Victory Fund for Income: Reflecting on Q4 2025 and Gearing Up for the New Year

Well, here we are, turning the page on 2025. It feels like just yesterday we were discussing the challenges of the previous year, and now, as the calendar flips to a new one, we’re reflecting on a quarter that, frankly, kept us on our toes. This commentary offers an honest look at how the Victory Fund for Income navigated the final stretch of 2025, the forces at play, and crucially, how we’re positioning ourselves for what’s next.

During the fourth quarter, we're pleased to report that the fund delivered a solid performance. While we don't chase every market ripple, our deliberate strategy allowed us to generate respectable returns, largely meeting our internal benchmarks and, I'm happy to say, often outperforming several broader income-focused indices. It’s never just about the numbers, though, is it? It’s about the stability, the resilience, and the thoughtful allocation behind them.

The macroeconomic backdrop in Q4 2025 remained, shall we say, a tapestry of contrasting threads. We saw continued, albeit moderating, inflation concerns, prompting central banks to maintain a cautious, 'data-dependent' stance. Interest rate expectations, as you know, continued to be a significant mover for bond markets, and we certainly witnessed some intriguing volatility there. Geopolitical currents, though never fully absent, seemed to stabilize a touch towards the close of the year, providing a small but welcome sigh of relief for investor sentiment in certain sectors.

Our core philosophy, focusing on diversified, high-quality income streams, truly proved its worth. We maintained our disciplined approach, targeting companies with robust balance sheets, consistent cash flows, and a proven track record of dividend sustainability. On the fixed-income side, our careful duration management and selective credit exposure allowed us to capture attractive yields without taking undue risk. We’re not about speculative bets; we're about dependable income generation, plain and simple.

For example, our allocations to certain essential services and utility-related REITs continued to act as a crucial anchor, providing stable, predictable dividends even as other parts of the market experienced some choppiness. We also saw positive contributions from our holdings in investment-grade corporate bonds, particularly those in sectors demonstrating strong pricing power and stable demand. Of course, no quarter is without its adjustments; we selectively trimmed positions where valuations seemed stretched, redeploying capital into areas we felt offered a more compelling blend of yield and capital appreciation potential.

Looking ahead to 2026, the landscape, naturally, holds its own set of challenges and opportunities. We anticipate that inflation dynamics and central bank policies will remain pivotal. We’re also keeping a very close eye on corporate earnings stability and any shifts in global trade narratives. Our commitment, however, remains unwavering: to actively manage your capital with an eye toward preserving principal while generating consistent, attractive income. We believe the Victory Fund for Income is well-positioned to navigate these evolving currents.

As always, we are incredibly grateful for your continued trust and partnership. We value the confidence you place in us, and we look forward to a productive and, dare I say, prosperous new year together.