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Q3 2024 Fund Updates

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Fixed income franchise

The Federal Reserve continued to be in the limelight during the third quarter as it finally moved to cut the federal funds interest rate by 50 bps in September. This was the first rate cut since 2020, and yields fell as markets have priced in additional cuts this year and next. Performance was positive across all major fixed income markets during the quarter, but what’s ahead for investors given the upcoming election and the uncertainty regarding future monetary policy? Gain more fixed income insights from Victory Income Investors.

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Global equity franchise

Global equities continued to register gains in the third quarter despite bouts of elevated volatility, especially during the month of August. The primary causes that spooked investors were softer economic data in the United States, along with a surprising rate hike by the Bank of Japan. However, these were offset somewhat by interest rate cuts in multiple regions later in the quarter, along with a major stimulus announcement from China. Learn more about which regions, sectors, and types of equities led the market from the RS Global team.


Value-oriented equity franchise

Just in time for Halloween, falling ten-year Treasury yields spurred a rally in many of the non-earning constituents—zombie companies—within our small- and mid-cap benchmarks. So while the Federal Reserve has cut rates and will likely do so again, we believe that the market’s reaction to non-earners suggests that many investors are expecting a return to near-zero rates. We don’t agree and think there is ample risk, but also opportunity, depending on how one allocates to small- and mid-cap stocks going forward. Read more about how Integrity Asset Management views the environment.

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Value-oriented equity franchise

At first blush it may appear that the song remained the same for the U.S. equity market. The third quarter saw a continuation of this year’s rally, with the broad market, as measured by the S&P 500® Index, delivering returns of almost 6%. Where the tune has changed, however, is in market breadth, which is good news for value-oriented strategies. In fact, we’ve seen a downright rotation away from large-cap tech stocks into more value-oriented names and, importantly, into the seemingly long-ignored small caps. Learn more about the outlook for value stocks from the RS Value team.

Value-oriented equity franchise

The third quarter marked a solid three-month period for the U.S. equity market with the major indices firmly in positive territory. Mid-cap and small-cap equities posted a solid quarter, highlighting a much-welcomed improvement in market breadth. Can the rally continue? Sycamore reminds us that the attractive riskless rate of return on cash has seen investment in money market and other short-term instruments balloon. But as rates decline, it would not be surprising to see some of the capital on the sidelines deployed further out on the risk curve. Read more from Sycamore Capital.

International equity franchise

International small-cap equities advanced broadly across markets and sectors, thanks to moderating inflation expectations, dovish signals from central banks that lifted investor sentiment, and a weaker U.S. Dollar index. Nine of the eleven sectors advanced during the quarter, with the more leveraged Utilities and Real Estate sectors leading the gains. Energy was the weakest sector as Brent Crude oil prices declined. Get more insights into the outlook for international equities from Trivalent.

Emerging markets equity franchise

The third quarter was fascinating for emerging markets investors, replete with conflicting signals, periods of sharp reversals, and elevated market volatility. The U.S. Federal Reserve’s 50-bps cut in September, a corresponding weaker U.S. dollar, and the Chinese government’s plans to stimulate the property market and domestic consumption are all positives for the asset class. However, optimism must be balanced by geopolitical risks and the unknown policy impact (i.e., possible tariffs) from the looming U.S. presidential election. Read more about emerging markets from Sophus Capital.

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Growth-oriented equity franchise

The U.S. equity market continued its recent strong performance in the third quarter, but it was notable that market leadership shifted beneath the surface as investors began rotating out of large-cap tech stocks and into smaller, less-recognized names. Even after this past quarter’s shift down the cap spectrum, we believe that the current investment landscape continues to offer intriguing opportunities for secular growth companies outside of the mega-cap growth category. Learn more from the RS Growth team.

Growth and core equity franchise

Although equities rallied during the third quarter, the script flipped within the Russell 3000® Index benchmark as value stocks outperformed their growth counterparts. This reversal was driven largely by price gains in the small- and mid-cap stocks. Learn how Munder Capital Management has been positioning portfolios given the new market leadership and the first Federal Reserve rate cut since 2020. Read more about which sectors and stocks have been driving recent performance.

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Macroeconomic core strategy franchise

The Federal Reserve may have begun a new easing cycle, but WestEnd Advisors still sees signs of a possible economic slowdown, along with the lingering headwinds from tight monetary policy. Amid this late-cycle environment, the WestEnd team is balancing defensive exposure with select economically sensitive allocations. Get more economic insights and learn how WestEnd Advisors has been positioning portfolios.



Carefully consider a fund's investment objectives, risks, charges and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit www.vcm.com/prospectus. Read it carefully before investing.

Funds distributed by Victory Capital Services, Inc., an affiliate of Victory Capital Management Inc. and WestEnd Advisors.

All investments carry a certain degree of risk including the possible loss of principal, and an investment should be made with an understanding of the risks involved with owning a particular security or asset class. Interested parties are strongly encouraged to seek advice from qualified tax and financial experts regarding the best options for your particular circumstances.

Advisory services offered by Victory Capital Management Inc. or its affiliate, WestEnd Advisors, both SEC-registered investment advisers.

WestEnd Advisors provides the day-to-day management of portfolios for which it serves as the investment adviser.

The opinions are as of the date noted and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes.

20241029-3985300

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