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Q3 2026 Updates

Value-Oriented Equity

For some time now we have been calling for small caps to reassert themselves, and indeed the year started strong. However, small caps faltered during the third quarter as rate concerns weighed on performance. Conventional wisdom seems to be that higher rates have been bad for small caps, but we see some potential mitigating factors in the current environment. Among other considerations, our research suggests that small-cap cash levels are near record highs, and debt-to-capital ratios have fallen substantially from post-financial-crisis peaks. Read more and learn why Integrity still likes the set up for small companies.

Fund Commentaries

Victory Integrity Discovery Fund

Victory Integrity Mid-Cap Value Fund

Victory Integrity Small-Cap Value Fund

Victory Integrity Small/Mid-Cap Value Fund

Fixed Income

Third quarter fixed-income market performance was shaped by the Federal Reserve's hawkish move as inflation remained elevated alongside resilient consumer spending, strong corporate earnings, and above-trend business investment spending. The Fed delivered a 25-bps hike at the September FOMC meeting, but the message was clear: there is still work to be done in restoring price stability. How much further will the Fed tighten, and what’s the outlook for fixed income? Read more from Pioneer Investments.

Fund Commentaries

Pioneer Bond Fund Trust CIT

Victory Pioneer Bond Fund

Victory Pioneer Strategic Income Fund

 

U.S. and Global Equity

The S&P® 500 Index advanced 2.3% in the third quarter of 2026, which marked a notable cooldown from Q2’s blowout. Breadth deteriorated beneath the surface, and broader AI sentiment grew more cautious amid AI security concerns and monetization questions. Energy outperformed as crude oil rebounded on the unresolved Mideast conflict, while utilities and industrials lagged. Get more market insights and learn how Pioneer Investments is positioning portfolios.

Fund Commentaries

Pioneer Large Cap Growth Portfolio CIT

Victory Pioneer Fundamental Growth Fund

Victory Pioneer International Equity Fund

Global Equity

Despite a host of headwinds that might have derailed the rally, Global Equities (as measured by the MSCI All Country World Index) managed to inch higher by approximately 1.6% in the third quarter of 2026. Developed markets outperformed emerging markets, and Japan was the top performing region thanks to robust earnings growth, positive sentiment around corporate governance reforms, and a weaker yen. Which regions and sectors are poised to perform going forward? Learn more about global equities from the RS Global Team.

Fund Commentaries

Victory RS Global Fund

Victory RS International Fund

 

Growth-Oriented Equity

Investors continue to grapple with a host of potential headwinds, including elevated inflation, rising interest rates and continuing geopolitical turmoil. Nevertheless, the economic cycle appears to be rolling onwards, and earnings of many high-profile companies continued to meet or exceed expectations. Given the cross-currents, we are expecting periodic bouts of elevated volatility as we look ahead, and we believe that individual company performance will become more divergent. Read more from the Growth Team at RS Investments and learn why the current environment may favor fundamental analysis and bottom-up stock picking.

Fund Commentaries

Victory RS Growth Fund

Victory RS Mid Cap Growth Fund

Victory RS Science and Technology Fund

Victory RS Select Growth Fund

Victory RS Small Cap Growth Fund

 

Value-Oriented Equity

During the third quarter, the AI-fueled momentum trade seemed to be running out of gas. The Iran conflict dragged on. Energy prices jumped. Inflation readings spurred the Federal Reserve to begin upping short-term rates for the first time in three years. And the yield curve shifted upwards with the 10-Year Treasury yield ending the quarter at a multi-year high of roughly 5.3%. Nevertheless, the broad market managed to move nominally higher. Will all the challenges eventually upend the rally? And what’s the outlook for value strategies going forward? Read the full market commentary from the RS Investments Value Team.

Fund Commentaries

Victory RS Investors Fund

Victory RS Large Cap Alpha Fund

Victory RS Partners Fund

Victory RS Value Fund

Victory RS Science and Technology Fund

Victory RS Small Cap Equity Fund

Value-Oriented Equity

The third quarter was a mixed bag for U.S. equities. The S&P 500® Index returned 2.3%, and the Nasdaq Composite rallied 2.6%, setting new all-time highs along the way. Beneath the surface, however, returns were volatile. Looking ahead, we believe that investors should anticipate choppy market conditions to close out the year given the upcoming U.S. midterm elections, ongoing geopolitical tensions, the uncertain path for U.S. rates, and the controversy surrounding the nascent AI ecosystem. Get more insights from Sycamore Capital in the full market commentary.

Fund Commentaries

Victory Sycamore Established Value Fund

Victory Sycamore Small Company Opportunity Fund

International Equity

International equities investors are trying to balance both risks and opportunities in this dynamic market environment. While geopolitics, energy price volatility, and interest-rate uncertainty remain meaningful risks, resilient economic indicators, broadening AI-driven growth, and solid corporate earnings support a cautiously optimistic outlook. From a regional perspective, Europe should benefit from ongoing fiscal stimulus and improving corporate fundamentals, while Japan is supported by the potential for expansionary fiscal policy, ongoing corporate governance reforms, and another record year of total shareholder return activity. Read more from Trivalent Asset Management.

Fund Commentaries

Victory Trivalent International Fund - Core Equity

Victory Trivalent International Small-Cap Fund

Fixed Income

Fixed income markets endured a challenging quarter as inflation's stubborn plateau and the Federal Reserve decisive hawkish pivot drove yields to levels not seen in roughly two decades. Yields rose across the Treasury curve, and price pressure outweighed income for most fixed income asset classes. Although the rising yields remain a headwind for near-term returns, we like to remind investors that the current market offers some of the most attractive starting yields we’ve seen in quite some time. Read the full market commentary from Victory Income Investors.

Fund Commentaries

Victory Core Plus Intermediate Bond Fund

Victory Fund for Income

Victory Government Securities Fund

Victory High Income Fund

Victory Income Fund

Victory Investment Grade Convertible Fund

Victory Short-Term Bond Fund

Victory Ultra Short-Term Bond Fund

Macroeconomic Core Strategy

The third quarter of 2026 saw continued economic expansion in the U.S. supported by ongoing tech investment and some broader cyclical improvement despite sluggish job growth. However, equity returns were mixed and bonds sold off amid ongoing geopolitical conflict, continued inflationary pressures, and a Fed rate hike. What’s in store for the economy and the markets ahead? Get more macro insights from WestEnd Advisors.

Economic and Market Commentary



FOR FINANCIAL PROFESSIONAL USE ONLY/NOT FOR USE WITH THE GENERAL PUBLIC

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.

Distributed by Victory Capital Services, Inc.

All investing involves risk, including the possible loss of principal. An investment should be made with an understanding of the risks involved with owning a particular security or asset class.

Advisory services offered by Victory Capital Management Inc.

The views expressed are as of the date noted and are subject to change at any time based on market or other conditions. These views should not be relied upon as investment advice, as securities recommendations, or as an indication of trading intent on behalf of any portfolio.

20261027-6061732

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