In the initial quarter of 2026, the Victory Tax Exempt Intermediate-Term Fund achieved notable success, outperforming its designated benchmark. This occurred within a fixed income environment characterized by significant geopolitical shifts and fluctuating expectations regarding monetary policy. The quarter commenced with optimistic signals from a steadily decreasing inflation rate and robust corporate credit markets, laying a foundation for the fund's positive trajectory.
Quarterly Performance Review: Victory Tax Exempt Intermediate-Term Fund
In the first quarter of 2026, the Victory Tax Exempt Intermediate-Term Fund (Fund Shares) distinguished itself by exceeding the performance of its benchmark, the Bloomberg Municipal 1-15 Years Blend Index. This achievement took place against a backdrop of dynamic fixed income markets, influenced by geopolitical developments and evolving expectations for monetary policy. Despite these complexities, the fund delivered superior returns. The broader Bloomberg Municipal Bond Index recorded a return of -0.18% for the same period. The quarter began with promising indicators, including a gradual reduction in inflation and corporate credit spreads that remained tightly compressed, suggesting market stability. The Federal Reserve's cautious approach to policy adjustments further contributed to the market's initial sentiment.
This performance underscores the importance of a skilled investment approach in navigating unpredictable market conditions. The fund's ability to outperform its benchmark, even in a quarter marked by volatility and shifting macroeconomic factors, highlights the potential benefits of active management and strategic positioning within the municipal bond sector. Investors may draw inspiration from such results, recognizing that prudent investment decisions can yield positive outcomes despite broader market challenges.
