Federated Launches Enhanced Treasury Income Closed-End Fund

Federated Investors completed the $178 million initial public offering of closed-end fund Federated Enhanced Treasury Income Fund on the New York Stock Exchange Wednesday.

The fund employs an integrated U.S. Treasury-based strategy with an option-writing strategy and a duration management overlay in order to provide the potential for current income and total return.

Shares were sold for $20, and assets may increase to $203.6 million, assuming the full exercise of the underwriters’ over-allotments.

Dix Hills Partners is sub-advisor to the fund, and 23-year investment management veteran Donald T. Ellenberger, a senior portfolio manager at Federated, is its manager. Twenty-year investment management veteran Joseph A. Baggett, chief investment officer and co-founder of Dix Hills, will head the fund’s duration management strategy.

“In the wake of recent economic challenges, investors have continued to seek the safety of U.S. Treasury securities,” said J. Christopher Donahue, president and chief executive officer of Federated. “They have also become increasingly concerned about the potentially negative impact of rising interest rates on the value of their fixed income portfolios. We believe Federated Enhanced Treasury Income Fund complements our strong array of products for investors seeking income from a high-quality manager.”