Navigating Market Swings: A Quarter of Strategic Gains

Fund's Superior Performance in the Second Quarter of 2025

During the three-month period concluding on June 30, 2025, the Victory Income Fund, specifically its Institutional Shares, demonstrated a stronger performance than the Bloomberg U.S. Aggregate Bond Index, its primary comparative measure.

Seizing Opportunities: Enhanced Allocation to Corporate Bonds

The Fund strategically increased its holdings in corporate debt instruments over the quarter. This decision was made to leverage opportunities that arose when corporate bond spreads expanded in April, driven by concerns surrounding new tariff implementations.

Maintaining Portfolio Stability: Consistent Duration with Benchmark

Throughout the reporting period, the Fund meticulously maintained its portfolio's duration, keeping it aligned with that of its benchmark. This approach ensures a balanced risk profile relative to the broader bond market.

Quarterly Market Dynamics: A Period of Economic Uncertainty

The second quarter of 2025 was characterized by considerable instability in risk assets. The announcement of new tariffs by President Trump initially triggered a decline in equity markets. However, a subsequent announcement of a temporary halt in these tariffs led to a market recovery, favoring riskier assets, including investment-grade bonds.