For the second quarter of 2025, the Victory RS Partners Fund (A shares without sales charge) did not meet the performance of its target index, the Russell 2000 Value Index. While strategic stock choices in the Health Care and Consumer Discretionary sectors provided a lift, these gains were eroded by weaker selections within the Financials and Information Technology sectors. Looking ahead, economic forecasts point to a period characterized by increased inflation and a higher interest rate environment than what has been observed over the last ten years.
Detailed Report: Q2 2025 Victory RS Partners Fund Performance
The second quarter of 2025 presented a challenging landscape for equity markets, influenced by a surge in protectionist trade measures and growing concerns over inflation. Against this backdrop, the Victory RS Partners Fund faced significant headwinds, culminating in its underperformance relative to the Russell 2000 Value Index for the period ending June 30, 2025.
Specifically, the fund's strategic investments in the Health Care sector proved beneficial, with carefully selected stocks contributing positively to its relative performance. Similarly, choices within the Consumer Discretionary sector also demonstrated strength, providing a partial buffer against broader market pressures. However, these positive impacts were unfortunately overshadowed by less favorable outcomes in the Financials sector. Investments here, alongside those in Information Technology, acted as a drag on the fund's overall relative standing. The market commentary from the fund underscored a challenging start to the quarter, marked by a palpable sense of apprehension among investors as discussions around tariffs and inflationary pressures intensified.
This quarter's results and the accompanying market commentary from the Victory RS Partners Fund emphasize the dynamic and often unpredictable nature of financial markets. It highlights the critical importance of adaptable investment strategies that can navigate fluctuating economic conditions, such as the anticipated shift towards a more inflationary and higher interest rate environment. For investors, this serves as a potent reminder to continuously re-evaluate portfolio allocations and consider sectors that might be more resilient or even thrive under such circumstances, emphasizing diversification and a long-term perspective to mitigate risks inherent in a changing economic climate.