In the second quarter of 2026, the Victory RS Small Cap Growth Fund demonstrated superior performance compared to its benchmark, the Russell 2000 Growth Index. This positive result was significantly influenced by astute stock picking within the Healthcare and Technology industries. While certain investment decisions in the Consumer Discretionary and Financials sectors presented challenges, the fund managed to achieve notable outperformance.

For the three-month period concluding on June 30, 2026, the Victory RS Small Cap Growth Fund (RSEGX) notably surpassed the Russell 2000 Growth Index. This strong showing can be attributed largely to strategic stock selection, particularly within the dynamic Healthcare and Technology sectors. These sectors proved to be key drivers of the fund's success during the quarter, yielding substantial returns that bolstered overall performance. The fund's emphasis on identifying promising opportunities in these innovative areas appears to have paid off, showcasing the effectiveness of its investment strategy.

However, it is important to note that the fund's outperformance was somewhat tempered by its holdings in the Consumer Discretionary and Financials sectors. Although the overall result was positive, these sectors experienced less favorable outcomes, which partially offset the significant gains achieved in Healthcare and Technology. This indicates the complex nature of market dynamics, where varying sector performances can influence a fund's overall trajectory.

Looking ahead, the fund remains committed to its core investment philosophy. Small-cap growth valuations are currently at historical lows relative to large-cap counterparts, a phenomenon not seen since 1979. This presents a compelling opportunity for investors with a long-term perspective. The fund aims to capitalize on this by focusing on companies exhibiting secular growth, employing thorough fundamental research and established anchor points to navigate market volatility and secure sustained growth over time. This forward-looking strategy is designed to identify robust businesses capable of thriving irrespective of short-term market fluctuations.

Ultimately, the Victory RS Small Cap Growth Fund's performance in Q2 2026 underscores its capability to generate strong returns through targeted sector investments. Despite some counteracting forces, the fund’s strategic choices in high-growth areas contributed to its benchmark-beating results, reinforcing its position as a noteworthy contender in the small-cap growth landscape.