Concentration Risk

(a) Revenue Concentration by Asset Class

The following table presents Federated's revenue concentration by asset class:



	Nine Months Ended
	September 30,
	2018		2017
Equity Assets	42	%	38	%
Money Market Assets	37	%	41	%
Fixed-Income Assets	16	%	17	%

The change in the relative proportion of Federated's revenue attributable to equity assets for the first nine months of 2018, as compared to the same period in 2017, was primarily the result of higher average equity assets mostly as a result of the July 2018 Hermes Acquisition. Because the Hermes Acquisition was primarily comprised of equity assets and alternative/private markets assets, the relative proportion of Federated's revenue attributable to money market assets decreased for the first nine months of 2018 as compared to the same period in 2017. Furthermore, Federated's revenue attributable to money market assets decreased as a result of a change in the mix of average money market assets.

(b) Revenue Concentration by Investment Strategy/Fund

The following table presents Federated's revenue concentration by investment strategy/fund:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Federated Strategic Value Dividend strategy¹	13	%	18	%	15	%	18	%
Federated Kaufmann Mid-Cap Growth strategy²	10	%	9	%	10	%	9	%

1Strategy includes Federated Funds and Separate Accounts.

2 Strategy includes Federated Funds.

A significant and prolonged decline in the AUM in either of these strategies/funds could have a material adverse effect on Federated's future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with the Federated Funds managed in accordance with these strategies/funds.

Approximately 12% and 13% of Federated's total revenue for the three- and nine-month periods ended September 30, 2018, respectively, and 16% for both the three- and nine-month periods ended September 30, 2017, respectively, was derived from services provided to one intermediary, The Bank of New York Mellon Corporation, including its Pershing subsidiary. Significant negative changes in Federated's relationship with this intermediary could have a material adverse effect on Federated's future revenues and, to a lesser extent, net income due to a related reduction in distribution expenses associated with this intermediary.