10.56 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**14**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Interest | &nbsp;&nbsp; $5613136 |
| Net income on securities loaned (includes $53,966 earned from affiliated holdings related to cash collateral balances) (Note 2) | &nbsp;&nbsp; 7838 |
| TOTAL INCOME | &nbsp;&nbsp; 5620974 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 809751 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 110880 |
| Custodian fees | &nbsp;&nbsp; 11034 |
| Transfer agent fees | &nbsp;&nbsp; 13411 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 2067 |
| Auditing fees | &nbsp;&nbsp; 32255 |
| Legal fees | &nbsp;&nbsp; 13348 |
| Portfolio accounting fees | &nbsp;&nbsp; 86267 |
| Distribution services fee (Note 5) | &nbsp;&nbsp; 28796 |
| Printing and postage | &nbsp;&nbsp; 35359 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 22437 |
| TOTAL EXPENSES | &nbsp;&nbsp; 1165605 |
| Waiver of investment adviser fee (Note 5) | &nbsp;&nbsp; (131503) |
| Net expenses | &nbsp;&nbsp; 1034102 |
| Net investment income | &nbsp;&nbsp; 4586872 |
| **Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:** |  |
| Net realized loss on investments | &nbsp;&nbsp; (381806) |
| Net realized gain on futures contracts | &nbsp;&nbsp; 88994 |
| Net change in unrealized depreciation of investments | &nbsp;&nbsp; 4840217 |
| Net change in unrealized depreciation of futures contracts | &nbsp;&nbsp; 46192 |
| Net realized and unrealized gain (loss) on investments and futures contracts | &nbsp;&nbsp; 4593597 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $9180469 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**15**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment income | &nbsp;&nbsp; $4586872 | &nbsp;&nbsp; $4524593 |
| Net realized gain (loss) | &nbsp;&nbsp; (292812) | &nbsp;&nbsp; (637395) |
| Net change in unrealized appreciation/depreciation | &nbsp;&nbsp; 4886409 | &nbsp;&nbsp; 1423404 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 9180469 | &nbsp;&nbsp; 5310602 |
| **Distributions to Shareholders:** |  |  |
| Primary Shares | &nbsp;&nbsp; (4166601) | &nbsp;&nbsp; (3912193) |
| Service Shares | &nbsp;&nbsp; (357626) | &nbsp;&nbsp; (328726) |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | &nbsp;&nbsp; (4524227) | &nbsp;&nbsp; (4240919) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 6008744 | &nbsp;&nbsp; 8976954 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 4524224 | &nbsp;&nbsp; 4240916 |
| Cost of shares redeemed | &nbsp;&nbsp; (20406132) | &nbsp;&nbsp; (20247294) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (9873164) | &nbsp;&nbsp; (7029424) |
| Change in net assets | &nbsp;&nbsp; (5216922) | &nbsp;&nbsp; (5959741) |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 138535057 | &nbsp;&nbsp; 144494798 |
| End of period | &nbsp;&nbsp; $133318135 | &nbsp;&nbsp; $138535057 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**16**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes Quality Bond Fund II (the "Fund"), a 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: Primary Shares and Service Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is to provide current income.

**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 Federated Investment Management Company (the "Adviser").

■

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 ask quotations.

■

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.

■

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 Adviser, 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 Adviser's valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser's 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 and Significant Events Procedures** 

Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.

The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review 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 ask 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 Adviser.

Annual Financial Statements and Additional Information

**17**

------

The Adviser has also adopted procedures requiring an investment to be priced at its fair value whenever the Valuation Committee determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■

With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;

■

Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;

■

Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Adviser has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Adviser. The Trustees periodically review fair valuations made in response to significant events.

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Repurchase agreements are subject to Master Netting Agreements (MNA) which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Distributions of net investment income and capital gains, if any, are declared and paid at least annually. 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. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of 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 $131,503 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 Primary Shares and Service 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 December 31, 2025, the Fund's Primary Shares and Service Shares did not incur other service fees; however, each may begin to incur this fee upon approval of the Trustees.

Annual Financial Statements and Additional Information

**18**

------

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 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.

**Futures Contracts** 

The Fund purchases and sells financial futures contracts to manage duration 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 clearinghouse, as counterparty to all exchange-traded futures contracts, guarantees the futures contracts against default.

Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.

The average notional value of long futures contracts held by the Fund throughout the period was $5,475,571. This is based on amounts held as of each month-end throughout the fiscal period.

**Securities Lending** 

The Fund participates in a securities lending program providing for the lending of corporate bonds to qualified brokers. The term of the loans within the program is one year or less. The Fund receives cash collateral for securities loaned, which generally is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund's securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings from collateral invested in affiliated holdings as presented parenthetically on the Statement of Operations do not reflect fees and rebates and are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.

Securities lending transactions are subject to MNA. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated below, the cash collateral received by the Fund exceeds the market value of the securities loaned reducing the net settlement amount to zero. The chart below identifies the amount of collateral received as well as the market value of securities on loan. Additionally, the securities lending agreement executed by the Fund includes an indemnification clause. This clause stipulates that the borrower will reimburse the Fund for any losses as a result of any failure of the borrower to return equivalent securities to the Fund.

As of December 31, 2025, securities subject to this type of arrangement and related collateral were as follows:

---

| | |
|:---|:---|
| **Fair Value of** <br>**Securities Loaned**<br>| **Collateral** <br>**Received**<br>|
| $830535 | &nbsp;&nbsp; $850558 |

---

**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 Adviser.

Annual Financial Statements and Additional Information

**19**

------

**Additional Disclosure Related to Derivative Instruments** 

---

| | | |
|:---|:---|:---|
| **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** |
|  | **Liabilities** | **Liabilities** |
|  | &nbsp;&nbsp; **Statement of** <br>**Assets and** <br>**Liabilities** <br>**Location**<br>| **Fair** <br>**Value**<br>|
| Derivatives not accounted for as hedging <br>instruments under ASC Topic 815<br>|  |  |
| Interest rate contracts | &nbsp;&nbsp; Payable for variation margin <br>on futures contracts<br>| &nbsp;&nbsp; $28,260\* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Includes cumulative net depreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's variation margin is reported within the Statement of Assets and Liabilities.

**The Effect of Derivative Instruments on the Statement of Operations for the Year Ended December 31, 2025** 

---

| | |
|:---|:---|
| **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** | **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>|
| Interest rate contracts | &nbsp;&nbsp; $88994 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** | **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>|
| Interest rate contracts | &nbsp;&nbsp; $46192 |

---

**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** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Primary Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 513855 | &nbsp;&nbsp; $5319176 | &nbsp;&nbsp; 813993 | &nbsp;&nbsp; $8245201 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 413764 | &nbsp;&nbsp; 4166601 | &nbsp;&nbsp; 397580 | &nbsp;&nbsp; 3912193 |
| Shares redeemed | &nbsp;&nbsp; (1804982) | &nbsp;&nbsp; (18567351) | &nbsp;&nbsp; (1811540) | &nbsp;&nbsp; (18305295) |
| NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | &nbsp;&nbsp; (877363) | &nbsp;&nbsp; $(9081574) | &nbsp;&nbsp; (599967) | &nbsp;&nbsp; $(6147901) |
|  | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2025** | **Year Ended** <br>**12/31/2024** | **Year Ended** <br>**12/31/2024** |
| **Service Shares:** | **Shares** | **Amount** | **Shares** | **Amount** |
| Shares sold | &nbsp;&nbsp; 66760 | &nbsp;&nbsp; $689568 | &nbsp;&nbsp; 72346 | &nbsp;&nbsp; $731753 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 35514 | &nbsp;&nbsp; 357623 | &nbsp;&nbsp; 33407 | &nbsp;&nbsp; 328723 |
| Shares redeemed | &nbsp;&nbsp; (178022) | &nbsp;&nbsp; (1838781) | &nbsp;&nbsp; (193178) | &nbsp;&nbsp; (1941999) |
| NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | &nbsp;&nbsp; (75748) | &nbsp;&nbsp; $(791590) | &nbsp;&nbsp; (87425) | &nbsp;&nbsp; $(881523) |
| NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (953111) | &nbsp;&nbsp; $(9873164) | &nbsp;&nbsp; (687392) | &nbsp;&nbsp; $(7029424) |

---

**4. FEDERAL TAX INFORMATION** 

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income | &nbsp;&nbsp; $4524227 | &nbsp;&nbsp; $4240919 |

---

Annual Financial Statements and Additional Information

**20**

------

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income | &nbsp;&nbsp; $4586558 |
| Net unrealized depreciation | &nbsp;&nbsp; $(196929) |
| Capital loss carryforwards | &nbsp;&nbsp; $(3230285) |
| TOTAL | &nbsp;&nbsp; $1159344 |

---

At December 31, 2025, the cost of investments for federal tax purposes was $133,007,226. The net unrealized depreciation of investments for federal tax purposes was $196,929. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $1,894,685 and unrealized depreciation from investments for those securities having an excess of cost over value of $2,091,614. The amounts presented are inclusive of derivative contracts. The difference between book-basis and tax-basis net unrealized depreciation is attributable to differing treatments for deferral of losses on wash sales and mark-to-market of futures contracts.

As of December 31, 2025, the Fund had a capital loss carryforward of $3,230,285 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** |
| $149283 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $3081002 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $3230285 |

---

The Fund used capital loss carryforwards of $122,501 to offset capital gains realized during the year ended December 31, 2025.

**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 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 December 31, 2025, the Adviser voluntarily waived $131,503 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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 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 December 31, 2025, the annualized fee paid to FAS was 0.082% 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 Primary Shares and Service 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:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Percentage of Average Daily** <br>**Net Assets of Class**<br>|
| Primary Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.25% |
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.25% |

---

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 December 31, 2025, distribution services fees for the Fund were as follows:

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp; **Distribution Services** <br>**Fees Incurred**<br>|
| Service Shares | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $28796 |

---

Annual Financial Statements and Additional Information

**21**

------

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended December 31, 2025, the Fund's Primary Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.

**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, if any) paid by the Fund's Primary Shares and Service Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.74% and 0.99% (the "Fee Limit"), respectively, up to but not including the later of (the "Termination Date"): (a) May 1, 2026; 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 approval 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 December 31, 2025, were as follows:

---

| | |
|:---|:---|
| Purchases | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $20595280 |
| Sales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $34222632 |

---

**7. 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 17, 2025. 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 December 31, 2025, the Fund had no outstanding loans. During the year ended December 31, 2025, the Fund did not utilize the LOC.

**8. 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**9. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**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

Annual Financial Statements and Additional Information

**22**

------

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. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the fiscal year ended December 31, 2025, 99.9% of total ordinary income distributions qualified as business interest income for purposes of 163(j) and the regulations thereunder.

Annual Financial Statements and Additional Information

**23**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes Quality Bond Fund II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes Quality Bond Fund II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian, transfer agent of the underlying fund, 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.

![](kpmgsig.jpg)

We have served as the auditor of one or more Federated Hermes' investment companies since 2006.

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**24**

------

Shareholder Meeting Results (unaudited)

At a Special Meeting held on October 25, 2024, shareholders of the Federated Hermes Insurance Series (the "Trust") elected Trustees of the Trust. Shareholders of the Trust elected new individuals to serve as Trustees effective January 1, 2025, who will serve on the Board with current Trustees Messrs. J. Christopher Donahue, Thomas R. Donahue, John G. Carson, G. Thomas Hough, Thomas M. O'Neill, John S. Walsh and Ms. Madelyn A. Reilly. Under the Trust's Director Service Policy, Trustees Judge Maureen Lally-Green and Mr. P. Jerome Richey retired from the Board on December 31, 2024. The number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes with respect to the election of each nominee for office, is included below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Trustee:** | **Voting For** | **Withheld Authority** | **Abstained** | **Broker Non-Voting** |
| J. Christopher Donahue | 139361429.008 | 3866280.559 | 0 | N/A |
| Thomas R. Donahue | 139344114.425 | 3883595.142 | 0 | N/A |
| John G. Carson | 138967757.649 | 4259951.918 | 0 | N/A |
| G. Thomas Hough | 139026471.524 | 4201238.043 | 0 | N/A |
| Karen L. Larrimer | 139433137.343 | 3794572.224 | 0 | N/A |
| Max F. Miller | 139235231.029 | 3992478.538 | 0 | N/A |
| Frank J. Nasta | 139362952.280 | 3864757.287 | 0 | N/A |
| Thomas M. O'Neill | 139014405.845 | 4213303.722 | 0 | N/A |
| Madelyn A. Reilly | 139382797.166 | 3844912.401 | 0 | N/A |
| John S. Walsh | 139312383.263 | 3915326.304 | 0 | N/A |

---

Annual Financial Statements and Additional Information

**25**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes Quality Bond Fund II (the "Fund")**

At its meetings in May 2025 (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, as amended (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 such information deemed necessary to evaluate the terms of the Contract and 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.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 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.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation 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").

Annual Financial Statements and Additional Information

**26**

------

In addition, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace, 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

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 full 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Adviser, including the execution of portfolio transactions and the selection of brokers for those transactions. 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).

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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, 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, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard. 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.

Annual Financial Statements and Additional Information

**27**

------

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.

**<u>Fund Investment Performance</u>**

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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes' explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. ("Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement 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 also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

The Board considered that 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, 2024. 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.

**<u>Fund Expenses</u>**

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, 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 overall 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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other 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 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.

Annual Financial Statements and Additional Information

**28**

------

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 contractual advisory fee rate and other expenses 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 nature and extent of services offered and fees charged by Federated Hermes 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 statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and can cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are

Annual Financial Statements and Additional Information

**29**

------

designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts, including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**30**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes Quality Bond Fund II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916884

CUSIP 313916785

G00433-14 (2/26)© 2026 Federated Hermes, Inc.

------

**Annual Financial Statements**

**and Additional Information**

**December 31, 2025**

![](img92c0d4af1.gif)

------

Federated Hermes Fund for U.S. Government Securities II

------

A Portfolio of Federated Hermes Insurance Series

------

**Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee**

------

**CONTENTS** 

---

| | |
|:---|:---|
| [Portfolio of Investments](#xx_59876d0f-b1dc-43d4-ae17-9d7e3f78b59c_1) | [1](#xx_59876d0f-b1dc-43d4-ae17-9d7e3f78b59c_1)  |
| [Financial Highlights](#xx_84a1407c-26dc-4fcc-903c-866d912a4546_1) | [6](#xx_84a1407c-26dc-4fcc-903c-866d912a4546_1)  |
| [Statement of Assets and Liabilities](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_1) | [7](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_1)  |
| [Statement of Operations](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_2) | [8](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_2)  |
| [Statement of Changes in Net Assets](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_3) | [9](#xx_538c76eb-e02b-426e-b4e8-2d57bc54f5d0_3)  |
| [Notes to Financial Statements](#xx_9d0bc27e-d8c1-4890-9e0d-ed6e4ad79e32_1) | [10](#xx_9d0bc27e-d8c1-4890-9e0d-ed6e4ad79e32_1)  |
| [Report of Independent Registered Public Accounting Firm](#xx_278ab929-8d67-4c78-9514-0edd6b345ab5_1) | [16](#xx_278ab929-8d67-4c78-9514-0edd6b345ab5_1)  |
| [Evaluation and Approval of Advisory Contract](#xx_470e7743-98d1-4cb5-97c5-9f1f59740d26_1) | [17](#xx_470e7743-98d1-4cb5-97c5-9f1f59740d26_1) |

---

------

Portfolio of Investments

December 31, 2025

---

| | | |
|:---|:---|:---|
| **Principal** <br>**Amount**<br>|  | **Value** |
|  | MORTGAGE-BACKED SECURITIES—64.7% |  |
|  | **Federal Home Loan Mortgage Corporation—16.2%** |  |
| $3491402 | 2.000%, 1/1/2052 | &nbsp;&nbsp; $2847958 |
| 1500684 | 2.000%, 1/1/2052 | &nbsp;&nbsp; 1238186 |
| 1102706 | 2.500%, 9/1/2050 | &nbsp;&nbsp; 946420 |
| 1020559 | 2.500%, 1/1/2052 | &nbsp;&nbsp; 878786 |
| 322715 | 3.500%, 6/1/2052 | &nbsp;&nbsp; 302805 |
| 1144725 | 3.500%, 7/1/2052 | &nbsp;&nbsp; 1070164 |
| 42558 | 4.000%, 12/1/2047 | &nbsp;&nbsp; 41069 |
| 505420 | 4.000%, 9/1/2052 | &nbsp;&nbsp; 482049 |
| 798987 | 4.500%, 11/1/2037 | &nbsp;&nbsp; 802484 |
| 113657 | 5.000%, 1/1/2034 | &nbsp;&nbsp; 115632 |
| 28262 | 5.000%, 5/1/2034 | &nbsp;&nbsp; 28743 |
| 27506 | 5.000%, 4/1/2036 | &nbsp;&nbsp; 28034 |
| 10566 | 5.000%, 5/1/2036 | &nbsp;&nbsp; 10768 |
| 6187 | 5.000%, 6/1/2036 | &nbsp;&nbsp; 6306 |
| 29839 | 5.000%, 6/1/2040 | &nbsp;&nbsp; 30424 |
| 187744 | 5.500%, 5/1/2034 | &nbsp;&nbsp; 194133 |
| 9579 | 5.500%, 12/1/2035 | &nbsp;&nbsp; 9920 |
| 49816 | 5.500%, 2/1/2036 | &nbsp;&nbsp; 51676 |
| 38886 | 5.500%, 5/1/2036 | &nbsp;&nbsp; 40301 |
| 2633 | 5.500%, 5/1/2036 | &nbsp;&nbsp; 2729 |
| 3731 | 5.500%, 5/1/2036 | &nbsp;&nbsp; 3871 |
| 2516 | 5.500%, 6/1/2036 | &nbsp;&nbsp; 2609 |
| 507 | 5.500%, 6/1/2036 | &nbsp;&nbsp; 526 |
| 30647 | 5.500%, 11/1/2037 | &nbsp;&nbsp; 31774 |
| 53916 | 5.500%, 1/1/2038 | &nbsp;&nbsp; 55920 |
| 214220 | 5.500%, 5/1/2038 | &nbsp;&nbsp; 220514 |
| 486604 | 5.500%, 8/1/2055 | &nbsp;&nbsp; 493545 |
| 994890 | 5.500%, 12/1/2055 | &nbsp;&nbsp; 1009780 |
| 1765 | 6.000%, 1/1/2032 | &nbsp;&nbsp; 1836 |
| 6140 | 6.000%, 2/1/2032 | &nbsp;&nbsp; 6360 |
| 35262 | 6.000%, 4/1/2036 | &nbsp;&nbsp; 37000 |
| 4462 | 6.000%, 5/1/2036 | &nbsp;&nbsp; 4684 |
| 113433 | 6.000%, 6/1/2037 | &nbsp;&nbsp; 119894 |
| 4938 | 6.000%, 7/1/2037 | &nbsp;&nbsp; 5216 |
| 1253 | 6.500%, 3/1/2029 | &nbsp;&nbsp; 1301 |
| 937 | 6.500%, 6/1/2029 | &nbsp;&nbsp; 973 |
| 438 | 6.500%, 7/1/2029 | &nbsp;&nbsp; 455 |
| 140 | 6.500%, 9/1/2029 | &nbsp;&nbsp; 145 |
| 447 | 7.000%, 12/1/2029 | &nbsp;&nbsp; 470 |
| 92 | 7.000%, 6/1/2030 | &nbsp;&nbsp; 97 |
| 69 | 7.000%, 11/1/2030 | &nbsp;&nbsp; 72 |
| 111579 | 7.000%, 4/1/2032 | &nbsp;&nbsp; 118306 |
| 3105 | 7.500%, 1/1/2031 | &nbsp;&nbsp; 3280 |
| 627 | 8.500%, 5/1/2030 | &nbsp;&nbsp; 659 |
|  | TOTAL | &nbsp;&nbsp; 11247874 |
|  | **Federal National Mortgage Association—28.6%** |  |
| 1843946 | 2.000%, 7/1/2050 | &nbsp;&nbsp; 1506423 |
| 736338 | 2.000%, 2/1/2052 | &nbsp;&nbsp; 602476 |
| 1636018 | 2.000%, 2/1/2052 | &nbsp;&nbsp; 1333487 |
| 646393 | 2.000%, 2/1/2052 | &nbsp;&nbsp; 529488 |
| 319845 | 2.500%, 9/1/2036 | &nbsp;&nbsp; 303358 |

---

Annual Financial Statements and Additional Information

**1**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br>|  | **Value** |
|  | MORTGAGE-BACKED SECURITIES—continued |  |
|  | **Federal National Mortgage Association—continued** |  |
| $1051481 | 2.500%, 9/1/2050 | &nbsp;&nbsp; $897855 |
| 497005 | 2.500%, 10/1/2051 | &nbsp;&nbsp; 425788 |
| 714652 | 2.500%, 1/1/2052 | &nbsp;&nbsp; 609792 |
| 575885 | 2.500%, 2/1/2052 | &nbsp;&nbsp; 489406 |
| 608660 | 2.500%, 3/1/2052 | &nbsp;&nbsp; 515738 |
| 26727 | 3.000%, 2/1/2047 | &nbsp;&nbsp; 24432 |
| 489896 | 3.000%, 2/1/2048 | &nbsp;&nbsp; 436502 |
| 704174 | 3.000%, 5/1/2051 | &nbsp;&nbsp; 623685 |
| 1247131 | 3.000%, 2/1/2052 | &nbsp;&nbsp; 1110427 |
| 922630 | 3.000%, 6/1/2052 | &nbsp;&nbsp; 826975 |
| 510330 | 3.000%, 6/1/2052 | &nbsp;&nbsp; 451871 |
| 582753 | 3.000%, 6/1/2052 | &nbsp;&nbsp; 520878 |
| 1030551 | 3.500%, 8/1/2037 | &nbsp;&nbsp; 1005602 |
| 1048830 | 3.500%, 9/1/2037 | &nbsp;&nbsp; 1023111 |
| 272909 | 3.500%, 12/1/2047 | &nbsp;&nbsp; 256754 |
| 690849 | 3.500%, 1/1/2048 | &nbsp;&nbsp; 644340 |
| 539958 | 3.500%, 6/1/2052 | &nbsp;&nbsp; 503775 |
| 103693 | 4.500%, 10/1/2041 | &nbsp;&nbsp; 103788 |
| 710122 | 4.500%, 2/1/2053 | &nbsp;&nbsp; 699766 |
| 89799 | 5.000%, 7/1/2034 | &nbsp;&nbsp; 91369 |
| 10849 | 5.000%, 11/1/2035 | &nbsp;&nbsp; 11055 |
| 1835153 | 5.000%, 6/1/2053 | &nbsp;&nbsp; 1838702 |
| 491941 | 5.000%, 5/1/2055 | &nbsp;&nbsp; 490894 |
| 737648 | 5.000%, 8/1/2055 | &nbsp;&nbsp; 736078 |
| 249509 | 5.000%, 12/1/2055 | &nbsp;&nbsp; 248978 |
| 51434 | 5.500%, 9/1/2034 | &nbsp;&nbsp; 53285 |
| 11174 | 5.500%, 1/1/2036 | &nbsp;&nbsp; 11597 |
| 25541 | 5.500%, 4/1/2036 | &nbsp;&nbsp; 26485 |
| 764103 | 5.500%, 6/1/2053 | &nbsp;&nbsp; 777867 |
| 490 | 6.000%, 7/1/2029 | &nbsp;&nbsp; 503 |
| 592 | 6.000%, 5/1/2031 | &nbsp;&nbsp; 612 |
| 4198 | 6.000%, 5/1/2036 | &nbsp;&nbsp; 4416 |
| 46397 | 6.000%, 7/1/2036 | &nbsp;&nbsp; 48823 |
| 1267 | 6.000%, 7/1/2036 | &nbsp;&nbsp; 1336 |
| 18703 | 6.000%, 9/1/2037 | &nbsp;&nbsp; 19749 |
| 16939 | 6.000%, 11/1/2037 | &nbsp;&nbsp; 17923 |
| 10381 | 6.000%, 12/1/2037 | &nbsp;&nbsp; 10845 |
| 815 | 6.500%, 6/1/2029 | &nbsp;&nbsp; 846 |
| 50 | 6.500%, 7/1/2029 | &nbsp;&nbsp; 52 |
| 84 | 6.500%, 7/1/2029 | &nbsp;&nbsp; 87 |
| 769 | 6.500%, 7/1/2029 | &nbsp;&nbsp; 799 |
| 73 | 6.500%, 7/1/2029 | &nbsp;&nbsp; 76 |
| 2078 | 6.500%, 9/1/2030 | &nbsp;&nbsp; 2158 |
| 9432 | 6.500%, 6/1/2031 | &nbsp;&nbsp; 9821 |
| 7666 | 6.500%, 4/1/2032 | &nbsp;&nbsp; 8034 |
| 444 | 7.000%, 10/1/2029 | &nbsp;&nbsp; 467 |
| 6219 | 7.000%, 10/1/2029 | &nbsp;&nbsp; 6536 |
| 2383 | 7.000%, 11/1/2030 | &nbsp;&nbsp; 2505 |
| 54328 | 7.000%, 4/1/2032 | &nbsp;&nbsp; 57549 |
| 180 | 7.500%, 8/1/2028 | &nbsp;&nbsp; 186 |
| 59 | 7.500%, 9/1/2028 | &nbsp;&nbsp; 61 |
| 1848 | 7.500%, 2/1/2030 | &nbsp;&nbsp; 1939 |
| 927 | 8.000%, 7/1/2030 | &nbsp;&nbsp; 974 |
|  | TOTAL | &nbsp;&nbsp; 19928324 |

---

Annual Financial Statements and Additional Information

**2**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br>|  | **Value** |
|  | MORTGAGE-BACKED SECURITIES—continued |  |
|  | **Government National Mortgage Association—19.9%** |  |
| $1544364 | 2.000%, 6/20/2052 | &nbsp;&nbsp; $1279828 |
| 2195462 | 2.500%, 6/20/2051 | &nbsp;&nbsp; 1894464 |
| 967764 | 3.000%, 7/20/2051 | &nbsp;&nbsp; 870887 |
| 839224 | 3.500%, 1/20/2048 | &nbsp;&nbsp; 771040 |
| 402899 | 3.500%, 5/20/2052 | &nbsp;&nbsp; 370165 |
| 801101 | 4.000%, 10/20/2052 | &nbsp;&nbsp; 763442 |
| 819304 | 4.000%, 12/20/2052 | &nbsp;&nbsp; 780279 |
| 149274 | 4.500%, 6/20/2039 | &nbsp;&nbsp; 149466 |
| 122972 | 4.500%, 10/15/2039 | &nbsp;&nbsp; 123179 |
| 171583 | 4.500%, 8/20/2040 | &nbsp;&nbsp; 171695 |
| 775260 | 4.500%, 10/20/2052 | &nbsp;&nbsp; 761023 |
| 84432 | 5.000%, 7/15/2034 | &nbsp;&nbsp; 85889 |
| 735322 | 5.000%, 9/20/2052 | &nbsp;&nbsp; 739319 |
| 665570 | 5.500%, 10/20/2052 | &nbsp;&nbsp; 677708 |
| 1087865 | 5.500%, 9/20/2053 | &nbsp;&nbsp; 1104559 |
| 1717205 | 5.500%, 4/20/2055 | &nbsp;&nbsp; 1733494 |
| 3719 | 6.000%, 4/15/2032 | &nbsp;&nbsp; 3812 |
| 14466 | 6.000%, 5/15/2032 | &nbsp;&nbsp; 15062 |
| 50821 | 6.000%, 5/15/2036 | &nbsp;&nbsp; 53230 |
| 12224 | 6.000%, 7/20/2036 | &nbsp;&nbsp; 12808 |
| 12465 | 6.000%, 5/20/2037 | &nbsp;&nbsp; 13068 |
| 75996 | 6.000%, 7/20/2038 | &nbsp;&nbsp; 79819 |
| 667668 | 6.000%, 10/20/2052 | &nbsp;&nbsp; 686399 |
| 597784 | 6.000%, 10/20/2053 | &nbsp;&nbsp; 613668 |
| 136 | 6.500%, 6/15/2029 | &nbsp;&nbsp; 141 |
| 1413 | 6.500%, 7/20/2031 | &nbsp;&nbsp; 1470 |
| 1194 | 6.500%, 8/20/2031 | &nbsp;&nbsp; 1240 |
| 14332 | 6.500%, 10/15/2031 | &nbsp;&nbsp; 15007 |
| 14135 | 6.500%, 12/15/2031 | &nbsp;&nbsp; 14779 |
| 1154 | 6.500%, 4/15/2032 | &nbsp;&nbsp; 1211 |
| 9129 | 6.500%, 5/15/2032 | &nbsp;&nbsp; 9578 |
| 80339 | 6.500%, 5/15/2032 | &nbsp;&nbsp; 84371 |
| 184 | 7.500%, 10/15/2029 | &nbsp;&nbsp; 190 |
| 1018 | 7.500%, 3/20/2030 | &nbsp;&nbsp; 1056 |
| 529 | 8.000%, 4/15/2030 | &nbsp;&nbsp; 546 |
|  | TOTAL | &nbsp;&nbsp; 13883892 |
|  | TOTAL MORTGAGE-BACKED SECURITIES <br>(IDENTIFIED COST $44,538,056)<br>| &nbsp;&nbsp; 45060090 |
|  | U.S. TREASURIES—13.6% |  |
|  | **U.S. Treasury Bonds—7.9%** |  |
| 300000 | 2.875%, 11/15/2046 | &nbsp;&nbsp; 221749 |
| 1200000 | 3.375%, 11/15/2048 | &nbsp;&nbsp; 950622 |
| 1850000 | 3.625%, 2/15/2044 | &nbsp;&nbsp; 1590703 |
| 300000 | 4.000%, 11/15/2052 | &nbsp;&nbsp; 260657 |
| 1600000 | 4.500%, 2/15/2036 | &nbsp;&nbsp; 1650750 |
| 850000 | 4.625%, 2/15/2055 | &nbsp;&nbsp; 820473 |
|  | TOTAL | &nbsp;&nbsp; 5494954 |
|  | **U.S. Treasury Notes—5.7%** |  |
| 1000000 | 3.500%, 1/31/2028 | &nbsp;&nbsp; 1000067 |
| 1750000 | 3.750%, 4/15/2028 | &nbsp;&nbsp; 1759106 |
| 500000 | 4.250%, 11/15/2034 | &nbsp;&nbsp; 505547 |
| 700000 | 4.625%, 2/15/2035 | &nbsp;&nbsp; 727016 |
|  | TOTAL | &nbsp;&nbsp; 3991736 |
|  | TOTAL U.S. TREASURIES <br>(IDENTIFIED COST $9,643,873)<br>| &nbsp;&nbsp; 9486690 |

---

Annual Financial Statements and Additional Information

**3**

------

---

| | | |
|:---|:---|:---|
| **Principal**<br> **Amount**<br>|  | **Value** |
|  | GOVERNMENT AGENCIES—10.8% |  |
|  | **Federal Home Loan Bank System—9.4%** |  |
| $1000000 | 3.500%, 10/4/2027 | &nbsp;&nbsp; $998594 |
| 2000000 | 4.000%, 10/9/2026 | &nbsp;&nbsp; 2005790 |
| 1500000 | 4.000%, 3/10/2027 | &nbsp;&nbsp; 1508274 |
| 2000000 | 4.125%, 9/14/2029 | &nbsp;&nbsp; 2032178 |
|  | TOTAL | &nbsp;&nbsp; 6544836 |
|  | **Government Agency—1.4%** |  |
| 1000000 | Tennessee Valley Authority Notes, 3.875%, 8/1/2030 | &nbsp;&nbsp; 1004401 |
|  | TOTAL GOVERNMENT AGENCIES <br>(IDENTIFIED COST $7,509,217)<br>| &nbsp;&nbsp; 7549237 |
|  | COMMERCIAL MORTGAGE-BACKED SECURITIES—4.9% |  |
|  | **Agency Commercial Mortgage-Backed Securities—4.9%** |  |
| 457000 | FHLMC REMIC, Series K151, Class A2, 3.800%, 10/25/2032 | &nbsp;&nbsp; 442647 |
| 900000 | FHLMC REMIC, Series K512, Class A2, 5.000%, 11/25/2028 | &nbsp;&nbsp; 923873 |
| 1000000 | FHLMC REMIC, Series K750, Class A2, 3.000%, 9/25/2029 | &nbsp;&nbsp; 976219 |
| 1000000 | FHLMC REMIC, Series K754, Class A2, 4.940%, 11/25/2030 | &nbsp;&nbsp; 1035566 |
|  | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES <br>(IDENTIFIED COST $3,243,274)<br>| &nbsp;&nbsp; 3378305 |
|  | COLLATERALIZED MORTGAGE OBLIGATIONS—2.9% |  |
|  | **Government National Mortgage Association—0.4%** |  |
| 315445 | REMIC, Series 2015-47, Class AE, 2.900%, 11/16/2055 | &nbsp;&nbsp; 305213 |
|  | **Non-Agency Mortgage—2.5%** |  |
| 452220 | GS Mortgage-Backed Securities Trust 2023-PJ1, Class A4, 3.500%, 2/25/2053 | &nbsp;&nbsp; 412085 |
| 925103<br><sup>1</sup> <br>| JP Morgan Mortgage Trust 2021-1, Class A11, 4.721% (30-DAY AVERAGE SOFR +0.650%), 6/25/2051 | &nbsp;&nbsp; 873598 |
| 415705 | JP Morgan Mortgage Trust 2023-6, Class A2, 6.000%, 12/26/2053 | &nbsp;&nbsp; 422655 |
|  | TOTAL | &nbsp;&nbsp; 1708338 |
|  | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS <br>(IDENTIFIED COST $2,055,319)<br>| &nbsp;&nbsp; 2013551 |
|  | ASSET-BACKED SECURITIES—1.0% |  |
|  | **Single Family Rental Security—0.6%** |  |
| 409212 | Progress Residential Trust 2022-SFR4, Class B, 4.788%, 5/17/2041 | &nbsp;&nbsp; 410409 |
|  | **Student Loans—0.4%** |  |
| 90832 | Navient Student Loan Trust 2020-FA, Class A, 1.220%, 7/15/2069 | &nbsp;&nbsp; 86363 |
| 192503 | Navient Student Loan Trust 2020-GA, Class A, 1.170%, 9/16/2069 | &nbsp;&nbsp; 180916 |
|  | TOTAL | &nbsp;&nbsp; 267279 |
|  | TOTAL ASSET-BACKED SECURITIES <br>(IDENTIFIED COST $692,596)<br>| &nbsp;&nbsp; 677688 |
|  | REPURCHASE AGREEMENT—1.4% |  |
| 952000 | Interest in $292,000,000 joint repurchase agreement 3.85%, dated 12/31/2025 under which Bank of America, N.A. will <br> repurchase securities provided as collateral for $292,062,456 on 1/2/2026. The securities provided as collateral at the end of <br> the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to <br> 10/1/2050 and the market value of those underlying securities was $297,903,705. <br>(IDENTIFIED COST $952,000)<br>| &nbsp;&nbsp; 952000 |
|  | TOTAL INVESTMENT IN SECURITIES—99.3% <br>(IDENTIFIED COST $68,634,335)<sup>2</sup> <br>| &nbsp;&nbsp; 69117561 |
|  | OTHER ASSETS AND LIABILITIES - NET—0.7%<sup>3</sup> <br>| &nbsp;&nbsp; 494073 |
|  | NET ASSETS—100% | &nbsp;&nbsp; $69611634 |

---

At December 31, 2025, the Fund had the following outstanding futures contracts:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description** | **Number of** <br>**Contracts**<br>| &nbsp;&nbsp; **Notional** <br>**Value**<br>| &nbsp;&nbsp;&nbsp; **Expiration** <br>**Date**<br>| &nbsp;&nbsp; **Value and** <br>**Unrealized** <br>**(Depreciation)**<br>|
| **Long Futures:** |  |  |  |  |
| United States Treasury Notes 2-Year Long Futures | &nbsp;&nbsp; 13 | &nbsp;&nbsp;&nbsp; $2714258 | March 2026 | &nbsp;&nbsp;&nbsp; $(1642) |
| United States Treasury Notes 5-Year Long Futures | &nbsp;&nbsp; 7 | &nbsp;&nbsp;&nbsp; $765133 | March 2026 | &nbsp;&nbsp;&nbsp; $(2423) |
| United States Treasury Notes 10-Year Long Futures | &nbsp;&nbsp; 11 | &nbsp;&nbsp;&nbsp; $1236812 | March 2026 | &nbsp;&nbsp;&nbsp; $(7673) |
| NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | &nbsp;&nbsp;&nbsp; $(11738) |

---

Annual Financial Statements and Additional Information

**4**

------

Net Unrealized Depreciation on Futures Contracts is included in "Other Assets and Liabilities—Net."

---

| | |
|:---|:---|
| 1 | Floating/variable note with current rate and current maturity or next reset date shown. |
| 2 | The cost of investments for federal tax purposes amounts to $68,634,787. |
| 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 net assets at December 31, 2025.

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.

The following is a summary of the inputs used, as of December 31, 2025, in valuing the Fund's assets carried at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** | **Valuation Inputs** |
|  | **Level 1—** <br>**Quoted** <br>**Prices**<br>| **Level 2—** <br>**Other** <br>**Significant** <br>**Observable** <br>**Inputs**<br>| **Level 3—** <br>**Significant** <br>**Unobservable** <br>**Inputs**<br>| **Total** |
| **Debt Securities:** |  |  |  |  |
| Mortgage-Backed Securities | &nbsp;&nbsp; $— | &nbsp;&nbsp; $45060090 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $45060090 |
| U.S. Treasuries | &nbsp;&nbsp; — | &nbsp;&nbsp; 9486690 | &nbsp;&nbsp; — | &nbsp;&nbsp; 9486690 |
| Government Agencies | &nbsp;&nbsp; — | &nbsp;&nbsp; 7549237 | &nbsp;&nbsp; — | &nbsp;&nbsp; 7549237 |
| Commercial Mortgage-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 3378305 | &nbsp;&nbsp; — | &nbsp;&nbsp; 3378305 |
| Collateralized Mortgage Obligations | &nbsp;&nbsp; — | &nbsp;&nbsp; 2013551 | &nbsp;&nbsp; — | &nbsp;&nbsp; 2013551 |
| Asset-Backed Securities | &nbsp;&nbsp; — | &nbsp;&nbsp; 677688 | &nbsp;&nbsp; — | &nbsp;&nbsp; 677688 |
| **Repurchase Agreement** | &nbsp;&nbsp; — | &nbsp;&nbsp; 952000 | &nbsp;&nbsp; — | &nbsp;&nbsp; 952000 |
| TOTAL SECURITIES | &nbsp;&nbsp; $— | &nbsp;&nbsp; $69117561 | &nbsp;&nbsp; $— | &nbsp;&nbsp; $69117561 |
| **Other Financial Instruments:**<sup>1</sup> <br>|  |  |  |  |
| Liabilities | &nbsp;&nbsp; $(11738) | &nbsp;&nbsp; $— | &nbsp;&nbsp; $— | &nbsp;&nbsp; $(11738) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

1 Other financial instruments are futures contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| The following acronym(s) are used throughout this portfolio: | The following acronym(s) are used throughout this portfolio: |
| FHLMC | —Federal Home Loan Mortgage Corporation |
| REMIC | —Real Estate Mortgage Investment Conduit |
| SOFR | —Secured Overnight Financing Rate |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**5**

------

Financial Highlights

(For a Share Outstanding Throughout Each Period)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | &nbsp;&nbsp; **$9.07** | &nbsp;&nbsp; **$9.35** | &nbsp;&nbsp; **$9.20** | &nbsp;&nbsp; **$10.71** | &nbsp;&nbsp; **$11.16** |
| **Income From Investment Operations:** |  |  |  |  |  |
| Net investment income (loss)<sup>1</sup> <br>| 0.33 | 0.33 | 0.30 | 0.21 | 0.15 |
| Net realized and unrealized gain (loss) | 0.27 | &nbsp;&nbsp; (0.28) | 0.08 | &nbsp;&nbsp; (1.54) | &nbsp;&nbsp; (0.38) |
| TOTAL FROM INVESTMENT OPERATIONS | 0.60 | 0.05 | 0.38 | &nbsp;&nbsp; (1.33) | &nbsp;&nbsp; (0.23) |
| **Less Distributions:** |  |  |  |  |  |
| Distributions from net investment income | &nbsp;&nbsp; (0.36) | &nbsp;&nbsp; (0.33) | &nbsp;&nbsp; (0.23) | &nbsp;&nbsp; (0.18) | &nbsp;&nbsp; (0.22) |
| **Net Asset Value, End of Period** | &nbsp;&nbsp; **$9.31** | &nbsp;&nbsp; **$9.07** | &nbsp;&nbsp; **$9.35** | &nbsp;&nbsp; **$9.20** | &nbsp;&nbsp; **$10.71** |
| **Total Return**<sup>2</sup> <br>| &nbsp;&nbsp; 6.80% | &nbsp;&nbsp; 0.58% | &nbsp;&nbsp; 4.19% | &nbsp;&nbsp; (12.55)% | &nbsp;&nbsp; (2.04)% |
| **Ratios to Average Net Assets:** |  |  |  |  |  |
| Net expenses<sup>3</sup> <br>| &nbsp;&nbsp; 0.78% | &nbsp;&nbsp; 0.80% | &nbsp;&nbsp; 0.78% | &nbsp;&nbsp; 0.78% | &nbsp;&nbsp; 0.78% |
| Net investment income | &nbsp;&nbsp; 3.67% | &nbsp;&nbsp; 3.64% | &nbsp;&nbsp; 3.29% | &nbsp;&nbsp; 2.12% | &nbsp;&nbsp; 1.34% |
| Expense waiver/reimbursement<sup>4</sup> <br>| &nbsp;&nbsp; 0.24% | &nbsp;&nbsp; 0.17% | &nbsp;&nbsp; 0.14% | &nbsp;&nbsp; 0.13% | &nbsp;&nbsp; 0.09% |
| **Supplemental Data:** |  |  |  |  |  |
| Net assets, end of period (000 omitted) | &nbsp;&nbsp; $69612 | &nbsp;&nbsp; $70744 | &nbsp;&nbsp; $84042 | &nbsp;&nbsp; $91840 | &nbsp;&nbsp; $114594 |
| Portfolio turnover<sup>5</sup> <br>| &nbsp;&nbsp; 57% | &nbsp;&nbsp; 22% | &nbsp;&nbsp; 74% | &nbsp;&nbsp; 122% | &nbsp;&nbsp; 166% |
| Portfolio turnover (excluding purchases and sales from dollar-roll transactions)<sup>5</sup> <br>| &nbsp;&nbsp; 25% | &nbsp;&nbsp; 13% | &nbsp;&nbsp; 65% | &nbsp;&nbsp; 96% | &nbsp;&nbsp; 31% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in <br> connection with any variable annuity or variable life insurance contract.<br>|
| 3 | Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. |
| 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/<br> reimbursement recorded by investment companies in which the Fund may invest.<br>|
| 5 | Securities that mature are considered sales for purposes of this calculation. |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**6**

------

Statement of Assets and Liabilities

December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Assets:** |  |
| Investment in securities, at value (identified cost $68,634,335) | &nbsp;&nbsp; $69117561 |
| Due from broker (Note 2) | &nbsp;&nbsp; 44975 |
| Income receivable | &nbsp;&nbsp; 416433 |
| Receivable for shares sold | &nbsp;&nbsp; 143129 |
| Total Assets | &nbsp;&nbsp; 69722098 |
| **Liabilities:** |  |
| Payable for shares redeemed | &nbsp;&nbsp; 3233 |
| Payable to bank | &nbsp;&nbsp; 49363 |
| Payable for variation margin on futures contracts | &nbsp;&nbsp; 3966 |
| Payable for investment adviser fee (Note 5) | &nbsp;&nbsp; 681 |
| Payable for administrative fee (Note 5) | &nbsp;&nbsp; 147 |
| Payable for legal fees | &nbsp;&nbsp; 13239 |
| Payable for portfolio accounting fees | &nbsp;&nbsp; 28171 |
| Payable for printing and postage | &nbsp;&nbsp; 7273 |
| Accrued expenses (Note 5) | &nbsp;&nbsp; 4391 |
| Total Liabilities | &nbsp;&nbsp; 110464 |
| Net assets for 7,474,952 shares outstanding | &nbsp;&nbsp; $69611634 |
| **Net Assets Consist of:** |  |
| Paid-in capital | &nbsp;&nbsp; $80216500 |
| Total distributable earnings (loss) | &nbsp;&nbsp; (10604866) |
| Net Assets | &nbsp;&nbsp; $69611634 |
| **Net Asset Value, Offering Price and Redemption Proceeds Per Share:** |  |
| $69,611,634 ÷ 7,474,952 shares outstanding, no par value, unlimited shares authorized | $9.31 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**7**

------

Statement of Operations

Year Ended December 31, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Investment Income:** |  |
| Interest | &nbsp;&nbsp; $3134341 |
| **Expenses:** |  |
| Investment adviser fee (Note 5) | &nbsp;&nbsp; 422067 |
| Administrative fee (Note 5) | &nbsp;&nbsp; 57424 |
| Custodian fees | &nbsp;&nbsp; 17145 |
| Transfer agent fees | &nbsp;&nbsp; 8544 |
| Directors'/Trustees' fees (Note 5) | &nbsp;&nbsp; 1714 |
| Auditing fees | &nbsp;&nbsp; 30098 |
| Legal fees | &nbsp;&nbsp; 13348 |
| Portfolio accounting fees | &nbsp;&nbsp; 112846 |
| Printing and postage | &nbsp;&nbsp; 37688 |
| Miscellaneous (Note 5) | &nbsp;&nbsp; 20128 |
| TOTAL EXPENSES | &nbsp;&nbsp; 721002 |
| Waiver of investment adviser fee (Note 5) | &nbsp;&nbsp; (168868) |
| Net expenses | &nbsp;&nbsp; 552134 |
| Net investment income | &nbsp;&nbsp; 2582207 |
| **Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:** |  |
| Net realized loss on investments | &nbsp;&nbsp; (828692) |
| Net realized gain on futures contracts | &nbsp;&nbsp; 46021 |
| Net change in unrealized depreciation of investments | &nbsp;&nbsp; 2893378 |
| Net change in unrealized appreciation of futures contracts | &nbsp;&nbsp; (43577) |
| Net realized and unrealized gain (loss) on investments and futures contracts | &nbsp;&nbsp; 2067130 |
| Change in net assets resulting from operations | &nbsp;&nbsp; $4649337 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**8**

------

Statement of Changes in Net Assets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | |
|:---|:---|:---|
| **Year Ended December 31** | **2025** | **2024** |
| **Increase (Decrease) in Net Assets** |  |  |
| **Operations:** |  |  |
| Net investment income | &nbsp;&nbsp; $2582207 | &nbsp;&nbsp; $2799773 |
| Net realized gain (loss) | &nbsp;&nbsp; (782671) | &nbsp;&nbsp; (972452) |
| Net change in unrealized appreciation/depreciation | &nbsp;&nbsp; 2849801 | &nbsp;&nbsp; (1413401) |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | &nbsp;&nbsp; 4649337 | &nbsp;&nbsp; 413920 |
| **Distributions to Shareholders** | &nbsp;&nbsp; (2802697) | &nbsp;&nbsp; (2822220) |
| **Share Transactions:** |  |  |
| Proceeds from sale of shares | &nbsp;&nbsp; 7628717 | &nbsp;&nbsp; 4875563 |
| Net asset value of shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 2802697 | &nbsp;&nbsp; 2822220 |
| Cost of shares redeemed | &nbsp;&nbsp; (13410343) | &nbsp;&nbsp; (18587974) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | &nbsp;&nbsp; (2978929) | &nbsp;&nbsp; (10890191) |
| Change in net assets | &nbsp;&nbsp; (1132289) | &nbsp;&nbsp; (13298491) |
| **Net Assets:** |  |  |
| Beginning of period | &nbsp;&nbsp; 70743923 | &nbsp;&nbsp; 84042414 |
| End of period | &nbsp;&nbsp; $69611634 | &nbsp;&nbsp; $70743923 |

---

See Notes which are an integral part of the Financial Statements

Annual Financial Statements and Additional Information

**9**

------

Notes to Financial Statements

December 31, 2025

**1. ORGANIZATION** 

Federated Hermes Insurance Series (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 six portfolios. The financial statements included herein are only those of Federated Hermes Fund for U.S. Government Securities II (the "Fund"), a 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. Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts. The investment objective of the Fund is to provide current income.

**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 Federated Investment Management Company (the "Adviser").

■

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 ask quotations.

■

Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Adviser.

■

For securities that are fair valued in accordance with procedures established by and under the general supervision of the Adviser, 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 Adviser's valuation policies and procedures for the Fund, or if information furnished by a pricing service, in the opinion of the Adviser's 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** 

Pursuant to Rule 2a-5 under the Act, the Fund's Board of Trustees (the "Trustees") has designated the Adviser as the Fund's valuation designee to perform any fair value determinations for securities and other assets held by the Fund. The Adviser is subject to the Trustees' oversight and certain reporting and other requirements intended to provide the Trustees the information needed to oversee the Adviser's fair value determinations.

The Adviser, acting through its Valuation Committee, is responsible for determining the fair value of investments for which market quotations are not readily available. The Valuation Committee is comprised of officers of the Adviser and certain of the Adviser's affiliated companies and determines fair value and oversees the calculation of the NAV. The Valuation Committee is also authorized to use pricing services 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 Adviser. The Trustees periodically review the fair valuations made by the Valuation Committee. The Trustees have also approved the Adviser's fair valuation and significant events procedures as part of the Fund's compliance program and will review 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 ask 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 Adviser.

Annual Financial Statements and Additional Information

**10**

------

**Repurchase Agreements** 

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a "securities entitlement" and exercises "control" as those terms are defined in the Uniform Commercial Code. Certain repurchase agreements may be structured as loans secured by a security interest or lien on the eligible securities. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Repurchase agreements are subject to Master Netting Agreements (MNA) which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.

**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 and capital gains, if any, are declared and paid at least annually. 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. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income. The detail of the total fund expense waiver of $168,868 is disclosed in Note 5.

**Federal Taxes** 

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code of 1986 (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 December 31, 2025, 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 December 31, 2025, tax years 2022 through 2025 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.

The Fund may transact in To Be Announced Securities (TBAs). As with other delayed-delivery transactions, a seller agrees to issue TBAs at a future date. However, the seller does not specify the particular securities to be delivered. Instead, the Fund agrees to accept any security that meets specified terms such as issuer, interest rate and terms of underlying mortgages. The Fund records TBAs on the trade date utilizing information associated with the specified terms of the transaction as opposed to the specific mortgages. TBAs are marked to market daily and begin earning interest on the settlement date. Losses may occur due to the fact that the actual underlying mortgages received may be less favorable than those anticipated by the Fund.

**Dollar-Roll Transactions** 

The Fund may engage in dollar-roll transactions in which the Fund sells mortgage-backed securities with a commitment to buy similar (same type, coupon and maturity), but not identical mortgage-backed securities on a future date. Both securities involved are TBA mortgage-backed securities. The Fund treats dollar-roll transactions as purchases and sales. Dollar-rolls are subject to interest rate risks and credit risks.

**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

Annual Financial Statements and Additional Information

**11**

------

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 clearinghouse, as counterparty to all exchange-traded futures contracts, guarantees the futures contracts against default.

Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.

The average notional value of long and short futures contracts held by the Fund throughout the period was $6,260,861 and $540,737, respectively. This is based on amounts held as of each month-end throughout the fiscal period.

**Securities Lending** 

The Fund participates in a securities lending program providing for the lending of government securities to qualified brokers. The term of the loans within the program is one year or less. The Fund receives cash collateral for securities loaned, which generally is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 100% of the market value of investments loaned, plus interest, if applicable. In accordance with the Fund's securities lending agreement, the market value of securities on loan is determined each day at the close of business and any additional collateral required to cover the value of securities on loan is delivered to the Fund on the next business day. Earnings on collateral are allocated between the borrower of the security, the securities lending agent, as a fee for its services under the program and the Fund, according to agreed-upon rates. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.

As of December 31, 2025, the Fund had no outstanding securities on loan.

**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 Adviser.

**Additional Disclosure Related to Derivative Instruments** 

---

| | | |
|:---|:---|:---|
| **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** | **Fair Value of Derivative Instruments** |
|  | **Liabilities** | **Liabilities** |
|  | &nbsp;&nbsp; **Statement of** <br>**Assets and** <br>**Liabilities** <br>**Location**<br>| **Fair** <br>**Value**<br>|
| Derivatives not accounted for as hedging <br>instruments under ASC Topic 815<br>|  |  |
| Interest rate contracts | &nbsp;&nbsp; Payable for variation margin <br>on futures contracts<br>| &nbsp;&nbsp; $11,738\* |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

\* Includes cumulative net depreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's variation margin is reported within the Statement of Assets and Liabilities.

**The Effect of Derivative Instruments on the Statement of Operations for the Year Ended December 31, 2025** 

---

| | |
|:---|:---|
| **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** | **Amount of Realized Gain or (Loss) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>|
| Interest rate contracts | &nbsp;&nbsp; $46021 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** | **Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income** |
|  | **Futures** <br>**Contracts**<br>|
| Interest rate contracts | &nbsp;&nbsp; $(43577) |

---

**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 Financial Statements and Additional Information

**12**

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**3. SHARES OF BENEFICIAL INTEREST** 

The following table summarizes share activity:

---

| | | |
|:---|:---|:---|
|  | **Year Ended** <br>**12/31/2025**<br>| **Year Ended** <br>**12/31/2024**<br>|
| Shares sold | &nbsp;&nbsp; 837910 | &nbsp;&nbsp; 536173 |
| Shares issued to shareholders in payment of distributions declared | &nbsp;&nbsp; 312801 | &nbsp;&nbsp; 317460 |
| Shares redeemed | &nbsp;&nbsp; (1476634) | &nbsp;&nbsp; (2041115) |
| NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | &nbsp;&nbsp; (325923) | &nbsp;&nbsp; (1187482) |

---

**4. FEDERAL TAX INFORMATION** 

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2025 and 2024, was as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Ordinary income | &nbsp;&nbsp; $2802697 | &nbsp;&nbsp; $2822220 |

---

As of December 31, 2025, the components of distributable earnings on a tax-basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income | &nbsp;&nbsp; $2598583 |
| Net unrealized appreciation | &nbsp;&nbsp; $482774 |
| Capital loss carryforwards and deferrals | &nbsp;&nbsp; $(13686223) |
| TOTAL | &nbsp;&nbsp; $(10604866) |

---

At December 31, 2025, the cost of investments for federal tax purposes was $68,634,787. The net unrealized appreciation of investments for federal tax purposes was $482,774. This consists of unrealized appreciation from investments for those securities having an excess of value over cost of $1,128,238 and unrealized depreciation from investments for those securities having an excess of cost over value of $645,464. The amounts presented are inclusive of derivative contracts. The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for Straddle loss deferral and mark-to-market futures contracts.

As of December 31, 2025, the Fund had a capital loss carryforward of $13,686,223 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** |
| $5134891 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $8551332 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $13686223 |

---

The Fund used capital loss carryforwards of $27,002 to offset capital gains realized during the year ended December 31, 2025.

At December 31, 2025, for federal income tax purposes, the Fund had $452 in straddle loss deferrals.

**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 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 December 31, 2025, the Adviser voluntarily waived $168,868 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** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Average Daily Net Assets** <br>**of the Investment Complex**<br>|
| 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 December 31, 2025, the annualized fee paid to FAS was 0.082% of average daily net assets of the Fund.

Annual Financial Statements and Additional Information

**13**

------

In addition, FAS may charge certain out-of-pocket expenses to the Fund.

**Expense Limitation** 

The Adviser and certain of its affiliates (which may include FAS) 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, if any) paid by the Fund (after the voluntary waivers and/or reimbursements) will not exceed 0.78% (the "Fee Limit") up to but not including the later of (the "Termination Date"): (a) May 1, 2026; 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 approval 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 December 31, 2025, were as follows:

---

| | |
|:---|:---|
| Purchases | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $— |
| Sales | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $2442815 |

---

**7. 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 17, 2025. 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 December 31, 2025, the Fund had no outstanding loans. During the year ended December 31, 2025, the Fund did not utilize the LOC.

**8. 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 December 31, 2025, there were no outstanding loans. During the year ended December 31, 2025, the program was not utilized.

**9. Operating Segments** 

An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity's chief operating decision maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. A management committee of the Adviser acts as the CODM. The Fund represents a single operating segment, as the CODM monitors the operating results of the Fund as a whole and the strategic asset allocation is determined based on the investment objective of the Fund and executed by the Fund's portfolio management team. The financial information in the form of the Fund's portfolio composition, total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations, subscriptions and redemptions) which is reviewed by the CODM to assess the Fund's performance in comparison to the Fund's benchmarks and to make resource allocation decisions for the Fund's single segment is consistent with the information presented in these financial statements. Segment assets are reflected on the accompanying Statement of Assets and Liabilities as "total assets" and significant segment expenses are listed on the accompanying Statement of Operations.

**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

Annual Financial Statements and Additional Information

**14**

------

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. FEDERAL TAX INFORMATION (UNAUDITED)** 

For the fiscal year ended December 31, 2025, 100% of total ordinary income distributions qualified as business interest income for purposes of 163(j) of the Code and the regulations thereunder.

Annual Financial Statements and Additional Information

**15**

------

Report of Independent Registered Public Accounting Firm

**To the Shareholders of Federated Hermes Fund for U.S. Government Securities II and the Board of Trustees of Federated Hermes Insurance Series:**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Federated Hermes Fund for U.S. Government Securities II (the Fund), a portfolio of Federated Hermes Insurance Series, including the portfolio of investments, as of December 31, 2025, 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 December 31, 2025, 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.

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 December 31, 2025, by correspondence with the custodian 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.

![](kpmgsig.jpg)

We have served as the auditor of one or more Federated Hermes' investment companies since 2006.

Boston, Massachusetts

February 17, 2026

Annual Financial Statements and Additional Information

**16**

------

Evaluation and Approval of Advisory Contract–May 2025

**Federated Hermes Fund for U.S. Government Securities II (the "Fund")**

At its meetings in May 2025 (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, as amended (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 such information deemed necessary to evaluate the terms of the Contract and 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.

**<u>Information Received and Review Process</u>**

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 report regarding data related to the Fund's management fee (the "CCO Management Fee Report"). The Board considered the CCO Management Fee 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.

In addition to the CCO Management Fee 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 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.

The Board's consideration of the Contract included review of materials and information covering the following matters, among others: (1) copies of the Contract; (2) the nature, quality and extent of the advisory and other services provided to the Fund by Federated Hermes; (3) Federated Hermes' business and operations; (4) the Adviser's investment philosophy, personnel and processes; (5) the Fund's investment objective and strategies; (6) the Fund's short-term and long-term performance - in absolute terms (both on a gross basis and net of expenses) and relative to an appropriate group of peer funds and its benchmark; (7) the Fund's fees and expenses, including the advisory fee and the overall expense structure of the Fund - in absolute terms and relative to an appropriate group of peer funds, with due regard for contractual or voluntary expense limitations (if any); (8) the financial condition of Federated Hermes; (9) the Adviser's profitability with respect to managing the Fund; (10) distribution and sales activity for the Fund; and (11) 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 evaluating the Contract. Using these judicial decisions as a guide, the Board considered several factors it deemed relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund, including: (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 fees and expenses, including a comparison of management fees paid to the adviser with those paid by similar funds managed by the same adviser or other advisers as well as management fees charged to institutional and other advisory clients of the same 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 considered that the Securities and Exchange Commission ("SEC") disclosure requirements 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 evaluation 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").

Annual Financial Statements and Additional Information

**17**

------

In addition, the Board considered 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 based 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 there are a range of investment options available to the Fund's shareholders in the marketplace, 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. The Board recognized that its evaluation process is evolutionary and that the factors considered and the 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.

**<u>Nature, Extent and Quality of Services</u>**

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 full 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 evaluated Federated Hermes' ability and experience in attracting and retaining qualified personnel to service the Fund. The Board considered the trading operations by the Adviser, including the execution of portfolio transactions and the selection of brokers for those transactions. 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).

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 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 Federated Hermes Funds. 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 Hermes in support of the Fund's obligations pursuant to Rule 38a-1 under the Investment Company Act of 1940, as amended, 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, and continue to lead, to an increase in the scope of Federated Hermes' oversight in this regard. 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.

Annual Financial Statements and Additional Information

**18**

------

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.

**<u>Fund Investment Performance</u>**

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 included, among other items, information on the Fund's 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, performance attribution information and commentary on the effect of market conditions. The Board noted that it evaluated investment performance at meetings throughout the year and received reports from Federated Hermes regarding the performance of certain Federated Hermes Funds as well as Federated Hermes' explanations for less favorable performance and any specific actions Federated Hermes had taken, or had determined to take, to seek to enhance Fund investment performance and the results of those actions.

The Board also reviewed comparative information regarding the performance of other registered funds in the category of peer funds selected by Morningstar, Inc. ("Morningstar"), an independent fund ranking organization (the "Performance Peer Group"). The Board noted the CCO's statement 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 also considered comparative performance data from Lipper, Inc. that was included in reports provided to the Board throughout the year. The Board noted that differences may exist between the Performance Peer Group and Lipper peers and that the results of these performance comparisons may vary.

The Board considered that 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, 2024. 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.

**<u>Fund Expenses</u>**

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, 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 overall 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 to funds by other advisers, the use of comparisons between the Fund and its Expense Peer Group assisted the Board in its evaluation of the Fund's fees and expenses. The Board focused on comparisons with other 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 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.

Annual Financial Statements and Additional Information

**19**

------

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 contractual advisory fee rate and other expenses 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 nature and extent of services offered and fees charged by Federated Hermes 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 statement that non-registered fund clients are inherently different products due to the following differences, among others: (i) types of targeted investors; (ii) applicable laws and regulations; (iii) legal structures; (iv) average account sizes; (v) portfolio management techniques made necessary by different cash flows and different associated costs; (vi) 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; (vii) SEC mandated risk management programs with respect to fund liquidity and use of derivatives; (viii) questions on regulatory reporting; (ix) a variety of different administrative responsibilities; and (x) degrees of risk associated with management. 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 statement 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 emphasized that differences in fees for providing advisory services to other types of clients may not be appropriate when judging the appropriateness of the Federated Hermes Funds' advisory fees because of the different services provided.

In the case of the Fund, the Board noted that Federated Hermes does not manage any other types of clients that are comparable to the Fund.

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.

**<u>Profitability</u>**

The Board received and considered profitability information furnished by Federated Hermes. 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 statement that, while the cost allocation report applies consistent allocation processes for purposes of general comparison of funds, the inherent difficulties in arbitrarily allocating costs lacks precision and can cause the report to be unreliable because a single change in an allocation estimate can 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 statement 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 to the Board that, although there is no single best method to allocate expenses, the methodologies used by Federated Hermes are reasonable. The Board considered the CCO's statement that the estimated profitability to the Adviser from its relationship with the Fund was not unreasonable in relation to the services provided.

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 recognized that profitability comparisons among fund management companies are difficult because of the variation in the type of comparative information that is publicly available, and the profitability of any fund management company is affected by numerous factors. The Board considered the CCO's statement that, based on such profitability information, Federated Hermes' profit margins did not appear to be excessive and that Federated Hermes appeared financially sound, with the resources available to fulfill its contractual obligations.

**<u>Economies of Scale</u>**

The Board received and considered information about the notion of possible realization of "economies of scale" as a fund grows larger, the difficulties of isolating and quantifying 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: portfolio management, investment research and trading operations; shareholder services; compliance; business continuity, cybersecurity and information security programs; internal audit and risk management functions; and technology, systems capabilities and use of data. The Board noted that Federated Hermes' investments in these areas are extensive and are

Annual Financial Statements and Additional Information

**20**

------

designed to provide enhanced or expanded services to the Federated Hermes Funds and their shareholders. The Board considered that the benefits of these investments are likely to be shared 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 that Federated Hermes has been active in managing expenses of the Federated Hermes Funds in recent years, which has resulted in benefits being realized by shareholders.

The Board also received and considered information on adviser-paid fees (commonly referred to as "revenue sharing" payments) that was provided to the Board throughout the year and in connection with the May Meetings. The Board considered that Federated Hermes believes that this information is relevant to consider whether Federated Hermes had an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, but should not be considered when evaluating the reasonableness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on economies of scale, 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.

**<u>Other Benefits</u>**

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 considered that Federated Hermes may derive a benefit to its reputation as an adviser to the Fund, which may help in attracting other clients and investment personnel. 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 service contracts, including for serving as the Federated Hermes Funds' administrator and distributor. In this regard, the Board considered that 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 the benefits, if any, that Federated Hermes may derive from its receipt of research services from brokers who execute portfolio trades for the Federated Hermes Funds.

**<u>Conclusions</u>**

The Board considered the CCO's presentation and statements and the information accompanying the CCO Management Fee Report. The Board recognized that its 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.

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.

Annual Financial Statements and Additional Information

**21**

------

Variable investment options 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 variable investment options involves investment risk, including the possible loss of principal.

This information 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.

![](fhilogok11p.jpg)

Federated Hermes Fund for U.S. Government Securities II

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

Contact us at **FederatedHermes.com/us**

or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 313916207

G00846-01 (2/26)© 2026 Federated Hermes, Inc.

------

**Item 8.** **Changes in and Disagreements with Accountants for Open-End Management Investment Companies**

[Federated Hermes Government Money Fund II](#a_ifgmf): Not Applicable.

[Federated Hermes High Income Bond Fund II](#a_ifhibf): Not Applicable.

[Federated Hermes Kaufmann Fund II](#a_ifkauf): Not Applicable.

[Federated Hermes Managed Volatility Fund II](#a_ifmvf): Not Applicable.

[Federated Hermes Quality Bond Fund II](#a_ifqbf): Not Applicable.

[Federated Hermes Fund for U.S. Government Securities II](#a_ifusg): Not Applicable.

**Item 9.** **Proxy Disclosures for Open-End Management Investment Companies.**

[Federated Hermes Government Money Fund II](#a_ifgmf): Not Applicable.

[Federated Hermes High Income Bond Fund II](#a_ifhibf): Not Applicable.

[Federated Hermes Kaufmann Fund II](#a_ifkauf): Not Applicable.

[Federated Hermes Managed Volatility Fund II](#a_ifmvf): Not Applicable.

[Federated Hermes Quality Bond Fund II](#a_ifqbf): Not Applicable.

[Federated Hermes Fund for U.S. Government Securities II](#a_ifusg): Not Applicable.

**Item 10.** **Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.**

[Federated Hermes Government Money Fund II](#a_ifgmf): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

[Federated Hermes High Income Bond Fund II](#a_ifhibf): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

[Federated Hermes Kaufmann Fund II](#a_ifkauf): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

[Federated Hermes Managed Volatility Fund II](#a_ifmvf): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

[Federated Hermes Quality Bond Fund II](#a_ifqbf): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

[Federated Hermes Fund for U.S. Government Securities II](#a_ifusg): The Fund's disclosure of remuneration items is included as part of the Financial Statements filed under Item 7 of this form.

**Item 11.** **Statement Regarding Basis for Approval of Investment Advisory Contract.**

[Federated Hermes Government Money Fund II](#a_ifgmf): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

[Federated Hermes High Income Bond Fund II](#a_ifhibf): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

[Federated Hermes Kaufmann Fund II](#a_ifkauf): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

[Federated Hermes Managed Volatility Fund II](#a_ifmvf): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

[Federated Hermes Quality Bond Fund II](#a_ifqbf): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

[Federated Hermes Fund for U.S. Government Securities II](#a_ifusg): The Fund's Evaluation and Approval of Advisory Contract summary by fund appear in the Financial Statements filed under Item 7 of this form.

**Item 12.** **Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies**

Not Applicable

**Item 13.** **Portfolio Managers of Closed-End Management Investment Companies.**

Not Applicable

**Item 14.** **Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.**

Not Applicable

**Item 15.** **Submission of Matters to a Vote of Security Holders.**

No Changes to Report

**Item 16.** **Controls and Procedures.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The registrant's Principal Executive Officer and Principal Financial Officer 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 as of a date within 90 days of the filing date of this report on Form N-CSR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 17.** **Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.**

Not Applicable

**Item 18.** **Recovery of Erroneously Awarded Compensation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp; Not Applicable

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp; Not Applicable

**Item 19.** **Exhibits**

(a)(1) Not Applicable.

(a)(2) Not Applicable.

(a)(3) [Certifications of Principal Executive Officer and Principal Financial Officer](fis2280-cert302.htm).

(a)(4) Not Applicable.

(a)(5) Not Applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp; [Certifications pursuant to 18 U.S.C. Section 1350](fis2280-cert906.htm).

**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: <u>Federated Hermes Insurance Series</u>**

By: <u>/s/ Jeremy D. Boughton</u>

Jeremy D. Boughton, Principal Financial Officer

Date: <u>February 17, 2026</u>

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: <u>/s/ John B. Fisher</u>

John B. Fisher, President - Principal Executive Officer

Date: <u>February 17, 2026</u>

By: <u>/s/ Jeremy D. Boughton</u>

Jeremy D. Boughton, Principal Financial Officer

Date: <u>February 17, 2026</u>

## Ex-99.Cert

**N-CSR Item 19(a)(3) - Exhibits: Certifications**

I, John B. Fisher, certify that:

* I have reviewed this report on Form N-CSR of Federated Hermes Insurance
Series on behalf of: Federated Hermes Government Money Fund II, Federated Hermes High Income Bond Fund II, Federated Hermes Kaufmann Fund
II, Federated Hermes Managed Volatility Fund II, Federated Hermes Quality Bond Fund II, Federated Hermes Fund for U.S. Government Securities
II("registrant");

* Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

* Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations, changes in
net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and
for, the periods presented in this report;

* The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940)
and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant
and have:

* designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;

* designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;

* evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a
date within 90 days prior to the filing date of this report based on such evaluation; and

* disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

* The registrant's other certifying officers and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

* all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability
to record, process, summarize, and report financial information; and

* any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 17, 2026

/S/ John B. Fisher

John B. Fisher

President - Principal Executive Officer

**N-CSR Item 19(a)(3) - Exhibits: Certifications**

I, Jeremy D. Boughton, certify that:

* I have reviewed this report on Form N-CSR of Federated Hermes Insurance
Series on behalf of: Federated Hermes Government Money Fund II, Federated Hermes High Income Bond Fund II, Federated Hermes Kaufmann Fund
II, Federated Hermes Managed Volatility Fund II, Federated Hermes Quality Bond Fund II, Federated Hermes Fund for U.S. Government Securities
II("registrant");

* Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

* Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations, changes in
net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and
for, the periods presented in this report;

* The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940)
and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant
and have:

* designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report
is being prepared;

* designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;

* evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a
date within 90 days prior to the filing date of this report based on such evaluation; and

* disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

* The registrant's other certifying officers and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

* all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability
to record, process, summarize, and report financial information; and

* any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 17, 2026

/S/ Jeremy D. Boughton

Jeremy D. Boughton, Treasurer - Principal Financial Officer

## Exhibit 99.906

**N-CSR Item 19(b) - Exhibits: Certifications**

**SECTION 906 CERTIFICATION**

Pursuant to 18 U.S.C.§ 1350, the undersigned officers of **Federated Hermes Insurance Series** on behalf of **Federated Hermes Government Money Fund II, Federated Hermes High Income Bond Fund II, Federated Hermes Kaufmann Fund II, Federated Hermes Managed Volatility Fund II, Federated Hermes Quality Bond Fund II, Federated Hermes Fund for U.S. Government Securities II**(the "Registrant"), hereby certify, to the best of our knowledge, that the Registrant's Report on Form N-CSR for the period ended December 31, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated: <u>February 17, 2026</u>

/s/ John B. Fisher

John B. Fisher

Title: President, Principal Executive Officer

Dated: <u>February 17, 2026</u>

/s/ Jeremy D. Boughton

Jeremy D. Boughton

Title: Treasurer, Principal Financial Officer

This certification is being furnished solely pursuant to 18 U.S.C.§ 1350 and is not being filed as part of the Report or as a separate disclosure document.